We've got all the assets to accelerate our digital transition

 

 

 

We've got all the assets to accelerate our digital transition

Since early March, nearly 95 percent of our personnel has been working from home. It's actually quite incredible how well this is working out, even though it must not last for too long. Right now, no one knows when the general lockdown will be lifted, but what we do know is that the impact on the economy and on society will be enormous.

In these exceptional times, we're more than ever finding out how important our media are. Every day, we try to offer journalism that's as reliable as possible, and our readers, viewers, and listeners appreciate that no end. In terms of reach, we're breaking record after record in all our media and on all our platforms. In a normal situation, this would be leading to higher advertising revenue. But it’s not.

On the contrary: many advertisers are cancelling their advertising campaigns because their companies are closed or no longer have customers. Adverts constitute almost a third of our turnover, and we already know this income will be substantially lower than last year. Obviously, that will have an impact on the group's 2020 result. Fortunately, our company's profitability is outstanding, and we can take a few hits. Moreover, we've decided to completely reserve our profits to keep our balance sheet strong. We're also taking measures to manage this crisis situation as well as possible, and we're preparing intensively for the aftermath. Our strategic priorities remain the same as before: accelerated digital transformation of our media, correct organization and structure, and optimum integration of the acquisitions.

Local champion

Our group is active in news media, TV, radio, periodicals, and online services. There are very few media companies with a portfolio this diverse, but we believe that the multimedia approach is the way to go, and we strive to be the “local champion” in any geographical market we're active in. As a group, we want to have the requisite scale to be able to invest in the best technology, so we can serve our end users and advertisers on the best and most attractive digital platforms.

Within this strategic framework, we've made significant acquisitions: for example, the complete takeover of Medialaan (Belgium's biggest TV and radio company) in 2017, and the takeover of Independer (the Netherlands' biggest comparison platform for insurance products) in 2018. The recently announced acquisition of Sanoma Nederland is also of great strategic importance. Digitally, we'll now be reaching as many people as Facebook and Google, and the addition of a wide-ranging portfolio of periodicals offers us the scale and great prospects to take these titles digital.

In 2019, we decided to change our company's name. De Persgroep became DPG Media. Of course, the three letters are a nod to our roots, but DPG Media is also better suited to the broad portfolio of activities of a company that's active in three countries: the Netherlands, Belgium, and Denmark. 

2019 was another very good year for our group: the digital transformation sped up considerably, the group's diversification is working, and we're in great shape financially.

Spectacular digital growth

In our news media, as we've calling newspapers for some time now, we have recorded growing reader revenue for the first time in many years. That trend will continue. In these confusing times, people are looking for quality news and they're prepared to pay for it—online too. Our newspapers' print run is declining, but at a much slower rate than what was generally predicted. The upswing in digital subscriptions, on the other hand, is spectacular. We're reaping the benefits of a very simple, 100-percent reader-oriented strategy: we serve all our readers as well as we can on all the platforms they want to be served on. We try to make the best possible newspapers in print, and we're investing heftily in the development of new apps, sites, and digital editions of newspapers. 

Our investments in journalism itself are no less important. Digitally, words, images, audio, and video come together, offering wonderful possibilities to cover the news better than ever before. We're highly optimistic about the future of journalism. Digitalizing periodicals is still a major challenge. They're still immensely popular print media and they're quite profitable, but there are almost no examples of successful digital magazines. We do believe, however, that it's possible and have concrete plans in that direction. This will be an absolute priority for the wide-ranging portfolio of the Sanoma magazines.

Our audiovisual activities showed mixed results. Once again, it was a very good year for radio, with growing market shares for our stations and rising revenue. TV, on the other hand, was harder, because the turnover from ads wasn't up to par. Conventional TV viewing is under pressure, because people have access to delayed viewing on all sorts of devices. In addition, there's the growing success of platforms such as Netflix. 

In extraordinary times, we’re struck by how important quality journalism is.
Christian Van Thillo Executive Chairman

New videoplatform

The world of television and video is changing fundamentally, and that will also change our business model. That's why we invested in the free video platform VTM GO, which now boasts more than 500,000 users. That will allow us to better serve our advertisers, with regard to our reach with younger target audiences as well as concerning data. And there was more big news: we announced that DPG Media and Telenet will be launching a subscription-based video platform together this autumn. We are convinced that there's a place for a solid range of local series and films, combined with the best material from abroad. We're aiming high for this segment, and are firm believers in both partners joining forces.

The third cornerstone of the group is Online Services. We help people make the right choice when they're online looking for a new job, a car, insurance, a computer, an energy supplier, or even a bank. Based on the user's individual profile and their specific requirements, we offer possible solutions on specialized websites. In addition, we also have a mobile telephony division in Mobile Vikings, a brand for young people that now has 300,000 customers. The profitability of that mobile department has skyrocketed in 2019, also thanks to our collaboration with mobile operator Orange.

Most online services recorded solid growth, but we saw challenges in the automotive and job markets. That's why we've structurally reinforced our presence in these markets thanks to two joint ventures with Mediahuis. We believe this will enable us to grow substantially. DPG Media will continue to be on the lookout for opportunities to reinforce its online services position. Prospects there are excellent. 

For the group, the turnover from ads amounts to 500 million euros, almost a third of the total turnover. The management discipline of marketing and advertising is changing fundamentally and at high speed. Of course, that's got everything to do with the boom in digital media and the possibility for advertisers to reach their target audience as effectively as possible thanks to data and technology. At DPG Media, too, we're seeing rapid growth in digital ad revenue, especially thanks to the huge reach of our popular news sites in the three countries we're active in.

We're investing heavily in data and technology now, but also in marketing expertise. Sustainable value is created by strong brands with clear-cut distinctive capability. That's the basis of “pricing power”, creating real long-term value. If you can build a brand and know the optimum way to boost its turnover, you've got a winning combination. That's exactly what we want to offer to our advertisers: the best solutions to build brands and the best and most efficient solutions to maximize your turnover. 

New CEO

“Structure follows strategy.Last year, DPG Media turned over more than 1.6 billion euros with 5,000 collaborators. The planned acquisition of Sanoma will bump up that turnover to 2 billion. We've grown a lot in a short time span, our portfolio of activities has become more diverse but more complex as well, and, last but not least, we have ambitious plans. That's why we thought about the group's future leadership. On 1 March 2020, Erik Roddenhof was officially appointed the group's new CEO, a position I myself held for exactly 30 years.

Erik has been working at DPG Media for eight years now, with a career in the group going nowhere but up. He's ambitious, restless, enterprising, always optimistic, and a people person. I'm convinced that Erik is the right person to perpetuate the group's success in a new era. To achieve that, he can rely on a top-notch management team, which I'm very proud of. It's terrible that we're now facing this unprecedented crisis, but once the worst is over, we'll get to work again and continue writing our story.

I myself, in my quality of executive president, will chiefly be focusing on the strategy and development of our media. I've always found it fascinating to combine the creative side of coming up with and making successful media with the business side of things. It's about the love for our trade and the desire to achieve good results. We must remain critical of ourselves, in the realization that we can always do better.
 

Erik Roddenhof


The trick is keeping our conventional media strong, and working hard to grow successfully in digital. We've made great headway in the latter, but there's a lot to be gained yet. We're making increasingly better and better-looking digital media, our knowledge of online marketing and advertising has rocketed, and, with the big takeovers of the past few years, we've got all the assets we need to accelerate. That's going to be our big focus, and I'd like to put my heart and soul into that for many years to come.

 

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