Strategic goals and growth directions for the Company
THE GROUP'S MAIN OBJECTIVES IN 2011:
• further exploitation of possibilities offered by the Internet to develop new forms and scope of activities in the so - called traditional media segments;
• cost control enabling further development of existing businesses and launching new projects;
• using internal synergies to take advantage of the Group's multimedia resources and competencies, especially in the field of content distribution and monetization;
• further development of current multimedia competence centers within the Group;
• increasing the scale of the Group's operations, inter alia, through further acquisitions strengthening the Group's position and/or diversifying the sources of the Group's revenues.
LONG-TERM STRATEGIC GOALS AND GROWTH DIRECTIONS FOR THE COMPANY:
20-02-2008
In 2006-2007 the Company was under strong pressure from its competitors, particularly in the paid newspaper market. The successful execution of "Gazeta's" market strategy based on cover price reduction combined with consistent and innovative marketing approach allowed Agora to return to solid profitability, high-level financial ratios and to strengthen "Gazeta's" position in the newspaper market. The 2007 financial results of all of the Group's business lines prove their solid operating fundaments, while a number of multimedia projects implemented during that period attest to their growth potential and unique competencies of Agora's team.
Agora will continue to actively strengthen the competitive positions of all of its assets, including "Gazeta Wyborcza". However, the Company is cognizant of the fact that the slowing advertising growth in the paid dailies segment combined with growing competition necessitate a search for new sources of growth beyond publishing.
At the same time, the media industry is undergoing significant changes. The boundaries between media, categories and segments are shifting. The consumers face a vast and growing array of new offers and their pattern of media consumption is changing; we are witnessing a growing popularity of profiled services, dedicated to increasingly smaller target groups. These trends are reflected in purchasing decisions of advertisers who increasingly allocate their budgets to profiled offers such as thematic TV channels, Internet classified vortals or consumer trade magazines. This trend concerns all media segments except for outdoor advertising which remains mass-oriented. The technology revolution in media also means changes in the method and quality of content distribution. The Company expects that within the next few years the digital transition and the growing broadband penetration will open up new opportunities in both traditional media enterprises, and in totally new areas of media endeavors.
In the context of the changes in the media landscape, Agora defined new growth directions for its operations for the next several years, as follows:
1. Content creation and distribution. This means we will amass and effectively leverage the Company's multimedia assets and its competencies in a wide array of thematic categories, as well as an actively search for new content sources and opportunities for their distribution.
2. Expanded presence and revenue maximization in the fast growing advertising segments. The Company will enter and/or expand its presence in those areas, selecting such which are the best fit with the Company's competencies and its financial capacity. They include, inter alia, Internet, television (thematic channels) and outdoor advertising.
3. Leveraging opportunities created by the digital transition in media. The Company believes that this process will open up vast expansion prospects for the electronic media market as it lowers barriers to entry, whether in terms of financing, distribution and regulation. Digital transition process will enable creation of new, targeted media offers.
The Company's growth priorities which ensue from the directions discussed above imply increased presence in the Internet arena (including intensive development of audiovisual and mobile content and classified offers), as well as content creation dedicated to both off and online TV production (thematic channels). At the same time, the Company intends to dynamically develop all those media assets in its portfolio which provide complementary content for the creation of new profiled offers (in particular, the magazine portfolio).
Implementation of Agora's strategy entails increased scale of operations, accelerated revenue growth and a broadening of revenue streams to include those from electronic media. Poland is the Company's primary market, however, it intends to play an active role in the changing media landscape of the neighboring countries (such as Ukraine). The Management Board aspires to expand the Group's topline in a way which will ensure that in three years a majority of revenues will come from activities other than the newspaper business lines. To meet this goal, the Company will employ a more aggressive acquisition approach, will actively search for and enter into joint ventures and partnerships (including equity partnerships) and accept higher risk in evaluating investment targets. The Management Board believes that the Group's current financial capacity combined with a more flexible approach to funding of growth activities (including credit line increase or new stock issues) are favorable and necessary conditions for the implementation of its expansion plans. The Management Board of Agora is committed and prepared to proactively and effectively execute the plan.
While executing Agora's growth strategy, the Company will focus internally on building new competence centers and on implementing pro-development management system.
