Preliminary Annual Result per 31.12.2004

Schibsted ASA (SCH) , Published 10/02/2005 16:31:37

At the Board meeting today, the Board of Directors of Schibsted ASA approved the consolidated preliminary Annual Statement for 2004. Enclosed please find Preliminary Annual Statement for 2004.
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    –     Operating profit (EBITA) for the 4th quarter and the full-year was the best ever. 
    –     Aftonbladet continues to report strong figures and for the first time overtook VG in nominal profits in Q4.
    –     VG continues to deliver strong results despite circulation losses for Norwegian single-copy newspapers in 2004.
    –     20 Minutes continues its success, reporting an operating margin (EBITA) of 19% for the 4th quarter. Sales of 20 Minutes in Switzerland are expected to give Schibsted a profit of approx. NOK 200 million in Q1 2005.
    –     Trends in the advertising market are positive, largely due to an improvement in the recruitment market, and Aftenposten continues to show clear improvement in its results.
    –     Internet activities are delivering strong figures, and account for 15% of the Group’s operating profit (EBITA) for the 4th quarter.
    –     Schibsted enters the Swedish catalogue market with Aftonbladet’s purchase of (TA Teleadress Information Holding AB).
    –     The Group’s TV & Film companies have had a weak 4th quarter, while publishing operations continue to deliver good results. 
    –     Schibsted has consolidated its position in the Nordic TV market, in which future structural changes are expected.
    –     Goodwill write-downs have been carried out in Sandrew Metronome and on book values in Tidningstryckarna.
    –     The Board proposes a dividend of NOK 3.25 per share for 2004.
    4. kv. 2003
    4. kv. 2004
    NOK mill.
    2 326
    2 760
    Operating revenues
    9 690
    8 555
    Operating profit (EBITA)
    Other items incl. GW
    Operating profit (EBIT)
    Profit (loss) before taxes
    EPS (NOK) excl. write-downs
    EPS (NOK)
    Consolidated results
    The Group’s operating revenues increased by NOK 434 million in the 4th quarter, compared with the same period in 2003. The Group’s operating profit (EBITA) showed a 36 % increase on the 2003 figure and is the Group’s best 4th quarter ever.
    Financial situation
    Income from associated companies amounted to NOK 39 (29) million for the 4th quarter. The increase on the 2003 figure is due to better results from TV 2 and the transition of 20 Minutes from an associated company to a subsidiary.
    Net financial items amounted to NOK -8 (-27) million in the 4th quarter. Other net financial income increased by NOK 16 million as a result of dividend received and a increase in market value from various share investments.
    Since the end of 2003, the Group’s net interest-bearing liabilities have increased by NOK 508 million. The Group’s total liquidity reserves amounted to approximately 2.5 billion at the end of the 4th quarter.
    The Group’s tax expense is 41.5%. In the interim reports up to and including the 3rd quarter of 2004, an effective tax rate of 30 % has been applied. The effective tax rate for 2004, after correction for special circumstances in the 4th quarter, is still approximately 30 %. There are two special circumstances in the 4th quarter of 2004 which affect the tax rate in 2004.
    The write-down of the goodwill that Schibsted has towards Sandrew Metronome of total NOK 72 million does not have an effect on the Group’s tax expense and thus increases the effective tax rate.
    The tax reform in Norway means that previously capitalised tax benefits relating to write-down of shares has been expensed.
    In the 4th quarter of 2004, the Group invested NOK 84 million in tangible and intangible assets and NOK 420 million in shares, with the largest item relating to the purchase of shares in the Swedish company TV4.
    Following authorisation by the annual general meeting of shareholders, Schibsted ASA purchased 1,320,470 of its own shares. The Board proposes to the annual general meeting a dividend of NOK 3.25 (3.00) per share. The Group’s equity ratio was 32.7 % (36.6 %) at the end of the 4th quarter.
    Schibsted will from Q1 2005 present financial statements in accordance with IFRS. See the interim report for Q3 2004 regarding significant effects on profit and equity caused by deviations between IFRS and the accounting principles presently applied. Actual changes in equity and net profit for 2004 will be presented before the issue of the interim report for Q1 2005.
    Future prospects
    Aftenposten’s transition to tabloid format at the beginning of the year was well received by the readership, and expectations of an increase in circulation numbers are positive and are also supported by the number of new trial subscriptions. The main challenge posed in advertising for the newspaper is the development in the real-estate market.
    2004 saw a fall in circulation figures for single-copy newspapers in Norway. VG is continuously evaluating measures to bring about a future reversal of this trend.
    Aftonbladet is expected to continue to hold a strong market position, with good results for both the newspaper and the company’s online activities. Svenska Dagbladet envisions improved advertising revenues in the future and sustained circulation revenues.
    In January 2005, Schibsted sold its 50.5 % stake in 20 Minutes in Switzerland to Tamedia before the date originally agreed. Schibsted will concentrate future efforts on developing the 20 Minutes concept in Spain and France. 20 Minutes was launched in Malaga on 14 January and will be introduced in Nantes during March. Competition is expected to become fiercer in the future. Recoletos recently launched rival publication “Que!” in Spain and 20 Minutes has already noticed aggressive advertising pricing. As a result of launches in several cities and an online focus, 20 Minutes is expected to achieve break-even (EBITA) in 2005.
    The Group’s online activities will probably continue to show strong development in the future. The investment in the Swedish catalogue market ( burdens the accounts in the short term, but is expected to produce considerable value creation eventually.
    Sandrew Metronome faces a tough year in 2005, as a result of the reorganisation following the loss of its distribution contract with Warner and because the Swedish Competition Authority’s has ruled out the sale of the Swedish cinema operations.
    Prospects appear brighter for Metronome, with a good level of orders and the publishing companies expect good results to continue.
    Schibsted has increased its ownership in TV in the Nordic region by purchasing a 20.8 % stake, plus options in TV4 and has strengthened its position in the Nordic TV market, despite the fact that Schibsted did not reach the aim of acquiring Alma Media. The Group’s main strategy and financial targets were maintained. The Group continues to be well aligned for further growth, and new strategic initiatives are regularly evaluated.
    Oslo, 10 February 2005
    The full report with tables can be downloaded from the following link:
    Presentation of 4th quarter 2004 can be downloaded from the following link: