Quarterly Report • Aug 21, 2017
Quarterly Report
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AS OF 30 JUNE 2017
2a. Condensed consolidated income statement
2b. Condensed consolidated statement of comprehensive income
Condensed consolidated balance sheet
Condensed consolidated cash flow statement
Consolidated statement of changes in equity
Selected notes to the half-yearly financial report
Main risks and uncertainties for the remaining months of the financial year
Declaration concerning the information given in this half-yearly financial report
Auditor's report
Dear Shareholders,
This interim financial report should be read in conjunction with the consolidated balance sheet and income statement of NV Roularta Media Group, and the related selected notes (see item 6 hereafter). This interim report is drawn up in accordance with the Royal Decree of 14 November 2007 concerning the obligations of the issuers of financial instruments.
The Roularta Media Group (RMG) 360° strategy continues unabated. RMG is omnipresent on TV, radio, in print and digitally with strong brands that are appreciated by viewers, listeners, readers, surfers and advertisers alike.
The revenue decrease (excluding the impact of acquisitions) of 5.0% (or € 12.1 million) on a combined basis is slightly better than the media sector average. Within the print segment, the decline was 6.4% or € 9.7 million, reflected mainly in the decline in advertising revenue and in printing orders from third parties. Within the audiovisual segment, including acquisitions, there was an increase of 1.4% or € 1.2 million, thanks to the mobile telecom products. There was a decrease of 2.9% or € 2.6 million before the impact of acquisitions, mainly due to TV advertising compared with the strong first half of 2016.
In the print segment, the gross margin percentage – revenue less raw materials, consumables and goods for resale remained stable. In the audiovisual segment, which enjoys good viewing ratings, investments were made in strong content for TV, which had a negative impact on the gross margin percentage.
The decline in revenue also had a direct impact on the Group's EBITDA for the print segment (-€ 7.6 million) and the audiovisual segment (-€ 4.6 million).
In the print segment, the investments in the launch costs for Storesquare and Proxistore are also included in the EBITDA. The audiovisual segment also invested heavily, with impact on the EBITDA, in a new digital platform for mobile telecom activities and in the joint data team formed between Medialaan and De Persgroep Publishing.
On the combined figures, there was an increase in depreciation of € 2.7 million compared to last year, mainly due to depreciation of the purchase cost of Mobile Vikings and CAZ, and the change of the expected life of some titles within the print segment from indefinite to definite, which was not a cash expenditure.
The slight increase in taxes in the print segment compared to June 2016 is related to the reversal of a deferred tax asset and therefore was not a cash expenditure. In the audiovisual segment, there was a sharp fall in taxes due to lower profits, but also due to an increase in deferred tax asset on acquisitions last year.
All of this resulted in a net profit for the RMG shareholder of € 1.3 million compared to € 14.7 million last year.
__
Note on combined and consolidated references
Under the application of the accounting standard IFRS 11, the joint ventures are consolidated by the equity method in place of the proportionate consolidation method. Hereinafter, all references to 'consolidated' figures always relate to the official data with IFRS 11 applied. In the income statement the net result of the joint ventures is accounted for as 'share in the result of companies accounted for using the equity method' as part of the operating cash flow (EBITDA). However, to ensure continuity of information on underlying operational performance and in accordance with IFRS 8, the financial data by segment is given in the form of 'combined' figures, including Roularta Media Group's pro rata share in the joint ventures, after elimination of intra-group elements, according to the proportionate consolidation method.
1.1 Consolidated key figures
| in thousands of euros | 30/06/17 | 30/06/16 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 132,570 | 143,035 | -10,465 | -7.3% |
| Adjusted sales (1) | 132,570 | 143,035 | -10,465 | -7.3% |
| EBITDA (2) | 8,829 | 19,911 | -11,082 | -55.7% |
| EBITDA - margin | 6.7% | 13.9% | ||
| EBIT (3) | 3,383 | 16,206 | -12,823 | -79.1% |
| EBIT - margin | 2.6% | 11.3% | ||
| Net finance costs | -2,427 | -2,315 | -112 | 4.8% |
| Income taxes | -455 | 30 | -485 | |
| Net result | 501 | 13,921 | -13,420 | -96.4% |
| Attributable to minority interests | -780 | -801 | 21 | 2.6% |
| Attributable to equity holders of RMG | 1,281 | 14,722 | -13,441 | -91.3% |
| Net result attributable to equity holders of RMG - margin | 1.0% | 10.3% | ||
| Number of employees at closing date (4) | 1,323 | 1,331 | -8 | -0.6% |
(1) Adjusted sales = sales on a like-on-like basis with 2016, excluding changes in the consolidation scope.
(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 (Medialaan, Bayard etc.) not included.
Consolidated sales for the first half of 2017, which under IFRS 11 exclude joint ventures, such as Medialaan and Plus Magazine, declined by 7.3% from € 143.0 to 132.6 million. The decrease in advertising revenues for Local Media (-9.4%) and the magazines (-7.1%) was partially offset by the strong performance of internet advertising revenue (+15.1%) and subscription recruitment (+0.5%). Newsstand sales declined by 15.2%, due among others to the discontinuation of the publication Royals. Printing for third parties was down by 11.6%, mainly due to work for Altice and Idéat, the French activities divested in 2015.
The EBITDA declined due to falling revenue, decreased share in the result of associated companies and joint ventures (-€ 3.3 million June 2017 compared to June 2016), and launch costs for future digital activities such as the e-commerce and marketing platform Storesquare.be. The EBIT evolved in line with the EBITDA, increased by higher depreciation (+€ 0.9 million) for intangible fixed assets in June 2017 compared to June 2016. This mainly concerns depreciation on titles for which a change in accounting estimate was made, and the expected life span was changed from indefinite to fixed.
Taxes in June 2017 were a 'non-cash' item due to the reversal of a deferred tax asset in the HealthCare entity.
The decrease in the EBIT and higher taxes resulted in a decrease in the net result from € 13.9 million to € 0.5 million and a € 13.4 million lower net result for RMG shareholders of € 1.3 million.
| Consolidated key figures | in euros | 30/06/17 | 30/06/16 | Trend (%) |
|---|---|---|---|---|
| EBITDA | 0.70 | 1.59 | -56.0% | |
| EBIT | 0.27 | 1.30 | -79.2% | |
| Net result attributable to equity holders of RMG | 0.10 | 1.18 | -91.5% | |
| Net result attributable to equity holders of RMG after dilution | 0.10 | 1.17 | -91.5% | |
| Weighted average number of shares | 12,533,021 | 12,509,223 | 0.2% | |
| Weighted average number of shares after dilution | 12,628,287 | 12,606,876 | 0.2% |
(applying the proportional consolidation method for joint ventures)
| in thousands of euros | 30/06/17 | 30/06/16 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 232,703 | 240,947 | -8,244 | -3.4% |
| Adjusted sales (1) | 228,891 | 240,947 | -12,056 | -5.0% |
| EBITDA (2) | 16,451 | 28,639 | -12,188 | -42.6% |
| EBITDA - margin | 7.1% | 11.9% | ||
| EBIT (3) | 7,147 | 22,738 | -15,591 | -68.6% |
| EBIT - margin | 3.1% | 9.4% | ||
| Net finance costs | -2,501 | -2,394 | -107 | 4.5% |
| Income taxes | -4,145 | -6,423 | 2,278 | -35.5% |
| Net result | 501 | 13,921 | -13,420 | -96.4% |
| Attributable to minority interests | -780 | -801 | 21 | 2.6% |
| Attributable to equity holders of RMG | 1,281 | 14,722 | -13,441 | -91.3% |
| Net result attributable to equity holders of RMG - margin | 0.6% | 6.1% | ||
| Number of employees at closing date (4) | 1,806 | 1,799 | 7 | 0.4% |
(1) Adjusted sales = sales on a like-on-like basis with 2016, excluding changes in the consolidation scope.
(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 (Medialaan, Bayard etc.) included.
Combined revenue decreased slightly by 3.4%, due to a drop in revenue in the print segment. More details can be found in section 2.
The EBITDA decreased compared to last year due to further investments in future digital activities such as the e-commerce platform Storesquare.be and the Mobile Vikings platform, declining revenue, and higher content costs in the audiovisual segment.
The EBIT evolved in line with the EBITDA, increased by additional depreciation for intangible fixed assets (+€ 2.5 million). This mainly concerned purchase price allocations related to the acquisitions of Mobile Vikings and CAZ in 2016, and changes in the depreciation of some titles from an indefinite to a fixed expected life.
This decrease in the EBIT was partly offset by lower taxes compared to June 2016. However, the net result decreased from € 13.9 million to € 0.5 million, and the net result for the RMG shareholder declined by € 13.4 million to € 1.3 million.
For further clarification of these combined key figures, we refer to section 2.
| in thousands of euros | 30/06/17 | 30/06/16 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 142,447 | 152,144 | -9,697 | -6.4% |
| Adjusted sales (1) | 142,447 | 152,144 | -9,697 | -6.4% |
| EBITDA (2) | 2,914 | 10,542 | -7,628 | -72.4% |
| EBITDA - margin | 2.0% | 6.9% | ||
| EBIT (3) | -2,927 | 6,648 | -9,575 | -144.0% |
| EBIT - margin | -2.1% | 4.4% | ||
| Net finance costs | -2,393 | -2,265 | -128 | 5.7% |
| Income taxes | -703 | -289 | -414 | 143.3% |
| Net result | -6,023 | 4,094 | -10,117 | -247.1% |
| Attributable to minority interests | -779 | -800 | 21 | 2.6% |
| Attributable to equity holders of RMG | -5,244 | 4,894 | -10,138 | -207.2% |
| Net result attributable to equity holders of RMG - margin | -3.7% | 3.2% |
(1) Adjusted sales = sales on a like-on-like basis with 2016, excluding changes in the consolidation scope.
(2) EBITDA = EBIT + depreciations, write-downs and provisions.
(3) EBIT = operating result, including the share in the result of associated companies and joint ventures.
Adjusted sales (advertising) in the free newspapers of the department Roularta Local Media decreased by 9.4% compared with the first half of 2016. Advertising revenue at Krant van West-Vlaanderen decreased (-15.2%). The 7.5% decline in magazine advertising can largely be explained by a decline in the business magazines.
Revenues from the various internet sites continue to grow. Sales are up by 15.1% in the first half of 2017.
Revenue from the readership market (newsstand sales and subscriptions) slightly fell by 2.5% compared to the first half of 2016. Without taking Royals into account, the decrease is limited to 2%. Subscriptions grew slightly (+0.4%).
Third party typesetting and printing fell by 12.1% compared with H1 2016. This is largely explained by the decline in print orders from the former French activities.
Adjusted sales from other income, the smallest segment, decreased by 9.2% compared with the first half of 2016, due among other things to the end of paper sales connected with the former French activities, declining sales of books (ancillary products) and the discontinuation of Inside Beleggen as a separate publication.
EBITDA decreased from € 10.5 million to € 2.9 million, mainly due to lower revenue and launch costs for Storesquare and Proxistore.
EBIT decreased from € 6.6 million to -€ 2.9 million, evolving in line with EBITDA, plus additional depreciation (+€ 1.0 million) for intangible fixed assets. This mainly represents depreciation under IFRS for changes from an indefinite to a fixed expected life.
The decline in the EBIT and higher taxes, and a reversal of a deferred tax asset at the HealthCare entity, resulted in a declining net result of -€ 6.0 million to € 4.1 million for the first half of 2017.
| in thousands of euros | 30/06/17 | 30/06/16 | Trend | Trend (%) |
|---|---|---|---|---|
| INCOME STATEMENT | ||||
| Sales | 90,673 | 89,426 | 1,247 | 1.4% |
| Adjusted sales (1) | 86,861 | 89,426 | -2,565 | -2.9% |
| EBITDA (2) | 13,537 | 18,097 | -4,560 | -25.2% |
| EBITDA - margin | 14.9% | 20.2% | ||
| EBIT (3) | 10,074 | 16,090 | -6,016 | -37.4% |
| EBIT - margin | 11.1% | 18.0% | ||
| Net finance costs | -108 | -129 | 21 | -16.3% |
| Income taxes | -3,442 | -6,134 | 2,692 | -43.9% |
| Net result | 6,524 | 9,827 | -3,303 | -33.6% |
| Attributable to minority interests | -1 | 0 | -1 | 0.0% |
| Attributable to equity holders of RMG | 6,525 | 9,827 | -3,302 | -33.6% |
| Net result attributable to equity holders of RMG - margin | 7.2% | 11.0% |
(1) Adjusted sales = sales on a like-on-like basis with 2016, excluding changes in the consolidation scope.
(2) EBITDA = EBIT + depreciations, write-downs and provisions.
(3) EBIT = operating result, including the share in the result of associated companies and joint ventures.
Sales by the Audiovisual Media increased by 1.4%, from € 89.4 million to € 90.7 million. Adjusted revenue, i.e. comparable with the consolidation scope in June 2016 and 2017, amounted to € 86.9 million, a decrease of 2.9%. The difference is mainly due to Mobile Vikings.
Advertising revenue at the TV and radio stations declined in the first half by 2.9%, due to declining revenue for TV. Radio revenues grew by 2.6%.
Other adjusted income
Adjusted sales from other income-producing activities including line extensions, video on demand, rights and audiovisual productions increased by 14.8%. This is due to higher sales from distribution fees and telecom.
EBITDA decreased from € 18.1 million to € 13.5 million (+25.2%), thanks mainly to increasing broadcasting costs and investments in Mobile Vikings.
EBIT decreased from € 16.1 million to € 10.1 million (-37.4%). In addition to the falling EBITDA, there was the PPA depreciation (+€ 1.2 million) for the 2016 acquisitions.
The decrease in the EBIT was partly offset by lower taxes on the result. The net result of the Audiovisual Media division amounts to € 6.5 million compared to the € 9.8 million in H1 2016.
| Balance sheet | in thousands of euros | 30/06/17 | 31/12/16 | Trend (%) |
|---|---|---|---|---|
| Non-current assets | 295,379 | 307,445 | -3.9% | |
| Current assets | 143,701 | 135,756 | +5.9% | |
| Balance sheet total | 439,080 | 443,201 | -0.9% | |
| Equity - Group's share | 216,162 | 222,293 | -2.8% | |
| Equity - minority interests | 3,013 | 1,762 | +71.0% | |
| Liabilities | 219,905 | 219,146 | +0.3% | |
| Liquidity (1) | 1.4 | 1.4 | +0.0% | |
| Solvency (2) | 49.9% | 50.6% | -1.4% | |
| Net financial debt | 59,240 | 57,443 | +3.1% | |
| Gearing (3) | 27.0% | 25.6% | +5.5% |
(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).
Equity – Group's share at 30 June 2017 was € 216.2 million compared with € 222.3 million at 31 December 2016. The change on equity consists mainly of the profit for the first half of 2017 (€ 1.3 million) minus the dividend paid (€ 6.3 million) and the effect of the acquisition of a 25% minority interest by RMG in the 'Open Bedrijvendag' companies. This concerns a transaction between shareholders; these companies were already fully consolidated.
At 30 June 2017 the Group's net financial debt position1 stood at € 59.2 million, compared with € 57.4 million at 31 December 2016, mainly explained by the dividend paid in 2017 in respect of the 2016 financial year (€ 6.3 million), investments and positive influence by the improvement in working capital.
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1 Net financial debt = Financial debts less current cash.
Total investments in the first half of 2017 amounted to € 2.7 million, of which € 0.2 million acquisitions, € 1.4 million investments in intangible assets (mainly software) and € 1 million in fixed assets (mainly machinery and office furniture).
Insufficient visibility of advertising revenues in all media makes it difficult to produce a forecast for the full second half.
The advertising portfolio for the third quarter of 2017 shows an evolution in revenue in line with the print, audiovisual and internet activities for the first half of the year, but with large variations from month to month, and increasingly later bookings. The readers' market is stable thanks to the subscriptions.
The new activities, like mobile telecommunications, Storesquare and Digilocal, ... are demanding additional investment and launch costs, which impact the Group net results.
Continuing attention is being paid to cost control.
| in thousands of euros | 30/06/17 | 30/06/16 |
|---|---|---|
| Sales | 132,570 | 143,035 |
| Own construction capitalised | 770 | 1,073 |
| Raw materials, consumables and goods for resale | -32,536 | -35,622 |
| Services and other goods | -49,975 | -50,277 |
| Personnel | -48,754 | -48,497 |
| Other operating result | -1,209 | -1,041 |
| Other operating income | 1,853 | 2,123 |
| Other operating costs | -3,062 | -3,164 |
| Restructuring costs: costs | 0 | 0 |
| Share in the result of associated companies and joint ventures | 7,963 | 11,240 |
| EBITDA | 8,829 | 19,911 |
| Depreciation, write-down and provisions | -5,446 | -3,705 |
| Depreciation and write-down of intangible and tangible assets | -5,696 | -4,698 |
| Write-down of debtors and inventories | -174 | 117 |
| Provisions | 424 | 876 |
| Impairment losses | 0 | 0 |
| Restructuring costs: provisions | 0 | 0 |
| Operating result - EBIT | 3,383 | 16,206 |
| Interest income | 443 | 749 |
| Interest expenses | -2,870 | -3,064 |
| Operating result after net finance costs | 956 | 13,891 |
| Income taxes | -455 | 30 |
| Net result of the consolidated companies | 501 | 13,921 |
| Attributable to: | ||
| Minority interests | -780 | -801 |
| Equity holders of Roularta Media Group | 1,281 | 14,722 |
| Earnings per share in euros |
||
| Basic earnings per share | 0.10 | 1.18 |
| Diluted earnings per share | 0.10 | 1.17 |
| in thousands of euros | 30/06/17 | 30/06/16 |
|---|---|---|
| Net result of the consolidated companies | 501 | 13,921 |
| Other comprehensive income of the period | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods: | ||
| Exchange differences | -25 | -17 |
| Other comprehensive income not to be reclassified to profit or loss in subsequent periods: | ||
| Non-current employee benefits - actuarial gain / loss | 0 | 0 |
| Share of non-reclassifiable other comprehensive income of joint ventures and associates | 13 | -22 |
| Other comprehensive income of the period | -12 | -39 |
| Total comprehensive income of the period | 489 | 13,882 |
| Attributable to: | ||
| Minority interests | -780 | -801 |
| Equity holders of Roularta Media Group | 1,269 | 14,683 |
| ASSETS in thousands of euros |
30/06/17 | 31/12/16 |
|---|---|---|
| Non-current assets | 295,379 | 307,445 |
| Intangible assets | 82,842 | 84,399 |
| Goodwill | 0 | 0 |
| Property, plant and equipment | 54,311 | 56,023 |
| Investments accounted for using the equity method | 134,463 | 127,722 |
| Available-for-sale investments, loans and guarantees | 2,072 | 2,470 |
| Trade and other receivables | 824 | 15,568 |
| Deferred tax assets | 20,867 | 21,263 |
| Current assets | 143,701 | 135,756 |
| Inventories | 5,341 | 6,236 |
| Trade and other receivables | 82,652 | 73,989 |
| Tax receivable | 256 | 284 |
| Short-term investments | 0 | 46 |
| Cash and cash equivalents | 46,775 | 50,565 |
| Deferred charges and accrued income | 8,677 | 4,636 |
| Total assets | 439,080 | 443,201 |
| LIABILITIES in thousands of euros |
30/06/17 | 31/12/16 |
|---|---|---|
| Equity | 219,175 | 224,055 |
| Group's equity | 216,162 | 222,293 |
| Issued capital | 80,000 | 80,000 |
| Treasury shares | -23,821 | -23,931 |
| Retained earnings | 156,932 | 163,224 |
| Other reserves | 3,042 | 2,966 |
| Translation differences | 9 | 34 |
| Minority interests | 3,013 | 1,762 |
| Non-current liabilities | 117,115 | 118,842 |
| Provisions | 6,902 | 7,380 |
| Employee benefits | 5,153 | 5,079 |
| Deferred tax liabilities | 521 | 521 |
| Financial debts | 104,502 | 105,825 |
| Trade payables | 0 | 0 |
| Other payables | 37 | 37 |
| Current liabilities | 102,790 | 100,304 |
| Financial debts | 1,513 | 2,229 |
| Trade payables | 38,265 | 42,266 |
| Advances received | 17,085 | 17,582 |
| Employee benefits | 16,728 | 13,497 |
| Taxes | 869 | 771 |
| Other payables | 15,955 | 16,242 |
| Financial derivatives | 0 | 0 |
| Accrued charges and deferred income | 12,375 | 7,717 |
| Total liabilities | 439,080 | 443,201 |
| Cash flow relating to operating activities | in thousands of euros | 30/06/17 | 30/06/16 |
|---|---|---|---|
| Net result of the consolidated companies | 501 | 13,921 | |
| Share in the result of the companies accounted for using the equity method | -7,963 | -11,240 | |
| Income tax expense / income | 455 | -30 | |
| Interest expenses | 2,870 | 3,064 | |
| Interest income (-) | -443 | -749 | |
| Losses / gains on disposal of intangible assets and property, plant and equipment | -14 | 10 | |
| Losses / gains on disposal of business | -35 | -399 | |
| Dividends received from companies accounted for using the equity method | 1,500 | 1,550 | |
| Non-cash items | 5,427 | 3,789 | |
| Depreciation of (in)tangible assets | 5,696 | 4,698 | |
| Impairment losses | 0 | 0 | |
| Share-based payment expense | 63 | 79 | |
| Losses / gains on non-hedging derivatives | 0 | 0 | |
| Increase / decrease in provisions | -424 | -876 | |
| Unrealised exchange loss / gain | 0 | 0 | |
| Other non-cash items | 92 | -112 | |
| Gross cash flow relating to operating activities | 2,298 | 9,916 | |
| Increase / decrease in current trade receivables | 5,729 | 4,760 | |
| Increase / decrease in current other receivables and deferred charges and accrued income | -3,511 | -2,252 | |
| Increase / decrease in inventories | 854 | -899 | |
| Increase / decrease in current trade payables | -4,001 | -4,526 | |
| Increase / decrease in other current liabilities | 2,684 | -2,645 | |
| Other increases / decreases in working capital (a) | 2,131 | 3,840 | |
| Increase / decrease in working capital | 3,886 | -1,722 | |
| Income taxes paid | -64 | -946 | |
| Interest paid | -318 | -504 | |
| Interest received | 378 | 115 | |
| NET CASH FLOW RELATING TO OPERATING ACTIVITIES (A) | 6,180 | 6,859 |
(a) Increases and decreases in non-current other payables, non-current trade payables, provisions, non-current employee benefits and accrued charges and deferred income.
| Cash flow relating to investing activities | 30/06/17 | 30/06/16 |
|---|---|---|
| Intangible assets - acquisitions | -1,393 | -1,474 |
| Tangible assets - acquisitions | -1,039 | -2,409 |
| Intangible assets - other movements | 5 | 1 |
| Tangible assets - other movements | 14 | 19 |
| Net cash flow relating to acquisition of subsidiaries | -231 | -450 |
| Net cash flow relating to disposal of subsidiaries | 125 | 0 |
| Net cash flow relating to loans to companies accounted for using the equity method | -375 | 122 |
| Available-for-sale investments, loans, guarantees - acquisitions | 0 | 0 |
| Available-for-sale investments, loans, guarantees - other movements | 399 | 15 |
| Increase / decrease in short-term investments | 46 | 0 |
| NET CASH FLOW RELATING TO INVESTING ACTIVITIES (B) | -2,449 | -4,176 |
| Dividends paid | -6,267 | -6,253 |
|---|---|---|
| Movement in capital | 0 | 0 |
| Treasury shares | 110 | 258 |
| Other changes in equity | 700 | -115 |
| Proceeds from current financial debts | 134 | 614 |
| Redemption of current financial debts | -1,273 | -1,393 |
| Proceeds from non-current financial debts | 0 | 0 |
| Redemption of non-current financial debts | -925 | 0 |
| Decrease in non-current receivables | 0 | 143 |
| Increase in non-current receivables | 0 | 0 |
| NET CASH FLOW RELATING TO FINANCING ACTIVITIES (C) | -7,521 | -6,746 |
| TOTAL DECREASE / INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) | -3,790 | -4,063 |
| Cash and cash equivalents, beginning balance | 50,565 | 38,496 |
| Cash and cash equivalents, ending balance | 46,775 | 34,433 |
| Net decrease / increase in cash and cash equivalents | -3,790 | -4,063 |
| Issued capital |
Treasury shares |
Retained earnings |
Other reserves |
Trans lation reserves |
Minority interests |
Total equity |
|
|---|---|---|---|---|---|---|---|
| Balance as of 01/01/2017 | 80,000 | -23,931 | 163,224 | 2,966 | 34 | 1,762 | 224,055 |
| Total comprehensive income of the period | 1,281 | 13 | -25 | -780 | 489 | ||
| Operations with own shares | 110 | 110 | |||||
| Dividends | -6,268 | -6,268 | |||||
| Recognition of share-based payments | 63 | 63 | |||||
| Dividends paid to minority interests | -27 | -27 | |||||
| Effect of minority interests purchase | -1,305 | 669 | -636 | ||||
| Capital contribution by minority interests | 1,389 | 1,389 | |||||
| Balance as of 30/06/2017 | 80,000 | -23,821 | 156,932 | 3,042 | 9 | 3,013 | 219,175 |
| Issued capital |
Treasury shares |
Retained earnings |
Other reserves |
Trans lation reserves |
Minority interests |
Total equity |
|
|---|---|---|---|---|---|---|---|
| Balance as of 01/01/2016 | 80,000 | -24,376 | 148,159 | 3,820 | 46 | 1,868 | 209,517 |
| Total comprehensive income of the period | 14,722 | -22 | -17 | -801 | 13,882 | ||
| Operations with own shares | 258 | 258 | |||||
| Dividends | -6,253 | -6,253 | |||||
| Recognition of share-based payments | 80 | 80 | |||||
| Dividends paid to minority interests | -99 | -99 | |||||
| Balance as of 30/06/2016 | 80,000 | -24,118 | 156,628 | 3,878 | 29 | 968 | 217,385 |
The summary interim financial statements have been drawn up in conformity with IAS 34 Interim Financial Reporting as approved by the EU.
The interim financial statements were approved by the members of the board of directors on 18 August 2017.
In preparing the interim financial statements the IFRS principles for inclusion and valuation have been applied as for the consolidated annual financial statements of 31 December 2016. For the new IFRS and improved IAS standards that have come into effect as of 1 January 2017 the reader is referred to Note 1 in the 2016 Annual Report. The application of these new or revised standards has no material effect on the Group's results or financial position.
IFRS 15 Revenue from contracts with customers introduces a five-step model for recognising customer-based revenue, and will apply to financial years from 2018 onward. The ongoing analysis, which will be completed in the second half of 2017, shows no material impact on the Group's results.
In accordance with IFRS 8 Operating Segments, the management approach is applied for the financial reporting of segmented information. This standard requires the segmented information to be reported to follow the internal reporting used by the company's main operating decision-making officer, based on which the internal performance of Roularta's operating segments is assessed and resources allocated to the various segments.
For reporting purposes, Roularta Media Group is organised into two operating segments based on the activities : Printed & Online Media and Audiovisual Media. These operating segments remain unchanged from those used last financial year. Despite the application of IFRS 11, the Group's operational decision-making officers continue to work based on the financial information by segment on a 'combined' basis, i.e. including Roularta Media Group's pro rata share in the joint ventures, after elimination of intra-group elements, by the proportionate consolidation method.
| 30/06/17 in thousands of euros |
Printed Media | Audiovisual Media |
Intersegment elimination |
Combined total | Effect IFRS 11 | Consolidated total |
|---|---|---|---|---|---|---|
| Sales of the segment | 142,447 | 90,673 | -417 | 232,703 | -100,133 | 132,570 |
| Sales to external customers |
142,217 | 90,486 | 232,703 | -100,133 | 132,570 | |
| Sales from transactions with other segments |
230 | 187 | -417 | 0 | 0 |
| 30/06/16 in thousands of euros |
Printed Media | Audiovisual Media |
Intersegment elimination |
Combined total | Effect IFRS 11 | Consolidated total |
|---|---|---|---|---|---|---|
| Sales of the segment | 152,144 | 89,426 | -623 | 240,947 | -97,912 | 143,035 |
| Sales to external customers |
151,772 | 89,175 | 240,947 | -97,912 | 143,035 | |
| Sales from transactions with other segments |
372 | 251 | -623 | 0 | 0 |
The discussion of the segments can be found in the interim report of the board of directors. The results are summarised below, along with their impact on the consolidated net result.
| 30/06/17 in thousands of euros |
Printed Media | Audiovisual Media |
Combined total | Effect IFRS 11 | Consolidated total |
|---|---|---|---|---|---|
| EBITDA | 2,914 | 13,537 | 16,451 | -7,622 | 8,829 |
| EBIT | -2,927 | 10,074 | 7,147 | -3,764 | 3,383 |
| Net result | -6,023 | 6,524 | 501 | 0 | 501 |
| Depreciation, write-down and provisions | |||||
| Depreciation and write-down of intangible and tangible assets |
-6,191 | -3,710 | -9,901 | ||
| Write-down of debtors and inventories | -158 | 62 | -96 | ||
| Other provisions | 508 | 185 | 693 |
| 30/06/16 in thousands of euros |
Printed Media | Audiovisual Media |
Combined total | Effect IFRS 11 | Consolidated total |
|---|---|---|---|---|---|
| EBITDA | 10,542 | 18,097 | 28,639 | -8,728 | 19,911 |
| EBIT | 6,648 | 16,090 | 22,738 | -6,532 | 16,206 |
| Net result | 4,094 | 9,827 | 13,921 | 0 | 13,921 |
| Depreciation, write-down and provisions | |||||
| Depreciation and write-down of intangible and tangible assets |
-4,890 | -2,333 | -7,223 | ||
| Write-down of debtors and inventories | 121 | 124 | 245 | ||
| Other provisions | 875 | 202 | 1,077 |
Update of Note 25 of the Annual Report 2016: there are no material changes to the pending disputes, described in Note 25 of the Annual Report 2016.
In the first half of 2017 the Group invested € 2.4 million in intangible and tangible assets (first half of 2016: € 3.9 million). The investments in intangible assets are in new software (€ 1.4 million). The largest investments in tangible assets relate a.o. machinery (€ 0.6 million) and office furniture in an amount of € 0.2 million.
Sales
In the first half of 2017 there were no material disposals of (in)tangible fixed assets.
There are no one-off items in the half-year results of 2017 and 2016.
At the end of 2016, this item included primarily the claim that Roularta Media Group has in connection with the sale of the French operations. This claim is interest-bearing and is guaranteed. It is payable before April 2018, and is therefore included under other short-term receivables on 30 June 2017.
There were no changes in the capital in the first semester of 2017.
The statutory authorisation to purchase own company shares, renewed at the annual meeting of 19 May 2015, was not used. In the first semester of 2017 6,990 own shares were granted to the holders of options at the moment of the exercise of their options.
In the first semester of 2017, no new share option plans were offered. In the first semester of 2017, the Group recognised € 63K (30/06/2016: € 79K) as personnel costs relating to equity-settled share-based payment transactions.
Provisions have decreased from € 7.4 million at the end of 2016 to € 6.9 million at 30 June 2017.
This evolution is largely explained by the reversal of the provision for leasing obligations related to a disused printing press pro-rated on the basis of the amounts paid in the first half of 2017 (-€ 0.7 million), and the increase in the provision for the dispute with InfoBase (€ 0.2 million).
During the first half of 2017, no new long-term bank loans were concluded. Besides the contractual repayments of € 1.3 million, there was a prepayment of a bank loan for € 0.9 million.
To ensure the liquidity of Roularta Media Group, new long-term credits were taken out with various principal bankers. € 47.5 million in term loans were negotiated, with inclusion in the second half of 2018 and linearly repayable until the second half of 2022. Additional committed revolving credit lines were also taken out. These amount to a total of € 47.5 million and extend until 2023. For these new loans, the existing covenants will remain applicable. We refer to Note 27 in the 2016 Annual Report for these covenants.
Fair value of financial assets and liabilities with a significant deviation between the book value and fair value at 30/06/2016:
| in thousands of euros | Carrying amount | Fair value |
|---|---|---|
| Financial debts | ||
| - debenture | 99,939 | 103,850 |
For other financial instruments, the fair value approximates the carrying value.
The other liabilities include VAT, payroll tax, and various other taxes payable and liabilities to joint ventures.
On 1 June 2017, € 6,267,644 of gross dividends in respect of the 2016 financial year were released for payment. On 1 June 2016, € 6,252,624 of gross dividends in respect of the 2015 financial year were released for payment.
Sales
Sales are down 7.3% on H1 2016. Adjusted revenue (excluding changes in the consolidation scope) also decreased by 7.3% since there were no changes in the consolidation scope. For a discussion of this development we refer to the press release on the half-year results and the interim report of the board of directors that is included at the beginning of this interim financial report.
These costs decreased by € 3.1 million compared to the first half of 2016. The purchase of raw materials at Roularta Media Group fell by € 1.2 million, mainly due to paper. The cost of general subcontracting at Roularta Media Group decreased by € 0.9 million due to lower printing costs (€ 0.4 million) and finishing costs (€ 0.4 million), including the investment in the flat back binding machine at the end of 2016. The purchase of paper for third parties fell by € 0.9 million.
The services and other goods amount to € 50.0 million and are in line with last year.
| in thousands of euros | 30/06/17 | 30/06/16 |
|---|---|---|
| Transport and distribution costs | 8,798 | 9,141 |
| Marketing and promotion costs | 10,062 | 10,943 |
| Commission fees | 2,546 | 2,572 |
| Fees | 13,240 | 13,159 |
| Operating leases | 6,072 | 6,021 |
| Energy | 1,095 | 1,124 |
| Subcontractors and other deliveries | 5,651 | 5,360 |
| Remuneration members of the board of directors | 199 | 199 |
| Temporary workers | 1,288 | 927 |
| Travel and reception costs | 540 | 408 |
| Insurances | 235 | 159 |
| Other services and other goods | 249 | 264 |
| Total services and other goods | 49,975 | 50,277 |
The biggest evolution was a decrease in advertising costs of € 0.9 million. This was mainly the result of a decrease of € 0.7 million in advertisements, due to exchange between media companies.
The personnel expenses decreased by € 0.3 million (0.5%) compared with H1 2016.
A net increase by € 168K compared with H1 2016 can be explained by a decrease by € 0.3 million of the other operating income and a decrease by € 0.1 million of the other operating expenses.
Other operating income includes the operating subsidies, the capital gain on the disposal of tangible and financial assets, government grants and miscellaneous cross-charges.
Other operating expenses include other taxes, the loss on the disposal of (in)tangible fixed assets, losses on trade receivables, payment differences and bank charges.
Share in the result of associated companies and joint ventures
| in thousands of euros | 30/06/17 | 30/06/16 |
|---|---|---|
| Medialaan group | 8,015 | 11,396 |
| Bayard group | 733 | 697 |
| Other | -785 | -853 |
| 7,963 | 11,240 |
At Medialaan, the result for the first half of 2017 was lower than in the first half of 2016, mainly due to falling TV advertising revenues, and investments in telecom. We note a slight increase in the result for the other affiliates and joint ventures.
The depreciation amounts to € 5.7 million and is € 1 million higher than last year. € 0.8 million of this increase is due to depreciation on titles for which a change in accounting estimate was made, and the expected life span was changed from indefinite to fixed.
Financial income and expenses
| in thousands of euros | 30/06/17 | 30/06/16 |
|---|---|---|
| Financial income: | 443 | 749 |
| - interest income | 443 | 749 |
| Financial costs: | -2,870 | -3,064 |
| - interest expense | -2,870 | -3,064 |
The decrease in interest revenue is largely due to the partial repayment of the interest-bearing debt in connection with the sale of the French operations.
Interest expenses decrease as a result of lower outstanding financial debt and lower interest rates.
The effective tax rate is influenced by a number of factors which affect the tax base. The company Roularta Media Group NV has tax loss carryforwards. The tax charge in respect of H1 2017 is offset by the recognition of an additional deferred tax asset, bringing the tax rate in the income statement to nil. In addition, there was a reversal of an active deferred tax liability amounting to € 0.4 million at a 100% controlled subsidiary.
The related parties of Roularta Media Group NV consist of subsidiaries, joint ventures, associated companies, other related parties and key management personnel (including directors). The composition of the related parties, and nature of the transactions and the outstanding balances have not changed significantly from those reported in the financial statements at 31 December 2016.
The half-year results of 2017 contain no discontinued operations.
a. Acquisitions
In the first semester of 2017 there were no new acquisitions.
At the beginning of July 2017, Roularta Media Group acquired the two companies around the STERCK brand. This group is active in B2B 360° marketing solutions for the local business community in the provinces of Antwerp and Limburg, and reaches out to this community via events and STERCK magazine.
At the end of July 2017, Roularta Media Group bought out the first contracts that expired related to the Econocom lease.
During the month of July, the Belgian government concluded the 'summer agreement'. This agreement contains insufficient data to calculate the impact on Roularta Media Group. We expect to have greater clarity at the end of the year to allow an initial assessment of the impact.
Otherwise, no major events have occurred which significantly affect the results and the financial position of the company.
The half-year results are not affected by any seasonal fluctuations. In general, sales are lower in January and February, as also in July and August with less good earnings as a result.
The media world is constantly changing. Central factors here are pressure on media spending and structural changes in the direction of digital products.
The Group's result is largely determined by the advertising market, the readers' market and viewing and listening figures. The Group closely follows market developments within the media world in which it operates, so as to be able to react to and take advantage of changes and new trends within its environment. The Group's multimedia offering enables it to react pertinently to shifts in attention by the advertising world and its audience from one media form to the other.
The Group's advertising revenues are cyclical and sensitive to the general economic environment. On the one hand, advertising expenditure decisions are taken at the last moment, so visibility is limited. On the other hand, the Group's strategy of operating limited in several European countries also reduces the economic and cyclical risks.
Besides the traditional in print products, digital derivatives are also coming into being on the internet and for iPad, iPhone or similar hand-held devices. Some specific cyclical advertising revenues, for example job ads, may fluctuate according to how certain or not the customer feels about the economic climate.
New acquisitions and new initiatives – both inside and outside the internet sphere – provide additional sales and margins in the future.
Although the Group strives as far as possible for geographical spread and a diversified product mix, changing market conditions may have a negative impact on the Group's activities and financial position. Therefore, the Group is continuously improving the efficiency of its production processes and costs are kept under control.
The IT system is of vital importance within the Group. Any disruption (due to defect, malicious attacks, viruses or other causes) could have a serious impact on various aspects of its activities. This impact includes sales, customer service and administration, but also the Group's operating results. To date, there are no significant known problems, but the Group cannot guarantee that such problems will not occur in the future.
The Group's currency risk is limited to the USD. Purchases of film rights by the audiovisual segment can be in USD. This risk is hedged with foreign exchange contracts. Despite these hedging instruments, fluctuations in the USD can have a limited impact on RMG's operating results.
The Group's debt gearing and interest charges may affect the results. Any IRS contracts and other financial instruments can serve to contain this risk. The strengthened liquidity of Roularta Media Group NV permitted to reduce the available credit lines from € 39 million in 2014 to € 26 million in 2015 and to € 8 million on 30 June 2016. As of today, in preparation for repayment of the bond in October 2018, the Group has taken out new credits with its principal banks, thus ensuring the Group's liquidity in the medium term.
The Group is also exposed to credit risks on its customers. Internal and external credit checks are used in order to manage these risks. Bills of exchange and credit insurance are other instruments used to lower this risk. Until now there has been no significant concentration of credit risks and the necessary provisions have been set up for existing risks.
For other general risks the reader is referred to the 2016 Annual Report (Annual Report of the Board of Directors), where bank covenants, liquidity and capital structure risks, impairment risks and risks from legal and arbitration proceedings are discussed on pages 33 ff.
The undersigned declare that, to the best of their knowledge,
Xavier Bouckaert, CEO Rik De Nolf (Chairman of the Board of Directors) Jeroen Mouton, CFO
In the context of our appointment as the company's statutory auditor, we report to you on the consolidated interim financial information. This consolidated interim financial information comprises the consolidated condensed balance sheet as at 30 June 2017, the consolidated condensed income statement, the consolidated condensed statement of comprehensive income, the consolidated condensed statement of changes in equity and the consolidated condensed cash flow statement for the period of six months then ended, as well as selective notes 6.1 to 6.22.
We have reviewed the consolidated interim financial information of Roularta Media Group NV ('the company') and its subsidiaries (jointly 'the Group'), prepared in accordance with International Accounting Standard (IAS) 34, 'Interim Financial Reporting' as adopted by the European Union.
The consolidated condensed statement of financial position shows total assets of 439,080 (000) EUR and the consolidated condensed income statement shows a consolidated profit (Group share) for the period then ended of 1,281 (000) EUR.
The board of directors of the company is responsible for the preparation and fair presentation of the consolidated interim financial information in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.
We conducted our review of the consolidated interim financial information in accordance with International Standard on Review Engagements (ISRE) 2410, 'Review of interim financial information performed by the independent auditor of the entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated interim financial information.
Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial information of Roularta Media Group NV has not been prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union.
Gent, 18 August 2017
The statutory auditor DELOITTE Bedrijfsrevisoren / Réviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Kurt Dehoorne Mario Dekeyser
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