The Egmont media group delivered a solid performance in 2016 with profit growth at three out of four divisions and revenue of EUR 1.6bn. The Grow with the Modern Consumer strategy brought digital growth and new tech-based businesses. Pre-tax profit amounted to EUR 70m. Egmont made charitable donations of EUR 13m to help children and young people and to support talents in the film industry.
Egmont had revenue of EUR 1.6bn in 2016 with organic growth in local currency of EUR 38m. With an additional EUR 250m in non-consolidated revenue from partly owned companies in growth areas such as e-commerce and digital marketing services, Egmont’s total business activities effectively generated revenue of EUR 1.8bn.
Nordisk Film, Egmont Publishing, and Egmont Books all reported earnings growth. TV 2 in Norway put in a good commercial performance and continued its strong digital growth, but higher costs for sports rights and restructuring adjustments to future-proof the organisation impacted the division’s results. All four divisions continued to adapt their business with the increasingly digital consumer behaviour. Profit before interest, depreciation and amortisation (EBITDA) totalled EUR 170m. Pre-tax profit (EBT) amounted to EUR 70m.
“I am delighted that we delivered solid results while continuing to invest in the future media market. The focus of our strategy Grow with the Modern Consumer is to ensure that Egmont builds a strong alignment between media content, consumer behaviour and technology. We’re strengthening content in our core business in TV, film, magazines and books, we’re investing in fast-growing, new business areas such as e-commerce, gaming, and digital marketing services, and we’re using technology to strengthen our subscription models and increase direct consumer relations,” says Egmont President and CEO Steffen Kragh.
Highlights from Egmont’s divisions:
“Journalism, drama and entertainment on TV, film, and in print remain Egmont’s core business, but we are increasingly also a technology business, because content and technology go hand-in-hand in the modern media market. As a commercial foundation, we invest long-term in the development of the business, but we have also donated EUR 13m to help vulnerable children and young people and support film talent,” says Steffen Kragh.
Egmont’s equity amounted to EUR 833m in 2016 with an equity ratio of 51%. Egmont is free of debt.
Egmont donated EUR 13m in 2016 to help vulnerable children and young people and to support film talent through the Nordisk Film Foundation. The year saw particular focus on the youngest children, and the Egmont Report documented that the first thousand days of a child’s life determine how it will cope in life later. Through the signature project Learning for Life, almost 300 children and young people placed in care have now participated in intensive learning camps and been assigned a personal mentor. Since 1920, Egmont has made donations totalling EUR 370m.
Key figures in mEUR
|Profit before interest, depreciation and amortisation (EBITDA)||170||190|
|Pre-tax profit (EBT)||70||102|
Head of Press, Communications & Public Affairs
Vice President, Communications & Public Affairs
Revenue: EUR 448 (436) million. Operating profit: EUR 11 (35) million.
TV 2 is Norway’s largest commercial media house in terms of daily viewing, delivering news, sports, and entertainment through seven TV channels as well as online and mobile platforms. Revenue grew by 7% in local currency in 2016, but earnings were down on 2015 due to investments in premium content and rights, and to costs for a major reorganisation scheduled to be rolled out in 2017 to prepare the company for the market of the future. TV 2 is Norway’s largest broadcaster in the 20-49 age group, and its main channel had a successful year with strong programme formats such as the talent show The Stream, developed in-house and sold for production in the US. TV 2’s genre channels made a positive contribution and maintained their viewing figures. TV 2 Sumo saw further increases in both revenue and subscribers, and is Norway’s largest streaming service in terms of revenue. The website tv2.no continued to grow and is Norway’s third-largest commercial news site with more than 1.1m unique visits daily. The subsidiary Vimond, which sells OTT software solutions, grew its revenue by 68% and has some of the world’s leading media companies as customers.
Revenue: EUR 530 (497) million. Operating profit: EUR 32 (29) million.
Nordisk Film produces, distributes and markets films and TV series in the Nordic region, operates cinemas in Denmark and Norway, and markets PlayStation in the Nordic and Baltic regions. The division also operates digital businesses in gift cards, ticketing, and online film channels. Nordisk Film delivered record revenue and very strong earnings in 2016. All business areas made positive contributions, and in particular the film business with its many strong titles and PlayStation sales exceeded expectations. Nordisk Film Games began to invest in Nordic computer games companies. Some of the best and most popular Danish films of 2016 were produced by Nordisk Film. Martin Zandvliet’s Land of Mine was nominated for an Oscar, and the comedy The Reunion 3 sold 550,000 tickets. The associate Zentropa was behind the year’s bestselling film, A Conspiracy of Faith, which sold more than 700,000 tickets. Nordisk Film was co-investor and distributor for a number of Nordic film successes. The Swedish film A Man Called Ove was nominated for two Oscars, and in Norway more than 720,000 cinemagoers watched the blockbuster The King’s Choice. Nordisk Film Cinemas sold 5.7m tickets in Denmark and 4.0m tickets in Norway and is the market leader in both countries. The ticketing business Venuepoint is now a joint venture with German company CTS Eventim and is planning to expand its portfolio to include venue operation. The gift card business GoGift.com reported increased revenue.
Revenue: EUR 529 (594) million. Operating profit: EUR 40 (36) million.
Egmont Publishing is behind 700 magazine titles across more than 30 countries, publishes children’s books internationally, and provides a variety of e-commerce and digital marketing services. Egmont Publishing achieved growth in profit, in particular due to strong performance in Norway and Sweden. The Russian and Czech operations and parts of the German operation were sold during the year, which impacted total revenue. The sale of the Russian operation was due to changes in Russian legislation preventing foreign media companies from holding more than 20% of Russian media companies. Egmont Publishing further developed its subscription models, including the digital magazine service Flipp, and had a total of 1.3m subscribers. The company is heavily involved in e-commerce and holds interests in seven Nordic e-commerce companies. The aim is for the individual companies to be Nordic market leaders in their niches. Egmont Publishing bought into the Swedish company Outnorth and the Danish company Nicehair during the year. The portfolio of e-commerce companies generated combined revenue of EUR 179m, of which only a part is consolidated in Egmont’s revenue. Egmont Publishing has also built up a strong portfolio of holdings in six Nordic companies in digital marketing services, and at the end of the year the company acquired a stake in the Swedish digital content agency KAN.
Revenue when including Egmont’s share of Cappelen Damm: EUR 123 (126) million.
Revenue exclusive of Cappelen Damm, which is not included in the consolidated accounts due to the international accounting standards (IFRS):
Revenue: EUR 44 (44) million. Operating profit: EUR 6 (6) million.
Egmont Books comprises Norway’s leading publishing house, Cappelen Damm, and Denmark’s second-largest publisher, Lindhardt og Ringhof. Both publish fiction, non-fiction, children’s books, audiobooks, e-books, and educational material. Lindhardt og Ringhof published around 600 new book titles in 2016 and was behind a number of acclaimed and prize-winning books. Merete Pryds Helle’s Folkets skønhed was nominated for a number of awards and won both the Golden Laurel Prize and the Politiken Literature Prize. Leif Davidsen’s crime novel Djævelen i hullet topped the bestseller lists, and Afghan-born Geeti Amiri’s Glansbilleder generated considerable interest and debate. Saga Egmont, a publisher of e-books and audiobooks, showed continued growth, partly through seven acquisitions, including Germany’s Steinbach Sprechende Bücher, Sweden’s Ljud Classicas and Denmark’s Forlaget Rosenkilde. Saga Egmont expects to have digitised 15,000 book titles by the end of 2017. Norway’s largest publisher, Cappelen Damm, enjoyed its best year ever. It released more than 1,500 titles and is the market leader in Norway with bestselling authors such as Vigdis Hjorth, Selma Lønning Aarø, Karin Fossum, Lars Kepler, Gudny Ingebjørg Hagen, Sophie Elise Isachsen and Torbjørn Færøvik. Cappelen Damm acquired the publisher Bazar and Grammafon during the year. The bookstore chain, Tanum, opened the first of five shops at Oslo Airport in 2016.
Egmont is a commercial foundation. Some of the profit generated by the media business is distributed to charitable activities helping vulnerable children and young people, while the remainder is reinvested in developing the media business. The Foundation mainly supports activities in Denmark, but donations in Norway have increased. Since 1920, it has distributed a total of EUR 370m in current values. In 2016, Egmont made donations of EUR13m, including EUR 0.7m for talent development in the film industry via the Nordisk Film Foundation. Egmont focused on the youngest children in 2016, teaming up with thinktank DEA to launch Småbørnsalliancen – an alliance that works to promote support to young children – which brings together stakeholders with expertise and an interest in children’s learning and life skills to give them a good start in life. The Egmont Report 2016 focused on the youngest children and showed that the first thousand days of a child’s life determine how the child will cope in life. The signature project Learning for Life continued in 2016, and 300 children and young people placed in care are now part of the programme, where they attend learning camps and are assigned a personal mentor. 2016 was also the year when Egmont in Norway entered into a four-year partnership with the Crown Prince and Crown Princess’ Foundation, which promotes wellbeing and learning among young people in Norway, and funds were earmarked to ensure that newly arrived refugee children get the best start in life in Denmark and Norway. The Nordisk Film Foundation made donations to the signature project The Polar Bear Writing Camp, which aims to develop the skills of professional scriptwriters.