Transition to focus on key brands on track
- Revenues in the amount of € 514.9 million were € 27.5 million lower than they were in 2013 due to declining advertising and circulation revenues;
- The operating result declined from negative € 10.3 million in 2013 to negative € 31.4 million;
- The 2014 results were affected by the impairment of Sky Radio Group in the amount of € 40.9 million due to the structurally lower results achieved by Radio Veronica; the 2013 results were affected by the € 37.0 million in restructuring costs;
- Change of management teams
- Initiated transition is to result in sustainable return on the basis of the key brands;
- No dividend over 2014.
Telegraaf Media Groep has had a difficult year. The declining trend in circulation and advertising revenues. The robust cost savings programme was not enough to offset the decline in revenues. TMG’s revenues fell by € 27.5 million to € 514.9 million.Although the EBITDA result improved by € 25 million to € 46.1 million, the reported operating result deteriorated. The net result was negative € 38.1 million versus positive € 177.9 million in 2013.
Geert-Jan van der Snoek, CEO of Telegraaf Media Groep: ‘Steps have been taken in recent months to revert the persistent decline in revenues. The 2014 results and our findings demonstrate that our organisation must increase the pace at which it adapts to rapidly changing media use. The management teams in virtually all business units have been changed. Plans are being implemented with the new management teams that give shape to the direction announced in December: focus on the core business and on the key brands. Our core activity, creating and marketing content, is our strength, and our focus for the future aims at this. We are in the process of determining the future of our non-core activities.
We have to create greater loyalty among our customers, both our readers and our advertisers. We have initiated a transition designed to work towards sustainable returns on the basis of our strength. The organisation requires further adjustments and the distribution of our content requires increased innovation. We are working on this with a great deal of energy. Through means of more intensive collaboration and by entering into cross-industry partnerships over the short term, we are going to improve TMG’s prospects. 2015 will primarily be a year of transition; a year of renewal, as well as a year in which further cost reductions are unavoidable.’
TMG’s circulation revenues declined by € 6.4 million (-2.3%) to € 273.7 million (2013: -3.6%). Advertising revenues from print activities declined by 15.2% (2013: -15.5%). Revenues from digital activities dropped by 7.2% to total revenues of € 64.2 million (2013: € 69.2 million). The decrease was primarily due to the termination of De Telegraaf webshop and the sale of several digital activities.In 2014, total costs, excluding impairments, declined by € 52.5 million (-10.1%).The savings were primarily the result of a reorganisation initiated back in 2013.
TMG Landelijke Media’s revenues declined by 7.4%, primarily due to a decrease in net advertising revenues and a decrease in De Telegraaf’s circulation. At De Telegraaf, revenues from digital subscriptions rose by 71% and from combi subscriptions by 44%. However, this growth was not sufficient to offset the decline in print. TMG Landelijke Media’s EBITDA contribution dropped significantly.Interest in print is also declining among Holland Media Combinatie’s regional dailies and weeklies. Total subscription and advertising revenues fell by 6.0%. The EBITDA contribution of the regional dailies increased significantly due to the impact of cost savings that were primarily due to a reorganisation initiated in 2013. On 6 February 2015, further measures were announced to strengthen the publications of the key brands Noordhollands Dagblad, Haarlems Dagblad, Leidsch Dagblad and De Gooi- en Eemlander. Nine Sunday titles that are not making a sufficient contribution to the result will be divested.Revenues at Sky Radio Group declined by 3.0%. The key reason for the decline is a decrease in advertising revenues from Radio Veronica due to the decreased listening market share.At year-end 2014 an impairment of € 40.9 million was recognised for Sky Radio Group. Due to the restyling of Radio Veronica and increased competition, the projected future cash flows are structurally lower.On 8 January 2015 the Trade and Industry Appeals Tribunal (CBb) issued a ruling in the legal proceedings instituted by Sky Radio Group against the State. The proceedings pertained to the € 20.4-million fee that Sky Radio Group is required to pay for the FM licensing permit over the period 2011-2017 for the qualified A2 Lot (Radio Veronica). CBb ruled in favour of Sky Radio Group. On the basis of analyses, acquired advice and deliberations, TMG concludes that the consequences of the ruling are still uncertain. The impact of the ruling will be further assessed in 2015.
The Keesing Media Group’s performance was positive. Revenues from puzzles and games rose by 1.6%. The shift from paper to digital consumption also affected Keesing Media Group. However, results rose in part due to increased efficiency in distribution and increased automation in production.
The number of employees in 2014 declined by 200 FTEs, from 2,459 to 2,259. In 2015 there will be further reductions in personnel, changes in competencies and flexibilisation of the workforce. At the same time the company will invest in employees in order to facilitate the transition to a modern and decisive media company. In part due to the cost reduction programmes and the reorganisations in recent years, talent development and advancement within the organisation had come to a halt.
Proposed Dividend and General Meeting of Shareholders
No profits were generated in the financial year 2014, consequently there will be no profit at the disposal of the General Meeting of Shareholders relating to the financial year 2014.The General Meeting of Shareholders will be held at Basisweg 30, Amsterdam on23 April 2015 at 10:30 a.m. The agenda and the associated documents will be made available on TMG’s website today under the header ‘Shareholders Meetings’. Topics on the agenda include (i) adoption of the 2014 Financial Statements; (ii) reappointment of Mr Boersma as member and Chairman of the Supervisory Board for a period of four years; (iii) long term remuneration component for the Executive Board; and (iv) authority to purchase company shares.
The Company’s focus, more clearly than ever before, will be on its key brands, the development of distinctive editorial content and consequently on reinforcing the core business. Digital initiatives that do not form part of the key brands and the printing plants will not form part of the core business. The 2015 financial year is qualified as a year of transition. In December 2014 it was announced that from the beginning of 2015, steps to adjust the organisation that are expected to result in sustainable returns from all business units are expected to be announced on a regular basis. The first announcement was made on 6 February 2015 and concerned organisational adjustments and the creation of focus at Holland Media Combinatie.
The annual figures have been prepared in accordance with the IFRS-EU guidelines applicable in 2014. The significant accounting policies are included in the consolidated financial statements. The consolidated income statement is presented on the basis of continued operations. The result of terminated activities or those held for sale is presented separately in 2014. The activities of Keesing Games, Mobilion, Hyves social network, Moviebites and Nobiles were already terminated/sold in 2013. Relatieplanet was held for sale in 2013 as well as in 2014.
- Consolidated statement of profit and loss 2014.
- Consolidated statement of comprehensive income 2014
- Consolidated statement of financial position 2014
- Consolidated statement of cash flows 2014.
- EBITDA 2014.
The summarized financial statements presented in the appendices to this press release are based on the financial statements as at 31 December 2014, which are to be released on March 11, 2015.In accordance with Section 2:395 of the Dutch Civil Code we hereby declare that our auditor Deloitte Accountants B.V. has issued an Independent auditor’s report with respect to those financial statements. For a better understanding of the financial position and results of Telegraaf Media Groep N.V. and the scope of the audit by Deloitte Accountants B.V., this press release should be read in conjunction with the financial statements to which it refers and the Independent auditor’s report thereon issued on March 10, 2015. These documents are to be published on 11 March 2015.
The financial statements are still to be adopted by the Annual General Shareholders’ Meeting. The Annual General Meeting of Shareholders will be held on Thursday 23 April 2015 in Amsterdam.
isclaimerThis 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.