Save! +

Remove!

February 17, 2017 / 07:37

The financial results of Agora Group in the fourth quarter of 2016

Press release

The fourth quarter of 2016 was for the Agora Group a time of record-high cinema attendance, better than the market advertising revenue growth in the Outdoor segment as well as of growth in the Internet and Radio segments and weaker results of the Press and Print segments. At that time, the METRO television channel started broadcasting, becoming the leader among the channels on MUX-8; and "Gazeta Wyborcza" recorded almost 100 thousand digital subscriptions. The better results of Agora Group were also influenced by the positive effects of the transactions made in the fourth quarter of 2016.

"In 2016, we took many courageous actions - both regarding the restructuring as well as the development of our businesses. The current, amazing results of Helios cinemas, benefiting from the record-high attendance and their leading position with regard to the number of facilities in Poland, are a consequence of our consistent investment policy in this area. AMS recorded the best result in its history, thanks to the methodically implemented development strategy in the segment of premium panels. We are also strengthening our position in the fastest growing segments of the Internet market, such as programmatic or mobile. Radio stations are also in good condition - Radio TOK FM breaks audience share records and Radio Pogoda steadily attracts new listeners. Our press business is changing significantly - we are restructuring the traditional part of the business and, at the same time, investing in developing digital competence. This is already bringing positive results in the form of almost 100 thousand digital subscriptions to "Gazeta Wyborcza" and of an increase in advertising sales of magazines," comments Bartosz Hojka, President of the Management Board of Agora.

The financial performance and results achieved by Agora Group's businesses in the fourth quarter of 2016 (yoy comparison):

The revenue of the Group decreased by 3.8% to PLN 340.3 million. It resulted mainly from lower income in the Press and Print segments, which amounted to PLN 68.5 million and PLN 37.0 million, respectively. The revenue of the Movies and Books segment amounted to PLN 111.5 million and was approximate to that in the fourth quarter of 2015. The dynamically growing income of the Internet, Outdoor and Radio segments had a positive impact on the value of the revenue of the Agora Group. The revenue in the Internet segment increased by 9.0% to PLN 49.5 million thanks to systematically growing inflows from web display advertising sales and sales of other Internet services. The growth rate of the revenue of the Outdoor segment was higher than the market dynamics because of the high interest of advertisers in citylight panels, thanks to which the segment's inflows from advertising increased by 4.3% to the amount of PLN 48.4 million. In the Radio segment, the total revenue increased by 2.2% to reach the amount of PLN 37.2 million, thanks to the rising sales of brokerage services in cinemas.

Agora Group's operating costs decreased by 6.3% and amounted to PLN 315.6 million. The decrease was primarily caused by the reduction in operating costs in the Press and Print segments. The Movies and Books segment recorded a slight increase in operating costs, to PLN 100.2 million. It was mainly related to higher costs of film copy purchases and higher costs of rent at Helios cinemas in connection with an increased number of facilities. However, higher staff costs as well as higher number of advertising campaigns resulted in an increase in operating costs in the Outdoor segment amounting to PLN 41.8 million. The advertising campaigns of radio stations and an increase in staff costs resulted in an increase in operating costs in the Radio segment to the amount of PLN 29.4 million. The increase in operating costs up to PLN 41.2 million in the Internet segment was related mainly to the development of the advertising brokerage offer and consolidation of GoldenLine.

The Group's EBITDA result increased to PLN 49.1 million, and the operating profit EBIT to PLN 24.7 million. The net profit amounted to PLN 11.7 million and the net profit attributable to the equity holders of the parent company stood at PLN 10.2 million.

In the fourth quarter of 2016, the Group's results were impacted by, among others, the group lay-offs and sales transactions. The result was negatively impacted by a provision amounting to PLN 6.9 million connected with the process of collective redundancy at Agora S.A. However, the Group's operating profit was positively affected by funds from sale of the Company's real property in Łódź, amounting to PLN 6.0 million, and from sale of shares in the subsidiary, Green Content Sp. z o.o., amounting to PLN 10.5 million. It is worth mentioning that because of the spectacular results of e.g. Helios S.A., the Company updated the valuation of liabilities arising from put options granted to non-controlling shareholders of subsidiaries, which decreased the net profit by PLN 7.1 million.

ADDITIONAL NOTES - RESULTS OF AGORA'S SEGMENTS IN THE FOURTH QUARTER OF 2016 (yoy comparison)

PRESS - reduction in operating costs and positive result at EBITDA level

The total revenue of the Press segment amounted to PLN 68.5 million and decreased yoy. It was primarily the result of lower inflows from sales of advertising in "Gazeta Wyborcza"^1,2 and the discontinuation of issue of the free daily "Metrocafe.pl"³. However, it is worth mentioning the dynamic increase in inflows from sales of advertising in magazines published by the Company - they were 28.6% higher and amounted to PLN 7.2 million. The segment's revenues from copy sales amounted to PLN 29.8 million.

The Group is continuing the process of digital transformation of its press business and is investing in the development of competence necessary for achieving success in the digital world. At the end of December 2016, the number of paid digital subscriptions of "Gazeta Wyborcza" amounted to approximately 100 thousand, which was higher than the expected goal.

At the same time, it is worth mentioning that the digital subscription stabilises the levels of sales of the content of "Gazeta Wyborcza". The sales of the daily's content in those two distribution channels - print and digital - amounted in 2016 to nearly 242 thousand (total number of the average sales of copies in 2016 according to ZKDP and the average number of active paid digital subscriptions to the daily).

Since 17 October 2016, "Gazeta Wyborcza" has been released in a new publishing formula and with a new layout of weeklies issued together with this title on individual days of the week. The Monday issue of the daily has been supplemented with a completely new magazine - "Mój biznes. Ludzie, praca, innowacje". The restructuring of the publishing offer of "Gazeta Wyborcza" was accompanied by changes in prices of individual issues of the daily.

Apart from the above changes, new version of Wyborcza.pl was launched.

"Wysokie Obcasy", a weekly published with "Gazeta Wyborcza" on Saturdays, as a part of the second round of the Digital News Initiative programme, was subsidised by Google for implementation of the project under the working title "Women Choose The News". It is one of five projects in Poland to have obtained subsidies under this programme.

The magazines and free press division prepared, for the first time in its history, a nationwide plebiscite - Top Avanti 2016. The purpose of the voting was to indicate to the readers of "Avanti" and users of Avanti24 the most valuable products worthy of recommendation among those available on the Polish market.

MOVIES AND BOOKS⁴ - record-high ticket sales

The revenue of the Movies and Books segment amounted to PLN 111.5 million and remained approximate to that in the fourth quarter of 2015. The revenue from sale of tickets increased by 10.1% to PLN 61.2 million, and the revenue from concession sales was 12.1% higher, amounting to PLN 22.3 million. The revenue from sale of advertising in cinemas also recorded a double-digit increase - by 10.4% and amounted to PLN 10.6 million. The segment's revenues from film co-production and distribution amounted to PLN 3.3 million and were lower than those in the fourth quarter of 2015. In that period, NEXT FILM released 3 Polish productions, which were less popular than the movies released in the same period of the previous year. The lower revenue from the activity of Agora's Publishing House resulted from the recorded in the last quarter of 2015 inflows connected with the game "The Witcher 3: Wild Hunt" totalling PLN 7.9 million.

The segment's operating costs remained comparable to those in the fourth quarter of 2015 and amounted to PLN 100.2 million. Their slight increase by 0.4% was caused by, among others, the costs of external services connected with higher rent costs in Helios cinemas, which is a consequence of the network's development. An increase in staff costs is also related to the expansion of the Helios cinema network to include new facilities. Payments for film copies increased as well, which is a result of the higher attendance that translates into growing revenue from cinema ticket sales. Promotion and marketing cost also increased i.a. due to more intense activity in the film distribution area. On the other hand, the operating cost of Agora's Publishing House was lower yoy due to the cost of settlement with the producer of the game "The Witcher 3: Wild Hunt" bore in the fourth quarter of 2015.

In the fourth quarter of 2016, attendance in Helios cinemas reached the level of 3.4 million viewers and exceeded last year's attendance by 7.3%.

In the fourth quarter of 2016, the Helios network opened 4 new cinemas, in Gdańsk, Przemyśl, Poznań and Tomaszów Mazowiecki. In total, at the end of 2016, the network had 41 cinemas and was the largest multiplex operator in Poland in terms of number of facilities.

In the last three months of 2016, Agora's Publishing House offered 33 new publishing projects to its readers. As a result, Agora sold 0.3 million books and books with CDs, and the revenue from this activity increased compared with the fourth quarter of 2015.

In the fourth quarter of 2016, 2 films co-produced by Agora were introduced to cinemas: "Jestem mordercą", the winner of the Silver Lions award at the Gdynia Film Festival, and "Szkoła uwodzenia Czesława M.". Both films were distributed by NEXT FILM, a Helios subsidiary company, which also distributed the movie "Plac zabaw", distinguished in the Debut category during the Gdynia Film Festival.

The fourth quarter of 2016 saw the end to "Titanic, the Exhibition", which premiered in the second quarter of 2016. Exact replicas of the ship's interior and over 200 items retrieved from the wreck of the Titanic were displayed in Warsaw's Palace of Culture and Science until 9 October 2016. Agora was the co-organiser of the Polish edition of the exhibition.

OUTDOOR⁵ - higher than the market-average revenue growth

In the fourth quarter of 2016, revenues from advertising sales⁶ on AMS panels increased by 4.3% and amounted to PLN 48.4 million, which was a result of the high interest of advertisers in citylight panels. The operating costs of the segment increased to PLN 41.8 million, mainly due to the higher staff costs and the higher costs of campaign execution. As a result, the operating result at the EBIT level increased by 13.8% to PLN 6.6 million, and at the EBITDA level by 13.7% to PLN 10.8 million.

In the fourth quarter of 2016, AMS continued to work on the construction of new bus shelters in Warsaw. As at the end of 2016, there were 1,333 new shelters built. A large portion of those, equipped with Warsaw Premium Citylight panels, have already been incorporated into the AMS sales network.

In the fourth quarter of 2016, AMS introduced new non-standard solutions into its offer: heated benches at bus/tram shelters and special poster print, thanks to which images gain the effect of depth (3D optical impression). The company also proposed a completely new solution to its customers, available as of January 2017, which allows for a more dynamic advertising message using a static vinyl poster - Dynamic Backlight.

INTERNET⁷ - dynamic revenue growth in the segment

In the fourth quarter of 2016, revenues^8,9 of the segment amounted to PLN 49.5 million, which means an increase by 9.0% yoy, mainly due to increasing sales of web display advertising. Revenues from advertising brokerage services and sales of other Internet services also increased. In the reported period, the increase of the segment's web display advertising revenue totalled 7.3% and was significantly influenced by higher sales of advertising by the Yieldbird network (formerly AdTaily) and affiliated networks as well as revenue generated by the GoldenLine.pl website.

In the fourth quarter of 2016, operating costs of the Internet segment increased to PLN 41.2 million. It was mainly due to a higher cost of external services resulting from a larger scale of operations regarding advertising brokerage. The higher staff costs result from full consolidation of GoldenLine Sp. z o.o. as well as an increased headcount in Yieldbird, Optimizers and sports websites.

The segment's dynamic growth makes it possible for the Group to strengthen its position in the fastest growing Internet categories: mobile and lifestyle. In the fourth quarter of 2016, Gazeta.pl presented new video formats. The first one of them was Myk! - an online video format created with a view to social media and being a part of the online video-advice trend. The second one is the "Dress for Less" project, executed by the editorial team of Gazeta.pl in cooperation with the lifestyle website Fashion Post. It was created with people interested in fashion, shopping and style in mind and shows how to create the style of favourite celebrities for reasonable money. As part of developing the lifestyle video formats, the first video cycle entitled "Matko Jedyna!" was prepared for the users of eDziecko.pl website.

The Internet segment also prepared new language versions of the popular cooking format, Haps, which is currently available in Polish, English, German, Czech and Hungarian.

30 November 2016 saw the premiere of a new version of the largest fitness website in Poland under a name Myfitness.pl. The website included new editorial formats, including tests of new products, trainings and celebrity diets; famous female fitness trainers became its ambassadors.

Thanks to systematic development of Plotek.pl and its mobile version in previous periods, the website not only improved its result in the ranking of "people" services once again in November 2016, but also became the leader in this popular category for the first time.

RADIO - increase in revenue and scale of operations

The Radio^10,11 segment's increase in revenue amounted to PLN 37.2 million, which resulted mainly from higher revenue from brokerage services at Helios cinemas and higher inflows from air time sales in the radio stations of Agora Radio Group. The segment's operating costs went up by 8.1%, mainly due to higher promotion and marketing costs resulting from the execution of marketing campaigns. The staff costs also grew slightly.

In the fourth quarter of 2016, Radio TOK FM achieved a record-high audience share in the station's history - 2.4%.

PRINT¹² - positive operating result at the EBITDA level

The segment's total revenues amounted to PLN 37.0 million. The operating costs decreased, amounting to PLN 39.7 million. The segment's operating result at the EBITDA5 level was positive and reached the amount of PLN 1.3 million.

Notes

Go back

Breaking news

Contact us

Phone: 22 555 60 00

Phone: 22 555 60 01

press@agora.pl

Info box

Quotations

AGO

11,38 zł

-0,7%

Download

Company data

The financial results of Agora Group in the fourth quarter of 2016

NEWSLETTER