Telegraaf Media Groep N.V. (the “Company”) is domiciled in Amsterdam, the Netherlands. Its activities are primarily the publication of print media and the operation of, and participation in, digital media and radio. The Company’s certificates shares are listed on the NYSE EuroNext in Amsterdam.
The Company’s consolidated semi-annual report for the first six months of 2016 comprises the Company, its subsidiaries and entities over which the Company has joint control (together referred to as Telegraaf Media Groep) and its interests in associates.
The consolidated financial statements for the financial year 2015 are available upon request at the Company’s postal address, P.O. Box 376, 1000 EB Amsterdam, or digitally via www.tmg.nl
The interim report, unaudited, was approved by the Executive Board and the Supervisory Board for publication on 28 July 2016.
The consolidated semi-annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board (IASB) and as adopted by the European Union, and the interpretations of these standards by the IASB.
The consolidated semi-annual financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The report does not contain all the information required for complete financial statements and should be read in combination with the consolidated financial statements of Telegraaf Media Groep for 2015.
The principles applied by Telegraaf Media Groep in these consolidated interim financial statements are the same as the accounting policies applied in the consolidated statements for the year 2015 and are in accordance with the International Financial Reporting Standards (IFRS) approved by the European Commission, with the exception of the application of new standards and interpretations effective as of 1 January 2016. As required by IAS 34, the nature and the effect of these changes are disclosed below:
The amendments require that accounting for a joint operation that constitutes a business, entities must apply the relevant IFRS 3 Business Combinations principles.
The amendments clarify that a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.
The amendments clarify the materiality requirements in IAS 1. They also clarify that entities can be flexible as to the order in which they present the notes to the financial statements.
The improvements relate to specific parts of IFRS 5, IFRS 7, IAS 19 and IAS 34.
These changes to IFRS standards have for now no influence on the accounting policies and principles applied, nor retroactively. Where necessary, changes in the presentation and disclosure notes are made in accordance with changes to IFRS.
In the process of compiling interim reports, management has made judgements, estimates and assumptions that affect the application of the accounting principles, the reported value of assets and liabilities, and the amounts of income and expenses. The resulting accounting estimates will, by definition, seldom equal the related actual results. Interim results are not necessarily indicative for full-year results. Unless stated otherwise, the estimates made by the management in applying the accounting principles of Telegraaf Media Groep and the principal estimate sources used are identical to the judgements and sources that were applied for the consolidated financial statements 2015.
Risk categories and factors affecting the financial position of Telegraaf Media Groep have been reported in the financial statements 2015. In the first six months of 2016, no significant changes with regard to risk occurred, as a result of which this report merely refers to the 2015 financial statements.
Economic developments have a particularly negative effect on net media spending, which is cyclical. Furthermore, media use is changing structurally, as a result of which traditional media is under pressure and new media and new technologies are seeing growing consumer use.
For further information on market conditions, see the notes to the semi-annual results 2016.
In thousands of euros |
TMG Landelijke Media |
TMG Digital |
Holland Media Combinatie |
Keesing Media Group |
Facilitating services |
Headoffice & Other |
Total |
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
|
Continued operations |
||||||||||||||
Revenues from third-party transactions |
97,397 |
109,474 |
17,961 |
16,408 |
47,336 |
52,548 |
35,044 |
33,054 |
8,883 |
10,831 |
331 |
421 |
206,952 |
222,736 |
Intercompany transactions |
- |
- |
- |
- |
- |
- |
102 |
30 |
35,422 |
38,787 |
-35,524 |
-38,817 |
- |
- |
Total income |
97,397 |
109,474 |
17,961 |
16,408 |
47,336 |
52,548 |
35,146 |
33,084 |
44,305 |
49,618 |
-35,193 |
-38,396 |
206,952 |
222,736 |
Segment result before depreciation, amortisation and impairment losses |
26,272 |
33,911 |
1,854 |
1,322 |
12,132 |
14,772 |
10,076 |
8,718 |
-16,600 |
-18,275 |
-25,663 |
-24,279 |
8,071 |
16,169 |
Total depreciation, amortisation and impairment losses |
166 |
901 |
481 |
2,030 |
321 |
715 |
2,340 |
2,104 |
2,731 |
10,495 |
1,441 |
220 |
7,480 |
16,465 |
Operating result |
26,106 |
33,010 |
1,373 |
-708 |
11,811 |
14,057 |
7,736 |
6,614 |
-19,331 |
-28,770 |
-27,104 |
-24,499 |
591 |
-296 |
Result from associates |
- |
-3 |
55 |
42 |
- |
- |
- |
- |
- |
- |
- |
- |
55 |
39 |
Financial income |
6 |
- |
10 |
3 |
- |
- |
7 |
146 |
- |
- |
- |
13 |
23 |
162 |
Financial expenses |
- |
- |
- |
- |
- |
- |
-52 |
-44 |
- |
- |
-550 |
-393 |
-602 |
-436 |
Income tax |
-6,542 |
-8,371 |
-361 |
280 |
-2,963 |
-3,525 |
-2,357 |
-1,920 |
4,833 |
5,460 |
6,788 |
8,510 |
-602 |
434 |
Net result for the period |
19,570 |
24,636 |
1,077 |
-383 |
8,848 |
10,533 |
5,334 |
4,796 |
-14,498 |
-23,310 |
-20,866 |
-16,369 |
-535 |
-97 |
Segment assets |
26,796 |
31,722 |
13,992 |
13,352 |
20,643 |
21,582 |
153,493 |
153,112 |
54,476 |
56,745 |
133,302 |
169,402 |
402,702 |
445,915 |
Investments in associates |
- |
24 |
374 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
374 |
24 |
Total assets as at 30 June 2016 / 31 December 2015 |
26,796 |
31,746 |
14,366 |
13,352 |
20,643 |
21,582 |
153,493 |
153,112 |
54,476 |
56,745 |
133,302 |
169,402 |
403,076 |
445,939 |
Segment liabilities |
44,095 |
57,972 |
4,623 |
5,367 |
21,699 |
25,783 |
33,136 |
33,921 |
4,757 |
25,030 |
65,573 |
70,660 |
173,883 |
218,733 |
Total liabilities as at 30 June 2016 / 31 December 2015 |
44,095 |
57,972 |
4,623 |
5,367 |
21,699 |
25,783 |
33,136 |
33,921 |
4,757 |
25,030 |
65,573 |
70,660 |
173,883 |
218,733 |
Segment investments |
294 |
1,176 |
24 |
271 |
13 |
95 |
486 |
460 |
1,891 |
2,948 |
2,854 |
364 |
5,562 |
5,314 |
Total investments |
294 |
1,176 |
24 |
271 |
13 |
95 |
486 |
460 |
1,891 |
2,948 |
2,854 |
364 |
5,562 |
5,314 |
Restructuring costs |
303 |
- |
- |
- |
27 |
- |
10 |
-288 |
-574 |
- |
537 |
- |
303 |
-288 |
Impairment losses on property, plant and equipment |
- |
- |
- |
- |
- |
- |
- |
- |
- |
6,900 |
- |
- |
- |
6,900 |
Other material non-cash items |
303 |
- |
- |
- |
27 |
- |
10 |
-288 |
-574 |
6,900 |
537 |
- |
303 |
6,612 |
Average number of FTE |
507 |
605 |
122 |
113 |
437 |
510 |
274 |
266 |
304 |
443 |
159 |
131 |
1,803 |
2,068 |
Telegraaf Media Groep N.V. comprises the following main operating segments:
As of January 2016, non-title-related digital activities have been part of the new business unit TMG Digital. The comparative figures have been adjusted for this change accordingly. Additionally, for centralisation purposes, some internal departments have been moved to Facilitating Services and Head Office (IT). The comparative figures 2015 have been adjusted to reflect these changes to the various segments.
A part of the business operations of Telegraaf Media Groep is subject to seasonal influences. During the first and third quarters of the year, advertising revenues are normally lower than during the remainder of the year. The single-copy sales of De Telegraaf and the Keesing Media Group’s publications are significantly higher in the third quarter. The fourth quarter is normally the most important quarter for advertising revenues.
Cash flow is the strongest in the fourth quarter because, in addition to quarterly subscriptions, annual subscriptions are also received in advance.
On 28 April 2016, TMG Landelijke Media B.V. acquired 100% of the shares in International Fashion Week B.V. (organiser of Amsterdam Fashion Week among other things) and its subsidiaries. TMG has recognised 907 as goodwill. This is mainly attributable to synergies expected to arise from the integration of the companies with existing operations of TMG. Other than goodwill, no intangible assets were identified in this transaction.
In the first half of 2016, TMG entered into a strategic partnership with Talpa, as a result of which the radio stations Sky Radio and Radio Veronica, among other things, will be transferred to a newly established radio company. TMG will acquire a minority interest in this new company. In anticipation of the final agreement, these activities are considered to be discontinued. The Sky Radio Group segment has therefore lapsed.
In thousands of euros |
Period |
Period |
|
---|---|---|---|
1/1 - 30/6 2016 |
1/1 - 30/6 2015 |
||
Result from discontinued operations |
|||
Revenues |
13,922 |
14,206 |
|
Wages and salaries |
2,383 |
2,385 |
|
Social charges and pension charges |
618 |
581 |
|
Other personnel costs |
139 |
268 |
|
Restructuring costs |
- |
432 |
|
Amortisation |
- |
5,263 |
|
Depreciation |
- |
225 |
|
Other operational costs |
5,955 |
7,678 |
|
Total operating expenses |
9,095 |
16,832 |
|
Operating result from discontinued operations |
4,827 |
-2,626 |
|
Financial income and expenses |
-138 |
-499 |
|
Income tax |
1,020 |
-765 |
|
Result from discontinued operations, net of tax |
3,669 |
-2,360 |
|
Average number of employees (FTE) |
88 |
94 |
|
Earnings and diluted earnings on discontinued operations per share (EUR) |
0.08 |
-0.05 |
|
Cash flows from discontinued operations |
|||
Net cash from operating activities |
4,772 |
3,097 |
|
Net cash used in investing activities |
-39 |
-198 |
|
Net cash used in financing activities |
- |
- |
|
Total net cash flow from discontinued operations |
4,733 |
2,899 |
In thousands of euros |
Period |
Period |
---|---|---|
1/1 - 30/6 2016 |
1/1 - 30/6 2015 |
|
Result from associates |
55 |
39 |
Result from associates |
55 |
39 |
Financial income |
23 |
162 |
Financial expenses |
-602 |
-436 |
Total |
-524 |
-235 |
The income tax is based on the best estimate for the expected 2016 average tax rate attributable to result before tax for the first six months of 2016. Due to higher statutory tax rates abroad and non-deductible costs, the effective tax rate in the first half year of 2016 was above the nominal tax rate in the Netherlands.
In 2015, an impairment loss of 6,900 was recognised in Property, plant and equipment.
Assets held for sale involve the business premises of Holland Media Combinatie and the discontinued activities of Sky Radio Group, which will become part of the new radio company. See note on Discontinued operations.
During the first half year of 2016, TMG paid out a dividend of € 0.16 (2015: nil) per share (or depositary receipt of a share), charged to retained earnings, for a total amount of 7,416 (2015: nil).
The movements in non-controlling interests in 2016 concern the acquisition of the remaining shares in Sienna Holding B.V., resulting in an increase of the share in Sienna Holding B.V. from 90% to 100%. In 2015, the movement was due to the dilution of non-controlling interests in Classic FM v.o.f.
In the first half of 2016, severance costs were paid to the amount of 27,905 (2015: 13,281).
The decline in interest-bearing loans and borrowings is due to the acquisition of the 10% minority interest of V-Ventures B.V. in Sienna Holding B.V. and the related shareholder loan. In addition, the liability licences of Sky Radio Group have been reclassified to liabilities held for sale.
In the first half of 2016, TMG used 5,000 of the existing credit facilities to deal with seasonality effects in the cash flow. The interest payable for the facility is the 3-month Euribor rate, with a premium of 1.50%.
In the first six months of 2016, Telegraaf Media Groep paid a premium of 4,829 (first six months 2015: 4,939) to Stichting-Telegraafpensioenfonds 1959. Including employees' contributions, the premium amounted to 7,244 (first six months 2015: 7,404).
On 22 July 2016, TMG published further information regarding the intended strategic partnership with Talpa that was announced on 15 January 2016. Both parties set out the following agreements in a contract:
On 29 July 2016, TMG announced several organisational changes in order to continue its focus strategy at the same pace and to anticipate further shrinking revenues from print ads. The main changes are:
In addition, TMG will align the sales organisation with the needs of the market, and the fixed costs within this department will be lowered and brought in line with advertising revenues. The reorganisation of the sales organisation is expected to result in the loss of approximately 75 jobs.
With the organisational changes now announced, TMG is taking a first step, with the ultimate aim of reducing the cost base by at least 20% in 2018 (compared to 2015). On 29 July, the works councils involved will be asked to prepare their advice on the proposed restructuring and its consequences for employees. In the coming weeks, the measures announced will be worked out in more detail. During the next Investor Relations Day at the end of September, among other things, these proposed organisational changes will be elaborated on further.