Semi-annual report 2015
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Notes to the consolidated
Semi-Annual Financial Statements

1. Corporate information

Telegraaf Media Groep N.V. (the “Company”), which is domiciled in Amsterdam, the Netherlands, is a media company with a leading market position and recognized brands in the Netherlands. The activities are primarily the publication of print media and the operation of, and participation in, digital media and radio. The Company’s shares are listed on the NYSE EuroNext in Amsterdam.

The Company’s consolidated semi-annual report for the first six months of 2015 comprises the Company, its subsidiaries and entities over which the Company has joint control (together referred to as Telegraaf Media Groep) and its interests in associates.

The consolidated financial statements for the financial year 2014 are available upon request at the Company’s postal address, P.O. Box 376, 1000 EB Amsterdam, or digital via www.tmg.nl

The interim report, unaudited, was approved by the Board of Directors and Supervisory Board for publication on July 30, 2015.

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2. Statement of compliance

The consolidated semi-annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board (IASB) and as adopted by the European Union, and the interpretations of these standards by the IASB.

The consolidated semi-annual financial statements is prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The report does not contain all the information required for complete financial statements and should be read in combination with the consolidated financial statements of Telegraaf Media Groep for 2014.

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3. Basis for preparation

The principles by which the Telegraaf Media Groep applies for this consolidated interim financial statements are the same as the accounting policies applied in the consolidated statements for the year 2014 and are in accordance with the European Commission approved International Financial Reporting Standards (IFRS), except of the application of new standards and interpretations with effect from 1 January 2015. As required by IAS 34, the nature and the effect of these changes are disclosed below:

Annual improvements IFRS 2010-2012 Cycle

The improvements apply to specific parts of IFRS 2, IFRS 3, IFRS 8, IAS 16 and IAS 24.

Annual improvements IFRS 2011-2013 cycle

The improvements apply to specific parts of IFRS 2, IFRS 3, IFRS 13 and IAS 40.

These changes on IFRS standards have for now no influence on the accounting policies and principles applied. Where necessary changes in the presentation and disclosure notes are made in accordance with changes to IFRS.

The consolidated semi-annual financial statements have not been audited.

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4. Critical accounting estimates and judgements

In the process of compiling interim reports, management has made judgments, estimates and assumptions which affect the application of accounting principles, the reported value of assets and liabilities and the amounts of income and expenses. The resulting accounting estimates will, by definition, seldom equal the related actual results.

Interim results are not necessarily indicative for full-year results. Unless stated otherwise, the estimates made by the management in applying the accounting principles of Telegraaf Media Groep and the principal estimate sources used are identical to the judgments and sources that were applied for the consolidated financial statements 2014.

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5. Financial risk management

Risk categories and factors influencing the financial position of Telegraaf Media Groep have been reported in the financial statements 2014. In the first six months 2015, no significant changes in risk occurred, which in this report is merely a reference to the 2014 financial statements.

European economic development has a particularly negative effect on the net media spending, which are cyclical. Furthermore, there is a structurally changing media use, where traditional media is under pressure and new media and new technologies have a growing consumer use.

For further information on market conditions, see the notes to the semi-annual result 2015.

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6. Segment reporting

In thousands of euros

TMG Landelijke Media

Holland Media Combinatie

Sky Radio Group

Keesing Media Group

Facilitating services

Headoffice/Eliminations

Total

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from third-party transactions

125,882

135,184

52,548

58,109

14,594

20,359

33,054

32,424

10,831

10,820

33

80

236,942

256,976

Intercompany transactions

-

-

-

-

2

-

30

20

38,787

43,835

-38,819

-43,855

-

-

Total income

125,882

135,184

52,548

58,109

14,596

20,359

33,084

32,444

49,618

54,655

-38,786

-43,775

236,942

256,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment result before depreciation, amortisation and impairment losses

30,431

23,447

11,814

9,886

2,836

8,802

8,718

7,811

-13,507

-12,008

-21,261

-15,721

19,031

22,217

Total depreciation, amortisation and impairment losses

2,931

2,399

715

818

5,508

5,458

2,104

2,475

10,495

3,467

200

359

21,953

14,976

Operating result

27,500

21,048

11,099

9,068

-2,672

3,344

6,614

5,336

-24,002

-15,475

-21,461

-16,080

-2,922

7,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Result from associates

39

-4,614

-

-

-

-

-

-

-

-

-

-132

39

-4,746

Financial income

3

51

-

-

-

-

146

-

-

-

-

-3

149

48

Financial expenses

-

-

-

-

-504

-604

-44

-8

-

-

-374

-312

-922

-924

Income tax

-6,891

-5,358

-2,785

-2,269

765

-814

-1,920

-1,318

4,268

3,859

7,762

3,996

1,199

-1,904

Net result for the period

20,651

11,127

8,314

6,799

-2,411

1,926

4,796

4,010

-19,734

-11,616

-14,073

-12,531

-2,457

-285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment assets

56,693

132,787

25,373

72,935

72,975

78,573

159,513

154,984

63,825

58,814

73,024

-22,996

451,403

475,097

Investments in associates

17

159

-

-

-

-

-

-

-

-

-

-

17

159

Total assets 30 June 2015 / 31 December 2014

56,710

132,946

25,373

72,935

72,975

78,573

159,513

154,984

63,825

58,814

73,024

-22,996

451,420

475,256

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment liabilities

53,544

50,145

15,622

22,059

46,742

46,633

34,083

34,418

3,201

9,978

49,984

61,322

203,176

224,555

Total liabilities 30 June 2015 / 31 December 2014

53,544

50,145

15,622

22,059

46,742

46,633

34,083

34,418

3,201

9,978

49,984

61,322

203,176

224,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment investments

1,447

915

95

283

198

757

460

533

2,948

1,830

166

364

5,314

4,682

Total investments

1,447

915

95

283

198

757

460

533

2,948

1,830

166

364

5,314

4,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs

-

-

-

-

432

-

-288

108

-

-

-

-

144

108

Impairment losses property, plant and equipment

-

-

-

-

-

-

-

-

6,900

-

-

-

6,900

-

Other material non-cash items

-

-

-

-

432

-

-288

108

6,900

-

-

-

7,044

108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of fte

779

857

559

683

96

104

266

284

321

329

141

146

2,162

2,403

Operating segments

The group comprises the following main operating segments:

TMG Landelijke Media: The publishing of national newspapers, magazines, print-related internet activities and video productions.

Holland Media Combinatie: The publishing of regional newspapers, free door-to-doorpapers and print-related internet activities.

Sky Radio Group: The operation of several radio stations in the Netherlands.

Keesing Media Group: The publishing of puzzle booklets within Europe.

Facilitating services: Other activities include, amongst others, the printing and distribution of newspapers, providing of office space and related facilities.

Headoffice/Eliminations

In the first half year of 2015 changes were made to the segments management reports. The internal charging of fixed costs has been stopped. Comparative figures 2014 are adjusted accordingly.

In the first half year of 2015 the assets of the segments display a considerable change. These are the result of a settlement in intercompany balances between subsidiaries.


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7. Seasonality of business activities

A part of the business operations of Telegraaf Media Groep is subject to seasonal influences. During the first and third quarter of the year, advertising revenues are normally lower than during the remainder of the year. The single-copy sales of De Telegraaf and the Keesing Media Group’s publications are significantly higher in the third quarter. The fourth quarter is normally the most important quarter for advertising revenues.

Cash flow is the strongest in the fourth quarter because quarter subscriptions and annual subscriptions are received in advance.

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8. Discontinued operations

Since 2013 Relatieplanet.nl is considered as held for sale. In june 2015 Relatieplanet is reclassified to continued operations, because the proposed sale is not expected in the near future. As a consequence of this decision an additional amortisation expense of 1,498 is recognised in intangible assets.

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9. Financial income and expenses

In thousands of euros

Period

Period

1/1 - 30/6 2015

1/1 - 30/6 2014

 

 

 

Other result from associates

39

-4,746

Result from associates

39

-4,746

 

 

 

Financial income

149

48

 

 

 

Financial expenses

-922

-924

 

 

 

Total

-734

-5,622

In 2014 Ticketsplus B.V. and Zoom.in Nederland B.V., both part of the National Media segment, were sold. The loss resulting of this divestment is 4,614 and is recognised in other result from associates.

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10. Income tax

The income tax is based on the best estimate for the expected 2015 average tax rate attributable to result before tax for the first six months of 2015. Due to higher statutory tax rates abroad, the effective tax rate in the first half year of 2015 is above the nominal tax rate in the Netherlands. The effective tax rate over the first six months of 2014 is influenced by non tax-deductible losses from the sale of Ticketsplus B.V. and Zoom.in Nederland B.V.

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11. Property, plant and equipment

In June 2015 it was announced that the printing capacity of the Telegraaf Media Groep, at locations Amsterdam and Alkmaar will be reduced. As a result of this change in strategy an impairment loss on buildings and machinery of € 6.9 million is recognised in June 2015.

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12. Assets held for sale

Assets held for sale ( 2015 4,275; 2014: 8,806) involves business premises of Facilitating services. In june 2015 Relatieplanet is reclassified to continued operations, immediate sale is not expected in the near future. On the buildings no impairment is recognised during 2015 (2014: 650). A sales plan is prepared for these buildings and an agent is hired. In 2014 a preliminary sale agreement is signed concerning the properties. A delay in the sale of these buildings occured.


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13. Shareholders' equity

In the first half of 2015 Telegraaf Media Groep has not paid a dividend (2014: nil). The number of issued shares during the period remained constant compared to December 2014.

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14. Provisions

Restructuring provision

In the first half of 2015 13,281 (2014: 6,262) of severance costs were paid. The FTE reduction will be finalised in 2015.

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15. Interest-bearing loans and borrowings

There is a bank financing agreement with a consortium of three banks. The agreement still consists of a revolving credit facility. At the end of June 2015 the revolving credit facility is not used. The terms and conditions of this financing agreement remain unchanged with a maturity until November 2015. Currently, TMG refinanced its existing finance arrangement, for more information see 17..

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16. Related parties

In the first six months of 2015 Telegraaf Media Groep paid 4,939 (first six months 2013: 5,194) premium to Stichting-Telegraafpensioenfonds 1959. Including employees contributions the premium amounted to 7,404 (first six months 2014: 7,791).

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17. Subsequent events

Restructuring

In June 2015, TMG announced its intention to reduce the printing capacity. Printing of newspapers is no longer considered as a core activity. In addition, in the second half year FTEs will be reduced at National Media, due to efficiency measures and improvements. With the departure of these employees an amount of approximately € 22 million is involved.

Intangible assets

Following the proposed decision to reduce or terminate the own printing capacity and to outsource a part of the printingactivities, approximately € 12 million of goodwill will be written off at the time of a letter of intent with a third party.

Financing

On 10 July 2015 a new revolving credit facility of € 70 million was concluded with a consortium of two banks, replacing the existing, by October 31 2015 maturing facility. The new facility has a maturity of three years, under market conditions. The maximum allowable leverage for 2015 is 2.5, the interest cover ratio should not be lower throughout the period than 5:1 and the initial applicable interest rate is 3 or 6 months Euribor + 1.5%. No security has been provided for this loan.

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