Profit development
Schibsted’s operating revenues came to NOK 12.75 billion in 2009, 1 per cent less than in 2008. The organic growth rate – adjusted for acquisitions and disposals, the closure of print-based classified ads operations in Spain and France, exchange rate fluctuations and the consolidation of Media Norge as from Q3 2009 – was negative at -4 per cent.
Advertising revenues fell by 6 per cent in 2009 compared to 2008. There was an underlying 9 per cent decline in advertising revenues. Circulation revenues increased by 3 per cent. The underlying growth in circulation revenues was 2 per cent.
The Group made an operating profit (EBITA) of NOK 832 million in 2009, up from NOK 766 million in 2008. The operating margin was 7 per cent (6%). NOK 135 million (272 million) was charged to the 2009 operating profit relating to investments in organic projects.
The underlying operating revenues from Schibsted’s editorial activities declined by 8 per cent in 2009 compared to 2008. The operating margin (EBITA) fell from 6 per cent to 4 per cent. The operating revenues of print newspapers decreased by 10 per cent while those of online newspapers increased by 10 per cent. The online classified ads/directories experienced underlying growth of 8 per cent in 2009, while the operating margin rose from 23 per cent in 2008 to 24 per cent in 2009.
Other revenues and expenses debited Schibsted’s accounts by NOK 236 million in 2009. Gains related to disposals contributed NOK 83 million, whilst restructuring costs resulted in a charge of NOK 319 million.
Schibsted’s Q4 2009 operating revenues were NOK 3.6 billion, an increase of 10 per cent compared to Q4 2008. The underly-ing operating revenues remained unchanged.
Advertising revenues rose by 11 per cent in Q4 compared to Q4 2008 but there was an underlying decline of 0.4 per cent. Circulation revenues rose by 10 per cent and had an underlying growth of 2 per cent.
In Q4 2009 the Group’s operating profit (EBITA) was NOK 348 million (-122 million). The operating margin (EBITA) was 10 per cent (-4%). The result was in Q4 2009 debited with NOK 29 million (59 million) related to investments in organic projects.
Schibsted’s editorial activities experienced an underlying reduction in operating revenues of 2 per cent in Q4 compared to Q4 2008. However, the operating margin (EBITA) improved from -1 to 8 per cent. The operating revenues from print newspapers fell by 5 per cent while those from online newspapers increased by 22 per cent. Online classified ads/directories experienced underlying growth of 14 per cent in Q4, while the operating margin improved from 14 per cent in Q4 2008 to 25 per cent in Q4 2009.
Schibsted’s online activities contributed 27 per cent (27%) of the Group’s operating revenues in Q4 2009.
Other revenues and expenses debited the Q4 2009 accounts by NOK 50 million. Gains on the sale of operations contributed NOK 40 million, while the accounts were debited by restructur-ing costs of NOK 90 million.
Cash flow and capital factors
Net cash flow from operations in 2009 came to NOK 933 million, compared to NOK 757 million in 2008. Improvements in the operations towards the end of 2009 contribute to the increase.
Net cash flow from investing activities came to NOK 148 million. In 2009, the Group divested shares with a total value of NOK 1,168 million. Over the same period, NOK 390 million (603 million) was invested in tangible and intangible fixed assets, and NOK 196 million in shares (1,001 million). In addition EUR 67 million has been paid out related to increased ownership in InfoJobs.net.
In 2009, net cash flow from financing activities was NOK -572 million. The impact of Schibsted’s rights issue in July was outweighed by a decline in interest-bearing debt.
Book value of the Group’s assets of the year decreased in the 2009 by NOK 1,171 to NOK 15,220 million. The Group’s net interest-bearing debt declined by NOK 2,836 million to NOK 2,554 million. Total assets were boosted by the establishment of Media Norge, offset by the impact of the stronger Norwegian kroner. The establishment of Media Norge also pushed up total liabilities, offset by the stronger Norwegian krone and the repayment of debt.
The Group’s equity ratio was 35 per cent at the end of Q4 2009, compared to 23 per cent at the end of Q4 2008 and 25 per cent at the end of first half 2009.
Net financial items came to NOK -156 million in 2009, compared to NOK -430 million in the same period in 2008. The Group’s net interest cost was NOK 248 million (280 million) in 2009. Despite increased interest margins on the Groups interest bearing loans, interest cost are reduced compared with the previous year. The reduction is mainly due to lower interest rates and gradual repayment of debt during the year. Foreign exchange gains of NOK 170 million are primarily linked to forward contracts and conversion of foreign currency debt to Norwegian kroner.
Schibsted raised through a rights issue in July 2009 NOK 1.3 billion in new equity. The amount raised, less issue costs, has been used to repay interest-bearing debt. At the end of Q4 2009, the key figure net interest-bearing debt was according to the bank definition 1.7 times EBITDA for the past 12 months (NIBD/EBITDA). The improved key figure will lead to lower interest margins for the Groups interest bearing debt in 2010.
Over the course of 2009, Schibsted has gradually reduced its exposure to Euro-denominated debt. It now constitutes around 50 per cent of total debt, which Schibsted considers to be an appropriate level.
Schibsted is continuing its efforts to focus on core operations and free up capital. In Q4 2009, Schibsted’s 69.4 per cent share of Basefarm AS was sold for NOK 130 million and the Group’s 80.1 per cent of TA Teleadress Information AB was sold for SEK 60 million. A process is ongoing which may result in Schibsted’s printing property in Sandakerveien 121 in Oslo being sold.
The Group Board will propose the distribution of NOK 1.50 per share as dividend for 2009 to the General Meeting on 12 May 2010. The suggestion reflects the Group’s profitability pro-gramme and earnings in the context of the macroeconomic environment, as well as the interest of long term shareholder return.