Agora SA

Investor presentation
Financial and market performance
3Q 2011
Advertising market slowdown
Quarterly performance of ad market segments
+8.5%
8.5%
10%
+6.
+6.5%
+6.5%
6.5%
+4.
+4.5%
+2.5%
2.5%
+2.0%
2.0%
Yoy % change
yoy % change
Quarterly ad spend performance
48%
40%
0%
0%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
-5.5%
5.5%
32%
24%
-8.0%
8.0%
-10%
16%
-14.0%
4.0% -13.5%
3.5%
8%
-20%
0%
-2-
-24%
Radio
8.5%
y0.5pp
Internet
Television¹
Magazines
Outdoor
Dailies
Cinema
Source: ad spend estimates by: Agora (press based on Kantar Media and Agora’s monitoring, radio based on Kantar Media), Starlink (TV, cinema, Internet – comprise revenues from e-mail marketing, display, search engine
marketing and affiliate marketing), IGRZ (outdoor);
¹ Data, for 1Q09 -3Q11, according to new methodology of TV ad market measurement (by media house Starlink), comprise standard TV advertising and sponsoring revenues. The estimates for previous reporting periods
have not been adjusted adequately therefore they are not fully comparable.
Radio
3Q11
2Q11
1Q11
4Q10
3Q10
-32%
2Q10
†1pp
-16%
1Q10
y2.0%
Magazines
11.5%
-8%
4Q09
PLN 1.6 billion
†1.5pp
Dailies
8.5%
†1.5pp
…1pp
Television
43.5%
0pp
yoy % and pp change
3Q09
…2.5pp
Outdoor
9.5%
Cinema
1.5%
2Q09
Internet
17.0%
1Q09
Advertising market structure in 3Q11
Revision of advertising market estimates
Current advertising market estimates – November 2011
24%
18%
18%
yoy % changer
24%
13-17%
13-17%
-3-
dailies
outdoor
radio
cinema
Total ad
television
Internet
magazines
dailies
market
-6%
-12%
Source: 3Q 2011: ad spend estimates by: Agora (press based on Kantar Media and Agora’s monitoring, radio based on Kantar Media), Starlink (TV, cinema, Internet – comprise revenues from e-mail marketing, display,
search engine marketing and affiliate marketing), IGRZ (outdoor); 2011 – Agora’s own estimates.
(-9%)-(-12%)
magazines
(-1%)-(-3%)
Internet
(-7%)-(-9%)
-12%
2-4%
0%
market
-6%
6-8%
6-8%
0%
3-5%
television
2-4%
3-5%
Total ad
6%
2-4%
3-5%
6%
7-9%
12%
7-9%
12%
(-4%)-(-6%)
yoy % changer
Previous advertising market estimates for 2011
outdoor
radio
cinema
Financial performance of the Agora Group
3Q 2011
yoy change
Revenues, incl.:
283.6
15.0%
898.7
15.8%
- advertising
162.4
2.9%
514.5
0.3%
- copy sales
42.3
(13.0%)
142.7
(7.0%)
- tickets sales2
34.8
-
104.3
-
- other
44.1
32.4%
137.2
33.5%
275.7
18.4%
854.2
18.4%
- raw materials, energy and consumables
57.5
30.1%
184.1
34.2%
- external services
84.5
26.5%
256.2
31.8%
- staff cost
76.6
15.5%
232.7
13.7%
-
-
8.8
49.2%
- marketing & promotion
26.8
(7.6%)
81.7
(10.2%)
- D&A
22.4
8.2%
70.3
17.4%
PLN million
Operating cost, incl.:
- non-cash expense relating to share-based
payments
EBIT
EBIT margin
Operating EBITDA1
Operating EBITDA margin1
Net profit
-4-
1-3Q 2011 yoy change
Growth of revenues caused by consolidation
in the Group’s results the revenues of Helios
S.A.. Additionally, positive contribution of
Radio, Outdoor and Internet segments.
The growth of advertising revenues results
from positive contribution of radio, Outdoor
and Internet segments.
The decrease caused mainly by lower copy
sales revenues in the Newspapers and
Magazines segments.
The growth results mainly from the inclusion
of revenues from food and beverages sales
in Helios cinema network and higher
revenues from the sales of printing services
to external clients.
The growth results mainly from the
consolidation of the operating cost of the
Helios cinema network.
The growth results mainly from the higher
cost of production materials, the inclusion
of the cost of purchase of products to be
sold in the bars located in Helios cinema
network, cost of materials and energy of
Helios cinema network.
Growth resulting from the increased number
of employees due to the purchase of Helios
group and execution of development
projects in the Group
Result of reduced advertising expenditure by
most segments in the Group.
7.9
(42.8%)
44.5
(18.5%)
2.8%
(2.8pp)
5.0%
(2.0pp)
30.3
(12.2%)
123.6
2.7%
10.7%
(3.3pp)
13.8%
(1.7pp)
5.5
(53.0%)
34.1
(36.4%)
Source: consolidated financial statements according to IFRS, 3Q11;
¹ excluding non-cash cost of share-based payments.
2
lack of yoy comparison as the ticket sales of 3q11 and 1-3q11 includes only revenues contributed solely in September 2011.
Due to the consolidation of Helios in the
Agora Group.
Segment performance: Newspapers
(Gazeta Wyborcza, Metro, Special Projects, Printing Division)
Financial performance¹
yoy change
1-3Q 2011
yoy change
132.9
(7.6%)
436.8
(7.2%)
- advertising in Gazeta
57.3
(15.5%)
189.5
(16.4%)
- copy sales of Gazeta
31.6
(12.2%)
97.3
(11.1%)
PLN million
Revenues, incl.:
113.7
0.5%
- raw materials, energy, consumables and
printing services
46.0
- staff cost excl. non-cash cost of share-based
payments
- marketing & promotion
Operating cost, incl.:
EBIT²
EBIT margin²
Operating EBITDA³
operating EBITDA margin³
-5-
3Q 2011
366.4
2.3%
7.0%
150.5
7.7%
33.1
2.2%
100.1
2.8%
14.9
(14.4%)
48.2
(12.0%)
19.2
(37.7%)
70.4
(37.5%)
14.4%
(7.0pp)
16.1%
(7.8pp)
25.8
(30.5%)
96.8
(28.3%)
19.4%
(6.4pp)
(22.2%)
(6.5pp)
Source: financials: consolidated financial statements according to IFRS, 3Q11; ad spend in dailies: Agora, display advertising, 3Q11;
¹ incl. Gazeta Wyborcza, Metro, Special Projects, Printing Division;
² excluding allocations of general overhead cost of Agora S.A.;
³ excluding non-cash cost of share-based payments and allocations of general overhead cost of Agora S.A.
The decline in revenues caused
mainly by limited expenditure in
the following advertising
categories: recruitment, tourism
and automotive.
The decrease caused by
smaller number and impact of
dual pricing offer and global
trend of copy sales decline.
Results mainly from higher
newsprint prices.
Due to limited number of
promotional campaigns of
Gazeta Wyborcza and smaller
number of book series in 3Q11.
Position of Gazeta Wyborcza in dailies segment
% share in copy sales of selected dailies¹
Weekly readership reach in 3Q11¹
Thou. copies
100%
no of readers
13.0%
Fakt
3.9 million
Gazeta Wyborcza
3.6 million
Super Express
1.7 million
5.6%
Metro
1.7 million
5.5%
Rzeczpospolita
1.1 million
Dziennik Gazeta Praw na
0.6 million
75%
12.1%
50%
27%
27.7%
25%
2.0%
Gazeta
Fakt
Super Express
Rzeczpospolita
Dziennik
0%
Sep'11
J ul'11
May '11
Mar'11
J an'11
Nov '10
Sep'10
J ul'10
May '10
Mar'10
J an'10
Nov '09
Sep'09
J ul'09
May '09
Mar'09
% reach
J an'09
0%
3.6%
4%
8%
12%
16%
Dziennik Gazeta Prawna²
Change in ad spend in the largest ad categories in dailies
in 3Q11
(till Sept. 11, 09 Gazeta Prawna)
y0.5pp
Mecom (local)
8.5%
0pp
yoy % change
n
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nm
yoy % and pp change
z0.5pp
20%
3Q11
15%
10%
5%
0%
PLN 0.17 billion
z14%
Other
8.5%
†0.5pp
5%
3
Polskapresse
19.0%
y2.0pp
-10%
-15%
-20%
-25%
-30%
-35%
1%
-1%
-5%
Dziennik Gazeta
Prawna
3.5%
0pp
Fakt
8.5%
z1pp
-6-
Gazeta W yborcza
36.5%
An
n
Rzeczpospolita
7.5%
z1.5pp
Super Express
3.5%
Metro
4.5%
y1pp
en
t
Dailies ad spend structure¹
-12%
-8%
-13%
-14%
-17%
-30%
-40%
Source: copy sales: ZKDP, total paid circulation, Jan09 – Sep11, comparison; financials: consolidated financial statements IFRS, 3Q11; readership: Polskie Badania Czytelnictwa, execution MillwardBrown SMG/KRC,
Jul-Sep 11, N=12 124, CCS indicator (weekly readership), elaboration Agora S.A.; ad spend in dailies Agora, estimates, display advertising;
¹ comparison of major dailies only;
² the title appeared on the market on September 14, 2009 from the merger of Gazeta Prawna and Dziennik. Previous copy sales data based on copy sales of Gazeta Prawna. The copy sales of Dziennik Gazeta Prawna
in the period Sep 14-30 amounted to 126 thou. Copies;
3
in July 2011 PolskaPresse purchased remaining 75% stake in Dziennik Polski.
-21%
-32%
-37%
Metro and Special Projects
Metro
Special Projects
Financial performance
24
22
20
18
16
14
12
10
8
6
4
2
0
-2
z3.5%
yoy % change
PLN million
PLN million
Financial performance
y10.4%
3Q11
2.7 mln
2.0 mln
1.4 mln
0.0 mln
3Q11
1-3Q10
Revenues
1-3Q10
4.5%
z24.7%
-0.5 mln
-0.8 mln
3Q10
3Q11
Revenues
3.0%
1.2 mln
1-3Q10
-0.6 mln
1-3Q11
EBIT²
Statistics
3Q11
3Q10
1
4
One-offs
14
7
Total:
15
11
Copies sold (million)³
0.1
0.3
…0.5pp
Series
local
y0.3%
yoy % change
Operating EBITDA¹
Metro ad market share in 3Q11
national
42
39
36
33
30
27
24
21
18
15
12
9
6
3
0
-3
4.5%
…1.0pp
(Total)
(excl. Warsaw)
…1pkt%
16.0% …2.5pp
Warsaw
0%
5%
10%
15%
20%
% share
-7-
Source: financials: consolidated financial statements according to IFRS, 3Q11; ad expenditure in dailies: Agora’s estimates, display advertising;
¹ excluding non-cash cost of share-based payments and allocations of general overhead cost of Agora S.A.;
² excluding allocations of general overhead cost of Agora S.A..
³ books and books with CDs and DVDs.
Growth of revenues in Internet segment
Financial performance¹
Position in thematic categories (August‘11)4
PLN million
3Q11
yoy change
1-3Q11
Revenues, incl.:
26.0
11.1%
81.4
15.5%
- display ads
18.0
13.2%
57.4
21.6%
- ad sales in verticals
6.0
3.4%
18.6
8.1%
Operating cost, incl.:
24.6
7.4%
78.5
14.4%
12.5
15.7%
36.2
12.8%
3.2
(28.9%)
13.3
3.9%
1.4
180.0%
2.9
52.6%
5.4%
3.3pp
3.6%
0.9pp
2.8
33.0%
8.1
11.0%
10.8%
1.8pp
10.0%
0.4pp
- staff cost excl. non-cash cost of
share-based payments
- marketing & promotion
EBIT ²
EBIT margin ²
Operating EBITDA³
operating EBITDA margin³
yoy change
Real users
Gazeta.pl position
6.5
#3
3.9
#1
News & journalism
5.3
#3
Lifestyle
4.7
#4
1.1
#2
Education
1.8
#3
Sports
3.1
#3
Construction, real estate
1.8
#1
Recruitment
1.5
#4
Communities
- Forums & discussion groups
- Children, Family
Mobile page views (August’11)4
70
90%
59.1
71.8%
60
59.1%
y0.1%
z2.8pp
11.1 mln
y1.9%
z1.8pp
11.2 mln
y4.4%
12.2 mln
y3.5%
z0.3pp
13.4 mln
30%
z1.0pp
50
52.8%
z4.1pp
z2.7%
59.5%
60%
No. of page views
54.0
65.4%
9.9 mln
% reach
Reach of websites of selected Internet publishers (August ‘11)4
Category
Yoy pp change
40
27.9
30
no. of real users
yoy % change
15.1
20
10.0
10
0
0%
Onet.pl group
-8-
Wirtualna Polska
- Orange group
Gazeta.pl group
Interia.pl group
o2.pl group
Onet.pl group
Source: financials: consolidated financial statements according to IFRS, 3Q11; Internet ad spend: Starlink (display, search engine marketing, e-mail marketing and
affiliate marketing);
¹ Internet division, Agora Ukraine, AdTaily, Trader.com (Polska) including print revenues;
² excluding allocations of general overhead cost of Agora S.A.;
³ excluding non-cash cost of share-based payments and allocations of general overhead cost of Agora S.A.;
4 Megapanel PBI/Gemius, reach, real users, page views of websites of the selected Internet publishers by means of mobile appliances August 2010, August 2011;
Wirtualna Polska Orange group
Gazeta.pl group
Interia.pl group
o2.pl group
Outdoor segment improves operating results
Financial results
AMS ad market share in 3Q11 ²
PLN million
3Q11
yoy change
1-3Q11
yoy change
Revenues, incl.:
- advertising
40.1
39.3
12.0%
12.0%
126.0
123.2
8.8%
8.2%
Operating cost, incl.:
39.1
4.5%
117.0
(0.4%)
6.1
18.1
(4.0%)
4.6%
19.7
55.0
2.6%
1.7%
5.0
13.6%
15.0
8.7%
4.5
(16.7%)
13.7
(16.0%)
1.1
(26.7%)
3.4
(26.1%)
1.0
2.5%
7.0pp
9.0
7.1%
8.6pp
5.5
13.7%
48.6%
3.4pp
23.4
18.6%
56.0
5.6pp
- execution of campaigns
- maintenance cost
- staff cost excl. non-cash cost
of share-based payments
- D&A
- marketing & promotion
EBIT
EBIT margin
Operating EBITDA¹
Operating EBITDA margin¹
Adjustment of portfolio of panels to market requirements3
Yoy change
Billboard
City light
Scroll
Backlight
Frontlight
-17
-8
Total
274
300
250
200
150
100
22
50
0
-50
-62
-100
-150
-200
-250
-300
-350
-400
-9-
-333
Source: financials: consolidated financial statements according to IFRS, 3Q11; ad expenditure in outdoor: IGRZ;
¹ excluding non-cash cost of share-based payments;
² excluding cross-promotion of Agora’s other media on AMS panels if such promotion was executed without prior reservation;
3 IGRZ: ad expenditure in outdoor; structure of panels as of September 30, 2011.
yoy pp and % change
Growth of ad revenues in
accordance with outdoor ad
expenditure growth.
AMS
27%
y2pp
Growth of staff cost
resulting from higher
variable component of
remuneration (meeting
sales objectives) and
development of regional
sales structure.
3Q11
y12%
New advertising solutions on AMS panels
Segment performance: Magazines
Financial results
Ad spend structure in monthlies in 3Q11
PLN million
3Q11
Revenues incl.:
- copy sales
- advertising
Operating cost, incl.:
- raw materials, energy and
consumables
yoy pp change
yoy change
17.6
(10.7%)
56.4
(10.5%)
7.4
10.1
(19.6%)
(1.9%)
23.3
32.6
(17.4%)
(5.2%)
14.7
(4.5%)
45.2
(10.7%)
(4.6%)
19.4
(0.5%)
4.3
4.9%
13.0
3.2%
3.1
(16.2%)
8.9
(31.5%)
2.9
16.5%
(32.6%)
(5.3pp)
11.2
19.9%
(9.7%)
0.2pp
2.9
(34.1%)
11.7
(9.3%)
16.5%
(5.8pp)
20.7%
0.2pp
Operating EBITDA²
Operating EBITDA margin²
1-3Q11
6.2
- staff cost excl. non-cash cost of
share-based payments
- marketing & promotion
EBIT¹
EBIT margin¹
yoy change
Decrease resulting
from reduction in
prices of selected
magazines and
lower number of
copies sold.
Av anti
Cztery Kąty
Limited number
promotional
campaigns and
termination of some
editions with
expensive gadgets.
Poradnik
5.5%
Glamour
Moj e
Mieszkanie
4.5%
3.4%
Joy
3.2%
Elle
2.6%
Olivia
Hot
0.8%
M j ak
2.9%
0%
%6 %reach
12%
-10-
Świat
24%
81.2
6.3%
Rady
Naj
0.7%
0%
5%
%
reach1 0 %
interior home design
50
72.5
2.4%
Magazyn
15%
#3
in parenting monthlies
6.5%
Dobre
2.0%
Decoration
18%
#1
interior home design
monthlies
6.6%
Kobiety
Dobre
Elle
women luxurious
170.7
100
Wnętrze
1.2%
#2
in women luxurious monthlies
3.1%
Wnętrze
mieszkanie
InStyle
Other
16.3%
7.6%
Życie
Dom &
Cosmopolitan
3Q11
Copy sales position in selected magazine segments (Jan-Jul’11)
150
Kobieta i
Burda Media
Polska
7.3%
†1.7pp
Murator
9.2%
†0.8pp
†1.3pp
8.3
Domowy
3.3%
Marquard
10.3%
†0.9pp
Bauer
21.1%
…7.1pp
.
9.9%
Claudia
9.0%
†1.7pp
†0.7pp
200
12.3%
Gruner+Jahr
15.5%
…0.7pp
Ringier Axel
Springer
3.7%
†0.7pp
Edipresse
6.7%
Reduction in number
of inserts and
gadgets.
Stable readership position in selected magazine segments (Jan-Aug’11)
Twój Styl
Agora
10.0%
0%
5%
lifestyle
10%
%
%1 5reach
0
Avanti
Cztery Kąty
Source: financials: consolidated financial statements according to IFRS, 3Q11; monthlies ad market: monitoring of Kantar Media based on rate card data, 126 titles in Jul-Sep 2010 and 129 in Jul-Sep 2011, excl. specialist
titles; readership: Polskie Badania Czytelnictwa, execution MillwardBrown SMG/KRC, Jan-September 11, N=36 674, target group: all; CCS indicator (weekly readership), elaboration Agora S.A., comparison;
¹ excluding allocations of general overhead cost of Agora S.A.;
² excluding non-cash cost of share-based payments and allocations of general overhead cost of Agora S.A.
3 copy sales: ZKDP, total paid circulation Jan-Jul 2011, elaboration Agora S.A., comparison (women luxurious monthlies: Twój Styl, Joy, Avanti, Glamour, Cosmopolitan, Elle, Hot Moda & Shopping; interior home design
monthlies: Cztery Kąty, M jak Mieszkanie, Moje Mieszkanie, Dobre Wnętrze, Dom & Wnętrze; parenting monthlies: Mamo To Ja, Dziecko, Mam Dziecko, Twoje Dziecko, M jak Mama);
Dziecko
Segment performance: Radio
Financial results¹
PLN million
Radio ad market structure in 3Q11
3Q11
yoy change
1-3Q11
yoy change
Revenues, incl.:
21.4
30.5%
62.0
17.9%
- ad revenues
21.1
31.1%
61.0
18.0%
21.7
34.8%
59.8
15.7%
Operating costs, incl.:
- staff cost excl. non-cash cost
of
share-based payments
- promotion & marketing
EBIT
EBIT margin
Operating EBITDA²
Operating EBITDA margin²
6.1
5.2%
18.7
3.9%
5.9
78.8%
12.7
4.1%
(0.3)
(1.4%)
(3.2pp)
2.2
3.5%
144.4%
1.8pp
0.3
(70.0%)
4.6
39.4%
1.4%
(4.7pp)
7.4%
1.1pp
% udziału
Share of audience in cities of broadcasting (3Q11)
8%
Result of growing radio
advertising expenditure and
higher revenues from brokerage
services and barter sales
connected with the organization
of ARTPOP Festival Zlote
Przeboje Bydgoszcz 2011.
Grupa Time
17.0%
z2.0pp
Grupa RMF
35.0%
y2.5pp
†0.9pp
2%
7.1%
4.2%
0%
TOK FM
-11-
y8%
Music stations
Source: financials: consolidated financial statements according to IFRS, 3Q11; ad market: Agora based on Kantar Media, Agora’s share incl. TOK FM, excl. brokerage, incl. cross-promotion
of Agora’s other media in GRA’s radio stations if such promotion was executed without prior reservation; Radio Track, MillwardBrown SMG/KRC, cities of broadcasting, weekdays; Music stations, 15+, Jul-Sep 2010:
N= 10 419; 2011: N=10 451; TOK FM, 15+ Jul-Sep N=7 735; 2011: N=7 747;
¹ local radio stations (incl. TOK FM);
² excluding non-cash cost of share-based payments.
z0.5pp
Polskie Radio
10.0%
y0.5pp
z 1pp
6%
4%
3Q11
Eurozet
19.0%
yoy pp change
Agora
11.0%
PLN 0.14 billion
Increase resulting from the
organization of ARTPOP
Festival Zlote Przeboje
Bydgoszcz 2011.
Important events in 3Q11
0pp
yoy % and pp change
Other
7.0%
y0.5pp
Cinema business in the Agora Group
Number of tickets sold in the Helios cinemas
PLN million
3Q2011
1-3Q2011
million tickets
Financial performance
Revenues incl.:
48.9
143.7
- tickets
- food & beverages
- advertising
Operating cost, incl.:
- external services
- raw materials, energy and consumables
- staff cost excl. non-cash cost of share-based payments
- D&A
34.8
104.3
10.3
30.5
3.2
7.7
45.9
133.5
26.2
75.5
6.3
18.3
6.0
18.1
4.5
13.3
3.0
6.1%
10.2
7.1%
1
7.5
15.3%
23.5
16.4%
0
EBIT
EBIT margn
Operating EBITDA¹
Operating EBITDA margin¹
yoy % change
+ 3.0%
3.0%
6
5
4
3
5.7 mln
5.9 mln
1-3Q10
1-3Q11
- 6.0%
6.0%
2
2.0 mln
1.9 mln
3Q10
3Q11
no. of tickets sold
Share of tickets for 3-D movies in Helios network of cinemas in 3Q11
Average price of tickets in the Helios cinemas in 3Q11
yoy pp change
PLN
yoy % change
20
+ 5.0%
5.0%
15
3D
59%
2D
41%
3Q11
y10.5 pp
10
PLN 18.01
PLN 18.84
3Q10
3Q11
5
0
average ticket price
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Source: financials: consolidated financial statements according to IFRS, 2Q11;
¹ As far as the Helios group is concerned EBITDA and operating EBITDA ratios are equal as in the period referred to in the table there was not any non-cash cost of share-based payments incurred.
This presentation has been prepared by Agora SA (the "Company"). The data and information
contained on the individual slides do not show a complete or coherent financial analysis, nor
present the commercial offer of the Company and serve for information purposes only. A
detailed description of the business and financial affairs of Agora SA is presented on
www.agora.pl website. All data therein are based on sources which the Company regards as
credible. The Company reserves the right to amend data and information at any time, without
prior notice. This presentation was not verified by an independent auditor.
This presentation may contain slides containing statements related to the future. Such
statements cannot be interpreted as forecasts or other assurances in respect of future
Company's financial results. The expectations of the Company's management are based on
their knowledge, experience and individual views and are dependent on many factors which
may cause that the actual results may differ from statements contained in this document. The
Company recommends that professional investment advice is sought in case any investment
in the Company's securities is considered.
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