AS Ekspress Grupp: Consolidated unaudited interim report for Q3 and 9 months of 2024

The revenue of AS Ekspress Grupp for the 3^rd quarter of 2024 increased by 2%, totalling EUR 16.8 million and EBITDA decreased by 19%, totalling EUR 2.0 million. The revenue for the first nine months of 2024 also increased year-over-year by 2%, totalling EUR 52.7 million and EBITDA decreased by 9%, totalling EUR 5.5 million. At the end of September, digital revenue made up 88% of the Group’s total revenue. Digital revenue increased by 8% as compared to the same period last year. The digital subscription revenue of the Group's media companies and the number of people with digital subscriptions grew strongly year-over-year in all three countries. The revenue from ticket platforms and the advertising revenue from outdoor screens have also seen strong growth.

The 3^rd quarter was successful both in terms of increasing the revenue from ticket platforms as well as the advertising revenue from outdoor screens. Digital subscriptions also increased strongly. The advertising revenue of media companies decreased due to the overall weak economic environment in the Baltic States. The revenue of Ekspress Grupp in the 3^rd quarter totalled EUR 16.8 million, increasing by 2% as compared to the same period last year. The 9-month revenue also increased by 2%.

In a year-over-year comparison, the Group received nearly 43 000 new digital subscriptions in the Baltic States, i.e. 24% more than at the end of September last year. At the end of September 2024, digital subscriptions totalled 223 000. The Group’s digital revenue is increasingly based on digital subscription revenue and it makes up an increasingly larger recurring revenue base without the need for additional sales activity (and costs). We have enhanced the quality and volume of the content offered by the Group’s media companies in order to be the leader in the digital subscription field in all Baltic States. The Group is gradually moving towards its financial strategic goals and wishes to offer paid digital content to at least 340 000 subscribers by the year 2026.

In the 3^rd quarter, Ekspress Grupp’s earnings before interest, tax, depreciation and amortisation (EBITDA) totalled EUR 2.0 million, decreasing by 19%. The 9-month EBITDA totalled EUR 5.5 million, decreasing by 9%. Lower profitability is due to the decline in the advertising market as a result of the general economic environment and the increasing pressure of input costs. The net profit for the 3^rd quarter of 2024 was 0.3 million, which is 0.6 million less as compared to last year. The Group’s nine-month net profit totalled 0.1 million, which is 0.7 million less than last year. The decrease in net profit is also mainly due to higher interest rates related to the increase in Euribor and the increase in depreciation expenses resulting from the Group's investments.

The Group’s liquidity continues to be strong. The Management Board considers it important to maintain liquidity reserves both for the use of potential new acquisitions and for situations related to further cooling of the economy. As of 30 September 2024, the Group’s available cash totalled EUR 5.4 million (30.09.2023: EUR 6.1 million). In May 2024, the Group paid dividends of 6 euro cents per share to its shareholders in the total amount of EUR 1.8 million.

Q3 AND 9 MONTHS RESULTS

REVENUE

In the 3^rd quarter of 2024, the consolidated revenue totalled EUR 16.8 million (Q3 2023: EUR 16.5 million). The revenue for the 3^rd quarter increased by 2% year-over-year. The consolidated revenue for the first 9 months of 2024 totalled EUR 52.7 million (9 months 2023: EUR 51.8 million). The revenue for the first 9 months of the year increased by 2% as compared to the previous year. The growth is attributable to the increase in digital subscription revenue as well as increase in the volume of ticket sales platforms and digital outdoor screens. The share of the Group’s digital revenue in total revenue was 88% in the first 9 months of 2024 (9 months 2023: 83% of total revenue). Digital revenue for the first 9 months of 2024 increased by 8% as compared to the same period last year.

PROFITABILITY

In the 3^rd quarter of 2024, the consolidated EBITDA totalled EUR 2.0 million (Q3 2023: EUR 2.4 million). EBITDA decreased by -19% as compared to last year and the EBITDA margin was 12% (Q3 2023: 15%). In the first 9 months of 2024, the consolidated EBITDA totalled EUR 5.5 million (9 months 2023: EUR 6.0 million). EBITDA decreased by -9% as compared to last year and the EBITDA margin was 10% (9 months 2023: 12%). Lower profitability is due to the decline in the advertising market as a result of the general economic environment and the increasing pressure of input costs.

The consolidated net profit for the 3^rd quarter of 2024 totalled EUR 0.31 million (Q3 2023: EUR 0.95 million), decreasing by -68%. The consolidated net profit for the first 9 months of 2024 totalled EUR 0.11 million (9 months 2023: EUR 0.83 million). The decrease in net profit is also primarily related to higher interest rates due to the increase in Euribor rates and higher depreciation expenses arising from the Group’s investments.

EXPENSES

In the first 9 months of 2024, the cost of goods sold, marketing, and general and administrative costs totalled EUR 52.0 million (9 months 2023: EUR 49.3 million). Operating expenses increased by EUR 2.7 million (+5%) as compared to the same period last year. Labour costs increased the most, by EUR 0.9 million (+3%).

CASH POSITION

At the end of the reporting period, the Group had available cash in the amount of EUR 5.4 million and equity in the amount of EUR 55.3 million (52% of total assets). The comparable data as of 30 September 2023 were EUR 6.1 million and 54.0 million (55% of total assets), respectively. As of 30 September 2024, the Group’s net debt totalled EUR 15.6 million (30 September 2023: EUR 14.3 million).

In the first 9 months of 2024, the Group’s cash flows from operating activities totalled EUR 3.1 million (9 months 2023: EUR 6.9 million).

In the first 9 months of 2024, the Group’s cash flows from investing activities totalled EUR -5.3 million (9 months 2023: EUR -3.0 million), of which EUR -3.0 million was related to the development and acquisition of tangible and intangible assets, demonstrating higher investments in products and technologies.

In the first 9 months of 2024, the Group’s cash flows from financing activities totalled EUR -2.1 million, of which EUR -1.8 million is the dividend payment to the shareholders of AS Ekspress Grupp (9 months 2023: EUR -5.2 million, of which EUR -1.0 million is the share buy-back and EUR -1.5 million is the dividend payment to the shareholders of AS Ekspress Grupp). The financing activities also include the net change in borrowings in the amount of EUR 1.0 million and lease liabilities in the amount of EUR -1.7 million.

DIVIDENDS

At the regular general meeting of shareholders of AS Ekspress Grupp held on 3 May 2024, it was decided to pay a dividend of 6 euro cents per share in the total amount of EUR 1.8 million. Dividends were paid to shareholders on 22 May 2024.

SEGMENT OVERVIEW

Key financial indicators for segments

(EUR thousand)	Sales
	Q3 2024	Q3 2023	Change %	9M 2024	9M 2023	Change %	12 months 2023
Media segment	16 780	16 455	2%	52 592	52 088	1%	73 365
advertising revenue	8 936	9 413	-5%	29 315	30 219	-3%	42 074
subscriptions (incl. single-copy sales)	5 012	4 665	7%	15 089	13 884	9%	19 016
marketplaces	940	861	9%	2 604	2 099	24%	3 434
outdoor screens	1 066	823	29%	3 117	2 349	33%	3 530
sale of other goods and services	827	692	19%	2 467	3 538	-30%	5 311
Corporate functions	194	167	16%	548	2 474	-78%	2 642
Inter-segment eliminations	(167)	(131)		(483)	(2 789)		(2 920)
TOTAL GROUP	16 806	16 490	2%	52 657	51 773	2%	73 086
incl. revenue from all digital channels	14 913	14 146	5%	46 232	42 942	8%	60 460
% of revenue from all digital channels	89%	86%		88%	83%		83%

(EUR thousand)	EBITDA
	Q3 2024	Q3 2023	Change %	9M 2024	9M 2023	Change %	12 months 2023
Media segment	2 374	2 852	-17%	6 676	6 974	-4%	11 695
Corporate functions	(380)	(416)	9%	(1 221)	(977)	-25%	(1 477)
Inter-segment eliminations	(12)	3		10	(4)		(1)
TOTAL GROUP	1 982	2 440	-19%	5 466	5 992	-9%	10 217

EBITDA margin	Q3 2024	Q3 2023	9M 2024	9M 2023	12 months 2023
Media segment	14%	17%	13%	13%	16%
TOTAL GROUP	12%	15%	10%	12%	14%

Consolidated statement of financial position (unaudited)

(EUR thousand)	30.09.2024	31.12.2023
ASSETS
Current assets
Cash and cash equivalents	5 351	9 606
Trade and other receivables	13 618	13 143
Corporate income tax prepayment	211	24
Inventories	353	321
Total current assets	19 533	23 094
Non-current assets
Other receivables and investments	1 752	1 628
Deferred tax asset	132	130
Investments in joint ventures	973	851
Investments in associates	2 416	2 197
Property, plant and equipment	9 661	10 384
Intangible assets	70 920	67 482
Total non-current assets	85 853	82 672
TOTAL ASSETS	105 386	105 766
LIABILITIES
Current liabilities
Borrowings	3 055	4 353
Trade and other payables	23 470	23 046
Corporate income tax payable	0	39
Total current liabilities	26 525	27 438
Non-current liabilities
Long-term borrowings	23 542	21 765
Other long-term liabilities	22	22
Total non-current liabilities	23 564	21 787
TOTAL LIABILITIES	50 090	49 225
EQUITY
Share capital	18 576	18 478
Share premium	14 277	14 277
Treasury shares	(5)	(1 057)
Reserves	2 364	2 285
Retained earnings	20 084	22 558
TOTAL EQUITY	55 296	56 541
TOTAL LIABILITIES AND EQUITY	105 386	105 766

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)	Q3 2024	Q3 2023	9M 2024	9M 2023	12 months 2023
Sales	16 806	16 490	52 657	51 773	73 086
Cost of sales	(13 594)	(12 384)	(41 853)	(40 131)	(55 046)
Gross profit	3 211	4 107	10 804	11 642	18 040
Other income	409	167	698	348	581
Marketing expenses	(640)	(649)	(2 321)	(2 011)	(2 803)
Administrative expenses	(2 455)	(2 253)	(7 851)	(7 180)	(9 582)
Other expenses	(39)	(122)	(134)	(262)	(737)
Operating profit /(loss)	486	1 250	1 196	2 537	5 499
Interest income	23	12	84	32	60
Interest expenses	(476)	(383)	(1 384)	(1 059)	(1 499)
Other finance income/(costs)	(16)	(14)	(39)	(35)	(55)
Net finance cost	(468)	(384)	(1 339)	(1 063)	(1 494)
Profit/(loss) on shares of joint ventures	122	69	243	(726)	(661)
Profit/(loss) on shares of associates	173	65	423	196	239
Profit /(loss) before income tax	312	1 000	524	943	3 583
Income tax expense	(7)	(52)	(416)	(113)	(232)
Net profit /(loss) for the reporting period	305	949	108	830	3 351
Net profit /(loss) for the reporting period attributable to
Equity holders of the parent company	305	949	108	828	3 349
Minority interest	0	0	0	2	2
Total comprehensive income /(loss)	305	949	108	830	3 351
Comprehensive income /(loss) for the reporting period attributable to
Equity holders of the parent company	305	949	108	828	3 349
Minority interest	0	0	0	2	2
Earnings per share (euro)
Basic earnings per share	0.0098	0.0315	0.0035	0.0275	0.1113
Diluted earnings per share	0.0098	0.0305	0.0035	0.0267	0.1081

Consolidated cash flow statement (unaudited)

(EUR thousand)	9M 2024	9M 2023	12 months 2023
Cash flows from operating activities
Operating profit /(loss) for the reporting year	1 196	2 537	5 499
Adjustments for (non-cash):
Depreciation and amortisation	4 266	3 455	4 719
(Gain)/loss on sale, write-down and impairment of property, plant and equipment	25	165	387
Change in value of share option	0	24	26
Cash flows from operating activities:
Trade and other receivables	(576)	211	(1 539)
Inventories	(32)	3	(35)
Trade and other payables	(84)	1 518	4 921
Income tax paid	(644)	(184)	(263)
Interest paid	(1 025)	(852)	(1 476)
Net cash generated from operating activities	3 127	6 876	12 239
Cash flows from investing activities
Acquisition of subsidiaries/ associates (less cash acquired) and other investments / cash paid-in equity-accounted investees	(2 579)	(1 310)	(1 469)
Receipts of other investments	0	13	13
Interest received	82	6	28
Purchase of property, plant and equipment and intangible assets (Note 5)	(3 036)	(2 405)	(3 391)
Proceeds from sale of property, plant and equipment and intangible assets	6	25	275
Loans granted	(12)	0	0
Loan repayments received	4	0	8
Dividends received	204	674	674
Net cash used in investing activities	(5 331)	(2 997)	(3 862)
Cash flows from financing activities
Dividends paid	(1 848)	(1 488)	(1 488)
Payment of lease liabilities	(1 708)	(1 446)	(2 004)
Change in overdraft balance	533	0	0
Proceeds from borrowings	2 240	0	0
Repayments of bank loans	(1 763)	(1 260)	(1 727)
Proceeds from share issuance	98	0	0
Proceeds from sale of treasury shares	397	0	0
Purchases of treasury shares	0	(1 000)	(1 000)
Net cash used in financing activities	(2 052)	(5 195)	(6 219)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	(4 256)	(1 316)	2 158
Cash and cash equivalents at the beginning of the period	9 606	7 448	7 448
Cash and cash equivalents at the end of the period	5 351	6 132	9 606

Argo Rannamets
CFO
AS Ekspress Grupp
E-mail address: argo.rannamets@egrupp.ee

AS Ekspress Grupp is the leading Baltic media group whose key activities include web media content production, and publishing of newspapers, magazines and books. The Group also operates an electronic ticket sales platform and ticket sales offices in Estonia and Latvia. Ekspress Grupp launched its operations in 1989 and employs almost 1100 people.

Attachment

• EG_III_kvartal_2024_ENG