Earnings Release • Mar 6, 2020
Earnings Release
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Regulated information EMBARGO – 6 March 2020 at 8:00 am Roularta Media Group
___________________________________________________________________________
The important strategic choices taken by Roularta Media Group in 2018 demonstrate their full effect in 2019.
Thanks to the synergies from acquisitions, the launch of new products, and improved customer offerings, P&L improved on every line, resulting in a strong cash flow position.
Roularta is focusing on its strengths, namely its longstanding subscription strategy combined with thoroughgoing recruitment through the digital channels. The acquisition of the Women's brands resulted in a significant increase in subscription income (+ € 10.6 million in 2019 vs.2018) and newsstand sales (+ € 8.5 million). These items would be 3.8% less without the Women's brands. The challenge remains the falling advertising income (- € 4.0 million incl. the acquired brands and - € 15.8 million excl. the Women's brands).
Roularta is debt-free and enjoyed a cash position of € 95.9 million at the end of 2019. The Board of Directors of Roularta Media Group gives its agreement to appeal to a number of specialized financial institutions to work on an efficient investment strategy for the Group's cash reserves. Special attention will be paid to a balanced structure, a careful approach and a preference for investments in sustainable companies. In this way, these resources remain available for investment in the long term.
Both the Printing Services segment and the Media Brands segment produced strong results. Within the Printing Services segment, we see stable gross margins and decreasing indirect costs, partly due to the disappearance of the Econocom leasing costs.
In the Media Brands segment, we see a rising gross margin both in euros and as a percentage of revenue.
The higher revenue and the improved gross margin percentage (79.6 % in 2019 vs.78.2 % in 2018) of the Group compensated for the higher costs for services and other goods ( - € 6.7 million) & personnel ( - € 0.7 million).
A significant impairment of € 69.2 million was booked last year on all brands with an indefinite lifetime. From 2019, all brands have a limited lifetime, as a result of which € 5.0 million of depreciation was included in the result; this is € 3.6 million with an impact below EBITDA and € 1.4 million on joint ventures with an impact within EBITDA.
EBITDA amounts to € 23.0 million, of which € 20.5 million for fully consolidated activities and € 2.5 million for joint ventures (their net result via equity change).
Mediafin's contribution is substantial but is not fully reflected under the consolidated IFRS figures. Standalone EBITDA and the net result of 100% Mediafin amount to € 11.1 million and € 5.6 million respectively. After depreciation for the De Tijd, L'Echo, Comfi, BeReal & BePublic brands, the 50% net result amounts to € 1.8 million. This amount is included in the Roularta Media Group 2019 EBITDA. In addition, Roularta received a dividend of € 3.5 million visible in the Group's cash flow statement.
The Board of Directors will propose to the General Meeting the distribution of a gross dividend of € 0.50 per share for the full year 2019.
1.1 Consolidated key fgures
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 295,798 | 277,008 | 18,790 | 6.8% |
| EBITDA (2) | 22,989 | 6,336 | 16,653 | 262.8% |
| EBITDA - margin | 7.8% | 2.3% | ||
| EBIT (3) | 9,978 | -65,547 | 75,525 | -115.2% |
| EBIT - margin | 3.4% | -23.7% | ||
| Net finance costs | -75 | -5,075 | 5,000 | -98.5% |
| Income taxes | 429 | -1,539 | 1,968 | -127.9% |
| Net result from continuing operations | 10,332 | -72,161 | 82,493 | -114.3% |
| Net result from discontinued operations | 0 | 151,093 | -151,093 | -100.0% |
| Net result | 10,332 | 78,932 | -68,600 | -86.9% |
| Attributable to minority interests | -521 | -1,010 | 489 | -48.4% |
| Attributable to holders of RMG | 10,854 | 79,942 | -69,088 | -86.4% |
| Net result attributable to equity holders of RMG - margin | 3.7% | 28.9% | ||
| Number of full time equivalent employees at closing date (4) | 1,217 | 1,287 | -70 | -5.4% |
(2) EBITDA = EBIT + depreciations, write-downs and provisions.
(3) EBIT = operating result, including the share in the result of associated companies and joint ventures.
(4) Joint ventures (Mediafin, Bayard etc.) not included
Consolidated revenue for 2019 enjoyed an increase of 6.8%, from € 277.0 to € 295.8 million. This is mainly due to the acquisition of the Women's brands in June 2018, which made a positive contribution of € 67.1 million to revenue. Part of this is advertising income that was partly able to compensate for a declining market in Local Media (-20.1%) and the payto-read newspapers (-13.7%).
On the one hand, driven by rising 'consumer' sales, adequate cost control and, on the other hand, due to the better net result of the joint ventures (which is included in EBITDA), EBITDA increased from € 6.3 million to € 23.0 million in 2019. EBITDA as a percentage of revenue increased from 2.3% to 7.8%.
The EBITDA of the fully consolidated entities amounts to € 20.5 million compared to € 8.2 million last year; the net result of joint ventures is € 2.5 million compared to - € 1.8 million in 2018. The normalization in 2019 comes after major impairments in 2018 in the German activities for the entities J.M. Sailer Verlag GmbH and Bayard Media GmbH & Co. KG, in which Roularta owns 50% of the shares.
As of January 2019 IFRS 16 Leases is applied, giving rise to a € 1.2 million positive impact on EBITDA in the 2019 figures.
EBIT contains no impairment losses this year, unlike in 2018 where an impairment of € 69.2 million was booked on brands with an indefinite lifetime. Due to this, EBIT evolved from - € 65.5 million in 2018 to € 10.0 million or 3.4% of revenue.
Thanks to full repayment of the bond loan in 2018 and the early repayment of other financial debts, almost no net financial expenses were incurred in 2019 (- € 0.1 million).
Taxes include, on the one hand, expected cash-out payments (- € 0.5 million) and, on the other hand, deferred tax income of € 0.9 million. The latter is due to the merger of Roularta Media Group with one of its 100% subsidiaries, Bright Communications BVBA, which had a net deferred tax liability of € 1.0 million. The deferred tax revenues that will result from this will ensure a higher recovery of tax losses brought forward. A deferred tax asset of € 1.0 million has been booked for this.
There will be no discontinued operations in 2019, where in 2018 the net result from discontinued operations was related to the sale of 50% of the shares in Medialaan (the TV channels VTM, Q2, Vitaya, CAZ, the radio channels Qmusic and Joe FM, Mobile Vikings, etc.) to DPG (De Persgroep).
Of the amount of - € 0.5 million minority interest in 2019, - € 0.6 million comes from the loss at Storesquare NV, where RMG owned 65% of the shares at the end of 2019. This loss-making activity will be stopped in the course of 2020.
The net result attributable to RMG shareholders thus amounts to € 10.9 million or € 0.87 per share.
| Consolidated key figures per share (in euros) | 31/12/2019 | 31/12/2018 | Trend | Trend (%) |
|---|---|---|---|---|
| EBITDA | 1.83 | 0.51 | 1.33 | 262.7% |
| EBIT | 0.80 | -5.23 | 6.02 | -115.2% |
| Net result attributable to equity holders of RMG | 0.87 | 6.37 | -5.51 | -86.4% |
| Net result attributable to equity holders of RMG after dilution | 0.86 | 6.35 | -5.48 | -86.4% |
| Weighted average number of shares | 12,545,621 | 12,541,645 | 3,976 | 0.0% |
| Weighted average number of shares after dilution | 12,560,022 | 12,597,381 | -37,359 | -0.3% |
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 258,520 | 241,570 | 16,950 | 7.0% |
| Gross margin | 198,547 | 179,269 | 19,278 | 10.8% |
| Gross margin on sales | 76.8% | 74.2% |
The Media Brands segment refers to all brands that are marketed by RMG and its participations.
Revenue from the Media Brands segment increased by 7.0% or € 17.0 million to € 258.5 million.
Advertising revenue from the complimentary magazines decreased by 20.1% compared to 2018; that of the pay-toread newspapers fell by 13.7%. These declines were slowed by the 5.2% increase in advertising in magazines thanks to the acquired Women's brands. Advertising income from the various internet sites fell slightly by 0.9%.
Revenue from the readership market (newsstand sales and subscriptions) increased by 22.8% compared to 2018. This is fully thanks to the Women's brands that are now included in revenue for a full year, while in 2018 this was only for half a year. Without these magazines, the readership market would have fallen by -3.8%, mainly due to a fall in newsstand sales. Subscriptions account for 70% of the total readership revenues and newsstand sales for 30%.
Gross margin increased from 74.2 % to 76.8 %, partly due to lower printing costs and partly due to higher selling prices within the Women's brands.
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 77,222 | 78,180 | -958 | -1.2% |
| Gross margin | 38,959 | 40,286 | -1,327 | -3.3% |
| Gross margin on sales | 50.5% | 51.5% |
The Printing Services segment represents the premedia and printing activities for in-house brands and external customers.
Revenue for the Printing Services segment was stable and amounted to € 77.2 million. The lower amounts (- € 2.4 million) invoiced to the Media Brands segment were largely offset by higher external sales (+ € 1.5 million).
Gross margin compared to revenue decreased slightly by 1% due to the lower charges passed on to the Brands segment. The margins on external sales remained stable or increased slightly.
| in thousands of euros | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Net Cash Flow relating to operating activities (A) | 29,630 | 7,051 |
| Net Cash Flow relating to investing activities (B) | -16,882 | 213,582 |
| Net Cash Flow relating to financing activities (C) | -7,266 | -167,661 |
| Total decrease / increase in cash and cash equivalents (A+B+C) | 5,482 | 52,972 |
| Cash and cash equivalents, beginning balance | 95,956 | 42,984 |
| Cash and cash equivalents, ending balance | 101,438 | 95,956 |
The cash flow statement shows positive cash generation of € 5.5 million in 2019 compared to a € 53.0 million cash generation in 2018.
Cash flow from operational activities increased by € 22.6 million to € 29.6 million in 2019, mainly driven by a € 12.3 million increase in EBITDA (excluding the joint ventures), lower interest costs paid (€ 6.3 million) and decreased working capital of € 3.0 million.
Cash flow from investing activities was - € 16.9 million in 2019. The largest cash outflows resulted from the last payment to Sanoma for the acquisition of the Women's brands (€ 7.9 million), investments in software for € 3.4 million, the advance paid on the new printing press (€ 2.6 million), and the earnout on the Sterck brand (€ 0.4 million). The large cash inflow in 2018 was mainly due to the sale of Medialaan (€ 279.6 million) less the purchase of Mediafin (€ 58.0 million) and the Women's brands (€ 15.9 million).
Cash flow from financing activities evolved from - € 167.7 million in 2018 to -€ 7.3 million in 2019. This includes the dividend paid of € 6.3 million and the repayment of the IFRS 16 leasing debts of € 1.4 million. In 2018, the repayment of the bond loan in the amount of € 100 million took place and there was an interim dividend payment of € 62.7 million.
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trend (%) |
|---|---|---|---|
| Balance sheet | |||
| Non-current assets | 182,720 | 184,107 | -0.8% |
| Current assets | 170,695 | 171,000 | -0.2% |
| Balance sheet total | 353,415 | 355,107 | -0.5% |
| Equity - Group's share | 227,846 | 222,561 | 2.4% |
| Equity - minority interests | 578 | 1,100 | -47.5% |
| Liabilities | 124,990 | 131,447 | -4.9% |
| Liquidity (1) | 1.6 | 1.5 | 8.1% |
| Solvency (2) | 64.6% | 63.0% | 2.6% |
| Net financial debt | -95,937 | -95,658 | 0.3% |
| Gearing (3) | -42.0% | -42.8% | -1.8% |
| (1) Liquidity = current assets / current liabilities. |
(2) Solvency = equity (Group's share + minority interests) / balance sheet total.
(3) Gearing = net financial debt / equity (Group's share + minority interests).
On 31 December 2019 equity - Group share € 227.8 million compared to € 222.6 million on 31 December 2018. The movement in equity mainly consists of the result over 2019 (+€ 10.9 million) less the dividend (- € 6.3 million).
As of 31 December 2019, the consolidated net financial cash position (= current cash less financial debts) was € 95.9 million vs. € 95.7 million the year before. The slight improvement is due to the cash generated of € 5.5 million, which is mainly offset by the financial debts that have been on the balance sheet since 2019 as a result of IFRS 16 Leasing with a value of € 5.0 million.
Total consolidated investments in 2019 amount to € 9.6 million compared to € 39.9 million in 2018. This amount was mainly invested in tangible fixed assets (€ 6.2 million, of which an advance on the new printing press of € 2.6 million) and software (€ 3.4 million). The high amount in 2018 was due to the acquisition of the Sanoma Women's brands (€ 32.9 million), € 2.8 million in investments in software and € 4.2 million in tangible fixed assets (mainly machines for the Printing Services segment).
The Board of Directors will propose to the General Meeting that a gross dividend of € 0.50 per share be paid for the full year 2019, which means a return of 3.6% on the closing price of 31/12/2019 of 14.05 euros per share.
The presentation of the 2019 annual results can be found on our website www.roularta.be/en under the section: Roularta on the stock market> Financial> Financial reporting> 31-12-2019> Presentation 2019 results. This presentation includes additional technical information on the annual results. The annual report will be available on our website from 17 April.
The outlook for subscription income in 2020 remains positive. Roularta has succeeded in going against the market trend and convincing more people of its quality media and innovative products. Declining newsstand sales follow the current market trend, caused by the closure of distribution points.
The Printing Services segment produces a large number of magazines each week for Belgium (mainly own brands, DPG Media & Mediahuis) and abroad (France, the Netherlands, and others) up to and including finishing and mailing. An additional Lithoman magazine press will become operational in November, which should ensure that the current cash flows continue with an estimated € 0.6 million annual depreciation.
Advertising revenue remains highly volatile for print activities, audiovisual media and internet activities. There are large fluctuations from month to month and late bookings, yielding insufficient visibility to make possible a forecast for 2020.
The statutory auditor has confirmed that his audit activities, which have been carried out thoroughly, have not revealed any significant adjustments that should be included in the accounting information published in the communiqué. Deloitte Bedrijfsrevisorenis represented by Charlotte Vanrobaeys.
| Contact persons | Chairman of the Board of Directors & IR) |
Xavier Bouckaert (CEO) |
Jeroen Mouton (CFO) |
|---|---|---|---|
| Tel.: | +32 51 26 63 23 | +32 51 26 63 23 | +32 51 26 68 92 |
| E-mail: | [email protected] | xavier.bouckaert@roul | jeroen.mouton@roularta. |
| arta.be | be | ||
| URL: | www.roularta.be |
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trend |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | 182,720 | 184,108 | -1,388 |
| Intangible assets | 54,734 | 57,796 | -3,062 |
| Property, plant and equipment | 59,894 | 54,078 | 5,816 |
| Investments accounted for using the equity method | 60,042 | 63,686 | -3,644 |
| Available-for-sale investments, loans, guarantees | 2,402 | 2,526 | -124 |
| Trade and other receivables | 100 | 219 | -119 |
| Deferred tax assets | 5,548 | 5,803 | -255 |
| Current assets | 170,695 | 171,000 | -305 |
| Inventories | 6,047 | 6,348 | -301 |
| Trade and other receivables | 60,061 | 65,756 | -5,695 |
| Cash and cash equivalents | 101,438 | 95,956 | 5,482 |
| Deferred charges and accrued income | 2,460 | 2,457 | 3 |
| Total assets | 353,414 | 355,108 | -1,694 |
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trends |
|---|---|---|---|
| LIABILITIES | |||
| Equity | 228,424 | 223,661 | 4,763 |
| Group's equity | 227,846 | 222,561 | 5,285 |
| Issued capital | 80,000 | 80,000 | - |
| Treasury shares | -23,643 | -23,705 | 62 |
| Retained earnings | 166,610 | 162,134 | 4,476 |
| Other reserves | 4,879 | 4,175 | 704 |
| Translation differences | - | -43 | 43 |
| Minority interests | 578 | 1,100 | -522 |
| Non-current liabilities | 17,626 | 15,211 | 2,415 |
| Provisions | 8,268 | 8,083 | 185 |
| Employee benefits | 5,180 | 5,778 | -598 |
| Deferred tax liabilities | 142 | 1,063 | -921 |
| Financial debts | 3,748 | - | 3,748 |
| Other payables | 287 | 287 | - |
| Current liabilities | 107,364 | 116,236 | -8,872 |
| Financial debts | 1,754 | 298 | 1,456 |
| Trade payables | 45,321 | 52,790 | -7,469 |
| Advances received | 25,794 | 25,175 | 619 |
| Employee benefits | 16,513 | 16,025 | 488 |
| Taxes | 338 | 259 | 79 |
| Other payables | 10,884 | 14,814 | -3,930 |
| Accrued charges and deferred income | 6,759 | 6,876 | -117 |
| Total liabilities | 353,414 | 355,108 | -1,694 |
| in thousands of euros | 31/12/2019 | 31/12/2018 | Trend |
|---|---|---|---|
| Sales | 295,798 | 277,008 | 18,790 |
| Own construction capitalised | 2,239 | 1,407 | 832 |
| Raw materials, consumables and goods for resale | -62,651 | -61,730 | -921 |
| Gross margin | 235,386 | 216,685 | 18,701 |
| % on sales | 79.6% | 78.2% | |
| Services and other goods | -118,942 | -112,276 | -6,666 |
| Personnel | -95,192 | -94,522 | -670 |
| Other operating income and expenses | -737 | -1,720 | 983 |
| Share in the result of associated companies and joint ventures | 2,475 | -1,831 | 4,306 |
| EBITDA | 22,989 | 6,336 | 16,653 |
| % on sales | 7.8% | 2.3% | |
| Depreciation, write-down and provisions | -13,011 | -71,883 | 58,872 |
| Depreciation and write-down of intangible and tangible assets | -13,156 | -11,658 | -1,498 |
| Write-down of inventories and debtors | 225 | 888 | -663 |
| Provisions | -80 | 2,091 | -2,171 |
| Impairment losses | - | -63,204 | 63,204 |
| EBIT | 9,978 | -65,547 | 75,525 |
| % on sales | 3.4% | -23.7% | |
| Financial income | 144 | 268 | -124 |
| Financial expenses | -219 | -5,343 | 5,124 |
| Income taxes | 429 | -1,539 | 1,968 |
| Net result from continuing operations | 10,332 | -72,161 | 82,493 |
| % on sales | 3.5% | -26.1% | |
| Net result from discontinued operations | - | 151,093 | -151,093 |
| Net result attributable to: | 10,332 | 78,932 | -68,600 |
| Minority interests | -521 | -1,010 | 489 |
| Equity holders of Roularta Media Group | 10,854 | 79,942 | -69,088 |
| in thousands of euros | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Cash flow relating to operating activities | ||
| Net result of the consolidated companies | 10,332 | 78,932 |
| Share in the results of associated companies and joint ventures | -2,475 | 1,046 |
| Dividends received from associated companies and joint ventures | 5,530 | 5,550 |
| Income tax expense / income | -429 | 1,539 |
| Interest expenses | 219 | 5,343 |
| Interest income (-) | -144 | -268 |
| Losses (+)/ gains (-) on disposal of intangible assets and property, plant and equipment | -436 | -764 |
| Losses (+)/ gains (-) on disposal of business | - | -150,396 |
| Non-cash items | 13,589 | 71,990 |
| Depreciation of (in)tangible assets | 13,156 | 11,658 |
| Impairment losses | - | 63,204 |
| Share-based payment expense | 57 | 102 |
| Increase (+)/ decrease (-) in provisions | 80 | -2,091 |
| Other non-cash items | 296 | -883 |
| Gross cash flow relating to operating activities | 26,186 | 12,972 |
| Increase / decrease in trade receivables | 6,409 | -10,360 |
| Increase / decrease in inventories | 391 | -779 |
| Increase / decrease in trade payables | 399 | 5,799 |
| Other increases / decreases in working capital (a) | -3,037 | 6,447 |
| Increase / decrease in working capital | 4,162 | 1,107 |
| Income taxes paid | -643 | -810 |
| Interest paid | -219 | -6,485 |
| Interest received | 144 | 267 |
| NET CASH FLOW RELATING TO OPERATING ACTIVITIES (A) | 29,630 | 7,051 |
(a) Increases and decreases in current other receivables, deferred charges and accrued income, provisions, employee benefits, other payables, advances received and accrued charges and deferred income.
| in thousands of euros | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Cash flow relating to investing activities | ||
| Intangible assets - acquisitions | -3,433 | -2,757 |
| Tangible assets - acquisitions | -6,187 | -4,232 |
| Intangible assets - other movements | - | 79 |
| Tangible assets - other movements | 523 | 51 |
| Net cash flow relating to acquisition of subsidiaries | -8,218 | -73,994 |
| Net cash flow relating to disposal of subsidiaries | - | 294,947 |
| Net cash flow relating to loans to investments accounted for using the equity method | 350 | -86 |
| Available-for-sale investments, loans, guarantees - acquisitions | - | -451 |
| Available-for-sale investments, loans, guarantees - other movements | 82 | 25 |
| NET CASH FLOW RELATING TO INVESTING ACTIVITIES (B) | -16,882 | 213,582 |
| Cash flow relating to financing activities | ||
| Dividends paid | -6,273 | -62,713 |
| Treasury shares | 62 | 82 |
| Other changes in equity | - | 416 |
| Redemption of current financial debts | - | -102,850 |
| Redemption of non-current financial debts | - | -2,425 |
| Decrease in non-current receivables | 119 | 129 |
| Increase in non-current receivables | - | -300 |
| NET CASH FLOW RELATING TO FINANCING ACTIVITIES (C) | -7,266 | -167,661 |
| TOTAL DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) | 5,482 | 52,972 |
| Cash and cash equivalents, beginning balance | 95,956 | 42,984 |
| Cash and cash equivalents, ending balance | 101,438 | 95,956 |
| NET DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS | 5,482 | 52,972 |
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