In 2001, Egmont increased the revenue generated in 24 countries by 7.6 % to the highest level to date, EUR 1,141 million. The Group’s pre-tax profit was 4.0 million EUR against 29.6 million EUR the previous year. Profit after tax was (5.4) million EUR in 2001 against 16.5 million EUR for the previous year. The result is clearly unsatisfactory.
Results were hampered by difficult market conditions, particularly for film and TV production and children’s media in Germany, and by the change process initiated by Egmont in 2001. However, positive earnings were recorded in other areas: Nordic weeklies, magazines, books, comics, and electronic entertainment for adults and children.
The profit on operating activities increased from EUR 6.8 million in 2000 to EUR 11.9 million. The total contribution from Magazines, Kids & Teens, Books and Entertainment amounted to EUR 59 million. The results recorded by Nordisk Film led to a reduction in profit of EUR 6 million, and International a reduction of EUR 9 million. In addition, profit was affected by the non-Group share of jointly managed activities, joint overheads, and restructuring costs, of which the winding up of Egmont’s main internet activities in Denmark and Germany was one example. The change process will continue to affect Egmont in 2002.
Steffen Kragh, President and CEO, comments:
“Egmont’s overall goal of creating long-term media value depends on profitability in our existing media activities. The result for 2001 is clearly unsatisfactory and underscores the importance of the change process already initiated. We have launched a number of initiatives aimed at improving profitability in 2002 and the coming years. We intend to concentrate our resources in fewer but larger subsidiaries. Other rationalization plans include reducing employee numbers and optimizing economies of scale. As a result of these changes, we hope to free up and reallocate resources for further investment in creativity and business development. We will focus on selected areas, including the Nordic home market.”
“We forecast an improvement in Group profit for 2002. The aim of the new organization is to reverse the negative business trends and strengthen Egmont’s long-term market positions. The reorganization will impact earnings, drive new launches and underpin progress in key areas through both organic growth and acquisitions. Egmont furthermore foresees that new partnerships will influence the media industry and welcomes the challenge of being a driving force.”
The Magazines division covers one-third of the Scandinavian market for weekly and special interest magazines. Every week, more than five million readers turn the pages of one of its more than 60 different publications. Egmont’s range of publications in Denmark includes ALT for Damerne, Her & Nu, Hjemmet, Euroman and Eurowoman.
Kids & Teens is undisputedly the leading publisher of print media for children and teenagers in Scandinavia. Its range of publications spans preschool products, comics and lifestyle magazines. In addition to a host of magazines and album series, Egmont creates content for comics, including Donald Duck & Co., in 27 countries.
Books comprises seven publishing houses and more than 30 book clubs in Scandinavia, where Egmont is the largest publisher of children’s books and the second-largest publisher of literary fiction for adults. Egmont also holds an expanding position on the market for school textbooks. In Denmark, Egmont is known through its publishing companies Aschehoug and Lademann, numerous book clubs run under the Egmont name as well as the co-owned schoolbook publisher, Alinea.
Entertainment owns the Nordic distribution rights to approximately every fifth cinema film and one-third of all videos, and is the largest supplier of films to TV stations. Egmont also distributes Sony PlayStation in the Nordic region. With a seating capacity of 15,000, Nordisk Film Biografer sells almost one in two of all cinema tickets in Denmark.
Nordisk Film embraces all aspects of storytelling in moving images: Film, TV, advertising, technical facilities, postproduction and electronic games. Efforts to improve profitability have not been sufficiently effective. Several areas have experienced negative fluctuations in market trends, and results have consequently been unfavorably affected by the alignment of capacity and cost structures to the varying level of activity.
International comprises companies in Central Europe, the UK, Asia and Eastern Europe. The division publishes printed entertainment products in 30 languages for children outside Scandinavia.
Egmont is owned by the Egmont Foundation, which supports and initiates social, educational and cultural projects, primarily initiatives that create lasting improvements for children and young people. In 2001, the Egmont Foundation spent a total of EUR 4.0 million on aid, grants and administration.
For further information please contact:
Lene Balleby, Vice President Communications
Telephone: +45 33 30 51 40
Mobile: + 45 40 16 24 26
e-mail: balleby@egmont.com.
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