Antwerp, 27 February 2020 – 2019 was a year of investment and international growth for Mediahuis. The group realised a consolidated turnover of € 857.9 million and a REBITDA of € 118.9 million and managed to achieve a strong operating result of € 65.9 million. The net recurring result amounted to € 50.7 million. The acquisition of Independent News & Media in Ireland contributed to this result over a period of 5 months. Mediahuis again achieved a strong growth in the number of subscribers in 2019, which can mainly be attributed to the successful digital strategy and the increasing willingness of consumers to pay for quality online journalism. A number of previously announced restructuring activities, together with the one-off cost linked to the acquisition of INM, weighed on the net result.
In the past year, Mediahuis further strengthened its ambition to develop into a leading European media group. The acquisition of Independent News & Media in Ireland, publisher of, among other publications, the Irish Independent, the Sunday Independent and The Belfast Telegraph, provided Mediahuis for the first time with access to the English-speaking market. The acquisition process was completed on 31 July by way of a court-sanctioned Scheme of Arrangement, which resulted in the immediate acquisition of 100% of INM. A digital transformation plan that will accelerate the digital transition of the INM news brands was subsequently developed. The INM results for 5 months post-acquisition were included in the consolidated Mediahuis result.
The number of subscriptions again increases, driven by the strong digital growth.
The Mediahuis news brands developed further in 2019 into digital services with a clear focus on an optimal user experience and the added value of video and audio. The total number of subscriptions further increased in both the Netherlands and Belgium as a result of a strong digital strategy, in combination with the increasing willingness of the consumer to pay for online journalism. Depending on the news brand, the share of digital subscriptions varies between 15% and 40%, with a positive trend evident for all titles. The strategy by which relevant and distinctive reporting is placed behind the pay wall is a major key to this success.
The Irish newspaper market is atypical in this context, as it is almost entirely based on single copy sales. The technology and expertise available within Mediahuis, as well as the great digital potential of the Irish market, will accelerate the digital transformation of the INM news titles in the short term. As an initial step, a pay wall was introduced on independent.ie, the Irish Independent and Sunday Independent site, in mid-February 2020. The same digital subscription service will be rolled out for The Belfast Telegraph in the third quarter of 2020.
Cost efficiencies and portfolio adjustments.
In order to raise the profitability of the news activities, an optimisation and transformation plan was implemented within the Belgian organisation. The Dutch activities also realised higher efficiency and managed to further reduce their cost base, so that they made a strong contribution to the result of the Mediahuis group.
The free sheets market experienced further structural decline, which led to the discontinuation of the Rondom activities in the Belgian market. Also within Mediahuis Limburg free sheet activities were adjusted and the decision was taken to integrate the free sheet VIA into the newspaper De Limburger from now on as a weekly supplement.
Finally, in the fall of 2019, Mediahuis announced the closure of the Citywest printing site in Dublin, with the final discontinuation of the printing activities being scheduled for the spring of 2020 after which remaining print volumes will be consolidated within print sites in Cork and Newry. Following a previous announcement, the Belgian printing site in Groot-Bijgaarden was closed at the end of 2019.
Diversification as a significant growth driver.
Mediahuis acquired 35% of the shares of the American data consultancy company Mather Economics at the end of 2019. For Mediahuis, this participation means an important broadening of its portfolio within the fast-growing market of media technology and services.
Mediahuis also succeeded in strengthening its position within the digital marketplaces last year. Among other things, the group acquired control of 4 All Solutions, the company behind Fortissimo, a CRM software for the real estate sector and the real estate portal Immo Proxio. As a result of this acquisition, Mediahuis became market leader in the area of CRM software and the design of websites for real estate professionals.
At the same time, Mediahuis and DPG Media joined forces in two important markets. Within the Belgian job and recruitment market, Jobat and Vacature.com were brought together in a joint venture that is currently exclusively marketing the Jobat brand. In the Dutch automotive market, both players joined the Gaspedaal and AutoTrack brands in a joint venture.
Pressure on advertising revenue continues.
Mediahuis held up reasonably well within the Dutch advertising market in the previous period. In Belgium, on the other hand, the result remained below expectations. The decline in print revenue was stronger than expected, and advertising revenue increased less rapidly than anticipated. The declining advertising revenue in the Belgian market was compensated by an efficient intervention in costs, however. The Mediahuis radio activities in Belgium, on the other hand, achieved a strong result, whereby Nostalgie developed into the largest radio broadcaster in terms of reach in the south of Belgium. Radio revenue showed an upward trend in both the north and the south.
Gert Ysebaert, CEO Mediahuis Group: “2019 was a significant investment year for Mediahuis. We invested in the digital acceleration of our portfolio, were able to create a leaner focus, and expanded at an international level. These investments will generate a positive effect in 2020, resulting in an increase of the net result once again. Today, our group has a solid financial basis that provides us with the necessary scope for further development. This ambition, combined with our belief in strong, independent journalism and in the power of our group to guide brands through the digital transformation, ensures that Mediahuis has all the assets necessary to develop further into a strong European media company.”
Key financial figures
With the addition of Independent News & Media as of August 2019, the revenue of Mediahuis increased by 5% compared to 2018. INM also immediately contributed to the group result. In addition, the REBITDA of Telegraaf Media Groep, acquired in 2017 (and now renamed Mediahuis Nederland), has evolved in a very positive way. Together, they account for the major part of the € 28.3 million growth in REBITDA, or +31% compared to 2018.
Mediahuis has been applying IFRS 16 to its operational lease contracts as of 2019. The positive impact of this on the REBITDA is compensated, however, by a revised and more conservative policy with regard to the activation of platforms and digital products.
The aforementioned reorganisations, together with the acquisition costs, mainly those of INM, and a number of accounting adjustments to the deferred taxes, had a negative impact on the net result, amounting to € 20 million.
The impact of the significant acquisition of INM in 2019 on the net debt of the group was limited. The net debt (bank debt + shareholder loans – liquid assets) on the REBITDA ratio decreased slightly from 1.8 to 1.7.
Kristiaan De Beukelaer, CFO Mediahuis Group : “Financially, 2019 was an intensive year. The optimisations and acquisitions - mainly INM - are investments in our future where we expect that the positive effects will already be visible in our 2020 results. At the same time, Mediahuis remains cautious in the financing of its growth. The proof of this is the stable net debt/REBITDA ratio, which still provides us with room for continued further investments in the current portfolio or in new acquisitions.”
Key figures for 2019
|(in millions of euro)||2019||2018||evolution|
|Operating Result (REBITA)||(1)||65,9||55,1||+10,7|
|Net recurring result||(2)||50,7||40,7||+9,9|
(1) Recurring operating result excluding amortization of acquisition-goodwill.
(2) Operating result after deduction of the respective corporate taxes, at the rates applicable per country.
(3) Liquid assets less bank debts and subordinated loans, excluding operating lease obligations under IFRS16 expressed as debt (as of 2019).