DPG Media: 2019 results and forecast

Expanding the group through growth in news, entertainment and services

DPG Media announces its annual results, while society has been hit by the coronavirus. Christian Van Thillo, Executive chairman, states: “In the 3 countries where we are active (Belgium, The Netherlands and Denmark), our business is experiencing the impact of the coronavirus. The majority of our staff has been working from home since March 12th, and we are managing remarkably well to ensure our media continues to be published and distributed successfully. In these disruptive times, there is an increased need for reliable, quality news, as well as a high demand for entertainment. As a result, the reach of our news media and television stations has grown explosively. On the other hand, our advertising market is confronted with a serious downturn since mid-March. How consumer and advertiser confidence is affected and how this demand is going to develop over the coming period, is the more complex question to answer.”

Results 2019
DPG Media generated an annual revenue of € 1.64 billion (+4%) in 2019. This growth in annual revenue resulted in an EBITDA growth of 7% to €258 million. Operating profit amounted to €183 million, and the net profit was €129 million, representing a growth of 2% compared to 2018. As a consequence of the sale of various assets, a further €9 million in exceptional revenue was added. Growth in profits was achieved in the three countries where the group is active. Given the current crisis, the decision has been taken to reserve the entire group’s profit. 
 
 
Consolidated financial statements DPG Media
 
 
 
Activities
The news media part of the group has undergone further digital transformation resulting in remarkable growth in sales of digital subscriptions and a considerably enlarged reach for the three major news sites: ad.nl, hln.be and bt.dk. All three take a leading position in their respective markets. The group now has more than 400,000 digital subscribers, resulting in renewed growth of total margin for the readers market. Revenue from digital advertising has also grown substantially, but not sufficiently to fully compensate for the downturn in printed advertising. The performance of the group’s magazines has exceeded expectations, once again delivering strong financial results. 
 
Television activities in Belgium struggled more, due to a fall in advertising revenues of 4%. As a response to the changing viewing behaviours, we launched the free video platform VTM GO, which now accounts for almost 600,000 active users.  To develop a paid video streaming platform, we entered into an important strategic joint venture with Telenet. This platform is due to be launched this autumn. As a result the television business is developing into a broad video business, active on all of our platforms. 
 
For radio, 2019 was once again a strong year with solid market shares and favourable revenue development, both in The Netherlands and Belgium. Activities in mobile telephony at Mobile Vikings evolved very positively, thanks to a subscriber base of 300,000 customers and the transition to a ‘full MVNO model’ in collaboration with Orange Belgium. 
 
Online Services are now generating an annual revenue of €120 million. The Dutch comparison site Independer, the undisputed market leader in insurance, expanded its range of services to include lending and mortgages. Notable was the solid growth by the Belgian energy comparison site Mijnenergie/Monenergie. Finally, two important joint ventures were established which will result in a substantial strengthening of the market position:  on the Belgian market with Mediahuis for job  advertising (Jobat), and  for car advertising (Autotrack and Gaspedaal) on the Dutch market. 
 
Acquisition of Sanoma
In December of last year, DPG Media announced that it had reached an agreement on the acquisition of Sanoma Media Netherlands. This takeover was approved on April 10th  by the Dutch competition authority (the ACM). This acquisition adds a broad portfolio of magazines and digital media to our Dutch activities, generating an additional €355 million of revenue. The results will be consolidated from the end of April onwards, which will also be the starting point of the integration. 
 
Forecast for 2020
It’s evident the corona crisis will have an impact on the group’s results for 2020. 
However, the level of predictability of the impact is limited. A great deal will depend on how and when governments are able to reactivate the economies. These will be complex and crucial exercise. Erik Roddenhof, CEO of the DPG Media Group: “The course of both the group and our business units will be adjusted accordingly, wherever possible. In the meantime we will not detract the implementation of the underlying strategy. We continue to work on our digital transformation and meanwhile strengthen our media brands, both online and offline.”