TMG puts focus on core business

TMG realized in the transition year 2012 an unchanged revenue and a lower recurring EBITDA result compared to the previous year. Organically, recurring revenues declined by € 36 million mainly due to lower turnover from newspaper advertisements and lower turnover at Hyves. As a result of cost reductions and acquisitions, the decrease in the recurring EBITDA was limited to € 21.2 million and amounted to € 41.3 million (2011: € 62.5 million). Approximately € 1 million of reorganization costs was charged to the result compared to € 44 million last year. Furthermore, impairments amounting to € 41.7 million were taken in the 2012 result, of which a € 36.5 million goodwill impairment of Hyves and € 5 million for real estate. In 2011, € 52.1 million was written down, including € 44 million on the goodwill of Sky Radio. Including € 18 million lower income from participating interests (particularly from ProSiebenSat.1 Media AG, which included last year a book profit on the sale of SBS Benelux of € 20 million), approximately € 2 million higher interest costs and € 2.4 million higher tax benefits, a net loss of € 15.1 million remained, compared to a net loss of € 32.6 million in 2011.

The advertising market, particularly in print, deteriorated further and faster than expected in the course of 2012.  There is no prospect of a quick recovery which necessitates accelerating cost measures. The funds that may become available from ProSiebenSat.1 Media AG will be used to provide the core business with a healthy balance sheet and to create liquidity for shareholders. TMG continues to roll out the current strategy for the core businesses with more limited resources and more efficiently while maintaining a solid capital structure. Due to the bad market conditions TMG suspends its financial targets for 2016.

Mainly due to the growth in digital activities and revenues from activities that were acquired, the total revenues of TMG remained unchanged compared to that of 2011. The economic developments in The Netherlands caused a stronger decline than expected in 2011 in advertising revenues of newspapers and door-to-door papers. Already in 2012 cost reductions were achieved through reorganization measures and cooperation with third parties in the newspaper distribution, but these savings were still insufficient to entirely compensate for the decline in the result.
In view of these results and the highly uncertain prospects for the print advertising market, TMG has taken measures aimed at a solid future for the core business of TMG (print, online and radio). The company thereby maintains the already started cross-media strategy, which is focused on growth in online and transformation into a cross media company.

Herman van Campenhout, CEO of TMG: "During the past year we have witnessed a significantly deteriorating market. Particularly our largest market, the market for print media, has declined further. We have taken measures which strengthen the position of our core business. This helps to emerge from the current storm that rages in the media landscape as a better and more solid company''.
The cross-media strategy launched in 2011 for the core business has been translated into a new organization during 2012 and puts the focus on the platforms: print, online and radio.
In the print market, the main driver of our online reach, TMG focuses on achieving more efficiency through both internal and external cooperation.
Within online all activities of TMG have been integrated, resulting in group-wide pooling of knowledge and expertise in the field of online product development. The [financial] results of Hyves for 2012 have not met the ambition and have led to an impairment loss of € 36.5 million. The social network now focuses specifically on youth and also develops activities in social and casual gaming.
The innovation-based growth at the Sky Radio Group is continued in view of the successes achieved. Over the last four there was a declining trend in numbers of listeners. That trend was turned around in 2012 as the market shares of Sky Radio and Radio Veronica grew strongly.
Keesing Media Group has successfully integrated Megastar. Taking into consideration that TMG focuses on the core business, Keesing Media Group is now under strategic review.

For the financial year 2012, it is proposed not to pay a regular dividend.

ProSiebenSat.1 Media AG
TMG expects to be able to distribute an interim dividend in 2013. Prerequisite is that the shareholders of ProSiebenSat.1 Media AG approve the proposal for a dividend of € 5.63 per share with voting rights due to the sale of the Scandinavian activities. The interim dividend of TMG will amount to € 0.47 per share and will be distributed in August /September 2013.

The preference shareholders of ProSiebenSat.1 Media AG will decide during the next Annual General Meeting of 23 July next on the integration of the preference shares and shares with voting rights.
If the proposal to convert the preference shares actually materialises, TMG’s interest in ProSiebenSat.1 would consist of listed securities and as such would be more liquid than is currently the case.
For the year 2013, the company expresses no specific expectation concerning the result. The following developments will have an impact on the result:

  • Print:
    - Decline in print advertising revenues;
    - Modest decrease in circulation revenues;
    - Acceleration in the current cost-savings program;
  • Online: increase in online revenues;
  • Radio: modest increase in radio advertising revenues.

Keesing Media Group is under strategic review.

1. Consolidated statement of comprehensive income for 2012.
2. Consolidated statement of financial position as per 31 December 2012.
3. Consolidated statement of cash flows 2012.
4. Recurring EBITDA 2012.

The summarized financial statements presented in the appendices to this press release are based on the financial statements as at 31 December 2012, which have not yet been published. In accordance with Section 2:395 of the Dutch Civil Code we hereby declare that our auditor Deloitte Accountants B.V. has issued on unqualified 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 and 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 auditor’s report thereon issued on March 11, 2013. These documents will be published on 12 March 2013. 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 25 April 2013 in Amsterdam.