- Consolidated turnover of 819 million euro (+28%), REBITDA of 91 million euro (+26%) and Net Result of 28 million euro (+90%).
- Digital transformation of news brands continues.
- TMG recovery plan ahead of schedule and turnaround De Telegraaf and Noordhollands Dagblad on track.
- Sales of De Standaard and NRC continue to rise.
- Advertising market under unrelenting pressure as a result of the dominance of international digital platforms
Mediahuis has again continued to strengthen its position in the Belgian/Dutch market in 2018, despite persistently challenging market conditions. The group achieved a consolidated turnover of 819 million euro (+28%) and REBITDA of 91 million euro (+26%). The excellent results, particularly of TMG, combined with efficient cost management throughout the entire group, are at the basis of this growth. The impact of rising costs (including paper and personnel costs), decreasing advertising revenue in print and the reduction in income from non-subscription newspaper sales, could thus be offset at group level.
For the first time, the results of Telegraaf Media Group (TMG) are part of the consolidated Mediahuis results over a 12-month period. The implementation of the recovery plan, which was formulated in 2017 and in which TMG aims to improve its performance in both the consumer and advertising markets, is ahead of schedule. Thanks to an efficient grip on costs, amongst other things, combined with an accelerated digital transformation, TMG has managed to make a significant contribution to the rise in Mediahuis results in 2018.
The synergy effects that Mediahuis managed to achieve when it was established have diminished in the Belgian market. Declining advertising turnover, combined with a significant structural rise in paper and personnel costs, led to a decrease in the results of Belgian news activities. The objective is to bring the decreasing profitability of Mediahuis news activities in the Belgian market back on track.
Digital transformation of news brands continues
Further development of a superior digital offering to the customer and a focus on building long-term relationships led to an increase in the number of subscribers. The newspaper market once again recorded a drop in non-subscription sales over the past year in both Belgium and the Netherlands.
- De Standaard clocked up impressive results with a 3.1% growth in sales compared to the previous year. Digital sales in particular are rising significantly, i.e. by 31.2% in 2018. No less than 1 in 3 subscribers to De Standaard are now opting for a digital formula (with or without a paper copy of the weekend edition).
- NRC (Handelsblad and Next) recorded an increase in sales (+1.0%) for the fourth year running, both in print and online.
- Het Nieuwsblad and the regional news brands Gazet van Antwerpen, Het Belang van Limburg and De Limburger also recorded a further rise in digital sales. However, this increase cannot fully compensate for the drop in print turnover, particularly with respect to non-subscription sales.
- De Telegraaf has managed to reverse the downward trend of many years into a stabilisation of sales in print and a rise in digital sales. This success is to a large extent based on the unequivocal choice to enter into long-term relationships with readers.
- Noordhollands Dagblad, Leidsch Dagblad, IJmuider Courant, Haarlems Dagblad and De Gooi- en Eemlander recorded growth for the first time They managed to turn the decline into a plus and are achieving further digital growth.
Readiness to pay for digital journalism is growing
Readiness to pay for digital journalism is growing. 2018, and the start of 2019, coincided with the further implementation of a pay wall on the news sites for Mediahuis. It gives readers the opportunity to peruse some of the articles free of charge, but pay for access to the full editorial content. The number of subscriptions sold through news sites in the Belgian market rose by 50%. The time spent by readers on perusing paying or ‘premium’ articles tripled. Partly as a result of the implementation of the pay wall, De Telegraaf increased the number of subscriptions sold online by 26%. TMG regional titles even recorded a tripling of sales.
Advertising market under unrelenting pressure
Advertising revenue in both Belgium and the Netherlands continues to be under pressure, mainly in the national print segment and also due to the fact that international digital players in particular are benefiting from advertising growth in digital. NRC is managing to maintain its position in the higher social class niche segment quite successfully. TMG also recovered in terms of print advertising turnover and was able to effectively market its wide-ranging brands.
Further strengthening and broadening of position
Mediahuis also managed to strengthen its position in the classifieds market. The successful merger of property platforms, Zimmo and Hebbes, into a single Zimmo platform, made Mediahuis the second largest party in the Belgian property advertising market. Jobat saw its position further reinforced as a result of targeted investment in the development of new services for both employers and jobseekers. Gaspedaal also increased its share in a fragmented Dutch vehicle classifieds market.
Finally, the 100% takeover of the Dutch digital media company Wayne Parker Kent has enabled Mediahuis to further expand its digital position. The launch of the new NRJ radio station gave Mediahuis a stronger presence in the Flemish radio market.
Gert Ysebaert, CEO Mediahuis: “We are currently recording excellent results as a group. The acquisitions in the Netherlands in recent years have generated the necessary synergies and improved financial resilience for Mediahuis. One year after the takeover by Mediahuis, TMG is back on track and the group's digital transformation has been successfully initiated. We are noting an increased readiness to pay for digital journalism and are making good progress with our digital subscription formulae. However, it remains a major challenge to always provide an appropriate response to continually changing market conditions. We believe in a solid foundation with each component of our group performing well and being profitable, and we anticipate being able to maintain this current level.”
Key financial data
The group’s turnover and REBITDA are rising significantly now that TMG, Mediahuis Limburg and the other activities acquired in 2017 have been included in the results for a full year. The TMG recovery plan is ahead of schedule but is not yet achieving the levels of return of the other activities in the Mediahuis portfolio.
The revaluation of latent tax positions as a result of decreasing corporation tax tariffs in the Netherlands had a positive impact on the group’s net results in 2018.
2018 was also an important year of investment for Mediahuis. These were mainly investments in the industrial domain with an upgrade of the newspaper printing plant in Paal-Beringen, and, in technological terms, the further digital transformation of the Mediahuis brands and the harmonisation of systems and processes across the entire group. Furthermore, the remaining minority shareholders in TMG were bought out and several small acquisitions were made. This increased the net debt by 16.6 million euro (+15%). The net debt to REBITDA ratio improved slightly from 1.5 to 1.4.
Kristiaan De Beukelaer, CFO Mediahuis: “Mediahuis has satisfactorily incorporated the major acquisitions of 2017. We started the year with a sound balance sheet and relatively low debt level. In 2018, the main focus was on integration and improved performance of the entire portfolio. Relevant efforts and investments are now bearing fruit. Their positive effect will become increasingly noticeable in 2019, both in terms of results and further debt reduction.”
Key data 2018
(1) Key data 2018 on the basis of the IFRS consolidated balance sheet and Mediahuis group results. Comparable 2017 figures on the basis of a pro forma IFRS consolidated balance sheet and results across a 12-month period. Consolidated annual accounts were prepared last year covering an extended financial year from 1-1-2016 to 30-12-2017.
(2) Business income including barter turnover.
(3) Group share in the consolidated Net Results after tax.
(4) Financial debts excluding subordinated loans minus liquid assets.