Ekspress Grupp

Earnings Release • Jul 31, 2024

Company AS Ekspress Grupp

Type Company Release

Category Half-yearly financial report

Disclosure time 31 Jul 2024 08:00:00 +0300

Attachments:

• EG_II_kvartal_2024_ENG.pdf (http://oam.fi.ee/en/download?id=8615)

• EG_II_kvartal_2024_EST.pdf (http://oam.fi.ee/en/download?id=8616)

Currency

Title

AS Ekspress Grupp: Consolidated unaudited interim report for Q2 and 6 months of 2024

The revenue of AS Ekspress Grupp for the 2(nd) quarter of 2024 increased by 6% to EUR 19.6 million and EBITDA increased by 27% to EUR 3.0 million. The revenue for the first six months of 2024 increased year-over-year by 2% to EUR 35.9 million and EBITDA decreased by -2% to EUR 3.5 million. At the end of June, the share of digital revenue made up 87% of the Group's total revenue. Digital revenue increased by 9% as compared to the same period last year. The digital subscription revenue of the Group's media companies and the number of people with digital subscriptions grew strongly year-over-year in all three countries. The revenue from ticket sales platforms and the advertising revenue from outdoor screens have also increased strongly.

The 2(nd) quarter was successful both in terms of growing online advertising revenue as well as digital subscription revenue. The revenue from ticket sales platforms and the advertising revenue from outdoor screens also increased strongly. In the 2(nd) quarter, the revenue of Ekspress Grupp reached EUR 19.6 million, increasing by 6% as compared to the same period last year. In the first half of the year, revenue increased by 2%.

In a year-over-year comparison, the Group received more than 47 000 digital subscriptions in the Baltic States, i.e. 27% more than at the end of June last year. At the end of June 2024, digital subscriptions totalled 223 000. The Group's digital revenue is increasingly based on digital subscription revenue and it makes up an increasingly larger recurring revenue base without the need for additional sales activity (and costs). We have enhanced the quality and volume of the content offered by the Group's media companies in order to be the leader in the digital subscription field in all Baltic States. The Group is gradually moving towards its financial strategic goals and wishes to offer paid digital content to at least 340 000 subscribers by the year 2026.

In the 2(nd) quarter, the earnings before interest, tax, depreciation and

amortisation (EBITDA) of Ekspress Grupp totalled EUR 3.0 million, increasing by 27%. The profitability in the 2(nd) quarter received a boost from the successful sale of online advertising and digital subscriptions as well as the increase in the volume of ticket sales platforms and digital outdoor screens. In the first six months of the year, EBITDA totalled EUR 3.5 million, decreasing by -2%. The negative impact is due to the 1(st) quarter, when advertising revenue decreased as a result of the general weak economic environment in the Baltic States, which was also exacerbated by the fact that the election cycles were in later quarters as compared to last year.

The net profit for the 2(nd) quarter of 2024 totalled EUR 1.0 million, which is 67% higher as compared to last year. However, in the first half of the year, the Group incurred a net loss of EUR -0.2 million, which is EUR 0.08 higher as compared to last year. Higher net loss in the first half of the year was also primarily attributable to higher interest rates due to the increase in Euribor and higher depreciation expenses arising from the Group's investments.

The Group's liquidity continues to be strong. The Management Board considers it important to maintain liquidity reserves both for the use of potential new acquisitions and for situations related to further cooling of the economy. As of 30 June 2024, the Group's available cash totalled EUR 5.5 million (30.06.2023: EUR 6.1 million). In May 2024, the Group paid dividends of 6 euro cents per share to its shareholders in the total amount of EUR 1.8 million.

Q2 AND 6 MONTHS RESULTS

REVENUE

In the 2(nd) quarter of 2024, the consolidated revenue totalled EUR 19.6 million (Q2 2023: EUR 18.5 million). The revenue for the 2(nd) quarter increased by 6% year-over-year. The consolidated revenue for the first 6 months of 2024 totalled EUR 35.9 million (6 months 2023: EUR 35.3 million). The revenue for the first 6 months of the year increased by 2% as compared to the previous year. The growth is attributable to the increase in digital subscription revenue as well as increase in the volume of ticket sales platforms and digital outdoor screens. The share of the Group's digital revenue in total revenue was 87% in the first 6 months of 2024 (6 months 2023: 82% of total revenue). Digital revenue for the first 6 months of 2024 increased by 9% as compared to the same period last year.

PROFITABILITY

In the 2(nd) quarter of 2024, the consolidated EBITDA totalled EUR 3.0 million (Q2 2023: EUR 2.4 million). EBITDA increased by 27% as compared to last year and the EBITDA margin was 15% (Q2 2023: 13%). The profitability in the 2(nd) quarter received a boost from the successful sale of online advertising and digital subscriptions as well as the increase in the volume of ticket sales platforms and digital outdoor screens. In the first 6 months of 2024, the consolidated

EBITDA totalled EUR 3.5 million (6 months 2023: EUR 3.6 million). EBITDA decreased by -2% as compared to last year and the EBITDA margin was 10% (6 months 2023: 10%). The negative impact is due to the 1(st) quarter, when advertising revenue decreased as a result of the general weak economic environment in the Baltic States, which was also exacerbated by the fact that the election cycles were in later quarters as compared to last year.

The consolidated net profit for the 2(nd) quarter of 2024 totalled EUR 1.0 million (Q2 2023: EUR 0.6 million), increasing by 67%. The consolidated net loss for the first 6 months of 2024 totalled EUR -0.2 million (6 months 2023: EUR -0.1 million). The higher net loss is also primarily related to higher interest rates due to the increase in Euribor rates and higher depreciation expenses arising from the Group's investments.

EXPENSES

In the first 6 months of 2024, the cost of goods sold, marketing, and general and administrative costs totalled EUR 35.3 million (6 months 2023: EUR 34.0 million). Operating expenses increased by EUR 1.3 million (+4%) as compared to the same period last year. Labour costs increased the most, by EUR 0.7 million (+4%).

CASH POSITION

At the end of the reporting period, the Group had available cash in the amount of EUR 5.5 million and equity in the amount of EUR 55.0 million (53% of total assets). The comparable data as of 30 June 2023 were EUR 6.1 million and 53.1 million (51% of total assets), respectively. As of 30 June 2024, the Group's net debt totalled EUR 13.4 million (30 June 2023: EUR 14.7 million).

In the first 6 months of 2024, the Group's cash flows from operating activities totalled EUR 1.3 million (6 months 2023: EUR 4.4 million).

In the first 6 months of 2024, the Group's cash flows from investing activities totalled EUR -1.7 million (6 months 2023: EUR -1.5 million), of which EUR -2.0 million was related to the development and acquisition of tangible and intangible assets, demonstrating higher investments in products and technologies.

In the first 6 months of 2024, the Group's cash flows from financing activities totalled EUR -3.6 million, of which EUR -1.8 million is the dividend payment to the shareholders of AS Ekspress Grupp (6 months 2023: EUR -4.3 million, of which EUR -1.0 million is the share buy-back and EUR -1.5 million is the dividend payment to the shareholders of AS Ekspress Grupp). The financing activities also include the net change in borrowings in the amount of EUR -1.1 million and lease liabilities in the amount of EUR -1.1 million.

DIVIDENDS

At the regular general meeting of shareholders of AS Ekspress Grupp held on 3 May 2024, it was decided to pay a dividend of 6 euro cents per share in the total amount of EUR 1.8 million. Dividends were paid to shareholders on 22 May 2024.

SEGMENT OVERVIEW

Key financial indicators for segments

(EUR thousand)	Sales
			Q2 2024 Q2 2023 Change % 6M 2024 6M 2023 Change % 2023				12 months
Media segment	19 607	18 766	4%	35 813	35 634	1%	73 365
advertising revenue	11 579	11 124	4%	20 379	20 805	-2%	42 074
subscriptions (incl. single- copy sales)	5 034	4 658	8%	10 077	9 219	9%	19 016
marketplaces	754	603	25%	1 664	1 239	34%	3 434
outdoor screens	1 269	837	52%	2 052	1 526	34%	3 530
sale of other goods and services	971	1 543	-37%	1 641	2 845	-42%	5 311
Corporate functions	184	1 081	-83%	354	2 308	-85%	2 642
Inter-segment eliminations	(161)	(1 320)		(316)	(2 658)		(2 920)
TOTAL GROUP	19 631	18 528	6%	35 851	35 283	2%	73 086
incl. revenue from all digital channels	17 651	15 412	15%	31 319	28 796	9%	60 460
% of revenue from all digital channels	90%	83%		87%	82%		83%

(EUR thousand)	EBITDA
----------------	--------

				Q2 2024 Q2 2023 Change % 6M 2024 6M 2023 Change % 2023		12 months
Media segment	3 388	2 643	28% 4 302	4 121	4%	11 695
Corporate functions	(363)	(240)	-51% (841)	(561)	-50%	(1 477)
Inter-segment eliminations	18	(4)	22	(8)		(1)
TOTAL GROUP	3 042	2 399	27% 3 484	3 552	-2%	10 217
EBITDA margin	Q2 2024	Q2 2023	6M 2024	6M 2023	12 months 2023
Media segment	17%	14%	12%	12%	16%
TOTAL GROUP	15%	13%	10%	10%	14%
Consolidated statement of financial position (unaudited)

(EUR thousand)	30.06.2024	31.12.2023
-------------------------------------------------------------- ASSETS
-------------------------------------------------------------- Current assets
-------------------------------------------------------------- Cash and cash equivalents	5 512	9 606
-------------------------------------------------------------- Trade and other receivables	14 898	13 143
-------------------------------------------------------------- Corporate income tax prepayment	150	24
-------------------------------------------------------------- Inventories	342	321
-------------------------------------------------------------- Total current assets	20 903	23 094
-------------------------------------------------------------- Non-current assets
-------------------------------------------------------------- Other receivables and investments	1 752	1 628
-------------------------------------------------------------- Deferred tax asset	132	130
-------------------------------------------------------------- Investments in joint ventures	973	851

Investments in associates	2 243	2 197
-------------------------------------------------------------- Property, plant and equipment	10 111	10 384
-------------------------------------------------------------- Intangible assets	67 996	67 482
-------------------------------------------------------------- Total non-current assets	83 207	82 672
-------------------------------------------------------------- TOTAL ASSETS	104 110	105 766
-------------------------------------------------------------- LIABILITIES
-------------------------------------------------------------- Current liabilities
-------------------------------------------------------------- Borrowings (Note 5)	3 082	4 353
-------------------------------------------------------------- Trade and other payables	24 206	23 046
-------------------------------------------------------------- Corporate income tax payable	16	39
-------------------------------------------------------------- Total current liabilities	27 304	27 438
-------------------------------------------------------------- Non-current liabilities
-------------------------------------------------------------- Long-term borrowings	21 793	21 765
-------------------------------------------------------------- Other long-term liabilities	22	22
-------------------------------------------------------------- Total non-current liabilities	21 815	21 787
-------------------------------------------------------------- TOTAL LIABILITIES	49 118	49 225
-------------------------------------------------------------- EQUITY
-------------------------------------------------------------- Share capital	18 576	18 478
-------------------------------------------------------------- Share premium	14 277	14 277
-------------------------------------------------------------- Treasury shares	(5)	(1 057)
-------------------------------------------------------------- Reserves	2 364	2 285
-------------------------------------------------------------- Retained earnings	19 779	22 558
-------------------------------------------------------------- TOTAL EQUITY	54 991	56 541
-------------------------------------------------------------- TOTAL LIABILITIES AND EQUITY	104 110	105 766

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)	Q2 2024	Q2 2023	6M 2024		6M 2023 12 months 2023
------------------------------------------------------------------------------- Sales	19 631	18 528	35 851	35 283	73 086
------------------------------------------------------------------------------- Cost of sales	(14 689) (14 107)		(28 258)	(27 748)	(55 046)
------------------------------------------------------------------------------- Gross profit	4 941	4 422	7 593	7 535	18 040
------------------------------------------------------------------------------- Other income	132	110	289	181	581
------------------------------------------------------------------------------- Marketing expenses -------------------------------------------------------------------------------	(823)	(791)	(1 680)	(1 362)	(2 803)
Administrative expenses -------------------------------------------------------------------------------	(2 561)	(2 376)	(5 396)	(4 927)	(9 582)
Other expenses -------------------------------------------------------------------------------	(73)	(120)	(95)	(140)	(737)
Operating profit /(loss) -------------------------------------------------------------------------------	1 617	1 245	711	1 287	5 499
Interest income -------------------------------------------------------------------------------	25	10	61	19	60
Interest expenses -------------------------------------------------------------------------------	(451)	(347)	(908)	(677)	(1 499)
Other finance income/(costs)	(12)	(11)	(22)	(21)	(55)
------------------------------------------------------------------------------- Net finance cost	(439)	(347)	(870)	(679)	(1 494)
------------------------------------------------------------------------------- Profit/(loss) on shares of joint ventures -------------------------------------------------------------------------------	83	(242)	122	(795)	(661)
Profit/(loss) on shares of associates -------------------------------------------------------------------------------	169	2	250	130	239
Profit /(loss) before income tax -------------------------------------------------------------------------------	1 430	658	212	(57)	3 583
Income tax expense	(406)	(46)	(409)	(62)	(232)
------------------------------------------------------------------------------- Net profit /(loss) for the reporting period	1 025	612	(197)	(118)	3 351
------------------------------------------------------------------------------- Net profit /(loss) for the reporting period attributable to
------------------------------------------------------------------------------- Equity holders of the parent company	1 025	613	(197)	(120)	3 349

-------------------------------------------------------------------------------
Minority interest	0	(1)	0	2	2
------------------------------------------------------------------------------- Total comprehensive income /(loss) -------------------------------------------------------------------------------	1 025	612	(197)	(118)	3 351
Comprehensive income /(loss) for the reporting period attributable to
------------------------------------------------------------------------------- Equity holders of the parent company -------------------------------------------------------------------------------	1 025	613	(197)	(120)	3 349
Minority interest	0	(1)	0	2	2
------------------------------------------------------------------------------- Earnings per share (euro)
------------------------------------------------------------------------------- Basic earnings per share	0.0332	0.0205	(0.0064)	(0.0040)	0.1113
------------------------------------------------------------------------------- Diluted earnings per share -------------------------------------------------------------------------------	0.0332	0.0199	(0.0064)	(0.0039)	0.1081

Consolidated cash flow statement (unaudited)

(EUR thousand) -------------------------------------------------------------------------------			6M 2024 6M 2023 12 months 2023
Cash flows from operating activities -------------------------------------------------------------------------------
Operating profit /(loss) for the reporting year -------------------------------------------------------------------------------	711	1 287	5 499
Adjustments for (non-cash): -------------------------------------------------------------------------------
Depreciation and amortisation -------------------------------------------------------------------------------	2 773	2 265	4 719
(Gain)/loss on sale, write-down and impairment of property, plant and equipment -------------------------------------------------------------------------------	10	(4)	387
Change in value of share option -------------------------------------------------------------------------------	0	16	26
Cash flows from operating activities: -------------------------------------------------------------------------------
Trade and other receivables -------------------------------------------------------------------------------		(1 882) (5 409)	(1 539)
Inventories -------------------------------------------------------------------------------	(21)	26	(35)
Trade and other payables -------------------------------------------------------------------------------	895	6 885	4 921
Income tax paid -------------------------------------------------------------------------------	(559)	(108)	(263)

Interest paid	(669)	(540)	(1 476)
------------------------------------------------------------------------------- Net cash generated from operating activities	1 258	4 420	12 239
------------------------------------------------------------------------------- Cash flows from investing activities
------------------------------------------------------------------------------- Acquisition of subsidiaries/ associates (less cash acquired) and other investments / cash paid-in equity-accounted investees	0	(949)	(1 469)
------------------------------------------------------------------------------- Receipts of other investments	0	13	13
------------------------------------------------------------------------------- Interest received	60	2	28
------------------------------------------------------------------------------- Purchase of property, plant and equipment and intangible assets		(2 008) (1 232)	(3 391)
------------------------------------------------------------------------------- Proceeds from sale of property, plant and equipment and intangible assets	5	3	275
------------------------------------------------------------------------------- Loan repayments received	4	0	8
------------------------------------------------------------------------------- Dividends received	204	674	674
------------------------------------------------------------------------------- Net cash used in investing activities -------------------------------------------------------------------------------		(1 735) (1 489)	(3 862)
Cash flows from financing activities -------------------------------------------------------------------------------
Dividends paid		(1 848) (1 488)	(1 488)
------------------------------------------------------------------------------- Payment of lease liabilities	(1 142)	(940)	(2 004)
------------------------------------------------------------------------------- Repayments of bank loans	(1 122)	(840)	(1 727)
------------------------------------------------------------------------------- Proceeds from share issuance	98	0	0
------------------------------------------------------------------------------- Proceeds from sale of treasury shares	397	0	0
------------------------------------------------------------------------------- Purchases of treasury shares		0 (1 000)	(1 000)
------------------------------------------------------------------------------- Net cash used in financing activities		(3 617) (4 268)	(6 219)
------------------------------------------------------------------------------- NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(4 094) (1 337)	2 158
------------------------------------------------------------------------------- Cash and cash equivalents at the beginning of the period	9 606	7 448	7 448
------------------------------------------------------------------------------- Cash and cash equivalents at the end of the

Argo Rannamets CFO AS Ekspress Grupp E-mail address: argo.rannamets@egrupp.ee (mailto:argo.rannamets@egrupp.ee)

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AS Ekspress Grupp is the leading Baltic media group whose key activities include web media content production, and publishing of newspapers, magazines and books. The Group also operates an electronic ticket sales platform and ticket sales offices in Estonia and Latvia. Ekspress Grupp launched its operations in 1989 and employs almost 1100 people.