Quarterly Report • Oct 31, 2022
Quarterly Report
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| MANAGEMENT REPORT 3 | |
|---|---|
| CONSOLIDATED INTERIM FINANCIAL STATEMENTS20 | |
| Management Board's confirmation of the Group's interim financial statements 33 | |
| BRIEF OVERVIEW OF THE GROUP34 |
In the 3rd quarter of 2022, the consolidated revenue of AS Ekspress Grupp totalled EUR 15.1 million and the net profit totalled EUR 0.86 million. The total revenue for the first nine months reached EUR 45.0 million, increasing by 20% yearover-year. The net profit for the first nine months totalled EUR 1.62 million, decreasing by EUR 0.2 million as compared to last year. Digital revenue increased by 25% as compared to the same period last year and digital revenue contributed 77% to the Group's total revenue at the end of September.
The Group's revenue for the 3rd quarter continued its growth as expected. The consolidated revenue for the quarter totalled EUR 15.1 million (Q3 2021: EUR 13.3 million), increasing by 14% as compared to last year. The Group's online advertising sales continued to grow at the time when the total market did not significantly grow. The Group's media companies managed to successfully grow at the expense of their competitors, providing the best solutions to their advertising customers in reaching consumers. Ad buyers direct an increasingly larger share of their marketing budget into online channels, ensuring the sustainability of the Group's key type of revenue. Nine-month revenue totalled EUR 45.0 million, increasing by 20% as compared to last year. In addition to advertising sales, better nine-month performance was attributable to a higher number of digital subscriptions and the growth in the average price of both paper and digital products.
The number of the digital subscriptions of AS Ekspress Grupp increased by 21% by the end of September as compared to the same period last year and totalled 151.4 thousand subscriptions. The number of digital subscriptions of Õhtuleht increased the most, indicating that the customer groups that until now had preferred print periodicals are also more willing to consumer more digital media. In percentage terms, the number of digital subscribers demonstrated the highest growth in Lithuania and Latvia where the transition to the digital subscription model started later than in Estonia and where the Group is expecting to see further growth potential in the near future.
Growth in digital subscriptions +21%
The earnings before interest, tax, depreciation and amortisation (EBITDA) of Ekspress Grupp totalled EUR 2.26 million in the 3rd quarter and EUR 5.1 million in the first nine months. EBITDA grew by 1% both in the 3rd quarter as well as in the first nine months as compared to last year. Due to the growth in input prices (primarily paper, printing and energy costs) and the pressure of the overall economic environment on wages, the Group's EBITDA margin for the first nine months fell from 13% to 11%. The Group is aware of the higher risks related to the weakening of the economic environment and the potential economic cooldown over the next 12 months. We have already reduced our cost base in the areas where revenue has not met the Group's expectations. The effect of cost reductions will be evident in the next quarters. In addition, we are looking for opportunities in the new economic environment for more efficient management of processes and increasing sales revenue.
In the 3rd quarter of 2022, the consolidated revenue totalled EUR 0.86 million and the net profit for the first nine months totalled EUR 1.62 million. In the first nine months, the net profit decreased by EUR 0.2 million (-11%) as compared to the previous year. Lower profit was attributable to higher losses of AS Express Post that is engaged in home delivery of print media and the growth in the depreciation charge due to higher capital expenditures as compared to the same period last year.
The Management Board of Ekspress Grupp considers the Group's 9-month results as positive: the Group was able to grow the digital revenue base (both the turnover and share of digital revenues as well as the number of digital subscribers) and maintain good profitability despite the unstable business environment and the increase in input prices and salary expenses. This shows that over the last two years, Ekspress Grupp has been able to adapt quickly and efficiently to changed business environment, but contradictory future forecasts require to stay flexible and react quickly also in the upcoming quarters.
Ekspress Grupp continues focusing on the organic growth of the existing digital business as well as finding opportunities to increase its business volumes through acquisitions. The Group's goal is to increase the company's value by creating a synergy between the new businesses acquired and current media operations.
In the digital media segment, we are implementing a strategy of rapid growth, the goals of which are market development and at the same time increasing market share. In the printed media, we monitor cost efficiency and offer the highest quality journalism in the market. The Group is strengthening its existing core businesses with investments in organic growth and also increases the share of digital revenues through other digital businesses that potentially offer good synergies with the media. The growth of both the media and the supporting digital businesses is supported by financially optimal distribution of investments, moderate use of leverage and dividend policy that takes into account the growth objectives.
To implement the Group's strategy, our goal remains production of award-winning content valued by our readers and media experts alike while being a leading digital publisher in the Baltic States both in terms of digital subscriptions, the time spent online and the number of actual users. We wish to continue providing high-quality printed media in the market for those readers who value this format.
The Group's long-term strategic financial targets set by the Supervisory Board are related to business growth, digitalisation, profitability, and ability to pay dividends. The targets are based on the changes in the operating environment, the competitive landscape, and the progress of the transformation strategy.
| Target by end of 2026 | 2026 target | 2021 actual |
|---|---|---|
| Digital subscriptions in Baltics | >340 000 | 134 947 |
| Share of digital revenues | >85% | 76% |
| EBITDA margin | >15% | 15% |
| Dividend pay-out rate | ≥30% | 37% |
In the 3rd quarter of 2022, the consolidated revenue totalled EUR 15.1 million (Q3 2021: EUR 13.3 million). The revenue for the 3rd quarter increased by 14% year-over-year. The consolidated revenue for the first 9 months of 2022 totalled EUR 45.0 million (9 months 2021: EUR 37.6 million). The revenue for the first 9 months increased by 20% year-over-year. This growth was attributable to both online advertising revenue as well as digital subscriptions revenue. The share of the Group's digital revenue in total revenue was 77% at the end of the 3rd quarter of 2022 (at the end of the 3rd quarter 2021: 74% of total revenue). Digital revenue for the first 9 months of 2022 increased by 25% as compared to the same period last year.
In the 3rd quarter of 2022, the consolidated EBITDA totalled EUR 2.26 million (Q3 2021: EUR 2.25 million). In the 3rd quarter of 2022, EBITDA increased by 1% as compared to the previous year and the EBITDA margin was 15% (Q3 2021: 17%). The consolidated EBITDA for the first 9 months of 2022 totalled EUR 5.10 million (9 months 2021: EUR 5.05 million). In the first 9 months of 2022, EBITDA increased by 1% as compared to the previous year and the EBITDA margin was 11% (9 months 2021: 13%).
The consolidated net profit for the 3rd quarter of 2022 totalled EUR 0.86 million (Q3 2021: EUR 1.15 million). In the 3rd quarter of 2022, the net profit decreased by 25% as compared to the previous year. The consolidated net profit for the first 9 months of 2022 totalled EUR 1.62 million (9 months 2021: EUR 1.82 million). In the first 9 months of 2022, the net profit decreased by 11% as compared to the previous year. This decline is primarily related to the higher loss of AS Express Post for the period and the increase of the Group's depreciation charge due to higher capital expenditures as compared to the same period last year.
In the first 9 months of 2022, the cost of goods sold, marketing, and general and administrative costs totalled EUR 43.29 million (9 months 2021: EUR 35.56 million). In the first 9 months of the year, operating expenses increased by EUR 7.73 million (+22%). Staff costs in the amount of EUR 4.39 million (+23%) increased the most. The significant growth in input expenses is linked to the outsourcing of the printing service related to print media as well as the home delivery service, the total growth was EUR 0.66 million (+16%).
As of 30 September 2022, the Group employed 861 employees which is 132 more as compared to the same period last year (30.09.2021: 729 employees). This growth is attributable to 56 employees who were transferred from OÜ Geenius Meedia acquired at the end of 2021 and the ELTA news agency acquired in the summer of 2022. 76 employees were hired in other companies in Estonia, Latvia and Lithuania. Given the general economic situation, we have selectively adjusted employee salaries in order to retain the best. In addition, we have started with cost reductions and layoffs, especially in Latvia where advertising sales have failed to meet the Group's internal targets. These activities will have an impact in the upcoming quarters.
In the first 9 months of the year, the one-off expenditure includes donations to Ukraine in the total amount of EUR 0.20 million (Q3 2022: additional donations of EUR 0.06 million).
The war in Ukraine has had a major negative effect on the GDP growth in the Baltic States. As a result, the economy has slowed down and created a high inflation environment (in September 2022, inflation was 24.1% in Estonia, 22.5% in Lithuania and 22% in Latvia as compared to the previous year) which is one of the highest in the Eurozone. The Group has neither any operations nor any assets in Ukraine and Russia, and therefore, the war has only an indirect impact on the Group.
At the end of the reporting period, the Group had available cash in the amount of EUR 6.1 million and equity in the amount of EUR 53.0 million (57% of total assets). The comparable data as of 30 September 2021 were EUR 12.4 million and EUR 54.4 million (61% of total assets), respectively. As of 30 September 2022, the Group's net debt was EUR 15.8 million (31 December 2021: EUR 11.3 million).
In the first 9 months of 2022, the Group's cash flows from operating activities totalled EUR 3.89 million (9 months 2021: EUR 4.41 million, incl. printing services segment) that were positively impacted by the ticket sales platforms in Estonia and Latvia. The sales activity of the Latvian ticket sales platform has recovered and is in a better position due to higher ticket prices as compared to the pre-Covid-19 period.
In the first 9 months of 2022, the Group's cash flows from investing activities totalled EUR -4.76 million (9 months 2021: EUR 4.98 million, incl. the sale of a discontinued operation in the amount of EUR 6.33 million), of which EUR -2.89 million was related to development and acquisition of property, plant and equipment and intangible assets, indicating higher investments in products and technologies. In the first 9 months of the year, the Group invested EUR -1.56 million in new LED screens, to be funded with a finance lease in the last quarter of 2022.
In the first 9 months of 2022, the Group's cash flows from financing activities totalled EUR -4.01 million (9 months 2021: EUR -3.29 million), of which EUR -2.43 million was the dividend payment to the shareholders of AS Ekspress Grupp. Financing activities also include a net change in borrowings and principal lease payments, where the changes made to SEB loan contracts entered into in summer 2021 had a positive impact. In the first 9 months of 2021, treasury shares were purchased in the amount of EUR 0.45 million.
At the regular General Meeting of Shareholders of AS Ekspress Grupp held on 2 May 2022, it was decided to pay a dividend of 8 euro cents per share in the total amount of EUR 2.43 million. Dividends were paid to shareholders on 20 May 2022.
| Performance indicators (EUR thousand) |
Q3 2022 | Q3 2021 | Change % | 9 months 2022 |
9 months 2021 |
Change % | 12 months 2021 |
|---|---|---|---|---|---|---|---|
| Continuing operations | |||||||
| For the period | |||||||
| Sales revenue | 15 120 | 13 265 | 14% | 44 956 | 37 573 | 20% | 53 516 |
| EBITDA | 2 264 | 2 251 | 1% | 5 096 | 5 051 | 1% | 8 240 |
| EBITDA margin (%) | 15.0% | 17.0% | 11.3% | 13.4% | 15.4% | ||
| Operating profit /(loss) | 1 183 | 1 401 | -16% | 2 056 | 2 563 | -20% | 4 864 |
| Operating margin (%) | 7.8% | 10.6% | 4.6% | 6.8% | 9.1% | ||
| Interest expenses | (183) | (175) | -4% | (529) | (537) | 1% | (709) |
| Profit /(loss) of joint ventures under the equity method |
(107) | 42 | -354% | (327) | (128) | -156% | (281) |
| Net profit /(loss) from continuing operations |
859 | 1 145 | -25% | 1 618 | 1 823 | -11% | 4 133 |
| Net margin (%) - continuing operations |
5.7% | 8.6% | 3.6% | 4.9% | 7.7% | ||
| Return on assets (ROA) (%) | 4.3% | 1.7% | 4.3% | 1.7% | 2.4% | ||
| Return on equity (ROE) (%) | 7.4% | 2.9% | 7.4% | 2.9% | 4.1% | ||
| Earnings per share (euro) - continuing operations | |||||||
| Basic earnings per share | 0.0282 | 0.0377 | 0.0533 | 0.0602 | 0.1362 | ||
| Diluted earnings per share | 0.0273 | 0.0364 | 0.0515 | 0.0581 | 0.1316 |
| Balance sheet (EUR thousand) | 30.09.2022 | 31.12.2021 | Change % |
|---|---|---|---|
| As of the end of the period | |||
| Current assets | 17 136 | 20 553 | -17% |
| Non-current assets | 75 104 | 73 705 | 2% |
| Total assets | 92 240 | 94 258 | -2% |
| incl. cash and cash equivalents | 6 077 | 10 962 | -45% |
| incl. goodwill | 45 766 | 45 576 | 0% |
| Current liabilities | 18 631 | 20 947 | -11% |
| Non-current liabilities | 20 624 | 19 619 | 5% |
| Total liabilities | 39 255 | 40 566 | -3% |
| incl. borrowings | 21 888 | 22 219 | -1% |
| Equity | 52 984 | 53 692 | -1% |
| Net debt | 15 812 | 11 257 | 40% |
| Total capital | 68 796 | 64 950 | 6% |
| Financial ratios (%) | 30.09.2022 | 31.12.2021 | Change % |
|---|---|---|---|
| Equity ratio (%) | 57% | 57% | 0% |
| Debt to equity ratio (%) | 41% | 41% | 0% |
| Debt to capital ratio (%) | 23% | 17% | 33% |
| Total debt/EBITDA ratio | 2.64 | 2.70 | -2% |
| Liquidity ratio | 0.92 | 0.98 | -6% |
| Formulas used to calculate the financial ratios | |
|---|---|
| EBITDA | Earnings before interest, tax, depreciation and amortisation. EBITDA does not include any impairment losses recognised during the period or result from restructuring. |
| EBITDA margin (%) | EBITDA/sales x 100 |
| Operating margin (%) | Operating profit /sales x100 |
| Net margin (%) - continuing operations | Net profit from continuing operations in financial statements/sales x100 |
| Earnings per share | Net profit attributable to owners of the parent / weighted average number of ordinary shares outstanding during the period |
| Diluted earnings per share | Net profit attributable to owners of the parent / (weighted average number of ordinary shares outstanding during the period + number of all potentially issued shares) |
| Equity ratio (%) | Equity/ (liabilities + equity) x100 |
| Debt to equity ratio (%) | Interest bearing liabilities /equity x 100 |
| Debt to capital ratio (%) | Interest bearing liabilities – cash and cash equivalents (net debt) /(net debt +equity) x 100 |
| Total debt/EBITDA ratio | Interest bearing borrowings /trailing twelve months EBITDA |
| Liquidity ratio | Current assets / current liabilities |
| Return on assets ROA (%) | Trailing twelve months net profit /average assets x 100 |
| Return on equity ROE (%) | Trailing twelve months net profit /average equity x 100 |
Due to the disposal of the 100% holding in the subsidiary Printall AS in September 2021, the printing services segment is recognised as a discontinued operation in the consolidated financial statements. The revenue and expenses of the discontinued operation are shown in a separated line of the consolidated statement of comprehensive income "Gain/loss from discontinued operation".
Starting from September 2021, the Group is operating only in one continuing business area – the media segment.
| (EUR thousand) | Sales | ||||||
|---|---|---|---|---|---|---|---|
| Q3 2022 | Q3 2021 | Change % | 9 months 2022 |
9 months 2021 |
Change % | 12 months 2021 |
|
| Media segment | 14 743 | 12 925 | 14% | 43 887 | 36 485 | 20% | 52 093 |
| incl. revenue from all digital and online channels |
12 006 | 10 061 | 19% | 34 586 | 27 664 | 25% | 40 453 |
| % of revenue from all digital and online channels |
81% | 78% | 79% | 76% | 78% | ||
| Corporate functions | 1 161 | 999 | 16% | 3 343 | 3 106 | 8% | 4 118 |
| Inter-segment eliminations | (784) | (660) | (2 274) | (2 018) | (2 695) | ||
| TOTAL GROUP | 15 120 | 13 265 | 14% | 44 956 | 37 573 | 20% | 53 516 |
| % of revenue from all digital and online channels |
79% | 76% | 77% | 74% | 76% |
Consolidated Interim Report for the Third Quarter and Nine Months of 2022
| (EUR thousand) | EBITDA | ||||||
|---|---|---|---|---|---|---|---|
| Q3 2022 | Q3 2021 | Change % | 9 months 2022 |
9 months 2021 |
Change % | 12 months 2021 |
|
| Media segment | 2 614 | 2 401 | 9% | 6 007 | 5 478 | 10% | 8 927 |
| Corporate functions | (311) | (134) | -132% | (802) | (423) | -90% | (669) |
| Inter-segment eliminations |
(39) | (16) | (109) | (3) | (18) | ||
| TOTAL GROUP | 2 264 | 2 251 | 1% | 5 096 | 5 051 | 1% | 8 240 |
| EBITDA margin | Q3 2022 | Q3 2021 | 9 months 2022 | 9 months 2021 | 12 months 2021 | ||
| Media segment | 18% | 19% | 14% | 15% | 17% | ||
| TOTAL GROUP | 15% | 17% | 11% | 13% | 15% |
In the 3rd quarter of 2022, media segment revenue totalled EUR 14.7 million (Q3 2021: EUR 12.9 million). Revenue increased by 14% as compared to the 3rd quarter last year. In the first 9 months of 2022, media segment revenue totalled EUR 43.9 million (9 months 2021: EUR 36.5 million). In the first 9 months of 2022, revenue increased by 20% as compared to the same period last year. Revenue growth is primarily attributable to the growth in online advertising and digital subscriptions. The advertising market has not significantly increased in terms of its size as compared to the same period last year, but it is the online advertising market that has continued its upward trend as compared to traditional media channels and where group companies have additionally managed to increase their volumes as compared to other market participants. In the first 9 months, revenue growth was strong as compared to the previous year, but it has still been negatively impacted by the war in Ukraine due to which several planned campaigns were postponed by advertising customers in the 1st quarter. At the end of the 3rd quarter of 2022, the Group's digital revenue contributed 77% to total revenue.
The Latvian ticket sales business has been under various operational restrictions for almost two years. From 1 April 2022, all restrictions were lifted in Latvia. The sales activity of the Latvian ticket sales platform has recovered and is stronger due to higher average gross ticket prices as compared to the pre-Covid-19 period.
Starting from April 2021, the Group entered the Estonian market with the ticket sales platform Piletitasku in Estonia. With the expansion of the ticket sales business into Estonia, the Group will continue its current strategy, the purpose of which is to increase the share of digital revenue, and identify synergies between new business lines and existing media activities. We wish to provide the most convenient platform for both ticket buyers as well as event organisers. The platform was well received in 2021 and the Group will continue its strategy and increase its market share in 2022.
The Latvian outdoor media company SIA D Screens that won the public tender granting it the right to rent the real estate properties owned by the City of Riga continues to actively develop its outdoor screen network. The contract enables the company to expand its network to more than 100 screens and participate in the market with both large and small screen networks that cover the most important roads in Riga. New screens will be installed by end of 2022, leading to additional advertising sales capabilities for the Group. Until the setup of new screens, the cost base of the Latvian outdoor media company will be impacted by the rent payable to the City of Riga which in the first 9 months of 2022 totalled EUR 0.15 million.
In December 2021, the Group acquired a 100% ownership interest in the media company Geenius Meedia OÜ. The purpose of the acquisition was to grow the digital media business and expand into a niche which the Group's periodicals do not yet regularly cover. The revenue of Geenius Meedia in the first 9 months of 2022 totalled EUR 1.7 million.
The joint venture Õhtuleht Kirjastus AS, a key media company on the Estonian market, is recognised under the equity method and included as one line item within finance income in the Group's results. In the first 9 months of 2022, the revenue of Õhtuleht Kirjastus AS totalled EUR 10.4 million (9 months 2021: EUR 10.3 million).
| (number of subscriptions) | 30.09.2022 | 30.06.2022 | change | 31.12.2021 | change | 30.09.2021 | change |
|---|---|---|---|---|---|---|---|
| AS Delfi Meedia | 77 920 | 84 072 | -7% | 74 873 | 4% | 72 860 | 7% |
| AS Õhtuleht Kirjastus | 23 548 | 22 281 | 6% | 20 992 | 12% | 19 198 | 23% |
| Geenius Meedia OÜ | 5 162 | 4 523 | 14% | 4 100 | 26% | 3 411 | 51% |
| Estonia total | 106 630 | 110 876 | -4% | 99 965 | 7% | 95 469 | 12% |
| Delfi AS (Latvia) | 21 035 | 18 190 | 16% | 17 549 | 20% | 15 030 | 40% |
| Delfi UAB (Lithuania) | 23 765 | 22 256 | 7% | 17 433 | 36% | 14 786 | 61% |
| Ekspress Grupp total | 151 430 | 151 322 | 0% | 134 947 | 12% | 125 285 | 21% |
Digital subscriptions
The number of digital subscriptions of AS Ekspress Grupp increased by 21% in total in the Baltic States year-over-year and totalled 151 430 at the end of September.
In a year-over-year comparison, the number of digital subscriptions of Ekspress Grupp continued to demonstrate fast growth and reached 21 per cent in total. The number of digital subscriptions of Õhtuleht increased the most which shows that the customer groups who until now had preferred periodicals published on paper are also beginning to consume more and more digital media. In percentage terms, the number of digital subscriptions increased the most in Lithuania and Latvia where the transition to digital subscription models started later than in Estonia and where we also expect to see further growth potential in the near future.
The number of digital subscribers of our company with the largest number of readers Delfi Meedia increased by 7 per cent year-over-year in Estonia. However, it decreased by 7 per cent as compared to the previous quarter. The quarterly drop was related to the one-off decision to cancel intermediation of digital subscriptions to the customers of the telecommunications company Telia and focus directly of the sale of subscriptions to the end customer. We are witnessing a long-term positive effect of this decision on the revenue growth of Delfi Meedia. Without accounting for the termination of subscriptions of Telia, the number of digital subscriptions of Delfi Meedia increased by 3 per cent in Estonia in the last quarter and by 21 per cent yearover-year.
As of 30 September 2022, the company's share capital is EUR 18 478 105 (31.12.2021: EUR 18 478 105), which is divided into 30 796 841 (31.12.2021: 30 796 841) shares with the nominal value of 0.60 euros per share.
All shares are of one type and there are no ownership restrictions. The company does not have any shares granting specific controlling rights and the company lacks information about agreements dealing with the restrictions on voting rights of shareholders. The articles of association of the public limited company set no restrictions on the transfer of the shares of the public limited company. The agreements entered into between the public limited company and the shareholders set no restrictions on the transfer of shares. In the agreements concluded between the shareholders, they are only known to the company to the extent related to pledging of securities and that is public information.
| Name | Number of shares | % |
|---|---|---|
| Hans H. Luik and companies under his control | 22 552 672 | 73.23% |
| Hans H. Luik | 7 963 307 | 25.86% |
| OÜ HHL Rühm | 14 589 365 | 47.37% |
| LHV Bank and funds managed by LHV Varahaldus | 2 551 132 | 8.28% |
| Members of the Management Boards* | 172 954 | 0.56% |
| Other minority shareholders | 5 073 007 | 16.47% |
| Treasury shares | 447 076 | 1.45% |
| TOTAL | 30 796 841 | 100.0% |
* Members of the Management Board of AS Ekspress Grupp and its key subsidiaries
Mari-Liis Rüütsalu holds 36 924 shares.
Kaspar Hanni holds 18 462 shares.
Signe Kukin holds 38 140 shares.
Hans H. Luik holds 7 963 307 shares and OÜ HHL Rühm holds 14 589 365 shares, the ownership interest of Hans H. Luik as the ultimate beneficiary of AS Ekspress Grupp is 73.23% (22 552 672 shares).
The price of the share of Ekspress Grupp (EEG1T) in euros and the trading statistics on NASDAQ Tallinn Stock Exchange from 1 January 2018 until 30 September 2022.
The share price comparison (%) with Nasdaq Tallinn Stock Exchange index from 1 January 2018 until 30 September 2022.
In October 2021, the Supervisory Board of AS Ekspress Grupp approved the Group's dividends policy according to which Ekspress Grupp will pay at least 30% of its annual net profit as dividends starting from 2022. The capital structure of Ekspress Grupp needs to be strong and sustainable to maintain the targeted operating freedom and make use of the growth opportunities of various economic cycles. The Group's task is to maintain conservative capital allocation in order to provide the Company with flexibility to make new investments in accordance with the requirements set for raising debt.
To support growth, Ekspress Grupp has set a goal of maintaining an optimal level for CAPEX, loan repayments and profit allocation from the point of view of the Group and its investors.
The Group will pay at least 30% of its previous year's net profit as dividends under the condition that there will be enough cash to fund its key operations and make new strategic investments. In the years of economic deceleration or when the cash flows are lower for other reasons, the Group may decide to lower the dividend payout rate or not to pay dividends.
At the regular General Meeting of Shareholders of AS Ekspress Grupp held on 2 May 2022, it was decided to pay a dividend of 8 euro cents per share in the total amount of EUR 2.43 million. Dividends were paid to shareholders on 20 May 2022.
| Date of the General Meeting | 13.06.2017 | 06.06.2018 | 04.11.2021 | 02.05.2022 |
|---|---|---|---|---|
| Period for which dividends are paid | 2016 | 2017 | 2020 | 2021 |
| Dividend payment per share (EUR) | 6 cents | 7 cents | 10 cents | 8 cents |
| Total payment of dividends (EUR thousand) | 1 787 | 2 085 | 3 028 | 2 425 |
| Dividend pay-out ratio (%) - calculated on the net profit from continuing operations |
131% | 212% | 119% | 59% |
| Dividend pay-out ratio (%) | 41% | 66% | 121% | 108% |
| Date of fixing the list of dividend recipients | 29.06.2017 | 20.06.2018 | 19.11.2021 | 16.05.2022 |
| Date of dividend payment | 06.07.2017 | 03.07.2018 | 23.11.2021 | 20.05.2022 |
As of 30 September 2022, the Group consists of 21 companies (31.12.2021: 21). A detailed list of group companies is disclosed in Note 1 to the financial statements.
On 16 June 2022, AS Ekspress Grupp's 100% subsidiary Geenius Meedia OÜ and OÜ RMP Eesti signed an agreement to aquire the business activities of the RMP.ee portal in Estonia. The merger of RMP to Geenius products increases the amount of information offered to the business user and is an important addition to the content of Ärigeenius and DigiPRO. Organizing of trainings and conferences forms an important part of RMP's activities. Together with the RMP team, Geenius Meedia plans to expand the training activities to the other topics. The acquisition of operations of RMP.ee portal is an organic step in our strategy.
OÜ Ekspress Finants signed a demerger contract on 28 July 2022, according to which OÜ Ekspress Finants will be divided by way of separation. During the demerger, a new company Vaheekspress OÜ will be set up, which will become a wholly-owned subsidiary of AS Ekspress Grupp with the share capital of EUR 2500. The demerger was finalised and Vaheekspress OÜ was registered as of 14 October 2022.
On 28 July 2022, the sole shareholder of OÜ Babahh Media, AS Ekspress Grupp, adopted a decision to terminate the operations of OÜ Babahh Media and launch liquidation proceedings.
In May 2022, UAB Delfi, 100% subsidiary of AS Ekspress Grupp, entered into the contract for the acquisition of the business activities of the news agency ELTA in Lithuania. The acquisition of operations of news agency ELTA is an organic step in our strategy. The main goal of this deal is to strengthen and modernize a news agency with a hundred-year experience so that it becomes a modern, competitive, and objective source of journalism for the Lithuanian media and foreign channels.
In September 2021, a merger agreement was concluded to merge the wholly-owned subsidiary of A/S Delfi (the wholly-owned subsidiary of AS Ekspress Grupp), i.e. SIA Delfi Tickets Service with the wholly-owned subsidiary of A/S Delfi, i.e. SIA Biļešu Paradīze, agreeing that SIA Biļešu Paradīze as the acquiring company will acquire all assets and liabilities of SIA Delfi Tickets Service. The merger agreement was concluded for the purpose of simplifying the Group's management and legal structure. The merger was registered on 19 April 2022.
On 2 March 2022, AS Ekspress Grupp, AS Postimees Grupp and AS Eesti Post entered into a share purchase and sale agreement, whereby AS Eesti Post would have acquired a 100% ownership interest in AS Express Post. The transaction was subject to an approval of the Competition Authority. The latter issued a negative resolution on 5 October 2022, due to which the share purchase and sale transaction will not take effect and the structure of shareholders of AS Express Post will not change. The company employs almost 490 people of whom 450 are newspaper carriers. The ownership interest of Ekspress Grupp in Express Post is 50%.
For the purpose of rearrangement of the Group's structure and arising from the terms and conditions of the loan agreement with AS SEB Pank, Vaheekspress OÜ and Geenius Meedia OÜ entered into a merger agreement on 27 October 2022.
On 24 May 2022, the Supervisory Board of OÜ Hea Lugu decided to recall Tiina Kaalepi from the Management Board as of 1 June 2022. Vallo Kalvik was elected as a member of the Management Board from the same date.
On 6 October 2022, the Supervisory Board of A/S Delfi decided to elect Filips Lastovskis and Maira Meija as the new members of the Management Board from 20th October 2022. The mandates of Ingus Bērziņš and Anatolijs Golubovs were not extended. Starting from 20 October 2022, the Management Board of A/S Delfi will be as follows: Konstantins Kuzikovs (the Chairman of the Board), Filips Lastovskis and Maira Meija.
The general meeting is the highest governing body of AS Ekspress Grupp. Regular general meetings are held once a year not later than six months after the end of the financial year at the seat of the company. Extraordinary general meetings are allowed to be convened in cases prescribed by law.
In January 2022, The Management Board of AS Ekspress Grupp proposed to the shareholders to adopt resolutions without convening a general meeting in accordance to § 2991 of the Commercial Code. The notice of adoption of resolutions was published on 20 January 2022 in the stock exchange information system and on the company's homepage, as well as in the 21 January 2022 issue of newspaper Eesti Päevaleht.
On 11 February 2022, the shareholders of AS Ekspress Grupp adopted the following resolutions:
The approval of the Share Option Program of AS Ekspress Grupp up to 371,000 options with the exercise date May 2023. The program enables Ekspress Grupp to comply with the commitment arising from the purchase and sale agreement of the shares of Geenius Meedia OÜ entered into on 17 December 2021.
The regular General Meeting of Shareholders of AS Ekspress Grupp was held on 2 May 2022 in the seat of the public limited company. All members of the Management Board and the Chairman of Supervisory Board participated in the meeting. The general meeting:
In August 2022, The Management Board of AS Ekspress Grupp proposed to the shareholders to adopt resolutions without convening a general meeting in accordance to § 2991 of the Commercial Code. The notice of adoption of resolutions was published on 9 August 2022 in the stock exchange information system and on the company's homepage, as well as in the 10 August 2022 issue of newspaper Eesti Päevaleht.
On 31 August 2022, the shareholders of AS Ekspress Grupp adopted the following resolutions:
The Supervisory Board of AS Ekspress Grupp consists of four members and includes:
On 2 May 2022 Triin Hertmann was elected as the Member of the Supervisory Board for the five years until 2 May 2027.
The member of the Supervisory Board of AS Ekspress Grupp Aleksandras Česnavičiuse who was member of the Supervisory Board of AS Ekspress Grupp since 26 October 2016, was recalled from the position of the member of the Supervisory Board of AS Ekspress Grupp on 2 May 2022.
On 31 August 2022 Sami Jussi Petteri Seppänen was elected as the Member of the Supervisory Board for the five years until 31 August 2027.
The member of the Supervisory Board of AS Ekspress Grupp Indrek Kasela who was member of the Supervisory Board of AS Ekspress Grupp since 20 June 2014, was recalled from the position of the member of the Supervisory Board of AS Ekspress Grupp on 31 August 2022.
More information about supervisory board on the website of AS Ekspress Grupp.
The Management Board of AS Ekspress Grupp operates with three members and includes:
More information about management board on the website of AS Ekspress Grupp.
The supervisory and management boards of AS Ekspress Grupp's key subsidiaries as of 30 September 2022 is shown below:
| COMPANY* | SUPERVISORY BOARD | MANAGEMENT BOARD |
|---|---|---|
| Delfi Meedia AS (15 213 086) |
Hans Luik (chairman), Mari-Liis Rüütsalu, Kaspar Hanni, Signe Kukin |
Argo Virkebau (chairman) Urmo Soonvald, Tarvo Ulejev, Erle Laak-Sepp, Piret Põldoja |
| Delfi UAB (4 023 354) |
Mari-Liis Rüütsalu (chairman), Kaspar Hanni, Signe Kukin |
Vytautas Benokraitis |
| SIA Biļešu Paradīze (3 305 283) |
- | Jānis Ķuzulis (chairman), Jānis Daube |
| Delfi A/S (Läti) (4 370 838) |
Mari-Liis Rüütsalu (chairman), Kaspar Hanni, Signe Kukin |
Konstantins Kuzikovs (chairman), Ingus Bērziņš, Anatolijs Golubovs |
| Ekspress Finants OÜ (18 379 520) |
- | Mari-Liis Rüütsalu (chairman), Kaspar Hanni, Signe Kukin |
* The amount of equity of the key subsidiary that is held by the owners of the parent company as of 30 September 2022 is shown in parentheses.
| Consolidated balance sheet (unaudited)21 |
|---|
| Consolidated statement of comprehensive income (unaudited) 22 |
| Consolidated statement of changes in equity (unaudited) 23 |
| Consolidated cash flow statement (unaudited) 24 |
| SELECTED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 25 |
| Note 1. General information 25 |
| Note 2. Bases of preparation26 |
| Note 3. Financial risk management26 |
| Note 4. Business combinations26 |
| Note 5. Property, plant and equipment and intangible assets27 |
| Note 6. Bank loans and borrowings27 |
| Note 7. Segment reporting28 |
| Note 8. Discontinued operation29 |
| Note 9. Earnings per share 30 |
| Note 10. Share option plan 31 |
| Note 11. Equity and dividends 31 |
| Note 12. Related party transactions 32 |
| Note 13. Contingent assets and liabilities32 |
| (EUR thousand) | 30.09.2022 | 31.12.2021 |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 6 077 | 10 962 |
| Trade and other receivables | 10 496 | 9 323 |
| Corporate income tax prepayment | 246 | 2 |
| Inventories | 317 | 266 |
| Total current assets | 17 136 | 20 553 |
| Non-current assets | ||
| Other receivables and investments | 1 586 | 1 671 |
| Deferred tax asset | 42 | 42 |
| Investments in joint ventures | 895 | 1 011 |
| Investments in associates | 2 255 | 2 210 |
| Property, plant and equipment (Note 5) | 8 829 | 7 964 |
| Intangible assets (Note 5) | 61 497 | 60 807 |
| Total non-current assets | 75 104 | 73 705 |
| TOTAL ASSETS | 92 240 | 94 258 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings (Note 6) | 1 865 | 3 201 |
| Trade and other payables | 16 630 | 17 664 |
| Corporate income tax payable | 136 | 82 |
| Total current liabilities | 18 631 | 20 947 |
| Non-current liabilities | ||
| Long-term borrowings (Note 6) | 20 023 | 19 018 |
| Other long-term liabilities | 601 | 601 |
| Total non-current liabilities | 20 624 | 19 619 |
| TOTAL LIABILITIES | 39 255 | 40 566 |
| EQUITY | ||
| Minority interest | 141 | 140 |
| Capital and reserves attributable to equity holders of parent company: | ||
| Share capital (Note 11) | 18 478 | 18 478 |
| Share premium | 14 277 | 14 277 |
| Treasury shares (Note 11) | (334) | (384) |
| Reserves (Note 11) | 2 057 | 1 920 |
| Retained earnings | 18 365 | 19 261 |
| Total capital and reserves attributable to equity holders of parent company | 52 843 | 53 552 |
| TOTAL EQUITY | 52 984 | 53 692 |
| TOTAL LIABILITIES AND EQUITY | 92 240 | 94 258 |
| (EUR thousand) | Q3 2022 | Q3 2021 | 9 months 2022 |
9 months 2021 |
12 months 2021 |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Sales | 15 120 | 13 265 | 44 956 | 37 573 | 53 516 |
| Cost of sales | (11 272) | (9 849) | (34 712) | (28 543) | (39 674) |
| Gross profit | 3 849 | 3 415 | 10 243 | 9 030 | 13 842 |
| Other income | 209 | 291 | 526 | 609 | 929 |
| Marketing expenses | (695) | (494) | (2 133) | (1 593) | (2 359) |
| Administrative expenses | (2 125) | (1 799) | (6 442) | (5 422) | (7 435) |
| Other expenses | (54) | (13) | (139) | (62) | (113) |
| Operating profit /(loss) | 1 183 | 1 401 | 2 056 | 2 563 | 4 864 |
| Interest income | 9 | 9 | 28 | 25 | 35 |
| Interest expenses | (183) | (175) | (529) | (537) | (709) |
| Other finance income/(costs) | (3) | (67) | 194 | (62) | 339 |
| Net finance cost | (177) | (233) | (308) | (574) | (335) |
| Profit/(loss) on shares of joint ventures | (107) | 42 | (327) | (128) | (281) |
| Profit/(loss) on shares of associates | 53 | 16 | 326 | 83 | 161 |
| Profit /(loss) before income tax | 953 | 1 226 | 1 747 | 1 944 | 4 409 |
| Income tax expense | (94) | (81) | (129) | (120) | (276) |
| Net profit /(loss) from continuing operations |
859 | 1 145 | 1 618 | 1 823 | 4 133 |
| Net profit /(loss) from discontinued operation | 0 | (2 180) | 0 | (1 876) | (1 876) |
| Net profit /(loss) for the reporting period | 859 | (1 035) | 1 618 | (53) | 2 257 |
| Net profit /(loss) for the reporting period attributable to | |||||
| Equity holders of the parent company | 857 | (1 037) | 1 617 | (57) | 2 243 |
| Minority interest | 2 | 2 | 1 | 4 | 14 |
| Total comprehensive income /(loss) | 859 | (1 035) | 1 618 | (53) | 2 257 |
| Comprehensive income /(loss) for the reporting period attributable to | |||||
| Equity holders of the parent company | 857 | (1 037) | 1 617 | (57) | 2 243 |
| Minority interest | 2 | 2 | 1 | 4 | 14 |
| Earnings per share (euro) - continuing operations | |||||
| Basic earnings per share (Note 9) | 0.0282 | 0.0377 | 0.0533 | 0.0602 | 0.1362 |
| Diluted earnings per share (Note 9) | 0.0273 | 0.0364 | 0.0515 | 0.0581 | 0.1316 |
| Earnings per share (euro) | |||||
| Basic earnings per share (Note 9) | 0.0282 | (0.0343) | 0.0533 | (0.0019) | 0.0742 |
| Diluted earnings per share (Note 9) | 0.0273 | (0.0331) | 0.0515 | (0.0018) | 0.0716 |
| Attributable to equity holders of parent company | ||||||||
|---|---|---|---|---|---|---|---|---|
| (EUR thousand) | Share capital | Share premium | Treasury shares | Reserves | Retained earnings |
Total | Minority interest | Total equity |
| Balance on 31.12.2020 | 18 478 | 14 277 | (209) | 1 758 | 20 189 | 54 493 | 126 | 54 619 |
| Increase of statutory reserve capital | 0 | 0 | 0 | 126 | (126) | 0 | 0 | 0 |
| Purchase of treasury shares | 0 | 0 | (446) | 0 | 0 | (446) | 0 | (446) |
| Share options | 0 | 0 | 271 | 27 | (17) | 281 | 0 | 281 |
| Total transactions with owners | 0 | 0 | (175) | 153 | (143) | (165) | 0 | (165) |
| Net profit /(loss) for the reporting period | 0 | 0 | 0 | 0 | (57) | (57) | 4 | (53) |
| Total comprehensive income /(loss) for the reporting period |
0 | 0 | 0 | 0 | (57) | (57) | 4 | (53) |
| Balance on 30.09.2021 | 18 478 | 14 277 | (384) | 1 911 | 19 989 | 54 271 | 130 | 54 401 |
| Balance on 31.12.2021 | 18 478 | 14 277 | (384) | 1 920 | 19 261 | 53 552 | 140 | 53 692 |
| Increase of statutory reserve capital | 0 | 0 | 0 | 110 | (110) | 0 | 0 | 0 |
| Share options | 0 | 0 | 50 | 27 | 22 | 99 | 0 | 99 |
| Dividends paid | 0 | 0 | 0 | 0 | (2 425) | (2 425) | 0 | (2 425) |
| Total transactions with owners | 0 | 0 | 50 | 137 | (2 513) | (2 326) | 0 | (2 326) |
| Net profit /(loss) for the reporting period | 0 | 0 | 0 | 0 | 1 617 | 1 617 | 1 | 1 618 |
| Total comprehensive income /(loss) for the reporting period |
0 | 0 | 0 | 0 | 1 617 | 1 617 | 1 | 1 618 |
| Balance on 30.09.2022 | 18 478 | 14 277 | (334) | 2 057 | 18 365 | 52 843 | 141 | 52 984 |
| (EUR thousand) | 9 months 2022 |
9 months 2021* |
12 months 2021* |
|---|---|---|---|
| Cash flows from operating activities | |||
| Operating profit /(loss) for the reporting year | 2 056 | 709 | 3 060 |
| Adjustments for (non-cash): | |||
| Depreciation and amortisation (Note 5) | 3 039 | 3 349 | 4 162 |
| (Gain)/loss on sale, write-down and impairment of property, plant and equipment | 30 | 35 | (10) |
| Change in value of share option | 27 | 27 | 36 |
| Loss on sale of discontinued operation | 0 | 2 077 | 2 077 |
| Cash flows from operating activities: | |||
| Trade and other receivables | (1 168) | (1 370) | (1 599) |
| Inventories | (51) | (79) | (33) |
| Trade and other payables | 607 | 337 | 1 464 |
| Income tax paid | (319) | (272) | (281) |
| Interest paid | (327) | (405) | (803) |
| Net cash generated from operating activities | 3 892 | 4 409 | 8 073 |
| Cash flows from investing activities | |||
| Acquisition of subsidiaries/ associates (less cash acquired) and other investments / cash paid-in equity-accounted investees |
(2 600) | (201) | (3 325) |
| Disposal of discontinued operation, net of cash disposed of | 0 | 6 326 | 6 326 |
| Receipts of other investments | 10 | 51 | 51 |
| Interest received | 1 | 3 | 3 |
| Purchase of property, plant and equipment and intangible assets (Note 5) | (2 891) | (1 901) | (2 786) |
| Proceeds from sale of property, plant and equipment and intangible assets | 60 | 3 | 3 |
| Loans granted | (30) | (130) | (212) |
| Loan repayments received | 86 | 0 | 156 |
| Dividends received | 601 | 828 | 828 |
| Net cash used in investing activities | (4 763) | 4 978 | 1 044 |
| Cash flows from financing activities | |||
| Dividends paid | (2 425) | 0 | (3 028) |
| Payment of lease liabilities | (1 305) | (1 389) | (1 814) |
| Loans received / Repayments of bank loans (Note 6) | (284) | (1 455) | 864 |
| Purchases of treasury shares | 0 | (446) | (446) |
| Net cash used in financing activities | (4 014) | (3 290) | (4 424) |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (4 885) | 6 096 | 4 693 |
| Cash and cash equivalents at the beginning of the period | 10 962 | 6 269 | 6 269 |
| Cash and cash equivalents at the end of the period | 6 077 | 12 364 | 10 962 |
*No adjustments have been made to the consolidated cash flows for 2021 in accordance with the requirements of IFRS. Cash flows related to the printing services segment are still consolidated line-by-line.
The main fields of activity of AS Ekspress Grupp and its subsidiaries include online media, publishing of newspapers, magazines and books. AS Ekspress Grupp (registration number 10004677, address: Narva mnt 13, 10151 Tallinn) is a holding company registered and operating in the Republic of Estonia. The Group consists of the subsidiaries, joint ventures and associates listed below.
The Management Board approved and signed these financial statements on 28 October 2022. The interim consolidated financial statements of AS Ekspress Grupp (hereinafter the Group) reflect the results of operations of the following group companies.
| Company name | Status | Ownership interest 30.09.2022 |
Ownership interest 31.12.2021 |
Main field of activity | Domicile |
|---|---|---|---|---|---|
| Operating segment: corporate functions | |||||
| Ekspress Grupp AS | Parent company | Holding company and support services | Estonia | ||
| Ekspress Finants OÜ | Subsidiary | 100% | 100% | Financing and book-keeping services | Estonia |
| Operating segment: media (online and print media) | |||||
| Delfi Meedia AS | Subsidiary | 100% | 100% | Online media, publishing of daily and weekly newspapers (formerly named as Ekspress Meedia AS) |
Estonia |
| Delfi A/S | Subsidiary | 100% | 100% | Online media | Latvia |
| D Screens SIA | Subsidiary | 100% | 100% | Sale of outdoor advertising | Latvia |
| Delfi Ticket Service SIA | Subsidiary | - | 100% | Holding company (merged with Biļešu Paradīze SIA from April 2022) |
Latvia |
| Biļešu Paradīze SIA | Subsidiary | 100% | 100% | Operation of the electronic ticket platform and box offices | Latvia |
| Altero SIA | Associate | 25.48% | 25.48% | Financial comparison and brokerage platform | Latvia |
| Delfi UAB | Subsidiary | 100% | 100% | Online media | Lithuania |
| Naujienų agentūra Elta UAB | Subsidiary | 100% | - | News agency | Lithuania |
| Sport Media UAB | Subsidiary | 51% | 51% | Currently dormant | Lithuania |
| Hea Lugu OÜ | Subsidiary | 83% | 83% | Book publishing | Estonia |
| Eesti Audioraamatute Keskus OÜ |
Associate | 33.33% | 33.33% | Production and sale of audio books | Estonia |
| Digital Matter UAB | Subsidiary | 100% | 100% | Online advertising solutions and network | Lithuania |
| Digital Matter SIA | Subsidiary | 100% | 100% | Online advertising solutions and network | Latvia |
| Videotinklas UAB | Subsidiary | 100% | 100% | Production studio for content creation | Lithuania |
| Geenius Meedia OÜ | Subsidiary | 100% | 100% | Online media and publishing magazines | Estonia |
| Linna Ekraanid OÜ | Subsidiary | 100% | 100% | Sale of digital outdoor advertising | Estonia |
| Babahh Media OÜ | Subsidiary | 100% | 100% | Sale of video production, media and infrastructure solutions (in liquidation) |
Estonia |
| Õhtuleht Kirjastus AS | Joint venture | 50% | 50% | Newspaper and magazine publishing | Estonia |
| Express Post AS | Joint venture | 50% | 50% | Home delivery of periodicals | Estonia |
| Kinnisvarakeskkond OÜ | Associate | 49% | 49% | Development of a real estate portal | Estonia |
The consolidated interim financial statements of AS Ekspress Grupp for the 3rd quarter and 9 months ended on 30 September 2022 have been prepared in accordance with IAS 34 "Interim Financial Reporting". The condensed interim consolidated financial statements should be read together to the annual report for the financial year ended on 31 December 2021.
The Management Board estimates that the interim consolidated financial statements for the 3rd quarter and 9 months 2022 present a true and fair view of the Group's operating results, and all group companies are going concerns. These interim financial statements have neither been audited nor reviewed in any other way by auditors. These consolidated interim financial statements are presented in thousands of euros, unless otherwise indicated.
The accounting policies used for preparation of theses financial statements are the same as those used for preparation of the Group's consolidated annual report for the year ended 31 December 2021.
The management of financial risks is an essential and integral part in managing the business processes of the Group. The ability of the management to identify, measure and verify different risks has a substantial impact on the profitability of the Group. The risk is defined by the management of the Group as a possible negative deviation from the expected financial performance.
Several financial risks are related to the activities of the Group, of which the more substantial ones include credit risk, liquidity risk, market risk (including foreign exchange risk, interest rate risk and price risk), operational risk and capital risk.
The risk management of the Group is based on the requirements established by the Tallinn Stock Exchange, Financial Supervision Authority and other regulatory bodies, compliance with the generally accepted accounting standards and good practice, internal regulations and policies of the Group and its subsidiaries. The management of risks at the Group level includes the definition, measurement and control of risks. The Group's risk management programme focuses on unpredictability of financial markets and finding of possibilities to minimise the potential negative impacts arising from this on the Group's financial activities.
The main role upon the management of risks is vested in the management boards of the Parent and its subsidiaries. The Group assesses and limits risks through systematic risk management. For managing financial risks, the management of the Group has engaged the financial unit of the Group that deals with the financing of the Parent Company and its subsidiaries and hence also managing of liquidity risk and interest rate risk. The risk management at the joint ventures is performed in cooperation with the other shareholder of joint ventures.
More information about risk management on the website of AS Ekspress Grupp.
In May 2022, UAB Delfi, 100% subsidiary of AS Ekspress Grupp, entered into the contract for the acquisition of the business activities of the news agency ELTA in Lithuania. The acquisition of operations of news agency ELTA is an organic step in our strategy. The main goal of this deal is to strengthen and modernize a news agency with a hundred-year experience so that it becomes a modern, competitive, and objective source of journalism for the Lithuanian media and foreign channels.
On 16 June 2022, AS Ekspress Grupp's 100% subsidiary Geenius Meedia OÜ and OÜ RMP Eesti signed an agreement to aquire the business activities of the RMP.ee portal in Estonia. The merger of RMP to Geenius products increases the amount of information offered to the business user and is an important addition to the content of Ärigeenius and DigiPRO. Organizing of trainings and conferences forms an important part of RMP's activities. Together with the RMP team, Geenius Meedia plans to expand the training activities to the other topics. The acquisition of operations of RMP.ee portal is an organic step in our strategy.
| Property, plant and equipment | Intangible assets | |||||
|---|---|---|---|---|---|---|
| (EUR thousand) | 9 months 2022 | 9 months 2021 | 9 months 2022 | 9 months 2021 | ||
| Balance at beginning of the period | ||||||
| Cost | 14 493 | 42 714 | 82 081 | 77 076 | ||
| Accumulated depreciation and amortisation | (6 529) | (28 580) | (21 274) | (20 441) | ||
| Carrying amount | 7 964 | 14 134 | 60 807 | 56 635 | ||
| Acquisitions and improvements | 3 058 | 2 907 | 1 352 | 1 347 | ||
| Disposals (at carrying amount) | (22) | (2) | 0 | 0 | ||
| Write-down, write-off and impairment of non current assets |
(313) | (61) | (132) | (51) | ||
| Reclassification | (13) | 39 | 0 | (40) | ||
| Acquired through business combinations | 3 | 41 | 662 | 282 | ||
| Disposed through business combinations | 0 | (8 608) | 0 | (382) | ||
| Depreciation and amortisation | (1 846) | (2 260) | (1 192) | (1 089) | ||
| Balance at end of the period | ||||||
| Cost | 16 891 | 12 610 | 84 026 | 77 657 | ||
| Accumulated depreciation and amortisation | (8 062) | (6 419) | (22 529) | (20 955) | ||
| Carrying amount | 8 829 | 6 191 | 61 497 | 56 702 |
| Repayment term | ||||
|---|---|---|---|---|
| (EUR thousand) | Total amount | Up to 1 year | Between 1-5 years |
More than 5 years |
| Balance as of 30.09.2022 | ||||
| Long-term bank loans | 11 066 | 1 410 | 9 656 | 0 |
| Notes | 5 000 | 0 | 0 | 5 000 |
| Lease liability | 5 822 | 455 | 5 367 | 0 |
| Total | 21 888 | 1 865 | 15 023 | 5 000 |
| Balance as of 31.12.2021 | ||||
| Long-term bank loans | 11 350 | 1 680 | 9 670 | 0 |
| Notes | 5 000 | 0 | 0 | 5 000 |
| Lease liability | 5 869 | 1 521 | 4 348 | 0 |
| Total | 22 219 | 3 201 | 14 018 | 5 000 |
Operating segments have been specified by the management on the basis of the reports monitored by the Management Board of the Parent Company AS Ekspress Grupp. The Management Board considers the business from the company perspective.
Starting from September 2021, the Group has only one continued operating segment, i.e. the media segment.
Media segment: management of online news portals and classified portals, advertising sales in own portals in the Baltics and publishing of newspapers, magazines, customer and advertising fliers, publishing and publication of books as well as sale of digital outdoor advertising in Estonia and Latvia. The media segment also includes organisation of the technology and innovation conference Login in Lithuania and operation of the electronic ticket sales platform and box offices in Latvia, and production studio for content creation in Lithuania.
This segment includes subsidiaries Delfi Meedia AS (Estonia), AS Delfi (Latvia), UAB Delfi (Lithuania), OÜ Hea Lugu (Estonia), D Screens SIA (Latvia), Digital Matter (Lithuania, Estonia, Latvia), Linna Ekraanid OÜ (Estonia), Babahh Media OÜ (Estonia) – in liquidation, SIA Biļešu Paradīze (Latvia), Videotinklas UAB (Lithuania), News agency ELTA UAB (Lithuania) and Geenius Meedia OÜ (Estonia).
The revenue of the media segment is derived from sale of advertising banners and other advertising space and products and digital subscriptions in its own portals in Estonia, Latvia and Lithuania. Sale of advertising space in newspapers and magazines, revenue from subscriptions and single copy sales of newspapers and magazines. Sale of books and miscellaneous book series, services fees for preparation of customer fliers and other projects. In addition sale of digital outdoor advertising and electronic ticket sales platforms in Estonia and Latvia.
The Group's corporate functions are shown separately and they do not form a separate business segment. It includes the Parent Company AS Ekspress Grupp, which provides legal advisory and IT services to its group companies and Ekspress Finants OÜ, which provides accounting services to group companies.
The Management Board assesses the performance of the operating segments based on revenue, EBITDA and the EBITDA margin. Internal management fees and goodwill impairment are not included in segment results.
According to the estimate of the Parent Company's management, the inter-segment transactions have been carried out on an arm's length basis and they do not differ significantly from the conditions of the transactions concluded with third parties.
| Q3 2022 (EUR thousand) |
Media | Corporate functions |
Eliminations | Total Group |
|---|---|---|---|---|
| Sales to external customers | 14 725 | 396 | 0 | 15 120 |
| Inter-segment sales | 18 | 766 | (784) | 0 |
| Total segment sales | 14 743 | 1 161 | (784) | 15 120 |
| EBITDA | 2 614 | (311) | (39) | 2 264 |
| EBITDA margin | 18% | 15% | ||
| Depreciation | 1 080 | |||
| Operating profit /(loss) | 1 183 | |||
| Investments | 971 |
| Q3 2021 (EUR thousand) |
Media | Corporate functions |
Eliminations | Total Group |
|---|---|---|---|---|
| Sales to external customers | 12 910 | 355 | 0 | 13 265 |
| Inter-segment sales | 15 | 645 | (660) | 0 |
| Total segment sales | 12 925 | 999 | (660) | 13 265 |
| EBITDA | 2 401 | (134) | (16) | 2 251 |
| EBITDA margin | 19% | 17% | ||
| Depreciation | 851 | |||
| Operating profit /(loss) | 1 401 | |||
| Investments | 749 | |||
28
| 9 months 2022 (EUR thousand) |
Media | Corporate functions |
Eliminations | Total Group |
|---|---|---|---|---|
| Sales to external customers | 43 817 | 1 139 | 0 | 44 956 |
| Inter-segment sales | 70 | 2 204 | (2 274) | 0 |
| Total segment sales | 43 887 | 3 343 | (2 274) | 44 956 |
| EBITDA | 6 007 | (802) | (109) | 5 096 |
| EBITDA margin | 14% | 11% | ||
| Depreciation | 3 039 | |||
| Operating profit /(loss) | 2 056 | |||
| Investments | 4 410 |
| 9 months 2021 (EUR thousand) |
Media | Corporate functions |
Eliminations | Total Group |
|---|---|---|---|---|
| Sales to external customers | 36 441 | 1 132 | 0 | 37 573 |
| Inter-segment sales | 44 | 1 973 | (2 018) | 0 |
| Total segment sales | 36 485 | 3 106 | (2 018) | 37 573 |
| EBITDA | 5 478 | (423) | (3) | 5 051 |
| EBITDA margin | 15% | 13% | ||
| Depreciation | 2 494 | |||
| Operating profit /(loss) | 2 563 | |||
| Investments | 3 858 |
In September 2021, AS Ekspress Grupp sold its 100% ownership interest in its subsidiary Printall AS. The management decided to sell Printall AS in order to exit from a business sector that doesn't match with Group's strategy and sector with a significant CAPEX requirements. As a result of the transaction, the capital is released for financing Group's continued growth in digital media.
In accordance with the decision of the extraordinary general meeting of shareholders of AS Ekspress Grupp from 13 July 2021, AS Ekspress Grupp and OÜ Trükitung concluded a sales agreement on 3 September 2021, according to which Ekspress Grupp sold its 100% ownership interest in its subsidiary Printall AS. The transaction was completed as of 6 September 2021, from which the business of Printall AS is reported in the consolidated financial statements as a discontinued operation and comparable data are presented for continuing operations, where the revenues and expenses of discontinued operations are shown in a separate line in the comprehensive income statement "Gain/-loss from discontinued operations".
The effect of the sales transaction on the Group's financial statements is disclosed in more detail in the consolidated financial statements of the Group for the year ended 31 December 2021.
Basic earnings per share have been calculated by dividing the profit attributable to equity holders of the Parent Company by the weighted average number of shares outstanding during the period. Treasury shares owned by the Parent Company are not taken into account as shares outstanding.
Diluted earnings per share have been calculated by dividing the profit attributable to equity holders of the Parent Company by the weighted average number of shares outstanding during the period, taking into account the number of shares potentially issued. Treasury shares owned by the Parent Company are not taken into account as shares outstanding.
| Q3 2022 | Q3 2021 | |||||
|---|---|---|---|---|---|---|
| EUR | Continuing operations |
Discontinued operation |
Total | Continuing operations |
Discontinued operation |
Total |
| Profit / (loss) attributable to equity holders |
856 608 | 0 | 856 608 | 1 142 257 | (2 179 612) | (1 037 355) |
| Average number of ordinary shares at the end of the period |
30 338 572 | 30 338 572 | 30 338 572 | 30 282 869 | 30 282 869 | 30 282 869 |
| Number of ordinary shares potentially issued as the part of option program at the end of the period |
1 064 071 | 1 064 071 | 1 064 071 | 1 064 071 | 1 064 071 | 1 064 071 |
| Basic earnings per share | 0.0282 | 0.0000 | 0.0282 | 0.0377 | (0.0720) | (0.0343) |
| Diluted earnings per share | 0.0273 | 0.0000 | 0.0273 | 0.0364 | (0.0695) | (0.0331) |
| 9 months 2022 | 9 months 2021 | |||||
|---|---|---|---|---|---|---|
| EUR | Continuing operations |
Discontinued operation |
Total | Continuing operations |
Discontinued operation |
Total |
| Profit / (loss) attributable to equity holders |
1 616 958 | 0 | 1 616 958 | 1 818 961 | (1 875 904) | (56 943) |
| Average number of ordinary shares at the end of the period |
30 310 475 | 30 310 475 | 30 310 475 | 30 229 763 | 30 229 763 | 30 229 763 |
| Number of ordinary shares potentially issued as the part of option program at the end of the period |
1 064 071 | 1 064 071 | 1 064 071 | 1 064 071 | 1 064 071 | 1 064 071 |
| Basic earnings per share | 0.0533 | 0.0000 | 0.0533 | 0.0602 | (0.0621) | (0.0019) |
| Diluted earnings per share | 0.0515 | 0.0000 | 0.0515 | 0.0581 | (0.0599) | (0.0018) |
| 12 months 2021 | |||||
|---|---|---|---|---|---|
| EUR | Continuing operations |
Discontinued operation |
Total | ||
| Profit / (loss) attributable to equity holders | 4 119 007 | (1 875 904) | 2 243 103 | ||
| Average number of ordinary shares at the end of the period | 30 243 148 | 30 243 148 | 30 243 148 | ||
| Number of ordinary shares potentially issued as the part of option program at the end of the period |
1 064 071 | 1 064 071 | 1 064 071 | ||
| Basic earnings per share | 0.1362 | (0.0620) | 0.0742 | ||
| Diluted earnings per share | 0.1316 | (0.0599) | 0.0716 |
In June 2017, the General Meeting of Shareholders approved the share option plan for key employees, most of which were exercised at the end of 2020 and in the 1st quarter of 2021.
By 30 September 2022, all options under the share option plan approved in 2017 have been exercised. As of 31.12.2021 the balance of issued options of the above mentioned stock option plan was 69 thousand options and the liability amounted to EUR 72 thousand.
In September 2020, the General Meeting of Shareholders approved a new share option plan for the management of AS Ekspress Grupp and its group companies for the period 2021-2023. As of 30 September 2022 total amount of share options granted was 1 064 thousand (31.12.2021: 1 064 thousand), each giving a right to acquire one share at the nominal price (currently 60 euro cents) of the shares at the time of the issuing the options.
The options are vesting proportionally 1/3 per year over three-year period. The exercise of the options and issue of the shares shall be performed by means of an increase of the share capital of AS Ekspress Grupp and issue of new shares that shall take place in Q1 2024. As of 30 September 2022 the number of options issued is 621 thousand.
Upon approving the share option, the option was recognised at its fair value and recognised on the one hand in the profit or loss statement as labour cost and, on the other hand, as a share option reserve in equity. As of 30 September 2022 this reserve totalled EUR 63 thousand (31.12.2021 EUR 36 thousand).
In February 2022, the General Meeting of Shareholders approved a new share option plan that entitles the option holders to acquire the shares of AS Ekspress Grupp in exchange for the underlying asset of the options issued by Geenius Meedia OÜ in 2020. Share option plan was approved up to 371 thousand options, each of which grants the right to receive one share of the company free of charge, with the exercise date May 2023. The exercise of these options will be performed in exchange for the own shares of Ekspress Grupp. No new shares shall be issued under this program. The program enables AS Ekspress Grupp to comply with the commitment arising from the purchase and sale agreement of the shares of Geenius Meedia OÜ entered into on 17 December 2021. As of 30 September 2022, the liability of the mentioned share option amounted to EUR 378 thousand (31.12.2021: EUR 378 thousand).
As of 30 September 2022, the company's share capital is EUR 18 478 105 (31.12.2021: EUR 18 478 105), which is divided into 30 796 841 (31.12.2021: 30 796 841) shares with the nominal value of 0.60 euros per share.
The maximum amount of share capital as stipulated by the articles of association is EUR 25 564 656.
In 2021, within the framework of the share option plan the option owners were transferred 374 611 shares and bought back 547 162 shares. As a result, the balance of treasury shares increased by EUR 175 thousand.
In the first 9 months of 2022, within the framework of the share option plan the option owners were transferred 66 896. As a result, the balance of treasury shares decreased by EUR 50 thousand.
As of 30 September 2022, the Company had 447 076 treasury shares (31.12.2021: 513 972) in the total amount of EUR 334 thousand (31.12.2021: EUR 384 thousand). 440 thousand treasury shares to be used for the share option plans due to be exercised in 2022 and 2023.
At the regular general meeting of shareholders of AS Ekspress Grupp held on 2 May 2022, it was decided to pay a dividend of 8 euro cents per share in the total amount of EUR 2.43 million. Dividends were paid to shareholders on 20 May 2022.
In 2021, in conjunction with the sale of Printall AS, the Group paid an extraordinary dividend of 10 euro cents per share to its shareholders in the total amount of EUR 3.03 million. Shareholder resolutions were adopted without calling the extraordinary general meeting of shareholders on 4 November 2021.
As of 30 September 2022, it is possible to distribute dividends without income tax payment in the total amount of EUR 22.9 million.
Transactions with related parties are transactions with Key Management Personnel and companies controlled by the Key Management Personnel, associates and joint ventures. The Key Management Personnel are members of the Group's and Group companies' Supervisory Board and Management Board.
The ultimate controlling individual of AS Ekspress Grupp is Hans H. Luik.
The Group has purchased from (goods for resale, manufacturing materials, non-current assets) and sold its goods and services to (lease of non-current assets, management services, other services) to the following related parties.
| (EUR thousand) | 9 months 2022 | 30.09.2022 | 31.12.2021 | ||||
|---|---|---|---|---|---|---|---|
| Sales | Purchases | Receivables | Payables | Receivables | Payables | ||
| Companies controlled by the Key Management Personnel* |
95 | 2 181 | 711 | 317 | 717 | 252 | |
| Associates | 115 | 1 | 141 | 0 | 192 | 0 | |
| Joint ventures | 1 090 | 1 544 | 147 | 210 | 145 | 226 | |
| Total | 1 300 | 3 726 | 999 | 527 | 1 055 | 478 |
| (EUR thousand) | 9 months 2021 30.09.2021 |
31.12.2020 | ||||
|---|---|---|---|---|---|---|
| Sales | Purchases | Receivables | Payables | Receivables | Payables | |
| Companies controlled by the Key Management Personnel* |
29 | 486 | 711 | 282 | 1 | 9 |
| Associates | 122 | 21 | 196 | 0 | 186 | 0 |
| Joint ventures | 1 018 | 1 463 | 122 | 213 | 218 | 197 |
| Total | 1 169 | 1 970 | 1 029 | 495 | 405 | 206 |
* since September 2021, Printall AS is a company related to a member of the Supervisory Board, and transactions and balances related to Printall AS are reported in the line "Companies controlled by the Key Management Personnel". Previously, Printall AS was a Group company and transactions and balances related to it are not reflected in the note "Related party transactions".
On 28 April 2020, Harju County Court forwarded a statement of claim of MM Grupp OÜ to AS Delfi Meedia, in which MM Grupp OÜ demands EUR 2.0 million from AS Delfi Meedia for compensation of non-patrimonial or alternatively future patrimonial damages caused by the publication of allegedly false factual allegations. On 17 March 2021, Harju County Court made a decision in the action of MM Grupp OÜ against AS Delfi Meedia, in which the court dismissed the claim for the compensation of damage in the amount of EUR 2.0 million and satisfied the action in the claim to refute one factual allegation. The court ordered both parties to cover their own procedural expenses. MM Grupp OÜ appealed the judgement to Tallinn Circuit Court. On 2 February 2022, Tallinn Circuit Court ruled in favour of AS Delfi Meedia in an action brought by MM Grupp OÜ pertaining to rebuttal of false data and compensation for damages. The procedural costs at both instances shall be borne by the plaintiff. MM Grupp OÜ appealed in cessation to the Supreme Court. 13 June 2022, the Supreme Court dismissed the appeal in cassation of MM Grupp OÜ against AS Delfi Meedia pertaining to rebuttal of false data and compensation for damages and MM Grupp OÜ shall bear the costs of the proceedings in the cassation instance.
The Management Board confirms that the management report and interim consolidated financial statements of AS Ekspress Grupp disclosed on pages 3 to 35 present a true and fair view of the key events which have occurred during the reporting period and their effect on the Group's financial position, results and cash flows, and they include a description of major risks and related party transactions of great significance.
| Mari-Liis Rüütsalu | chairman of the Management Board | signed digitally | 28.10.2022 |
|---|---|---|---|
| Signe Kukin | member of the Management Board | signed digitally | 28.10.2022 |
| Kaspar Hanni | member of the Management Board | signed digitally | 28.10.2022 |
Ekspress Grupp with its more than 30-year history is the leading media group in the Baltic States that owns five media companies in Estonia, Latvia and Lithuania. In addition, the Group owns several portals and companies providing digital entertainment solutions. It organises cultural and sports as well as other events on socially important topics in all Baltic States. The key focus is to provide the best solutions to media consumers, advertising customers and cooperation partners using modern digital solutions and services.
In 2021, Ekspress Grupp reinforced its positions in all areas of operation. In the financial year, the ongoing spread of the coronavirus significantly impacted the work of group companies, primarily challenging the work procedures of media publications and turning other services digital.
The shares of AS Ekspress Grupp have been listed on NASDAQ Tallinn Stock Exchange since 5 April 2007. The key shareholder is Hans H. Luik, whose ownership interest as the final beneficiary through various entities is 73.23%.
* The number of digital subscriptions also includes the figures of joint ventures.
*Brands that AS Ekspress Grupp owns or has invested in *Detailed information about our brands and businesses on the website of AS Ekspress Grupp
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