Mediahuis makes a quantum leap in 2017.

The originally Belgian publishing group, Mediahuis, not only succeeded in strengthening its position in the Belgian market in 2017, but also expanded in the Netherlands to become a leading multimedia company with a turnover of € 800 million, more than 3,200 employees and total daily sales amounting to 1.4 million newspapers. The positive evolution of the operating result for 2017 (REBITDA +23%) must therefore be seen as a precursor to the further growth and improved results that Mediahuis is expecting as a result of the addition of VP Exploitatie as a third shareholder, the acquisition of the Telegraaf Media Groep (TMG) and the media activities brought in by Corelio and Concentra.

2017 will stand out as a pivotal year for Mediahuis, in which the group succeeded in limiting the impact of falling advertising revenue on its operational cash flow (REBITDA) from existing activities (Belgian newspapers, digital classifieds and the Dutch NRC), despite the difficult marketing conditions and partly thanks to the positive effect of good cost control.

Sales of the Belgian Mediahuis newspapers dropped by 3% last year, a drop mainly recorded in loose sales. Newspaper sales through subscriptions remained virtually stable, with a continued shift to digital subscriptions. Despite the pressure of a declining newspaper market and driven by a strong digital proposition, both De Standaard and NRC (NRC Handelsblad and nrc.next) succeeded in achieving an increase in total sales of + 0.4% and + 4.3%, respectively.

The popular titles Het Nieuwsblad/De Gentenaar, Gazet van Antwerpen and Het Belang van Limburg managed to further strengthen their position in online reach and took an important step in stimulating paying digital journalism with the development of the ‘plus’ environment.

The advertising revenue of the Belgian newspapers was negatively affected in 2017 by a sharp drop in the national segment and the increasing pressure from several large international platforms. The regional advertising market and the classifieds market in both print and digital remained stable, however, or even experienced a slight increase. NRC managed to maintain the level of 2017 in a global advertising market that is strongly declining.

Increasing importance of classifieds activities and broadening of the product range.

The classifieds activities are becoming increasingly important within the results of Mediahuis. The existing platforms, for example, succeeded in strengthening their position in their respective markets, and, at the same time, Mediahuis invested in broadening the product range.  The recruitment platform Jobat expanded in both print and online in 2017. The positive trend within the job market and the evolution towards ever newer forms of cooperation resulted in Mediahuis entering into a strategic partnership for the Dutch and Belgian markets with Jellow, an online matching platform for freelancers. Within the real estate market, Hebbes and Zimmo joined forces, leading to one powerful brand, i.e. Zimmo. Mediahuis will continue to focus on the accelerated growth of its classifieds activities in 2018, with the aim of taking on a leading position in those growth markets where the group already has a strong starting position today. This strategy will be further supported by the classifieds platforms of Media Groep Limburg and TMG within Mediahuis.

In addition, Mediahuis also ensured a broadening of its activities by taking up a participation in Wayne Parker Kent (WPK), one of the fastest-growing digital content companies in the Netherlands, with its core business of reaching very specific target groups. This strategic partnership resulted in a joint venture for the Belgian market, which was launched in the spring of 2018.

Further strengthening of the multimedia dimension of Mediahuis.

A major step in the further growth of Mediahuis took place on 31 May 2017, when the media activities that were held in the portfolio of shareholders Corelio and Concentra were transferred to Mediahuis. These activities contributed to the operating result for 7 months.

  • The Dutch Media Groep Limburg reaches 77.1% of the Limburg population (18+) with the newspaper De Limburger, the door-to-door paper Via Limburg and some digital titles, and is a profitable and promising addition to the Dutch arm of Mediahuis, with a REBITDA margin of 17.6 %. The declining revenue from the door-to-door papers was offset by new digital revenues of the newspaper and several niche platforms within the context of the job market and local business news.
  • The various audiovisual activities with radio Nostalgie, the regional TV channels ATV, TV Limburg, TV Oost and ROB TV, and the participations in the French-language Nostalgie (Nostalgie SA) and De Vijver Media (SBS, Woestijnvis), were able to slightly improve their contribution, or remained stable.
  • The 50% participation in Flanders Classics, which, among other activities, organises and operates the Tour of Flanders and Omloop Het Nieuwsblad, is also a positive and profitable addition to the Mediahuis portfolio.
  • The newspaper printers of Coldset Printing Partners contributed consistently to last year’s result. Due to the continued decline of print volumes year after year, the total capacity will be further optimised in the coming years by the already announced closure of the printing plant in Groot-Bijgaarden in 2021 on the one hand, and an expansion and thorough overhaul of the machine park at the printers in Paal-Beringen, on the other.
  • In the decreasing and changing advertising environment, the free Metro newspaper and the door-to-door papers have a difficult year behind them.

Acquisition of TMG as a major step in the growth strategy.

Mediahuis became the controlling shareholder of the Telegraaf Media Groep (TMG) on 22 June 2017. In the months following the acquisition, the group increased its participation further, to 95%. This even went up to 99.5% early in 2018, following which the stock exchange listing of TMG was terminated. The non-core participations in Keesing Mediagroep and Talpa Radio were sold in September and December respectively, whereby Mediahuis confirmed its focus on the core activities of (news) media and digital brands.

After acquiring control over TMG, the new management immediately developed a recovery plan, which is now in full implementation. A quick and efficient intervention in the costs made it possible to stop the negative spiral of declining results. As a result of all this, TMG already made a positive contribution to the REBITDA and the net result of the group in the 6 months since Mediahuis acquired control. With titles such as De Telegraaf, regional brands such as Noord-Hollands Dagblad, the weekly magazines Privé and Autovisie, the Dumpert video portal, the GroupDeal.nl e-commerce platform and the GasPedaal.nl car portal, TMG has a portfolio of strong brands that will substantially contribute to the increase of the turnover and the result of the group in the years to come.

Gert Ysebaert, CEO of Mediahuis: “The acquisition of TMG was not only successfully completed, but it was also already largely digested from a financial point of view, thanks to the transactions of Keesing Mediagroep and Talpa Radio. 2017 was therefore a pivotal year for Mediahuis. Our group has expanded into a solid Belgian-Dutch media group with a strong portfolio of valuable brands. 2018 announces itself as a challenging year in which we will focus on making choices. Mediahuis therefore continues to focus more than ever on the further digital transformation of its core business, the news brands and classifieds. We have great local brands that really matter to people. We will make the difference with the wide area we cover and our strong commitment.”

Financial key figures

In the comparison of the final operating result (EBIT) with respect to the REBITDA, € 16.5 million of non-recurring costs must be taken into account for 2017. These are mainly transaction costs relating to the acquisition of TMG and the various contributions from Corelio and Concentra, one-off financing costs, some goodwill impairments, one-off depreciations and provisions for various risks and costs.  These one-off expenses also significantly affected the net result.

After the various contributions and the acquisition of TMG, Mediahuis has refinanced its total debt.  The net debt only increased to a limited extent, by € 34.8 million, partly due to the sale of Keesing Mediagroep and the participation in Talpa Radio.  On the basis of a 1-month REBITDA, the debt ratio (net financial debt / REBITDA) of the group remained virtually unchanged.

Kristiaan De Beukelaer, CFO Mediahuis: “The transactions associated with the acquisition of TMG have provided Mediahuis with a more solid financial basis at the end of 2017, compared to the beginning of the year. Thanks to TMG and the other activities acquired in 2017, the REBITDA of Mediahuis is expected to increase towards € 90 million in 2018. As a result, we will end the year 2018 with a debt ratio of approximately 1.1, despite a substantial investment programme for this year.”

2017 Key Figures

(in millions of euros)       2017 2016 evolution
Turnover (normalised) (1) (2) 616.2 412.7 + 49%
REBITDA   (1)   73.2 59.8 + 23%
REBITDA Margin     11.9% 14.5%  
REBITA   (1)   52.7 48.6 + 8%
EBIT   (1)   20.4 34.5 - 41%
Net Result (1) (3) 14.8 18.2 - 19%
Net debt (4)   111.1 76.2 + 46%
(1) Pro forma IFRS consolidated results, whereby:
- the participations contributed by shareholders Corelio and Concentra for 7 months
- and TMG for 6 months
are included in the 2017 figures
As of financial year 2017, Mediahuis will deposit its own consolidated financial statements with IFRS as a valuation basis.
Mediahuis and the subsidiaries were previously included in the consolidated financial statements of its shareholders.
The figures shown are pro forma, because Mediahuis is drawing up its first consolidated financial statements in an extended financial year.
The comparative figures for 2016 are restated because of the impact of the IFRS adaptation and first consolidation of Mediahuis.
(2) Operating income, excluding barter turnover.
(3) Group share in the net result after tax.
(4) Debts, excluding the subordinated loans to shareholders.