BONNIER ANNUAL REPORT Table of Contents
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BONNIERS ÅRSBERÄTTELSE 2017 1 2018BONNIER ANNUAL REPORT Table of Contents Board of Directors’ Report 3 Consolidated Income Statements 14 Consolidated Statements of Comprehensive Income 14 Consolidated Statements of Financial Position 15 Consolidated Statements of Changes in Equity 17 Consolidated Statements of Cash Flow 18 Notes to the Consolidated Financial Statements 19 The Parent Company’s Income Statements 48 The Parent Company’s Statements of Comprehensive Income 48 The Parent Company’s Balance Sheets 49 The Parent Company’s Statements of Changes in Equity 50 The Parent Company’s Statements of Cash Flow 50 Notes to the Parent Company’s Financial Statements 51 Auditor’s Report 61 Multi-year Summary 63 Translation from the Swedish original bonnier ab annual report 2018 2 Board of Directors’ Report The Board of Directors and the CEO of Bonnier AB, corporate Development of the operations, financial position and registration no. 556508-3663, herewith submit the annual report profit or loss (Group) and consolidated financial statements for the 2018 financial year on pages 3-60. SEK million (unless stated otherwise) 2018 2017 2016 Net sales 26,447 25,740 25,492 The Group’s business area and business model EBITA1) 824 625 731 Bonnier AB is a parent company in a media group with companies in Operating profit/loss -225 -1,423 630 3) TV, daily newspapers, business media, magazines, film production, Net financial items -157 -212 -239 books, e-commerce and digital media and services. The group con- Profit/loss before tax -382 -1,635 391 3) ducts operations in 12 countries with its base in the Nordic countries Profit/loss for the year -872 -2,239 276 3) and significant operations in the United States, Germany, United EBITA margin 3.1% 2.4% 2.9% Kingdom and Eastern Europe. Return on operating capital -1.9% -11.0% 4.8% 3) The Group’s revenue comes from two main categories: partly user revenue from consumers and B2B costumers in the form of Net debt at year end 7,743 8,553 7,376 3) subscriptions, occasional purchases and events, and partly adver- Net debt/equity, multiple 2.12 2.18 1.25 tising revenues, primarily from all digital media services, linear TV Business areas and print advertising. The largest external supplier categories are within purchases Net sales per business area of rights, printing, books and other goods for sale through e- SEK million 2018 2017 Change, % commerce and IT. Books 2) 6,334 6,274 0.9% E-Commerce 2) 2,247 2,002 12.3% Ownership Broadcasting 8,253 7,497 10.1% Bonnier AB is a wholly-owned subsidiary of Bonnier Group AB Film Studios 2) 1,256 1,389 -9.6% (formerly Bonnier Holding AB), a subsidiary of Albert Bonnier AB, Ventures 2) 358 402 -10.9% which is owned by more than 90 members of the Bonnier family. Magazines 3,060 3,455 -11.4% Business to Business 1,202 1,130 6.4% Significant events during the financial year News 5,004 4,890 2.3% In 2018, Bonnier carried out in particular two changes of great Other and eliminations -1,267 -1,299 n/a impact to the business. Bonnier AB, total 26,447 25,740 2.7% Agreement on the sale of Bonnier Broadcasting to Telia Company In June, it was announced that Bonnier AB had signed an agree- EBITA1) per business area ment with Telia Company to divest Bonnier Broadcasting, includ- SEK million 2018 2017 Change ing the television businesses TV4, C More and Finnish MTV. The Books 2) 154 74 80 deal is being reviewed by the European Competition Commission E-Commerce 2) -125 31 -157 and is expected to be completed in the second half of 2019. The Broadcasting 1,027 423 604 purchase price for a debt-free company has been agreed at SEK Film Studios 2) 17 -14 31 9.2 billion. 2) The deal will strengthen Bonnier financially and will provide Ventures -18 -93 75 increased stability for Bonnier’s businesses and room for maneu- Magazines 34 168 -134 ver going forward. At the same time, the new owner of Bonnier Business to Business 104 131 -28 Broadcasting will have very good conditions for its future develop- News 159 303 -144 ment of TV4, MTV and C More. Other -528 -397 -130 Bonnier AB, total 824 625 199 New governance model and organizational structure In September, Bonnier announced a change in corporate gover- Books includes the Group’s book businesses. It includes Bonnier- nance, in which the present business areas within Bonnier were förlagen, Pocket Shop, Bonnier Media Deutschland, Bonnier UK to become independent companies. As of January 1, 2019, the in England, Finnish WSOY, Akateeminen (Academic Bookstore) governance of companies is primarily conducted through the in Finland, 50% in Cappelen Damm in Norway and BookBeat. Board of Directors for each company instead of through the Group Books’ EBITA amounted to SEK 154 million (74) with a signifi- company Bonnier AB. As a result, on January 1, 2019, the role of cant improvement in cash flow. The book publishing operations Group CEO was ended. Bonnier AB’s CEO, Tomas Franzén, will altogether had positive growth, driven both by physical and digital continue his commitment within Bonnier as board chairman for growth, although the physical book retailers, primarily in Finland Adlibris, Bonnier News and Bonnier Broadcasting. Operationally, and Norway, had a very weak year. the organization of Bonnier AB is combined with Bonnier Group The group’s biggest book publishing business, Bonnier Media (formerly Bonnier Holding) into a smaller parent company. The Deutschland, had an extremely strong year, with powerful growth CEO of Bonnier Group is Erik Haegerstrand. and record profits. The Swedish publishing group Bonnierförla- gen had yet another stable year, with results comparable to the During the fall of 2018, it was also decided that the business previous year’s. In the U.K., Bonnier Books UK led by new CEO area Business to Business and the operations within Magazines Perminder Mann have come quite a ways in turning around the & Brands (formerly Bonnier Tidskrifter) would become a part of company, after a very weak 2017. In Finland, WSOY performed Bonnier News as of January 1, 2019. admirably with market improvement in profitability and after a 1) A description of the Group’s definitions of key ratios may be found on page 59. number of tough years, had profits of SEK 23 million. However 2) As of 2018, the Group has eight business areas, compared with six previously. E-Commerce, Norway’s Cappelen Damm, 50-percent owned by Bonnier, had a which includes the Adlibris Group, was formerly part of Books. The business area Ventures weak year in the shrinking Norwegian book market, with signifi- has changed its name from Growth Media, and Film Studios, which was previously part of Growth Media, is now, as of 2018, a separate business area. Operations have also been trans- cant losses in the bookstore chain Tanum. ferred from Growth Media to Magazines. As a result, figures presented for comparison. During the year, a number of smaller publishing and distribu- 3) Figures for 2016 were restated in 2017 due to a reevaluation of the Group’s accounting tion companies were divested, to make Books more profitable and for intangible assets and inventory relating to development costs and publishing rights, and correction of errors. increase focus on the publishers and on audio- and e-book service bonnier ab annual report 2018 3 BOARD OF DIRECTORS’ REPORT BookBeat. During 2018, BookBeat showed a 150 percent increase Bonnier Corporation started the year with a big reorganization in paid subscriptions, and at the end of the year was released in the and, despite the U.S. magazine industry’s rapidly diminishing print German market. market, achieved a positive operating profit. Bonnier Corporation continued its diversification with businesses adjacent to its maga- E-Commerce is the business area that brings together Bonnier’s zine titles. One example is Working Mother Media, which grew Nordic online retail investments. The business area includes with its profitable consulting business for companies. Adlibris Group, one of the Nordic region’s leading online retail- Bonnier Publications has a very strong and profitable cross- ers with operations in Sweden, Norway and Finland. The Adlibris border model for titles such as Science Illustrated and History, Group also has three physical shops, two in Stockholm and one in and had EBITA margin of over 9 percent. A push for digital reader Gothenburg, under the concept Adlibris Market. Adlibris Group revenues has been launched, with Science Illustrated first out. The increased its revenues by 12 percent. The EBITA was SEK -125 Norwegian subsidiary was shut down during the year and the Nor- (31), weighed down by large investments in warehousing and lo- wegian titles will be managed via Denmark from here on in. gistics and weak sales in December. Adlibris expanded its product Bonnier Magazines & Brands’ business in Sweden had big portfolio during the year, in areas such as toys, games, DIY and challenges, with a faster market downturn than expected and a cooking supplies. transition to a new subscriber system that had a negative effect on the subscription business. During the fall, a decision was made to Broadcasting includes TV4 Group, C More, Nyhetsbolaget and integrate Magazines & Brands with Bonnier News as of January 1, MTV Media in Finland. Broadcasting increased profits by more 2019. In conjunction with the integration, both the number of staff than 140 percent, with EBITA profits of SEK 1.02 billion (423). and the office space will be reduced, resulting in extra structural Revenues grew by 10 percent, to SEK 8.25 billion.