Schibsted presents its consolidated financial statements in accordance with International Financial Reporting Standards that are approved by the EU (IFRS).
SCHIBSTED MEDIA GROUP
|Depreciation and amortisation
|Operating profit before income from associated companies, impairment loss and other revenues and expenses
|Income from associated companies
|Operating profit before impairment loss and other revenues and expenses
|Other revenues and expenses
Throughout the financial crisis that started in the autumn of 2008, Schibsted made rapid, strong moves to safeguard the Group’s financial position. The Group implemented an extensive NOK 1.7 billion profitability programme in 2008 that, together with the NOK 1.3 billion share issue in the summer of 2009, has safeguarded the Group’s balance sheet and flexibility. Activities defined as being outside the core activities have been sold during the past two years. These sales have freed up around NOK 2 billion and tidied up the Group structure. All these measures led to Schibsted being well positioned for growth and profitability at the start of 2010.
The Group’s reported revenues increased by 8 per cent from 2009 to 2010. The underlying growth (adjusted for the acquisition and sale of companies and exchange-rate fluctuations) was 5 per cent. The increase in revenues was due to improved advertising markets and good growth in the Group’s online classified ads services. The underlying growth for advertising revenues was 14 per cent. Changes to readership habits and a greater transition to digital media have led to a considerable decline in the circulation of the VG and Aftonbladet single-copy sales newspapers. There was an underlying decline of 4 per cent in the total circulation revenues.
The Group’s total operating expenses experienced an underlying drop of 1 per cent. Lower newsprint prices and a smaller circulation volume for the single-copy sales newspapers have led to lower raw materials costs. There was an underlying drop in the salary costs due to downsizing, but this reduction was somewhat counteracted by the wage settlement. Other operating expenses increased as a result of the growth in revenue and higher level of activity in several of the Group’s subsidiaries. Schibsted increased the rate at which it rolled out online classified ads services based on Blocket technology in new markets in 2010. The total amount debited by the portfolio of classified ads in investment phase increased by NOK 128 million from 2009 to 2010.
The Group’s depreciation amount fell as a result of sale and scaling down of operations.
The revenues from associates improved considerably from 2009 to 2010. The improvement compared to 2009 is due to the Media Norge companies, which had large restructuring costs in 2009, changing from associated companies into subsidiaries as from June 2009 and to improved results achieved by Metro Sverige compared to 2009.
The other revenues and expenses in 2010 of NOK 1.9 billion (236 million) mainly consist of revenue of NOK 1.5 billion resulting from the change in the Group’s stake in classified ads website leboncoin.fr (revenue according to the new measurement for step-by-step acquisitions) and a gain of NOK 416 million on the sale of the property in Sandakerveien 121 in Oslo. At Group level, the sale and leaseback of the property have led to a net reduction in the operating profit (EBITA) of around NOK 30 million per annum.
At the beginning of 2011, Schibsted took the initiative to hold negotiations with Media Norge with the aim of merging Schibsted ASA and Media Norge ASA. The boards of these companies have approved a merger plan stipulating the terms of the merger. The negotiated plan safeguards Media Norge’s publishing foundation and supports the Group’s strategic ambitions. The merger will be financially attractive to the parties and at the same time the desire to safeguard the minority shareholders in Media Norge ASA will be combined with the ambition to create a future-oriented, robust corporate structure in Schibsted. The exchange ratio in the merger is based on each Media Norge share being valued at NOK 72.50 and each Schibsted share being valued at NOK 171.35. This values Media Norge’s equity at NOK 7.25 billion. The merger was approved at an extraordinary general meeting of Media Norge ASA held on 10 March 2011. At the end of the creditor notification period of two months, the merger will be implemented. Once the merger has been implemented, Schibsted will own 100 per cent of Media Norge and its stake in Finn.no will have increased to 90 per cent.