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Kristiaan De Beukelaer CFO Mediahuis group |
Mediahuis remains financially sound despite difficult market condition
Last year was a difficult year, following the two Covid years when Mediahuis took great steps in terms of growth and profitability. The conditions we were operating in were complex and challenging, with historically high paper prices, inflation, pressure on distribution and stagnating subscription numbers. But that is only slightly reflected in our operational result, which at €155.7 million was just €10.4 million lower than in the peak year of 2021. Net income fell, from €117.3 million to €65.3 million. In 2021, we realised the capital gain from the sale of our Keesing stake. In contrast, in 2022, the net result was negatively impacted by one-off restructuring costs, the main one being the closure of the printing plants in Luxembourg and Newry (Northern Ireland). This one-off expense came from the pursuit of operational excellence and the resulting reduction of printing capacity. We have thus quickly adapted our processes to falling print volumes and the needs of the digital transformation, and simultaneously safeguarded our operations from growing fixed costs due to external factors such as inflation.
Historically high paper prices weigh on the gross margin
Organic revenue growth was rather limited, at 0.6%. Despite stagnating subscriber numbers and the continued shift from expensive print subscriptions to cheaper digital formulas, subscription revenue rose by 1.5% or €8.4 million. Single-copy sales of the news brands and the related revenue continued to fall, in line with the market. In the advertising market, we succeeded in delivering organic growth of 1.1%, with strong digital growth and print sales holding up well, despite difficult market conditions, particularly in Belgium. Our digital platforms Zimmo, Jobat and CarsIreland also bounced back. The e-commerce activities of our news brands confirmed their strong growth from the Covid years, with a gross margin that was almost equal to 2021.
Reach Group’s retail business, which is important to Mediahuis Ireland, saw handsome sales and margin growth. Furthermore, Mediahuis’ turnover grew mainly as a result of acquisitions: in January 2022 we acquired 70% of the German Medienhaus Aachen and in the final quarter 100% of the Irish platforms Carzone and Switcher. With this, Mediahuis’ turnover grew to above €1.2 billion.
However, the gross margin of the news brands and other print business was heavily impacted by historically high paper prices, which virtually tripled over 24 months. Excluding Medienhaus Aachen, this increase led to an additional cost of more than €30 million, with the same effect on gross margin and operating profit. Cost per copy for distribution rose sharply, mainly in the Netherlands, due to efforts to maintain the quality of delivery and upward pressure on fees of independent distributors. Historically high energy prices had only a limited effect as Mediahuis has consistently hedged, which meant that energy market volatility had almost no impact on our costs. In fixed costs, we managed to limit the impact of inflation through further process optimisation and good cost management.
The impact of inflation remained limited due to good cost management
Mediahuis’ balance sheet total increased by €72 million to €1.180 million, mainly due to the first consolidation of the companies acquired in 2022: Medienhaus Aachen (70%), Carzone and Switcher. Equity attributable to shareholders remained virtually unchanged. The net income added to equity in 2022 and the positive impact of increased discount rates on pension liabilities were offset by the dividend paid to shareholders in 2022 and the buyback of own shares. For the first time, Mediahuis also has a significant minority stake, as a result of acquiring 70% of Medienhaus Aachen. Whereas at the end of 2021, we were net debt-free for the first time since the company was established, we ended 2022 with a limited net debt of €54.1 million, with Mediahuis financing the mentioned acquisitions with existing bank facilities. With an equity ratio of 41% and financial leverage of 0.27, Mediahuis remains financially sound.
Recurring operating revenue
in € million
Operating result
in € million
EBIT excluding the amortisation of acquisition-goodwill and non-recurrent results
Net recurring result
in € million
Operating result plus financial result (including result of participating interests in equity method), after deduction of corporate taxes
Net debt
in € million
Cash and cash equivalents less bank liabilities, excluding operating lease obligations denominated under IFRS16 as debt (since 2019)
Revenue per country
