Amsterdam,
27
September
2016
|
07:32
Europe/Amsterdam

TMG Investor Relations day: delivering on our 24/7 strategy

Today, during the Investor Relations day, TMG will provide an update on its 24/7 strategy and the progress of the organisational changes announced at the first half-year results presentation. The 24/7 strategy focuses on creating and distributing relevant content to all consumers anywhere and anytime, via all conceivable distribution channels (a.o. print and mobile), and on further strengthening the reach of TMG’s main brands, for which all existing data is used. This process proceeds according to a strict time-schedule and is executed on an ongoing basis. This enables us to adapt to the constant changes in the Dutch media- and consumer market. TMG is executing its strategy on the basis of three pillars: focus, fixing the core and future-proofing the organization.

Geert-Jan van der Snoek, CEO of TMG: “During the last couple of months we have sharpened the focus of our strategic direction. The organisational changes we have announced put us on track to future-proof our organisation. Not only are we reducing our cost base and realising internal synergy and synergies with our partners, we are also making the organisation more flexible, increasing our potential to develop new initiatives, products and services on a continuing basis for our consumers and clients. The strategic partnerships with cross medial partners like Talpa provide TMG growth opportunities towards the future. We strengthen the development of TMG to a modern media company, providing relevant content anywhere, anytime via any distribution channel. Overall, TMG’s strategy ensures the realization of the present underlying values of our strong brands and our business units.”

Strategic partnership with Talpa

The previously announced radio partnership with Talpa offers TMG advantages both from a strategic and from a financial perspective. For TMG, this deal improves the solvency ratio by approximately 3% and will result in a non-cash book profit in 2016. Furthermore, the EBITDA contribution from Sky Radio Group (SRG) will be replaced by the share in the result in associates of the new (radio) entity. The cash generation from SRG (EUR 2.6 million in 2015) in the cash flow statement will be replaced by dividend from investments in associates, estimated at EUR 3 million to EUR 4 million annually. The outcome of the dispute with the Dutch government on the valuation of the ‘Radio Veronica license’ is not part of this transaction.

Outlook 2019

As part of the TMG strategy and the organisational transformation, we will continue to invest in expanding our digital activities and our reach, both organically and through (strategic) partnerships. In 2019, these combined measures will lead to:

  1. A double digit Continuing EBIT margin (1.3% in 2015, > 4% in 2017, >10% in 2019)
  2. A cost reduction of EUR 90 million (2017 EUR 40 million)
  3. Growth of the digital revenue component of total revenue to > 25% (13% in 2015, 2017 > 16%)
  4. A dividend pay-out ratio of 35% of the operational cash flow

Subsequent to the reorganisations of the printing capacity and several parts of HMC and TMG Landelijke Media, in 2015 the first steps have been taken to make the organization future-proof. At the presentation of the 2016 half-year result additional organizational changes have been announced that aim to reduce the cost base by at least 20% over the year 2018 (compared to 2015, excluding investments in new activities). This will result in a reduction of cost of EUR 90 million in 2019 compared to 2015. The expected restructuring costs in total are expected to amount between EUR 30 and EUR 40 million.

As part of the restructuring of the company TMG is in the advanced stage of exploring the further reduction of the tangible fixed assets on the balance sheet. This includes the possibility of a sale-and-leaseback transaction of the real estate portfolio, for which an initial analysis shows a minimal market value of between EUR 60 million and EUR 80 million for the land and building located at Basisweg Amsterdam.

For Keesing it has been determined that additional international expansion, rationalisation and efficiency can be achieved. The coming years this will result in a notable improvement of the margin (by at least one percentage point per year).

Investor Relations day

Participation of today’s Investor Relations day is on an invitation only basis. All relevant information will be published on TMG’s website: https://www.tmg.nl/nl/audio-webcasts-en-presentaties. A live audio webcast of the presentations will also be made available on the website.

About Telegraaf Media Groep

Telegraaf Media Groep N.V. (TMG) is the largest Dutch media company in the Netherlands, with strong brands such as De Telegraaf, DFT, Telesport, Metro, Autovisie, Privé and VROUW; regional dailies such as Noordhollands Dagblad and de Gooi- en Eemlander; digital brands such as GeenStijl, Dumpert and Gaspedaal; Classic FM and – through a strategic collaboration – national radio stations Sky Radio, Radio Veronica, Radio 538 and Radio 10. We also have dozens of other brands and titles that focus on providing local news, entertainment or e-commerce (e.g., GroupDeal). Through Keesing Media Group, we are market leader in Europe in the field of puzzle magazines and digital puzzles. It is TMG’s mission to provide consumers with high-quality, personalised and relevant news, sport and entertainment 24 hours a day, 7 days a week, via any available form of distribution. For more information about TMG, go to www.tmg.nl.

Disclaimer

This press release is a translation of the original text in Dutch. In the event of a discrepancy between the two versions, the one in the Dutch language prevails.