Egmont had a good 2017 with viewer share gains and strong content productions. Profit before tax increased by 11% and totalled EUR 78m. 20 acquisitions were completed in growth companies. Structured as a foundation Egmont reinvests its profits in development of media and new growth businesses, and last year Egmont donated EUR 13m to help children and young people.
The media group Egmont holds a strong position in story-telling and journalism across tv, film, magazines, and books, but business development is increasingly also driven by using new technology and data to service the modern consumer with content on new platforms. In addition comes Egmont’s development of growth areas such as gaming, digital marketing services, and e-commerce to compensate for a decreasing print market.
Investments in growth businesses continued in 2017 with a total of 20 acquisitions, including stakes in new companies and additional stakes in existing holdings. Egmont’s share of revenue in non-consolidated growth companies totalled EUR 300m, and consolidated revenue amounted to EUR 1.5bn. In total, Egmont’s business activity in 2017 thus generated revenue of EUR 1.8bn.
Egmont’s profit before tax increased by 11% to EUR 78m. Many different factors contributed to the result for 2017: increase in share of viewings in TV 2 in Norway, strong film productions, good advertising sales, great magazine titles in a market characterised by declining sales, a modest year for cinemas in Denmark, and costs relating to investments in growth areas.
Egmont’s equity is EUR 830m and the group is free of debt, which allows for significant investments in development and acquisitions.
“I am proud of the creativity generated by our employees. We have made excellent films, delivered great TV productions, and amazing books and magazines. We have a focus on using data and technology to provide relevant and outstanding content and service to our consumers on a variety of user-friendly platforms. Furthermore, I am pleased with the rate of development in the growth businesses within e-commerce, gaming, and digital marketing services,” says Egmont President and CEO Steffen Kragh.
Highlights in 2017
Egmont donated EUR 13m in 2017 to help vulnerable children and young people in Denmark and Norway, and to support film talent (through the Nordisk Film Foundation). A new philanthropic strategy was launched with the key objective of ensuring that by 2030 all young people in Denmark and Norway are able to complete an upper secondary education. Egmont hosted its first summit for children in 2017, and the annual Egmont Report focused on what needs to be done to ensure that children and young people placed in care are able to fulfil the key objective on education. 400 children placed in care have now been signed up to the signature programme Learn for Life, where they participate in learning camps and have a personal mentor. Egmont also supports a number of activities in Norway, including the project Reading Friend where volunteers read aloud to children. Since 1920, Egmont has made donations totalling EUR 386m.
The publishing houses Lindhardt og Ringhof in Denmark and Cappelen Damm in Norway reinforced their positions in digital rights and digital educational materials. Cappelen Damm, the biggest publishing house in Norway, achieved its strongest turnover so far. Lindhardt og Ringhof released solid titles and has now digitized a total of 20,000 book titles.he publishing houses Lindhardt og Ringhof in Denmark and Cappelen Damm in Norway reinforced their positions in digital rights and digital educational materials. Cappelen Damm, the biggest publishing house in Norway, achieved its strongest turnover so far. Lindhardt og Ringhof released solid titles and has now digitized a total of 20,000 book titles.
Key figures in mEUR
|Profit before interest, depreciation, and amortisation (EBITDA)||159||170|
|Profit before tax (EBT)||78||70|
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Revenue: EUR 456 (448) million. Operating profit: EUR 35 (11) million.
TV 2 is Norway’s largest commercial media house and broadcasts news, sports and entertainment through nine tv channels and the streaming service TV 2 Sumo. TV 2 achieved revenue growth in 2017 and delivered a solid result. TV 2 moved into two new, state-of-the-art media houses in Bergen and Oslo in 2017, increased their viewing shares and was Norway’s largest broadcaster in the 20-49 age group. TV 2 reached the Norwegian population with its coverage of the parliamentary elections, the broadcasting production of the World Cycling Championships in Bergen, and with strong documentaries. The main channel had a successful year with programme formats such as Celebrity Farm, Dancing with the stars and The Voice. TV 2’s news channel – the only 24/7 news channel in Norway – achieved progress. TV 2 Sumo is Norway’s largest streaming service in terms of revenue. The website tv2.no is Norway’s third-largest commercial news site with 1.2m unique visits daily. In 2017, TV 2 applied for a new five-year agreement with the Norwegian state to continue as a public service tv provider – a decision is expected in the first half of 2018.
Revenue: EUR 498 (530) million. Operating profit: EUR 17 (32) million.
Nordisk Film produces films and tv series in the Nordic region, operates cinemas in Denmark and Norway, and has significant business in interactive games. Nordisk Film delivered a good performance in 2017. The decline in revenue was primarily due to the fact that several major, Danish film premieres were postponed until 2018, and as a result fewer people visited the cinemas. Due to underdelivery of advertising contracts during the period 2013-17, Dansk Reklame Film will compensate advertisers, which impacts Nordisk Film’s profit by EUR 12.8m. Exclusive of the compensation, Nordisk Film’s operating profit 2017 was in line with 2016. Nordisk Film invested in four Nordic gaming studios, including Swedish Avalanche Studios. The five best selling Danish films in 2017 were all produced or co-produced by Nordisk Film or associated companies. In Norway, the Nordisk Film blockbuster production The 12th Man has sold more than 600,000 tickets since the premiere on Christmas Day. Nordisk Film Cinemas sold 5.3m tickets in Denmark and 3.7m tickets in Norway, and Nordisk Film will open its first cinema in Sweden in 2018. The growth company GoGift delivered strong underlying growth in digital gift card solutions.
Revenue: EUR 505 (529) million. Operating profit: EUR 33 (40) million.
Egmont Publishing is behind 700 magazine titles in more than 30 countries as well as e-commerce companies and digital marketing services. Egmont Publishing experienced a decrease in revenue and operating profit due to a decline in printed weekly and monthly magazines, but profitability remains strong. The digital magazine platform Flipp demonstrated solid performance in Norway and Denmark, where Egmont Publishing expects to gain even stronger digital content positions in the coming years. Substantial growth was generated within e-commerce and digital marketing services, but most of the revenue is not consolidated as it is generated by minority ownerships. Egmont Publishing’s portfolio of e-commerce companies comprises six Nordic companies – Jollyroom, Fjellsport, Outnorth, Bagaren och Kocken/GoShopping, Med24 and Nicehair – and in 2017 they generated a combined revenue of EUR 235m. Egmont Publishing is now majority owner of Bagaren och Kocken/GoShopping and Outnorth. In addition, Egmont Publishing is co-owner of six Nordic companies in digital marketing services – Ingager, s360, Very Patchwork, Klintberg Niléhn, KAN and Sempro – which reported revenue growth.
Revenue when including Egmont’s share of Cappelen Damm: EUR 132 (123) million.
Revenue exclusive of Cappelen Damm, which is not included in the consolidated accounts due to the international accounting standards (IFRS):
Revenue: EUR 48 (44) million. Operating profit: EUR 5 (6) million.
Egmont Books comprises the part-owned Norwegian publishing house Cappelen Damm, and the Danish publisher Lindhardt og Ringhof. Both publish print books, audiobooks, e-books, and educational material. Lindhardt og Ringhof published approximately 600 new book titles in 2017 and has digitised a total of 20,000 titles. Lindhardt og Ringhof achieved revenue growth, but operating profit was affected by planned digital investments. The publisher was behind several strong titles in 2017, including Danish authors Anne Mette Hancock, Steffen Jacobsen, and Sissel-Jo Gazan. Saga Egmont, which publishes e-books and audiobooks, is now present in Sweden, Norway and Germany and is planning further European expansion in 2018. Norway’s largest publisher, Cappelen Damm, generated record revenue, published more than 1,500 book titles, and is the market leader in Norway with authors such as Roy Jacobsen, Lars Saabye Christensen, and Dan Brown. Cappelen Damm further strengthened its position through acquisition of the three publishers Font, Fontini and Arneberg.
Egmont is a commercial foundation, and part of the media group’s profit is donated to help vulnerable children and young people and promote film talent, 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 386m in current value. In 2017, Egmont made donations of EUR 13m, including EUR 0.7m distributed by the Nordisk Film Foundation. A new philanthropic strategy was launched for the period 2017-21 with the key objective of ensuring that by 2030 all young people are able to complete an upper secondary education. 400 children placed in care have now been signed up to the signature programme Learn for Life, where children placed in care participate in learning camps and have a personal mentor. Egmont hosted its first summit for children in April 2017, and 30 children and young people placed in care presented their views on what is needed to strengthen their learning and life skills. The Egmont Report 2017 focused on what needs to be done to ensure that children and young people placed in care are able to fulfil the key objective on education and thereby get a solid basis for a good life. A partnership with Red Cross Youth ensures 120 learning cafes throughout Denmark where 5,000 vulnerable children with academic and social challenges can get help, which increases their motivation for schooling. Among activities supported in Norway is the project Reading Friend where volunteers read aloud to children. In 2017, the Nordisk Film Foundation donated 59 travel grants to film talents and distributed the largest donation so far, EUR 130,000, to ensure more visual effects in films made by up-coming talents.