Quarterly Report • Oct 29, 2021
Quarterly Report
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Consolidated interim report for Q3 and 9 months of 2021
January-September 2021 | Unaudited
| MANAGEMENT REPORT 3 | |
|---|---|
| CONSOLIDATED INTERIM FINANCIAL STATEMENTS 19 | |
| Management Board's confirmation of the Group's interim financial statements 35 | |
| BRIEF OVERVIEW OF THE GROUP 36 |
In the 3rd quarter of 2021, the revenue of AS Ekspress Grupp totalled EUR 13.3 million and the revenue for the first nine months of the year totalled EUR 37.6 million. The Group's net profit for the 3rd quarter of 2021 was EUR 1.15 million and the net profit for the first 9 months of the year was EUR 1.82 million. At the end of September, the share of the Group's digital revenue was 74% of total revenue
In the 3rd quarter of 2021, the consolidated revenue totalled EUR 13.3 million (3rd quarter 2020: EUR 10.9 million), increasing by 22%. The revenue growth is attributable to the online advertising market which continues to grow as compared to traditional media channels. The advertising customers have adapted to the circumstances and the growth of the advertising business in all countries demonstrates that the majority of companies have been able to digitalise their businesses more; they have opened or adapted their ways of trading to e-channels and the need to advertise has recovered. However, the revenue of both ticket sales platforms as well as outdoor screens continues to be under pressure which is directly attributable to the effects of the COVID-19 pandemic. The effect is especially evident in the Latvian market where restrictions are currently considerably stricter than in other countries.
The number of the digital subscriptions of AS Ekspress Grupp increased by 75% by the end of September 2021 as compared to the same period last year and was approximately 122 thousand subscriptions.
The additional growth in digital subscriptions is primarily attributable to new customers and it demonstrates that more readers who have not yet become subscribers to the Group's products are being addressed. The Group is able to
come up with topics for an increasingly larger number of customers and thus those readers who have read articles for free also decide to sign up for digital subscriptions. The Group has also managed to keep its current digital subscribers for a longer period of time, lowering the share of those cancelling their subscriptions and increasing the average life of the subscription.
The earnings before interest, tax, depreciation and amortisation (EBITDA) of Ekspress Grupp totalled EUR 2.25 million in the 3rd quarter and EUR 5.05 million in the first 9 months of the year which is 38% and 62%, respectively, higher as compared to the same period in 2020. Strong sales of online advertising and digital subscriptions in all Baltic States and continued cost reductions have helped improve profitability. The net profit in the 3rd quarter totalled EUR 1.15 million which is 48% higher than in the same period last year. The net profit for the first 9 months
of the year totalled EUR 1.82 million which is six times higher than in the same period last year (9 months 2020: EUR 0.29 million).
At the beginning of September 2021, the Group concluded an agreement to sell Printall AS. The transaction was completed on 6 September 2021, as a result of which the Group incurred a sales loss in the amount of EUR 2.3 million and according to the agreement, after the adjustments to the sales price, the Group received a net amount of EUR 6.3 million. At the beginning of 2026, the
Group will receive another EUR 0.7 million, contingent upon the results of Printall in 2025. As a result of the transaction, the Group will exit the business with high CAPEX requirements that is not in line with the Group's digital revenue growth strategy. Availability of new capital will provide additional capacity for the Group to fund the digital area, both organically as well as through making new acquisitions. In this report, Ekspress Grupp presents the results for the 3rd quarter and 9 months of the current year as well as comparable periods in compliance with the requirements of IFRS set for interim reports, i.e. for its continuing operations. The loss from the sale of Printall and its operating results have been recognised as discontinued operations and are included in the Group's comprehensive income statement.
As of 30 September 2021, the Group had available cash in the amount of EUR 12.4 million (30 September 2020: EUR 5.8 million). The Group's liquidity continues to be good. In order to strengthen the Group's liquidity position and make more effective use of equity, the Group signed amendments to the loan agreements with AS SEB Pank in July 2021. The maturity dates of loans were extended by 5 years and monthly payments were reduced from EUR 0.2 million to EUR 0.06 million per month.
Due to its strong liquidity position and additional available funds from the sale of Printall AS, the Management Board of Ekspress Grupp made a proposition to the shareholders on 13 October 2021 to distribute extraordinary dividends of 10 euro cents per share in the total amount of EUR 3.03 million. Shareholder resolutions will be adopted without calling an extraordinary general meeting on 4 November 2021. The shareholders included in the share register of shareholders on 19 November 2021 will be entitled to receive dividends and dividends will be distributed on 23 November 2021.
The Supervisory Board of AS Ekspress Grupp has approved the Group's dividends policy according to which Ekspress Grupp will distribute at least 30% of its annual profit as dividends starting from 2022.
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. In the consolidated interim report for the 3rd quarter and the first 9 months of the year, the information is presented about continuing operations where the revenue and expenses of discontinued operations are shown in a separate line in the comprehensive income statement "Gain/-loss from discontinued operations". Until the sale, the business of Printall AS used to be recognised a separate printing services segment which the Group will disclose as a discontinued operation starting from this period. In the comprehensive income statement of the interim report and the segment overview, the comparative information of continuing operations has been restated. No restatements have been made to the consolidated balance sheet and cash flows in accordance with the requirements of IFRS. The assets of the printing services segment continue to be consolidated line-by-line in the balance sheet as of 31 December 2020, because the sale of Printall AS was not yet recognised as a discontinued operation as of 31 December 2020.
In the 3rd quarter of 2021, the consolidated revenue from continuing operations totalled EUR 13.3 million (3rd quarter 2020: EUR 10.9 million). Revenue increased by 22% year-over-year in the 3rd quarter. Both advertising as well as digital subscription revenue increased. The consolidated revenue from continuing operations for the first nine months of 2021 totalled EUR 37.6 million (first nine months of 2020: EUR 31.0 million). At the end of the 3rd quarter of 2021, the share of the Group's digital revenue accounted for 74% of total revenue (at the end of 3rd quarter 2020: 69% of total revenue). Digital revenue increased by 30% as compared to the same period last year.
In the 3rd quarter of 2021, the consolidated EBITDA of continuing operations totalled EUR 2.25 million (3rd quarter 2020: EUR 1.63 million). In the 3rd quarter of 2021, EBITDA increased by 38% as compared to the previous year and the EBITDA margin was 17.0% (3rd quarter 2020: 14.9%). Strong sales of online advertising, digital subscriptions and tight cost controls in all Baltic States have helped to improve profitability. The consolidated EBITDA of continuing operations for the first nine months of 2021 totalled EUR 5.05 million (first nine months of 2020: EUR 3.12 million) increasing by 62% compared to last year.
In the 3rd quarter of 2021, the consolidated net profit from continuing operations totalled EUR 1.15 million (3rd quarter 2020: EUR 0.77 million), which is EUR 0.37 million and 48% higher as compared to 2020. The consolidated net profit from continuing operations for the first nine months of 2021 totalled EUR 1.82 million (first nine months of 2020: EUR 0.29 million), which is EUR 1.53 million and 532% better as compared to 2020.
At the end of the reporting period, the Group had available cash in the amount of EUR 12.4 million and equity in the amount of EUR 54.4 million (61% of total assets). The comparable data as of 30 September 2020, including the printing services segment, were EUR 5.8 million and EUR 52.6 million (55% of total assets), respectively. As of 30 September 2021, the Group's net debt was EUR 6.2 million (30 September 2020: EUR 16.5 million). As of 30 September 2021, the cash position was positively impacted by net cash proceeds from the sale of the ownership interest in Printall AS in the amount of EUR 6.3 million (incl. premature payment of the outstanding loan balance of Printall AS to AS SEB Pank under the loan contract in the amount of EUR 2.06 million, see Note 7).
The cash position in 2020 was impacted by the agreements concluded with the banks due to the COVID-19 related state of emergency. Agreements were concluded with AS SEB Pank to suspend loan payments in the period March-August 2020 (EUR 1.2 million) and with AS Citadele banka in the period of June-November 2020 (EUR 0.3 million). The salary subsidy received from the Estonian Unemployment Insurance Fund (EUR 1.14 million) and the postponement of the payment of tax arrears (EUR 1.60 million) due to the state of emergency for the period of 24 months had an additional positive impact on the Group's cash position last year.
In conjunction with the sale of Printall AS, the Group's Management Board has proposed to the shareholders to distribute extraordinary dividends of 10 euro cents per share in the total amount of EUR 3.03 million. Shareholder resolutions will be adopted without calling the extraordinary general meeting of shareholders on 4 November 2021. The shareholders included in the register of shareholders on 19 November 2021 will be entitled to receive dividends and dividends will be distributed on 23 November 2021.
The Supervisory Board of AS Ekspress Grupp has approved the Group's dividends policy, according to which Ekspress Grupp will pay at least 30% of the annual profit as dividends starting from 2022.
| Performance indicators (EUR thousand) |
Q3 2021 |
Q3 2020 |
Change % |
9 months 2021 |
9 months 2020 |
Change % |
12 months 2020 |
|
|---|---|---|---|---|---|---|---|---|
| Continuing operations | ||||||||
| For the period | ||||||||
| Sales revenue | 13 265 | 10 914 | 22% | 37 573 | 30 978 | 21% | 44 514 | |
| EBITDA | 2 251 | 1 628 | 38% | 5 051 | 3 122 | 62% | 5 924 | |
| EBITDA margin (%) | 17.0% | 14.9% | 13.4% | 10.1% | 13.3% | |||
| Operating profit /(loss) | 1 401 | 925 | 51% | 2 563 | 959 | 167% | 3 071 | |
| Operating margin (%) | 10.6% | 8.5% | 6.8% | 3.1% | 6.9% | |||
| Interest expenses | (175) | (182) | 4% | (537) | (672) | 20% | (860) | |
| Profit /(loss) of joint ventures under the equity method |
42 | 99 | -57% | (128) | 107 | -220% | 102 | |
| Net profit from continuing operations |
1 145 | 772 | 48% | 1 823 | 289 | 532% | 2 566 | |
| Net margin (%) - continuing operations |
8.6% | 7.1% | 4.9% | 0.9% | 5.8% | |||
| Return on assets (ROA) (%) | 1.6% | 2.7% | 1.6% | 2.7% | 2.7% | |||
| Return on equity (ROE) (%) | 2.8% | 5.0% | 2.8% | 5.0% | 4.9% | |||
| Earnings per share (euro) - continuing operations | ||||||||
| Basic earnings per share | 0.04 | 0.03 | 0.06 | 0.01 | 0.09 | |||
| Diluted earnings per share |
0.04 | 0.02 | 0.06 | 0.01 | 0.08 |
| Balance sheet (EUR thousand) | 30.09.2021 | 31.12.2020 | Change % |
|---|---|---|---|
| As of the end of the period | |||
| Current assets | 21 743 | 18 482 | 18% |
| Non-current assets | 67 687 | 75 696 | -11% |
| Total assets | 89 430 | 94 177 | -5% |
| incl. cash and cash equivalents | 12 364 | 6 269 | 97% |
| incl. goodwill | 43 366 | 43 085 | 1% |
| Current liabilities | 16 187 | 18 945 | -15% |
| Non-current liabilities | 18 892 | 20 613 | -8% |
| Total liabilities | 35 079 | 39 558 | -11% |
| incl. borrowings | 18 517 | 22 202 | -17% |
| Equity | 54 351 | 54 619 | 0% |
| Net debt | 6 153 | 15 933 | -61% |
| Total capital | 60 504 | 70 552 | -14% |
| Financial ratios (%) | 30.09.2021 | 31.12.2020 | Change % |
|---|---|---|---|
| Equity ratio (%) | 61% | 58% | 5% |
| Debt to equity ratio (%) | 34% | 41% | -17% |
| Debt to capital ratio (%) | 10% | 23% | -57% |
| Total debt/EBITDA ratio | 2.36 | 3.17* | -26% |
| Liquidity ratio | 1.34 | 0.98 | 37% |
* 31.12.2020 Total debt/EBITDA ratio calculated on the basis of EBITDA, which also includes EBITDA from discontinued operations.
| 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 |
Starting from this interim report, the Group will be operating only in one continuing business area - the media segment.
| Key financial indicators for segments (continuing operations) | ||
|---|---|---|
| --------------------------------------------------------------- | -- | -- |
| (EUR thousand) | Sales | ||||||
|---|---|---|---|---|---|---|---|
| Q3 2021 | Q3 2020 | Change % | 9 months 2021 |
9 months 2020 |
Change % | 12 months 2020 |
|
| Media segment | 12 925 | 10 750 | 20% | 36 485 | 30 667 | 19% | 43 728 |
| incl. revenue from all digital and online channels |
10 061 | 7 812 | 29% | 27 664 | 21 338 | 30% | 30 963 |
| % of revenue from all digital and online channels |
78% | 73% | 76% | 70% | 71% | ||
| Corporate functions | 999 | 693 | 44% | 3 106 | 1 728 | 80% | 2 761 |
| Inter-segment eliminations | (660) | (529) | (2 018) | (1 417) | (1 975) | ||
| TOTAL GROUP | 13 265 | 10 914 | 22% | 37 573 | 30 978 | 21% | 44 514 |
| % of revenue from all digital and online channels |
76% | 72% | 74% | 69% | 70% |
Consolidated Interim Report for the Third Quarter and Nine Months of 2021
| (EUR thousand) | EBITDA | ||||||
|---|---|---|---|---|---|---|---|
| Q3 2021 | Q3 2020 | Change % | 9 months 2021 |
9 months 2020 |
Change % | 12 months 2020 |
|
| Media segment | 2 401 | 1 729 | 39% | 5 478 | 3 491 | 57% | 6 601 |
| Corporate functions | (134) | (90) | -49% | (423) | (325) | -30% | (720) |
| Inter-segment eliminations | (16) | (11) | (3) | (43) | 43 | ||
| TOTAL GROUP | 2 251 | 1 628 | 38% | 5 051 | 3 122 | 62% | 5 924 |
| EBITDA margin | Q3 2021 | Q3 2020 | 9 months 2021 | 9 months 2020 | 12 months 2020 |
|---|---|---|---|---|---|
| Media segment | 19% | 16% | 15% | 11% | 15% |
| TOTAL GROUP | 17% | 15% | 13% | 10% | 13% |
In the 3rd quarter of 2021, media segment revenue totalled EUR 12.9 million (3rd quarter 2020: EUR 10.8 million) and in the first nine months of 2021, revenue totalled EUR 36.5 million (first nine months of 2020: EUR 30.7 million). Revenue increased by 20% as compared to the 3rd quarter of last year. Advertising revenue has demonstrated a strong recovery, specifically in online media where the levels are higher as compared to pre-Covid times. Paper media advertising has not yet reached the 2019 levels and will remain challenging in the coming months. The advertising market has not grown in the Baltics, however the digital channels have gained momentum at the expense of other advertising channels which we believe will be a continuing trend in the future.
At the end of the 3rd quarter 2021, the share of the Group's digital revenue made up 74% of total revenue.
The EBITDA of the media segment in the 3rd quarter of 2021 totalled EUR 2.4 million (3rd quarter 2020: EUR 1.7 million) and in the first nine months of 2021, the EBITDA totalled EUR 5.5 million (first nine months of 2020: EUR 3.5 million). As compared to the 3rd quarter of the previous year, EBITDA increased by 39%. This was positively impacted a strong sales of online advertising, digital subscriptions and tight cost controls carried out throughout the Group.
The state of emergency related to COVID-19 has had the most profound impact on the Latvian ticket sales platform. In the 4th quarter of 2020, a state of emergency was imposed and all events were cancelled. The state of emergency in Latvia lasted until 4 April 2021 but strong restrictions remained in place until mid-June 2021. While most events took place in the 3rd quarter, starting from 11 October a state of emergency was reinstated in Latvia and from 21 October until 15 November 2021, all concerts will be cancelled and theatres will be closed in Latvia as additional restrictions.
Starting from April 2021 the Group also 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 both for ticket buyers as well as event organisers. The platform has been well received and we hope that Estonia will not suffer from such extreme restriction as Latvia.
The Latvian outdoor media company SIA D Screens that won a public tender granting it the right to rent the real estate properties owned by the City of Riga in the first half of the year, will actively continue developing the 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. Due to mobility restrictions in Latvia, between 21 October and 15 November 2021, it will difficult to maintain the revenue base of outdoor media.
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 3rd quarter of 2021, the revenue of Õhtuleht Kirjastus AS totalled EUR 3.4 million (3rd quarter 2020: EUR 3.2 million) and in the first nine months of 2021, the revenue totalled EUR 10.3 million (first nine months of 2020: EUR 9.9 million).
Consolidated Interim Report for the Third Quarter and Nine Months of 2021
| (number of subscripitons) | 30.09.2021 | 30.06.2021 | Change % | 31.12.2020 | Change % | 30.09.2020 | Change % |
|---|---|---|---|---|---|---|---|
| AS Ekspress Meedia | 72 860 | 69 082 | 5% | 49 696 | 47% | 46 362 | 57% |
| AS Õhtuleht Kirjastus | 19 198 | 16 102 | 19% | 13 820 | 39% | 12 653 | 52% |
| Delfi AS (Latvia) | 15 030 | 12 977 | 16% | 11 143 | 35% | 7 305 | 106% |
| Delfi UAB (Lithuania) | 14 786 | 12 092 | 22% | 6 595 | 124% | 3 348 | 342% |
| Ekspress Grupp total | 121 874 | 110 253 | 11% | 81 254 | 50% | 69 668 | 75% |
The number of digital subscriptions of the largest Baltic media group, AS Ekspress Grupp increased by 75% across the Baltic States year-over-year (11% in the 3rd quarter and 50% in the first nine months of 2021) and totalled 121 874 at the end of September.
In the 3rd quarter of 2021, rapid digital subscription growth continued in all the countries in which Ekspress Grupp operates. Additional digital growth is primarily attributable to new customers, indicating that we are increasingly more able to reach those readers who have not yet subscribed to our products. The Group Is able to come up with topics for an increasing number of customers which prompts the readers who have read articles for free to sign up for a digital subscription.
The addition of digital subscriptions will have a positive impact on the results of operations of Ekspress Grupp, confirming that its long-term strategic direction is appropriate. Ekspress Grupp has set digital subscription growth as one of its key objectives as it will provide a differentiated and an increasingly stronger digital revenue base for the Group's media outlets. The growth in digital subscription revenue is also important in terms of journalistic quality. Readers seek quality content that would prompt them to sign up and even higher quality content to remain subscribers.
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The 3rd quarter of 2021 was characterised by a low number of properties/offers in the real estate portals and the entire real estate market. On the other hand, interest in real estate properties remained strong, evidenced by the record number of searches in the history of Kinnisvara24.ee when 6 087 searches were made. The low number of offers is primarily due to the shortage of new developments in 2020, the normalisation of which may take additional 12 to 18 months depending on the construction duration of new projects.
In September 2021, AS Ekspress Grupp sold its 100% ownership interest in its subsidiary Printall AS. Until the sale, the business of Printall AS constituted a printing services segment whose revenue was generated by the paper and printing services. The printing services segment is reported as a discontinued operation in the consolidated interim report for the 3rd quarter and first nine months of 2021 and this segment's income and expenses are shown in a separate line of "Gain/-loss from discontinued operations" in the consolidated income statement.
The key conditions of the share sales agreement are as follows:
As a result of the transaction completed on 6 September 2021, the Group's loss from the sale of the operation totals EUR 2.3 million and the Group's net cash flow totals EUR 6.3 million. The effect of the sales transaction on the Group's financial statements is disclosed in more detail in Note 7.
As of 30 September 2021, the company's share capital is EUR 18 478 105 (31.12.2020: EUR 18 478 105), which is divided into 30 796 841 (31.12.2020: 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 | 2 541 583 | 8.25% |
| Members of the Management Boards* | 70 923 | 0.23% |
| Other minority shareholders | 5 117 691 | 16.62% |
| Treasury shares | 513 972 | 1.67% |
| 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.
Kaspra Hanni holds 18 462 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 67.55% (20 801 948 shares).
On 29 June 2021, an agreement was entered into, pursuant to which KJK Fund SICAV-SIF transferred all its 4 002 052 shares of AS Ekspress Grupp to OÜ HHL Rühm. The transferred shares are 13.00% of total AS Ekspress Grupp shares. The transaction was completed and the ownership of the shares was transferred on 12 August 2021.
Pursuant to the transaction, Hans Luik's share in AS Ekspress Grupp increased to 73.23% – OÜ HHL Rühm's shareholding increased to 47.37% (14 589 365 shares) and Hans Luik's shareholding remains the same 25.86% (7 963 307 shares).
The price of the share of Ekspress Grupp (EEG1T) in euros and the trading statistics on NASDAQ Tallinn Stock Exchange from 1 January 2017 until 30 September 2021.
The share price comparison (%) with Nasdaq Tallinn Stock Exchange index from 1 January 2017 until 30 September 2021.
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 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 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.
In conjunction with the sale of Printall AS, the Group's Management Board has proposed to the shareholders to distribute extraordinary dividends of 10 euro cents per share in the total amount of EUR 3.03 million. Shareholder resolutions will be adopted without calling the extraordinary general meeting of shareholders on 4 November 2021. The shareholders included in the register of shareholders on 19 November 2021 will be entitled to receive dividends. The date for changing the securities-related rights, i.e. ex-date is 18 November 2021. From this date, the persons who have acquired the shares will be no longer entitled to receive them.
The dividends will be distributed to shareholder's bank account linked with the shareholder's securities account on 23 November 2021.
As of 30 September 2021, the Group consists of 20 companies (31.12.2020: 22). A detailed list of group companies is disclosed in Note 1 to the financial statements.
In July 2021, AS Ekspress Grupp acquired a 100% ownership interest in Babahh Media OÜ that is engaged in sales of video production, media and infrastructure solutions. Until then, AS Ekspress Grupp owned 49% of the company.
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, for additional information, see Note 7.
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 will be completed within the next 6 months.
On 18 May 2021, the Supervisory Board of AS Ekspress Meedia decided to temporarily recall Karin Vene from the Management Board as of 15 August 2021. Karin Vene will be on a maternity leave. Piret Põldoja is elected as a member of the Management Board from the same date until 15 February 2023. Piret Põldoja will be responsible for the company's business development area. Starting from 15 August 2021, the Management Board of Ekspress Meedia will be as follows: Argo Virkebau (Chairman of the Board), Erle Laak-Sepp, Tarvo Ulejev, Urmo Soonvald and Piret Põldoja.
On 27 August 2021, AS Ekspress Grupp extended the mandate of Hans Luik and Mari-Liis Rüütsalu, members of the Supervisory Board of AS Ekspress Meedia – the 100% subsidiary of AS Ekspress Grupp – until 2 September 2026. The Supervisory Board of AS Ekspress Meedia will continue in the former four-member composition: Hans Luik (the Chairman), Mari-Liis Rüütsalu, Signe Kukin and Kaspar Hanni.
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 May 2021, 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 Management Board made this proposal in order to avoid physical gatherings during the corona pandemic. The notice of adoption of resolutions was published on 20 May 2021 in the stock exchange information system and on the company's homepage, as well as in the 21 May 2021 issue of newspaper LP Eesti Päevaleht.
On 15 June 2021, the shareholders of AS Ekspress Grupp adopted the following resolutions:
The approval of the 2020 annual report of AS Ekspress Grupp for the financial year from 1st of January 2020 to 31st of December 2020.
The extraordinary meeting of the shareholders of AS Ekspress Grupp was held on 13 July 2021 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:
The Supervisory Board of AS Ekspress Grupp consists of four members and includes:
On 15 June 2021, the mandate of Aleksandras Česnavičius as the Member of the Supervisory Board was extended until 16.06.2025.
The member of the Supervisory Board of AS Ekspress Grupp Peeter Saks who was member of the Supervisory Board of AS Ekspress Grupp since 26 October 2016, resigned from the position of the member of the Supervisory Board and of AS Ekspress Grupp on 11 January 2021.
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:
On 27 July 2021, the mandate of Signe Kukin as a Member of the Management Board was extended until 31.12.2024. At the same time, the mandate of Signe Kukin as a Member of the Supervisory Board of AS Ekspress Meedia – the 100% subsidiary of AS Ekspress Grupp – was also extended till 31.01.2026.
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 2021 is shown below:
| COMPANY* | SUPERVISORY BOARD | MANAGEMENT BOARD |
|---|---|---|
| Ekspress Meedia AS (14 752 030) |
Hans Luik (chairman), Mari-Liis Rüütsalu, Kaspar Hanni, Signe Kukin |
Argo Virkebau (chairman) Urmo Soonvald, Tarvo Ulejev, Erle Laak-Sepp, Piret Põldoja |
| Delfi UAB (3 416 303) |
Mari-Liis Rüütsalu (chairman), Kaspar Hanni, Signe Kukin |
Vytautas Benokraitis |
| SIA Biļešu Paradīze** (419 049) |
Mari-Liis Rüütsalu (chairman), Signe Kukin, Konstantins Kuzikovs |
Jānis Ķuzulis (chairman), Jānis Daube |
| Delfi A/S (Latvia) (3 736 101) |
Mari-Liis Rüütsalu (chairman), Kaspar Hanni, Signe Kukin |
Konstantins Kuzikovs (chairman), Ingus Bērziņš, Anatolijs Golubovs |
* The amount of equity of the key subsidiary that is held by the owners of the parent company as of 30 September 2021 is shown in parentheses.
** No supervisory board based on articles of association; SIA Delfi Ticket Services management board executes the role.
| Consolidated balance sheet (unaudited) 20 |
|---|
| Consolidated statement of comprehensive income (unaudited) 21 |
| Consolidated statement of changes in equity (unaudited) 22 |
| Consolidated cash flow statement (unaudited) 23 |
| SELECTED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS24 |
| Note 1. General information 24 |
| Note 2. Bases of preparation 25 |
| Note 3. Financial risk management 25 |
| Note 4. Property, plant and equipment, and intangible assets 26 |
| Note 5. Bank loans and borrowings 26 |
| Note 6. Segment reporting 27 |
| Note 7. Discontinued operation 30 |
| Note 8. Earnings per share 31 |
| Note 9. Share option plan 32 |
| Note 10. Equity and dividends 32 |
| Note 11. Related party transactions 33 |
| Note 12. Contingent assets and liabilities 34 |
| (EUR thousand) | 30.09.2021 | 31.12.2020 |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 12 364 | 6 269 |
| Trade and other receivables | 8 858 | 9 450 |
| Corporate income tax prepayment | 209 | 7 |
| Inventories | 312 | 2 756 |
| Total current assets | 21 743 | 18 482 |
| Non-current assets | ||
| Other receivables and investments | 1 662 | 982 |
| Deferred tax asset | 30 | 30 |
| Investments in joint ventures | 1 007 | 1 661 |
| Investments in associates | 2 094 | 2 253 |
| Property, plant and equipment (Note 4) | 6 191 | 14 134 |
| Intangible assets (Note 4) | 56 702 | 56 635 |
| Total non-current assets | 67 687 | 75 696 |
| TOTAL ASSETS | 89 430 | 94 177 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings (Note 5) | 1 671 | 3 613 |
| Trade and other payables | 14 385 | 15 251 |
| Corporate income tax payable | 130 | 81 |
| Total current liabilities | 16 187 | 18 945 |
| Non-current liabilities | ||
| Long-term borrowings (Note 5) | 16 846 | 18 589 |
| Other long-term liabilities | 2 046 | 2 025 |
| Total non-current liabilities | 18 892 | 20 613 |
| TOTAL LIABILITIES | 35 079 | 39 558 |
| EQUITY | ||
| Minority interest | 130 | 126 |
| Capital and reserves attributable to equity holders of parent company: | ||
| Share capital (Note 10) | 18 478 | 18 478 |
| Share premium | 14 277 | 14 277 |
| Treasury shares (Note 10) | (384) | (209) |
| Reserves (Note 10) | 1 911 | 1 758 |
| Retained earnings | 19 939 | 20 189 |
| Total capital and reserves attributable to equity holders of parent company | 54 221 | 54 493 |
| TOTAL EQUITY | 54 351 | 54 619 |
| TOTAL LIABILITIES AND EQUITY | 89 430 | 94 177 |
| (EUR thousand) | Q3 2021 | Q3 2020* | 9 months 2021 |
9 months 2020* |
12 months 2020* |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Sales | 13 265 | 10 914 | 37 573 | 30 978 | 44 514 |
| Cost of sales | (9 849) | (8 482) | (28 543) | (24 874) | (34 013) |
| Gross profit | 3 415 | 2 432 | 9 030 | 6 105 | 10 501 |
| Other income | 291 | 521 | 609 | 1 036 | 1 691 |
| Marketing expenses | (494) | (478) | (1 593) | (1 376) | (1 905) |
| Administrative expenses | (1 799) | (1 529) | (5 422) | (4 718) | (6 930) |
| Other expenses | (13) | (20) | (62) | (88) | (286) |
| Operating profit /(loss) | 1 401 | 925 | 2 563 | 959 | 3 071 |
| Interest income | 9 | 7 | 25 | 19 | 28 |
| Interest expenses | (175) | (182) | (537) | (672) | (860) |
| Other finance income/(costs) | (67) | (28) | (62) | (46) | 634 |
| Net finance cost | (233) | (204) | (574) | (699) | (198) |
| Profit/(loss) on shares of joint ventures | 42 | 99 | (128) | 107 | 102 |
| Profit/(loss) on shares of associates | 16 | (48) | 83 | (75) | (129) |
| Profit /(loss) before income tax | 1 226 | 773 | 1 944 | 292 | 2 846 |
| Income tax expense | (81) | (1) | (120) | (3) | (280) |
| Net profit from continuing operations | 1 145 | 772 | 1 823 | 289 | 2 566 |
| Net profit /(loss) from discontinued operation | (2 230) | 310 | (1 926) | 633 | (30) |
| Net profit /(loss) for the reporting period | (1 085) | 1 081 | (103) | 921 | 2 536 |
| Net profit /(loss) for the reporting period attributable to | |||||
| Equity holders of the parent company | (1 087) | 1 074 | (107) | 906 | 2 510 |
| Minority interest | 2 | 7 | 4 | 15 | 26 |
| Total comprehensive income /(loss) | (1 085) | 1 081 | (103) | 921 | 2 536 |
| Comprehensive income /(loss) for the reporting period attributable to | |||||
| Equity holders of the parent company | (1 087) | 1 074 | (107) | 906 | 2 510 |
| Minority interest | 2 | 7 | 4 | 15 | 26 |
| Earnings per share (euro) - continuing operations | |||||
| Basic earnings per share (Note 8) | 0.04 | 0.03 | 0.06 | 0.01 | 0.09 |
| Diluted earnings per share (Note 8) | 0.04 | 0.02 | 0.06 | 0.01 | 0.08 |
| Earnings per share (euro) | |||||
| Basic earnings per share (Note 8) | (0.04) | 0.04 | 0.00 | 0.03 | 0.08 |
| Diluted earnings per share (Note 8) | (0.03) | 0.03 | 0.00 | 0.03 | 0.08 |
*2020 figures adjusted and show only the results of operations from continuing operations consolidated on a line-byline basis (see Note 7).
| 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 31.12.2019 | 17 878 | 14 277 | (22) | 1 688 | 17 701 | 51 522 | 100 | 51 622 |
| Increase of statutory reserve capital | 0 | 0 | 0 | 70 | (70) | 0 | 0 | 0 |
| Total transactions with owners | 0 | 0 | 0 | 70 | (70) | 0 | 0 | 0 |
| Other changes | 0 | 0 | 0 | 0 | 9 | 9 | 0 | 9 |
| Net profit /(loss) for the reporting period | 0 | 0 | 0 | 0 | 906 | 906 | 15 | 921 |
| Total comprehensive income / (loss) for the reporting period |
0 | 0 | 0 | 0 | 906 | 906 | 15 | 921 |
| Balance on 30.09.2020 | 17 878 | 14 277 | (22) | 1 758 | 18 546 | 52 437 | 115 | 52 552 |
| 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 | (107) | (107) | 4 | (103) |
| Total comprehensive income / (loss) for the reporting period |
0 | 0 | 0 | 0 | (107) | (107) | 4 | (103) |
| Balance on 30.09.2021 | 18 478 | 14 277 | (384) | 1 911 | 19 939 | 54 221 | 130 | 54 351 |
| (EUR thousand) | 9 months 2021 |
9 months 2020 |
12 months 2020 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Operating profit for the reporting year (Note 6) | 709 | 1 593 | 3 078 |
| Adjustments for (non-cash): | |||
| Depreciation and amortisation (Note 4) | 3 349 | 2 974 | 3 968 |
| (Gain)/loss on sale, write-down and impairment of property, plant and equipment |
35 | (1) | 986 |
| Change in value of share option | 27 | 0 | 0 |
| Loss on sale of discontinued operation (Note 7) | 2 077 | 0 | 0 |
| Cash flows from operating activities: | |||
| Trade and other receivables | (1 370) | 1 880 | 3 274 |
| Inventories | (79) | 214 | 375 |
| Trade and other payables | 337 | 327 | (1 201) |
| Cash generated from operations | 5 086 | 6 987 | 10 480 |
| Income tax paid | (272) | (91) | (263) |
| Interest paid | (405) | (453) | (903) |
| Net cash generated from operating activities | 4 409 | 6 443 | 9 314 |
| Cash flows from investing activities | |||
| Acquisition of subsidiaries/ associates (less cash acquired) and other investments / cash paid-in equity-accounted investees |
(201) | (203) | (425) |
| Disposal of discontinued operation, net of cash disposed of (Note 7) | 6 326 | 0 | 0 |
| Receipts of other investments | 51 | 84 | 16 |
| Interest received | 3 | 1 | 2 |
| Purchase of property, plant and equipment and intangible assets (Note 4) |
(1 901) | (1 623) | (2 562) |
| Proceeds from sale of property, plant and equipment and intangible assets |
3 | 29 | 308 |
| Loans granted | (130) | (187) | (331) |
| Dividends received | 828 | 150 | 150 |
| Net cash used in investing activities | 4 978 | (1 750) | (2 841) |
| Cash flows from financing activities | |||
| Payment of lease liabilities | (1 389) | (693) | (949) |
| Change in overdraft | 0 | (1 018) | (1 018) |
| Loans received / Repayments of bank loans (Note 5) | (1 455) | (868) | (1 884) |
| Proceeds from share issuance | 0 | 0 | 600 |
| Purchases of treasury shares | (446) | 0 | (600) |
| Net cash used in financing activities | (3 290) | (2 579) | (3 851) |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | 6 096 | 2 114 | 2 621 |
| Cash and cash equivalents at the beginning of the period | 6 269 | 3 647 | 3 647 |
| Cash and cash equivalents at the end of the period | 12 364 | 5 760 | 6 269 |
The main fields of activity of AS Ekspress Grupp and its subsidiaries include online media, publishing of newspapers, magazines and books and provision of printing services. AS Ekspress Grupp (registration number 10004677, address: Parda 6, 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 2021. 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 30.09.2021 |
Ownership interest 31.12.2020 |
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 (established in March 2020 through a spin-off from AS Printall) |
Estonia | |
| Operating segment: media (online and print media) | ||||||
| Ekspress Meedia AS | Subsidiary | 100% | 100% | Online media, publishing of daily and weekly newspapers | 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% | 100% | Holding company | 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 | |
| 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 (established in March 2020) |
Estonia | |
| Adnet Media UAB | Subsidiary | 100% | 100% | Online advertising solutions and network | Lithuania | |
| Adnet Media SIA | Subsidiary | 100% | 100% | Online advertising solutions and network | Latvia | |
| Videotinklas UAB | Subsidiary | 100% | 100% | Production studio for content creation | Lithuania | |
| Õhtuleht Kirjastus AS | Joint venture | 50% | 50% | Newspaper and magazine publishing | Estonia | |
| Express Post AS | Joint venture | 50% | 50% | Home delivery of periodicals | Estonia | |
| Linna Ekraanid OÜ | Subsidiary | 100% | 100% | Sale of digital outdoor advertising | Estonia | |
| Babahh Media OÜ | Subsidiary | 100% | 49% | Sale of video production, media and infrastructure solutions |
Estonia | |
| Kinnisvarakeskkond OÜ | Associate | 49% | 49% | Development of a real estate portal | Estonia | |
| Operating segment: printing services (discontinued operation) | ||||||
| Printall AS | Subsidiary | 0% | 100% | Printing services (disposed in September 2021) | Estonia | |
The consolidated interim financial statements of AS Ekspress Grupp for the 3rd quarter and 9 months ended on 30 September 2021 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 2020.
The Management Board estimates that the interim consolidated financial statements for the 3rd quarter and 9 months 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 2020.
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.
| Property, plant and equipment | Intangible assets | ||||
|---|---|---|---|---|---|
| (EUR thousand) | 9 months 2021 | 9 months 2020 | 9 months 2021 | 9 months 2020 | |
| Balance at beginning of the period | |||||
| Cost | 42 714 | 41 551 | 77 076 | 75 854 | |
| Accumulated depreciation and amortisation | (28 580) | (26 608) | (20 441) | (19 485) | |
| Carrying amount | 14 134 | 14 943 | 56 635 | 56 369 | |
| Acquisitions and improvements* | 2 907 | 1 316 | 1 347 | 845 | |
| Disposals (at carrying amount) | (2) | 0 | 0 | 0 | |
| Write-down, write-off and impairment of non current assets |
(61) | (2) | (51) | (25) | |
| Reclassification | 39 | 0 | (40) | 0 | |
| Acquired through business combinations | 41 | 1 | 282 | 457 | |
| Disposed through business combinations | (8 608) | 0 | (382) | 0 | |
| Depreciation and amortisation | (2 260) | (1 911) | (1 089) | (1 063) | |
| Balance at end of the period | |||||
| Cost | 12 610 | 42 799 | 77 657 | 77 118 | |
| Accumulated depreciation and amortisation | (6 419) | (28 451) | (20 955) | (20 535) | |
| Carrying amount | 6 191 | 14 348 | 56 702 | 56 583 |
* Acquisition and improvements of property, plant and equipment in 2021 include the recognition of right of use leased assets in the amount of EUR 1 332 thousand according to the accounting standard IFRS 16 "Leases".
| Repayment term | ||||
|---|---|---|---|---|
| (EUR thousand) | Total amount | Up to 1 year |
Between 1-5 years |
More than 5 years |
| Balance as of 30.09.2021 | ||||
| Overdraft | 0 | 0 | 0 | 0 |
| Long-term bank loans | 9 031 | 1 320 | 7 711 | 0 |
| Notes | 5 000 | 0 | 0 | 5 000 |
| Lease liability | 4 486 | 351 | 4 135 | 0 |
| Total | 18 517 | 1 671 | 11 846 | 5 000 |
| Balance as of 31.12.2020 | ||||
| Overdraft | 0 | 0 | 0 | 0 |
| Long-term bank loans | 12 545 | 2 401 | 10 144 | 0 |
| Notes | 5 000 | 0 | 0 | 5 000 |
| Lease liability | 4 657 | 1 212 | 3 445 | 0 |
| Total | 22 202 | 3 613 | 13 589 | 5 000 |
Within the framework of the sale transaction of ownership interest in Printall AS, the premature payment of the outstanding loan balance of Printall AS to AS SEB Pank under the loan contract in the amount of EUR 2.06 million was made.
In July 2021 AS Ekspress Grupp and AS SEB Pank signed amendments to the loan agreements, as a result of which the new due date of the loans is 18 July 2026 instead of the previous date of 25 April 2022. According to the new agreement, the monthly repayment was reduced from EUR 204 thousand a month to EUR 60 thousand a month.
In addition, a new loan agreement was concluded with AS SEB Pank to refinance the loan of AS Citadele banka in the amount of EUR 2.1 million with due date 3 June 2024. According to the new agreement the loan repayment schedule will remain unchanged, the new due date is 18 July 2026.
According to the new agreements the interest margin will be in the range of 1.75%-1.9% instead of the previous 1.9%- 3.9%. Other key terms of the loan agreements remained unchanged.
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.
In September 2021, AS Ekspress Grupp sold its 100% ownership interest in its subsidiary Printall AS. Until the sale, the operations of Printall AS made up the printing services segment. The printing services segment is recognised as a discontinued operation in the consolidated interim report for the 3rd quarter and first nine months of 2021, and this segment's income and expenses are shown in a separate line "Gain/-loss from discontinued operations" in the consolidated comprehensive income statement.
Beginning with this interim report, the Group will have 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 (bilesuparadize.lv) and box offices in Latvia, and production studio for content creation in Lithuania.
This segment includes subsidiaries Ekspress Meedia AS (Estonia), AS Delfi (Latvia), UAB Delfi (Lithuania), OÜ Hea Lugu (Estonia), D Screens SIA (Latvia), Adnet Media (Lithuania, Estonia, Latvia), Linna Ekraanid OÜ (Estonia), Babahh Media OÜ (Estonia), SIA Biļešu Paradīze (Latvia) and Videotinklas UAB (Lithuania).
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. Volume-based and other fees payable to advertising agencies have not been deducted from the advertising sales of segments, because the Group's management monitors the gross income of companies and segments. Discounts and volume rebates are reported as a reduction of the consolidated sales revenue and are shown in the aggregate line of eliminations. 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.
Consolidated Interim Report for the Third Quarter and Nine Months of 2021
| Q3 2021 (EUR thousand) |
Media | Printing services (discontinued)* |
Corporate functions |
Eliminations | Total Group (continuing+ discontinued)* |
|---|---|---|---|---|---|
| Sales to external customers | 12 910 | 2 729 | 321 | 0 | 15 959 |
| Inter-segment sales | 15 | 353 | 679 | (1 047) | 0 |
| Total segment sales | 12 925 | 3 082 | 999 | (1 047) | 15 959 |
| EBITDA | 2 401 | 264 | (134) | (32) | 2 500 |
| EBITDA margin | 19% | 9% | 16% | ||
| Depreciation (Note 4) | 1 043 | ||||
| Operating profit /(loss) | (816) | ||||
| Investments (Note 4) | 707 |
* see Note 7
| Q3 2020 (EUR thousand) |
Media | Printing services (discontinued)* |
Corporate functions |
Eliminations | Total Group (continuing+ discontinued)* |
|---|---|---|---|---|---|
| Sales to external customers | 10 737 | 4 331 | 152 | 0 | 15 220 |
| Inter-segment sales | 13 | 570 | 542 | (1 125) | 0 |
| Total segment sales | 10 750 | 4 901 | 693 | (1 125) | 15 220 |
| EBITDA | 1 729 | 603 | (90) | (11) | 2 231 |
| EBITDA margin | 16% | 12% | 15% | ||
| Depreciation (Note 4) | 963 | ||||
| Operating profit /(loss) | 1 274 | ||||
| Investments (Note 4) | 597 |
* see Note 7
| 9 months 2021 (EUR thousand) |
Media | Printing services (discontinued)* |
Corporate functions |
Eliminations | Total Group (continuing+ discontinued)* |
|---|---|---|---|---|---|
| Sales to external customers | 36 440 | 11 707 | 993 | 0 | 49 140 |
| Inter-segment sales | 45 | 1 537 | 2 113 | (3 695) | 0 |
| Total segment sales | 36 485 | 13 244 | 3 106 | (3 695) | 49 140 |
| EBITDA | 5 478 | 1 286 | (423) | (85) | 6 255 |
| EBITDA margin | 15% | 10% | 13% | ||
| Depreciation (Note 4) | 3 349 | ||||
| Operating profit /(loss) | 709 | ||||
| Investments (Note 4) | 4 254 |
* see Note 7
| 9 months 2020 (EUR thousand) |
Media | Printing services (discontinued)* |
Corporate functions |
Eliminations | Total Group (continuing+ discontinued)* |
|---|---|---|---|---|---|
| Sales to external customers | 30 620 | 13 941 | 306 | 0 | 44 867 |
| Inter-segment sales | 47 | 1 773 | 1 423 | (3 243) | 0 |
| Total segment sales | 30 667 | 15 714 | 1 728 | (3 243) | 44 867 |
| EBITDA | 3 491 | 1 434 | (325) | (43) | 4 556 |
| EBITDA margin | 11% | 9% | 10% | ||
| Depreciation (Note 4) | 2 974 | ||||
| Operating profit /(loss) | 1 593 | ||||
| Investments (Note 4) | 2 162 |
* see Note 7
| (EUR thousand) | Sales | |||||
|---|---|---|---|---|---|---|
| Q3 2021 | Q3 2020 | 9 months 2021 | 9 months 2020 | |||
| Total Group (continuing+discontinued) | 15 959 | 15 220 | 49 140 | 44 867 | ||
| Elimination of discontinued operation | (3 082) | (4 901) | (13 244) | (15 714) | ||
| Inter-segment eliminations | 387 | 595 | 1 677 | 1 826 | ||
| TOTAL GROUP | 13 265 | 10 914 | 37 573 | 30 978 |
| (EUR thousand) | EBITDA | |||||
|---|---|---|---|---|---|---|
| Q3 2021 | Q3 2020 | 9 months 2021 | 9 months 2020 | |||
| Total Group (continuing+discontinued) | 2 500 | 2 231 | 6 255 | 4 556 | ||
| Elimination of discontinued operation | (264) | (603) | (1 286) | (1 434) | ||
| Inter-segment eliminations | 16 | 0 | 83 | 0 | ||
| TOTAL GROUP | 2 251 | 1 628 | 5 051 | 3 122 |
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. In the consolidated interim report for the 3rd quarter and the first 9 months of the year, the information is presented about continuing operations where the revenue and expenses of discontinued operations are shown in a separate line in the comprehensive income statement "Gain/-loss from discontinued operations". Until the sale, the business of Printall AS used to be recognised a separate printing services segment which the Group will disclose as a discontinued operation starting from this period. In the comprehensive income statement of the interim report and the segment overview, the comparative information of continuing operations has been restated. No restatements have been made to the consolidated balance sheet and cash flows in accordance with the requirements of IFRS. The assets of the printing services segment continue to be consolidated line-by-line in the balance sheet as of 31 December 2020, because the sale of Printall AS was not yet recognised as a discontinued operation as of 31 December 2020.
| Results of discontinued operation | ||
|---|---|---|
| -- | ----------------------------------- | -- |
| (EUR thousand) | 9 months 2021 | 9 months 2020 | 12 months 2020 |
|---|---|---|---|
| Segment sales revenue | 13 244 | 15 714 | 21 384 |
| Elimination of inter-segment revenue | (1 677) | (1 826) | (2 655) |
| Sales to external customers | 11 567 | 13 888 | 18 730 |
| Segment expenses | (12 898) | (15 081) | (21 414) |
| Elimination of expenses related to inter-segment sales | 1 677 | 1 826 | 2 655 |
| External expenses | (11 221) | (13 256) | (18 760) |
| Net profit /(loss) for the reporting period | 346 | 633 | (30) |
| Loss on sale of discontinued operation | (2 272) | - | - |
| Net profit /(loss) from discontinued operation | (1 926) | 633 | (30) |
| Basic earnings per share (euro) | (0.06) | 0.02 | 0.00 |
| Diluted earnings per share (euro) | (0.06) | 0.02 | 0.00 |
| (EUR thousand) | 9 months 2021 | 9 months 2020 | 12 months 2020 |
|---|---|---|---|
| Net cash generated from operating activities | 1 079 | 2 293 | 3 350 |
| Net cash used in investing activities | 6 151 | (406) | (512) |
| Net cash used in financing activities | (1 514) | (1 528) | (2 236) |
| Net cash flows for the period | 5 716 | 359 | 602 |
| (EUR thousand) | 2021 |
|---|---|
| Net assets and liabilities | (9 312) |
| Consideration received, satisfied in cash | 6 340 |
| Deferred payment | 700 |
| Cash and cash equivalents disposed of | (14) |
| Net cash inflows | 6 326 |
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 2021 | Q3 2020 | |||||
|---|---|---|---|---|---|---|
| EUR | Continuing operations |
Discontinued operation |
Total | Continuing operations |
Discontinued operation |
Total |
| Profit / (loss) attributable to equity holders |
1 142 254 | (2 229 612) | (1 087 357) | 764 593 | 309 544 | 1 074 137 |
| Average number of ordinary shares at the end of the period |
30 282 869 | 30 282 869 | 30 282 869 | 29 779 314 | 29 779 314 | 29 779 314 |
| Number of ordinary shares potentially issued at the end of the period |
1 064 071 | 1 064 071 | 1 064 071 | 2 853 966 | 2 853 966 | 2 853 966 |
| Basic earnings per share | 0.04 | (0.07) | (0.04) | 0.03 | 0.01 | 0.04 |
| Diluted earnings per share | 0.04 | (0.07) | (0.03) | 0.02 | 0.01 | 0.03 |
| 9 months 2021 | 9 months 2020 | ||||||
|---|---|---|---|---|---|---|---|
| EUR | Continuing operations |
Discontinued operation |
Total | Continuing operations |
Discontinued operation |
Total | |
| Profit / (loss) attributable to equity holders |
1 818 958 | (1 925 904) | (106 946) | 273 402 | 632 778 | 906 180 | |
| Average number of ordinary shares at the end of the period |
30 229 763 | 30 229 763 | 30 229 763 | 29 779 314 | 29 779 314 | 29 779 314 | |
| Number of ordinary shares potentially issued at the end of the period |
1 064 071 | 1 064 071 | 1 064 071 | 2 853 966 | 2 853 966 | 2 853 966 | |
| Basic earnings per share | 0.06 | (0.06) | 0.00 | 0.01 | 0.02 | 0.03 | |
| Diluted earnings per share | 0.06 | (0.06) | 0.00 | 0.01 | 0.02 | 0.03 |
In June 2017, the General Meeting of Shareholders approved the share option plan for key employees, which was mostly exercised at the end of 2020 and in the 1st quarter of 2021.
By 30 September 2021, the balance of issued options of the share option plan approved in 2017 was 69 thousand (as of 31.12.2020: 450 thousand options issued), each of which grants the right to receive one share of the company free of charge. As a rule, 1/3 of the options can be earned in each calendar year. Equity options were exercisable from December 2020. As of 30 September 2021, the remaining liability of the mentioned stock option amounted to EUR 51 thousand (31.12.2020: EUR 289 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 2021 total amount of share options granted was 1 064 thousand, each giving a right to acquire one share at the nominal price of the shares at the time of the issuing the options. 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.
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 2021 this reserve totalled EUR 27 thousand (31.12.2020 EUR 0).
As of 30 September 2021, the company's share capital is EUR 18 478 105 (31.12.2020: EUR 18 478 105), which is divided into 30 796 841 (31.12.2020: 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 the first 9 months 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.
As of 30 September 2021, the Company had 513 972 treasury shares (31.12.2020: 341 421) in the total amount of EUR 384 thousand (31.12.2020: EUR 209 thousand) to be used for the current share option plan.
In conjunction with the sale of Printall AS, the Group's Management Board has proposed to the shareholders to distribute extraordinary dividends of 10 euro cents per share in the total amount of EUR 3.03 million. Shareholder resolutions will be adopted without calling the extraordinary general meeting of shareholders on 4 November 2021. The shareholders included in the register of shareholders on 19 November 2021 will be entitled to receive dividends. The date for changing the securities-related rights, i.e. ex-date is 18 November 2021. From this date, the persons who have acquired the shares will be no longer entitled to receive them.
The dividends will be distributed to shareholder's bank account linked with the shareholder's securities account on 23 November 2021.
As of 30 September 2021, it is possible to distribute dividends without income tax payment in the total amount of EUR 27.5 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 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 |
| (EUR thousand) | 9 months 2020 | 30.09.2020 | 31.12.2019 | |||
|---|---|---|---|---|---|---|
| Sales | Purchases | Receivables | Payables | Receivables | Payables | |
| Companies controlled by the Key Management Personnel |
4 | 314 | 2 | 24 | 9 | 12 |
| Associates | 121 | 24 | 161 | 2 | 182 | 0 |
| Joint ventures | 320 | 834 | 279 | 185 | 107 | 116 |
| Total | 445 | 1 172 | 442 | 211 | 297 | 128 |
* 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".
According to the decision of the General Meeting held on 4 May 2012, Hans H. Luik will be paid a guarantee fee for granting the financing agreements, of 1.5% per annum on the guarantee amount for the personal guarantee of EUR 4 million until the provided guarantee expires. In the first 9 months 2021, a payment of EUR 45 thousand (9 months 2020: EUR 41 thousand) was paid for the personal guarantee and there are no outstanding liabilities as of 30 September 2021 and 31 December 2020.
| (EUR thousand) | 9 months 2021 | 9 months 2020 |
|---|---|---|
| Salaries and other benefits (without social tax) | 1 309 | 1 132 |
| Share option | 22 | 24 |
| Total (without social tax) | 1 331 | 1 156 |
The members of all management boards of the group companies (incl. key management of foreign subsidiaries if these companies do not have management board as per Estonian Commercial Code) (hereinafter Key Management) are entitled to receive compensation upon expiry or termination of their contracts in accordance with the terms laid down in their employment contracts. The Key Management terminations benefits are payable only in case the termination of contracts is originated by the company. If a member of the Key Management is recalled without a substantial reason, a notice thereof shall be given up to 3 months in advance and the member shall be paid compensation for termination of the contract in the amount of up to 8 months' salary. Upon termination of an employment relationship, no compensation shall be usually paid if a member of the Key Management leaves at his or her initiative or if a member of the Key Management is removed by the Supervisory Board with a valid reason. As of 30 September 2021, the maximum gross amount of potential Key Management termination benefits was EUR 704 thousand (31.12.2020: EUR 759 thousand). No remuneration is paid separately or in addition to the members of the Supervisory Boards of the Group companies and no compensation is paid if they are recalled.
On 28 April 2020, Harju County Court forwarded a statement of claim of MM Grupp OÜ to AS Ekspress Meedia, in which MM Grupp OÜ demands EUR 2.0 million from AS Ekspress 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 Ekspress 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.
The Management Board confirms that the management report and interim consolidated financial statements of AS Ekspress Grupp disclosed on pages 3 to 34 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 | 28.10.2021 |
|---|---|---|---|
| Signe Kukin | member of the Management Board | signed digitally | 28.10.2021 |
| Kaspar Hanni | member of the Management Board | signed digitally | 28.10.2021 |
Ekspress Grupp with its 30-year history is the leading media group in the Baltic States that owns four media companies in Estonia, Latvia and Lithuania and one of the largest printing houses in the Baltic States. We have a strong internal capability for provision of digital content and advertising solutions, and we arrange impressive and memorable entertainment events.
Our customers are media content consumers (retail and business customers), advertising buyers and other organisations that purchase the services of our companies.
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 67.55%.
*The number of digital subscriptions, periodicals, online media platforms, companies and employees also includes the data of joint ventures and associates.
*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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