Notes to the consolidated quarterly report for the first quarter of 2009
I. Accounting rules The Group's consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) and on the basis of historic cost. The financial statements present amounts in thousand PLN.
II. Key changes to estimates, including corrections due to provisions, deferred income tax provisions and assets, and adjustment deductions to assets The Group established: Provisions for future payables: PLN 1 023,000 Usunięto: 621,000 Provisions for remuneration under specific work contracts: PLN 1 205,000 Deferred income tax provision: PLN 793,000 Deferred income tax assets: PLN 609,000 Estimation of income based on contracts made proportionally to costs borne: PLN 12,441,000.
The Group released: Provisions for future trade payables: PLN 1,079,000 Provisions for remuneration under specific work contracts: PLN 624,000 Deferred income tax provision: PLN 925,000 Deferred income tax assets: PLN 915,000 Estimation of income based on contracts made proportionally to costs borne: PLN 6,830,000.
III. Brief description of key achievements and failures of the issuer during the reporting period, including the list of key events relating thereto
The first quarter of 2009 saw high levels of investment, especially in modern television equipment. Due to the growing digitization of the media and changing technologies of television production, it is necessary to gradually replace old equipment to ensure that the quality of the Group’s programming is as high as possible.
In the period in question, ATM Grupa S.A. acquired lighting equipment for a new shooting stage in Bielany Wrocławskie, a ProStar multi-module LED projection screen, a performance stage, XDCAM-HD Professional cameras, telephoto lenses, and other equipment. In addition, in mid-February 2009 ATM Grupa S.A. acquired a PLN 20 million High Definition truck. The HD truck makes it possible to produce ground-breaking television and film productions, makes it much easier to work with television broadcasters, and enables the company to single-handedly undertake major projects such as concerts, live broadcasts of sports events, and other outdoor events.
The TV truck and other equipment are part of a bigger, already completed project called “The Advanced, Fully Equipped Film and Television Studio Based Around XDCAM HD,” which was partly funded with EU money under an Operational Sectoral Programme called “Improvement of the Competitiveness of Enterprises.” (the company disclosed this information in the current reports No. 30/2008 of 31 December 2008 and No. 1/2009 of 5 January 2009).
Due to the digitization of TV broadcasting, the number of new nationwide channels of terrestrial television is expected to grow. We expect new broadcasters and thematic channels to enter the market. This might generate new customers for our television products. To meet the new demand, the ATM Capital Group is expanding its production
1 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a capabilities not only by acquiring new professional equipment, but by building new television studios (planned development projects in Warsaw and Gdańsk).
Currently the ATM Capital Group is the only Polish television producer (which is not a television broadcaster) that owns advanced and complete production facilities. This significantly increases the Group’s competitive advantage over other television production companies operating in Poland, and has a major impact on the Group’s revenue levels and its market position.
In late March and early April, ATM Grupa S.A. attended MIPTV, the international film and programme market for television held in Cannes, the most important such event in Europe, and one of the most important in the world. The company is the only Polish independent TV producer to have exhibited at the event since 2002 and sell its formats to foreign buyers. This year it presented productions such as First Love, The Kiepskis’ World, Prime Minister, and the game shows Clueless and Cash Battle. New additions to the ATM Group’s portfolio included the web series Klatka B and Pitu Pitu, produced by the Group’s subsidiary A2 Multimedia Sp. z o.o. In addition, the Cannes market is a perfect opportunity to buy foreign licenses and options for formats popular in other countries, to assess the current state of the industry, and to learn about new trends and technologies. As the Group is creating a “programming library,” a database of material for producing new formats (based on the Group’s own ideas—a script database, and foreign licenses), a presence at the market is an important part of the company’s annual calendar.
The first quarter of 2009 also brought a continuation of well-known and loved series, which have strong positions in the schedules of television channels, including First Love, Złotopolscy, and The Ranch, based on original ideas of their producers: ATM Grupa, M.T.ART, and Studio A, respectively. In addition, the reporting period saw the launch of a new game show, Moment Prawdy [The Moment of Truth], and the taping of a new series, The Dancers (Tancerze). Both productions are based on foreign formats.
Despite the current macroeconomic situation, with the economic slowdown having a significant impact on decreasing sales and worse results of many companies, the ATM Capital Group’s sales revenue was higher than in the same period of 2008. The Group’s EBITDA was also good—it grew by 13.1% over Q1 2008.
Other key events of the first quarter of 2009, arranged chronologically, include:
1. On 5 January, 2009 Studio A and Polskie Media S.A. (TV 4) signed a new annex to the production contract of 25 September, 2007 to produce 39 episodes of Happy Hour. 2. On 6 January, 2009 ATM Grupa S.A. and Polskie Media S.A. (TV 4) signed an annex to the production contract of 1 September, 2008 to produce 16 new episodes of Kłamczuch. 3. On 15 January, 2009 ATM Grupa S.A. and Telewizja Polsat S.A. signed a contract to produce a pilot of the game show tentatively titled Pan i Pani. 4. ATM Grupa S.A. co-produced the prestigious film production The Karamazovs, directed by Peter Zelenka. 5. ATM Grupa S.A. finished taping the first season of the new game show Moment prawdy, based on a foreign license of The Moment of Truth. 6. Studio A was named to the Forbes’ Diamonds List 2009. The list includes companies that have shown the highest growth over the past three years. Studio A ranked first in the Mazovian list of companies with revenues between PLN 5 and 50 million. The Forbes’ Diamonds List is a prestigious list of Polish companies compiled by the Forbes magazine in conjunction with the credit ratings agency Dun & Bradstreet. Sformatowano: Angielski (Wielka Brytania), Wyróżnienie
2 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a IV. Description of factors and events, including in particular untypical ones, Usunięto: ¶ having a significant impact on the company's financial results
In the first quarter of 2009 the consolidated sales revenue totalled PLN 27.7 million, an increase by 18.5% on the same period of 2008, while EBITDA was 6,974 thousand PLN, up by 13.1%.
Earnings can be broken down as follows: PLN 7.1 million in sales profit, PLN 3.8 million in operating profit, and PLN 3.5 million in net earnings (in Q1 2008 the figures were, respectively, PLN 7.4 million, PLN 4.2 million, and PLN 4.3 million).
Key figures used to assess the Group's profitability are presented in the following table. Usunięto: 1-st Table 1. Selected financial data for four quarters of 2008 and 2007 Usunięto: 4 1st quarter of 2008 1st quarter of 2008 Usunięto: 7 from 01.01.2009 from 01.01.2008 DESCRIPTION Usunięto: 7 to 31.03.2009 to 31.03.2008 Usunięto: 12 (PLN '000) (PLN '000) Usunięto: 7 Net sales 27 765 23 436 Usunięto: 114 494 Movement 18,5% Usunięto: 117 191 Profit on sales 7 091 7 467 Usunięto: -2.3 Movement -5.0% Usunięto: 36 173 Margin 25,5% 31.9% Usunięto: 39 334 Profit on operating activities 3 815 4 202 Usunięto: 8 Movement -9,2% Usunięto: 31.6 Margin 13.7% 17.9% Usunięto: 3 Usunięto: 6 EBITDA 6 974 6 167 Usunięto: 19 933 Movement -13,1% Usunięto: 27 943 Margin 25.1% 26,3% Usunięto: 28.7 Net profit 3 526 4 335 Usunięto: 7 Movement -18.7% Usunięto: 4 Margin 12,7% 18,5% Usunięto: 23 Usunięto: 8 As compared to the first quarter of 2008, there was an increase in indirect production Usunięto: 29 costs due to higher amortization levels. As a result, the sales margin was 25.5%, down by 5% over the first quarter of 2008. This is mainly due to investment activities of the Usunięto: 022 parent company, ATM Grupa S.A. As a result of the expansion of the Group’s production Usunięto: 36 050 capabilities (new studio, acquisition of television equipment), there was an increase in Usunięto: 19.5 fixed costs, which led to the reduction of profits and margins in the profit and loss Usunięto: 3 account. Usunięto: 30.8 Notwithstanding, the Management Board sees investment as a priority, as it prepares the Usunięto: 20 537 ATM Group to adopt to the current and future changes taking place in the media industry Usunięto: 24 735 (HD broadcast, digitization of television channels, mobile television), and enables it to Usunięto: 7 take part in large-budget international productions. Currently, the economic situation is favourable to the investment strategy pursued by ATM Group companies (lower prices of Usunięto: 0 construction and construction materials, favourable conditions for further consolidation of Usunięto: 7 the production market), but it also translates to smaller and more cautious orders from Usunięto: . broadcasters (reviewed budgets, higher levels of equipment contributed by broadcasters, Usunięto: 9 renegotiated payment terms). Usunięto: 21,1
3 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a
We believe that the economic slowdown, which affects the situation of the television industry and the related advertising and new media markets, is only temporary. The investments of ATM Grupa S.A., which has significant amounts of funds, will strengthen the company’s competitive position and allow it to make the best possible use of the economic conditions, though this might, for a time being, relate to lower margin levels.
When the current economic situation improves, the volume of the Group’s television productions will increase, which will be possible thanks to the company’s production capabilities, and our margins will revert to higher levels.
In the first quarter of 2009, there was an increase in the ATM Capital Group’s management costs (from PLN 3,424 thousand as of the end of Q1 2008 to PLN 3,906 thousand in Q1 2009). This increase is mainly related to the acquisition of a new company that was not consolidated in the first quarter of 2008 (MT Art was acquired on 3 April 2008) and the consultancy costs related to grant management.
In Q1 2009, two of the Group’s subsidiaries reported a loss. These were: A2 Multimedia Sp. z o.o., based in Warsaw (net loss of PLN 340 thousand as of 31 March 2009, of which 50% was included in the results of ATM Grupa S.A.) and Profilm Agencja Filmowa Sp. z o.o., based in Sopot (net loss of PLN 178 thousand as of 31 March 2009).
Both companies operate in relatively niche markets. The loss reported at the end of the first quarter of 2009 by Profilm results from a large Profilm exposure to financing A City Built of Sea, a large-budget film production, expected to generate distribution proceeds in the third quarter of 2009. The production of the film is in a large part funded by the Polish Film Institute, which is a very good source of funding. The funds allocated by the Institute must be reimbursed but only if the proceeds are sufficiently high. This reduces the risk associated with the project’s commercial failure, and enables Profilm to produce ambitious niche productions. The commencement by Profilm of a number of projects planned for this year should significantly improve the company’s results.
A2 Multimedia, a company specializing in the production and distribution of Internet- dedicated formats, is still a start-up company in this market sector. Due to the nature of A2 Multimedia’s operations, it is necessary to incur high starting costs at this early stage of the company’s development. Now A2 Multimedia is focused on pursuing new Internet projects based on unorthodox ideas that have a strong potential to succeed online. A2 Multimedia’s productions are becoming increasingly popular with Internet users, attracting advertisers to TIVI.pl. In addition, the company received an award for best website in the prestigious Webstarfestival competition. How popular the Internet projects are is evidenced by the fact that the miniseries Klatka B moved to the television channel Polsat Play, which provides the company with new income-generation opportunities. We believe that A2 Multimedia is a project worth investing in.
In the first quarter of 2009, the ATM Group’s results were significantly affected by the Warsaw-based company M.T.ART., which reported high revenue and profit levels from all its operations. The company’s good results are related to the introduction of the new rules of production organization, which made the company’s operations more effective. M.T.ART’s Q1 2009 revenue comes from well-known and loved programmes Złotopolscy and Niesamowite historie.
Major factors that affected the company’s revenue in the first quarter of 2009.
The series produced by ATM Grupa S.A., such as First Love, The Dancers (Tancerze), Złotopolscy, and The Ranch (Ranczo), accounted or the largest share of the company’s first-quarter revenue.
4 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a First Love, a soap made by ATM Grupa S.A. for Polsat Television since 2004, continues to Usunięto: Smaller income of the be very popular with television viewers, which ensures that it remains a fixture in the Capital Group of ATM in 2008, in Polasat schedule. The series is set in Wrocław. In terms of individual productions, First comparison to the last year, resulted mainly from information on Love earns ATM Grupa S.A. the highest revenue and profits, which results from its high approaching economic slow-down, in broadcast frequency (5 times a week at 6 p.m.). particular in the last quarter. Big uncertainty as to further development Złotopolscy, the second longest running Polish television series after Klan (broadcast of macroeconomic situation in Poland and possible reduction of the since 3 January 1998 on TVP 2). Despite its age, the soap is still very popular, and advertising market caused that issuers M.T.ART Sp. z o.o. keeps receiving orders to produce new episodes. were careful while concluding new contracts. Given an expected drop of The Ranch, a Studio A series, is hugely popular with Polish viewers. Its fourth season has income from advertisements, televisions verify their budgets and aim at been airing on TVP1 since 1 March 2009, attracting an over 8 million audience every increasing the value of their own Sunday. In February, The Ranch won a Telekamera 2009 for best comedy series. The equipment contribution in the production beat other nominees (including the series Niania and 39 i pół), receiving over productions. Excessive precautionary 116 thousand of viewers votes. In addition, The Ranch won a special award, Super measures of TV broadcasters caused that several large projects planned for Telekamera, awarded for the second time. The winner was chosen via SMS voting. 2008 will be carried out later.¶ In spite of inconvenient market High revenue levels were also generated by The Dancers, a Polish version of the Spanish situation, in December 2008 large production called Un Paso Adelante. The Dancers, the first music and dance series in flexibility of ATM Group companies and wide production capacities contributed Poland, began airing on 4 April 2009 on TVP2. ATM Grupa S.A. tapes the series in its to the conclusion of a production newly built studio in Bielany Wrocławskie, with outdoor scenes being shot in Wrocław. agreement on a new large-budget The show is shot in huge, specially-built two-story 2000 sq.m. sets that include a dancing project, the TV series "Tancerze", which will be presented in spring by TVP 2. room, a theatre room, teacher rooms and a dormitory for students. This is one of the The series will be mostly produced in biggest sets created for a TV series in Poland. the new studio in Bielany Wrocławskie, where the film set being one of the A significant contribution to Q1 2009 revenue came from a new ATM Grupa S.A. game biggest in Poland prepared specially for the purpose of TV production was show called Moment Prawdy [The Moment of Truth], based on the American show The constructed.¶ Moment Of Truth. The new show started airing on Polsat on 5 March 2009. Outside the ¶ USA, the show has already been broadcast in Spain, Portugal, Netherlands, Denmark, Slightly smaller sales profitability in Germany, Croatia, Estonia, UK, Australia, Sweden, Italy, Israel, and in other countries. comparison to 2007 was mainly an effect of the commencement of several The format has been purchased by television stations in 50 countries all around the new large-budget productions in 2008 world. by ATM Capital Group companies (constituting a half of productions The revenue also included proceeds from a M.T.ART production, Niesamowite historie, planned for 2008), which, comparing to the on-going projects, record much made for Telewizja Puls. Despite its good ratings, the series will not be continued, as Plus smaller profitability because of high is experiencing financial difficulties. initiation costs (e.g. "Fabryka Gwiazd", "Fort Boyard", "Tancerze", In the first quarter of 2009, a new Studio A series, Doręczyciel, had very good ratings. "Doręczyciel"). If continued, next series will generate bigger profitability.¶ The series started airing on 1 March 2009 on TVP 1. The first two episodes drew an over ¶ 5-million audience, and a very good audience share (almost 40%). Most of the revenue ATM Investment recorded much smaller generated by the series was reported in 2008, so the series did not have a significant income than planned because of impact on the revenue earned in the quarter in question. We believe, however, that the unrealised sale of one-family houses in Bielany Wrocławskie, constituting the high ratings will prompt the broadcaster to order the production of a new season of the last stage of the company's investment series. consisting in the construction of a housing estate (after the end of the project the company does not plan to continue such an activity). The Key factors influencing results in the 1st quarter of 2008 postponement of the sale of most houses to 2009 is caused by the The series produced by ATM Grupa S.A., such as First Love, The Dancers (Tancerze), general situation in the housing market, Złotopolscy, and The Ranch (Ranczo), accounted or the largest share of the company’s which records much a smaller demand for apartments than still a year ago.¶ first-quarter revenue. ¶ Loss generated by A2 Multimedia and First Love, a soap made by ATM Grupa S.A. for Polsat Television since 2004, continues to Profilm Agencja Filmowa had a be very popular with television viewers, which ensures that it remains a fixture in the significant impact on results of the Capital Group of ATM. As at 31 Polasat schedule. The series is set in Wrocław. In terms of individual productions, First December 2008, A2 Multimedia ... [1] Love earns ATM Grupa S.A. the highest revenue and profits, which results from its high Sformatowano: Czcionka: Kursywa broadcast frequency (5 times a week at 6 p.m.). Usunięto: fourth
5 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a Usunięto: Series ("Pierwsza Miłość", Złotopolscy, the second longest running Polish television series after Klan (broadcast "Złotopolscy", "Ranczo") and since 3 January 1998 on TVP 2). Despite its age, the soap is still very popular, and entertainment programmes ("Fabryka M.T.ART Sp. z o.o. keeps receiving orders to produce new episodes. Gwiazd", "Kłamczuch", "Happy Hour", "Orzeł czy reszta") produced by the ATM Group companies had the biggest The Ranch, a Studio A series, is hugely popular with Polish viewers. Its fourth season has share in income of the fourth quarter.¶ been airing on TVP1 since 1 March 2009, attracting an over 8 million audience every ¶ Sunday. In February, The Ranch won a Telekamera 2009 for best comedy series. The The series "Pierwsza Miłość" has been produced by ATM Grupa S.A. since production beat other nominees (including the series Niania and 39 i pół), receiving over 2004. In spite of large competition of 116 thousand of viewers votes. In addition, The Ranch won a special award, Super programmes broadcasted at the same Telekamera, awarded for the second time. The winner was chosen via SMS voting. time, the soap opera enjoys continuous popularity among the audience and is one of the three most popular High revenue levels were also generated by The Dancers, a Polish version of the Spanish programmes of Telewizja Polsat. Its production called Un Paso Adelante. The Dancers, the first music and dance series in market share is by 7 percentage points Poland, began airing on 4 April 2009 on TVP2. ATM Grupa S.A. tapes the series in its above an average market share of the broadcaster.¶ newly built studio in Bielany Wrocławskie, with outdoor scenes being shot in Wrocław. ¶ The show is shot in huge, specially-built two-story 2000 sq.m. sets that include a dancing The series "Ranczo" enjoys great room, a theatre room, teacher rooms and a dormitory for students. This is one of the popularity among the Polish audience. biggest sets created for a TV series in Poland. In February 2009, it was awarded with Telekamera in the category of a comedy series. The production defeated A significant contribution to Q1 2009 revenue came from a new ATM Grupa S.A. game its competitors (including "Niania" and show called Moment Prawdy [The Moment of Truth], based on the American show The "39 i pół" ) by obtaining over 116 000 Moment Of Truth. The new show started airing on Polsat on 5 March 2009. Outside the votes. The series has been produced by Studio A and broadcasted by TVP1 USA, the show has already been broadcast in Spain, Portugal, Netherlands, Denmark, since 2005. Since 1 March 2009, Germany, Croatia, Estonia, UK, Australia, Sweden, Italy, Israel, and in other countries. viewers may see new episodes of the The format has been purchased by television stations in 50 countries all around the fourth series every Sunday. "Ranczo" world. was also awarded with a special reward, Super Telekamera, granted only for the second time. The winner of The revenue also included proceeds from a M.T.ART production, Niesamowite historie, that reward was selected via SMSes made for Telewizja Puls. Despite its good ratings, the series will not be continued, as Plus from among all prizewinners.¶ is experiencing financial difficulties. The great popularity of the series is also confirmed by the fact that even repeated episodes of "Ranczo" were the A new Studio A series, Doręczyciel, attracted very good ratings. The series started airing most often watched series in Poland in on 1 March 2009 on TVP 1. The first two episodes of the series had an over 5-million the last quarter, given the market share audience, and a very good audience share (almost 40%). As most of the revenue of over 40%.¶ ¶ generated by the series was reported in 2008, Doręczyciel did not have a significant The series "Złotopolscy" has been impact on the revenue generated in Q1 2009. We believe, however, that its high ratings produced by M.T.ART for TVP2 for over will prompt the broadcaster to order the production of a new season of the series. 10 years. ON 21 December 2008, the th 1000 episode of the series was broadcasted. In spite of the long period, the soap opera still enjoys great V. Explanations on the seasonal or cyclical nature of the issuer's activity during popularity and M.T.ART Sp. z o.o. the reporting period receives further orders for the production of new episodes.¶ Seasonal and cyclical phenomena do not apply to the issuer. ¶ The income of the fourth quarter of 2008 was also significantly influenced by the entertainment programme "Fabryka Gwiazd" produced in cooperation with Endemol. This show, which is popular abroad, was not an expected success in Poland. Thus, we do not expect it to be continued this year.¶ ¶ In December 2008, ATM Grupa S.A. produced the second series of the TV quiz "Kłamczuch" for Polskie Media S.A., based on the popular licence ”Dirty Rotten Cheater”. The quiz has already won a group of viewers, thus we are getting ready to the production of further series of the programme.¶... [2]
6 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a VI. Issue, redemption and repayment of debt and capital securities
Not applicable.
VII. Dividend paid (or declared), including dividend per share by ordinary and preference shares
Not applicable.
VIII. Events occurring after the abridged quarterly financial statement date, not disclosed therein, but likely to have a significant impact on future financial performance of the issuer
Not applicable.
IX. Consequences of changes in the business entity's structure, including changes resulting from the merger of business entities, the acquisition or sale of capital group units, long-term investments, the division, restructuring and discontinuance of activities
On 14 May 2009, ATM Grupa S.A. acquired a full stake in Baltmedia Sp. z o.o., based in Warsaw, for PLN 2,000 thousand. Baltimedia is a producer of the series Ojciec Mateusz, which drew very good ratings. The company has recently signed a deal with Telewizja Publiczna S.A. to produce the second season of the show.
On the same day, ATM Grupa S.A. signed the Memorandum of Association of an SPV called ATM Studio Sp. z o.o., based in Warsaw, taking over a full stake in the company for PLN 10,000 thousand. The company will oversee the development of a complex of television studios in Warsaw, and most of its revenue will come from studio rental. Usunięto:
7 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a X. Changes in contingent assets and liabilities occuring since the end of the last financial year Sformatowano: Angielski (Wielka Brytania), Wyróżnienie As of the end of the first quarter of 2009, contingent liabilities totalled PLN 2,074 Sformatowano: Bez punktorów lub thousand, maintaining the same level as at the end of the last quarter. numeracji
Usunięto: In the analysed period, XI. Management Board's opinion on the possible execution of earlier published contingent liabilities dropped from PLN forecasts for a given year in the light of results presented in the quarterly 2 819 000 as at the end of the last report in comparison to forecasted results financial year to PLN 2 074 000 as at the end of the current period.¶
The company did not publish any forecast results.
XII. Shareholders holding, directly or indirectly through subsidiaries, at least 5% of the total number of votes at the issuer's general shareholder assembly as at the quarterly report filing date, including the number of shares held by such entities, their percentage share in the share capital, the number of votes resulting therefrom and their percentage share in the total number of votes at the general shareholder assembly, as well as changes in the ownership structure of key share stakes held by the issuer during a period since the previous quarterly report delivery
In the current report of 1 April 2009, (No. 6/2009), the Management Board of ATM Grupa S.A. informed that on 31 March 2009 they were notified by ING Towarzystwo Funduszy Inwestycyjnych S.A. that as a result of selling the company’s shares on 27 March 2009 by ING Parasol Specjalistyczny Fundusz Inwestycyjny Otwarty, the total number of votes Usunięto: In the current report of 3 at the AGM of ATM Grupa S.A. held by all investment funds managed by ING dropped November 2008, the Management below a 10% level. Board of ATM Grupa SA informed that on 3 November 2008, they were informed that the limit of 10% of the Before the change, funds managed by ING Towarzystwo Funduszy Inwestycyjnych S.A. total number of votes at the General owned 10,902,325 shares of the company, i.e. 12.68% of the company’s share capital Shareholder Assembly of ATM Grupa SA and 10,902,325 votes, i.e. 10.002% of the total number of votes at the AGM. was exceeded by ING Towarzystwo Funduszy Inwestycyjnych S.A. ¶ ¶ As of 27 March 2009, funds managed by ING Towarzystwo Funduszy Inwestycyjnych S.A. Before the change, funds managed by owned a total of 10,899,262 shares of the company, i.e. 12.67% of the company’s share ING Towarzystwo Funduszy capital and 10,899,262 votes, i.e. 9.999% of the total number of votes at the AGM. As of Inwestycyjnych S.A. owned 10 329 093 the notice date, i.e. 31 March 2009, funds managed by ING Towarzystwo Funduszy shares of the Company in total, i.e. 12.01% of the Company's share capital Inwestycyjnych S.A. owned a total of 10,887,761 shares, i.e. 12.66% of the company’s and 10 329 093 votes, i.e. 9.48% of the share capital and 10,887,761 votes at the AGM, i.e. 9.989% of the total number of AGM total number of votes at the general votes. shareholder assembly.¶ As at the notice date, i.e. 3 November 2008, investment funds managed by According to the information available to the company, as of the end of the reporting ING Towarzystwo Funduszy period, shareholders with more than a 5% stake included: Inwestycyjnych S.A. owned 10 914 093 shares in total, i.e. 12.69% of the share capital and 10 914 093 votes at the Vote general shareholder assembly, i.e. No. of Capital No. of Shareholder percentag percenta 10.01% of the total number of votes at shares votes e ge the general shareholder assembly.¶ ING Towarzystwo Funduszy Dorota Michalak-Kurzewska and Tomasz Kurzewski 34 420 000 40.02% 57 420 000 52.68% Inwestycyjnych S.A. stated that investments in the Company's shares Zygmunt Solorz-Żak with subsidiaries, including a met the investment goals of investment funds managed by ING Towarzystwo part at the account of a custody bank, EFG Bank S.A. Funduszy Inwestycyjnych S.A., i.e. the EFG Bank S.A. in Zurich holds 8,749,980 shares 9 280 000 10.79% 9 280 000 8.51% growth of fund assets as a result of the constituting 10.17% of the capital and 8.03% of growth of investment value.¶ ¶ votes As at the end of the reporting period, shareholders owning more than 5% of the shares were as follows:¶
8 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a Vote No. of Capital No. of Shareholder percentag percenta shares votes e ge ING Towarzystwo Funduszy Inwestycyjnych S.A. 10 887 761 12.66% 10 887 761 9,989% Usunięto: 914 093 Usunięto: 9 Usunięto: 914 XIII. Statement of changes in the number of the issuer's shares or rights to Usunięto: 093 shares (options) held by the issuer's managing and supervisory staff, in Usunięto: 10.01 accordance with information being in the issuer's possession, during a period since the last quarterly report delivery date
There have not been any changes since the delivery of the latest periodical report. As at the reporting date, the ownership of shares by members of ATM Grupa S.A.'s authorities was as follows:
Capital No. of No. of Vote percentag Shareholder Entity percentage shares e votes Dorota Michalak-Kurzewska and ATM Grupa 34 420 000 40.02% 57 420 000 52.68% Tomasz Kurzewski
XIV. Proceedings run before courts, arbitration authorities or public administration authorities No proceedings relating to an amount exceeding 10% of the issuer's equity are run before courts, arbitration or public administration authorities.
XV. Information about a single transaction or many transactions made by the issuer or its subsidiary with related entities if the value of such transactions (total value of all transactions made since the beginning of the financial year) exceeds the zloty equivalent of EUR 500,000 During a period from the year commencement until the end of a reporting period, the Company made transactions whose total value exceeded EUR 500,000 with its subsidiaries: ATM System and ATM Investment. These transactions covered many services provided by the companies, whose prices were based on market prices and came within typical types of services offered thereby, including: . ATM System Sp. z o.o.: montage, production services, rental of equipment, sound, lighting, IT and transport services, . ATM Investment Sp. z o.o.: rental of office and warehouse premises, lease of land, rental of containers and aggregates.
In addition, in the fourth quarter of 2008, ATM Grupa S.A. granted the following loans to its related entities for purposes connected with their activity:
. on 24 October 2008, ATM Grupa S.A. granted to M.T.ART Sp. z o.o. the loan of PLN 500 000.00, repayable by 31 December 2008. The loan was repaid; . on 14 November 2008, ATM Grupa S.A. granted to M.T.ART Sp. z o.o. the loan of PLN 500 000.00, repayable by 31 December 2008. The loan was repaid; . on 16 December 2008, ATM Grupa S.A. granted to A2 Multimedia Sp. z o.o. the loan of PLN 300 000.00, repayable by 31 January 2009. The loan was repaid.
9 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a During the last three months ended on 31 December 2008, ATM Grupa S.A. did not conclude any untypical transactions with its related entities whose value would exceed the equivalent of PLN 500 000.
XVI. Credit warranties or guarantees granted by the issuer or its subsidiary, in total, to one entity or subsidiary of such an entity if the total value of the existing warranties or guarantees constitutes at least 10% of the issuer's equity Not applicable.
XVII. Other information that, in the issuer's opinion, is important for the assessment of its personnel, assets, financial standing, financial results and movements therein, as well as information important to evaluate the issuer's payment capacities Not applicable.
XVIII. Factors that, in the issuer's opinion, will influence its results at least during the next quarter
Development of situation in the TV advertisement market. Further income diversification. Initiation of new production projects. Participation in the TV fairs in Cannes in April. Utilisation of effects of synergy between the existing group entities and new companies to maximise the whole group's rate of growth. Maintenance of high audience ratings for the productions. Investments in modern technologies and properties – the planned expansion and modernisation of the first studio of ATM in Bielany Wrocławskie and the construction of a connection between the old and new studio and office complex.
XIX. Rules applied to covert PLN into EUR Particular assets and liabilities in the balance sheet were converted at an average foreign exchange rate published by the National Bank of Poland as at the last period day. Particular items of the profit and loss account and the cash flow statement were converted at an average foreign exchange rate of a given period, calculated as an arithmetic mean of foreign exchange rates published by the National Bank of Poland as at the last day of each month in a given period.
Average foreign exchange rate in the period 4,5994 Foreign exchange rate as at the last day of the period 4,7013 The smallest foreign exchange rate in the period 3,9170 The biggest foreign exchange rate in the period 4,8999
10 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a XX. Reporting on activity segments The ATM Group generates sales mainly from film and TV production. Given the type of its activities, its production is not broken down into either geographical segments or economic sectors since the share of other activities in total income is insignificant.
ATM Investment Sp. z o.o. derives revenue from construction operations, i.e. the sale of single-family houses.
The key information on these activities are as follows:
Q1 2009 Q1 2008 Sformatowano: Angielski (Wielka Brytania), Wyróżnienie Revenue 1 084 - Sformatowano: Angielski (Wielka Costs 876 - Brytania), Wyróżnienie Work in progress 6 559 5 048 Sformatowano: Angielski (Wielka Brytania), Wyróżnienie Goods (land) 300 - Sformatowano: Angielski (Wielka Prepayments 175 374 Brytania), Wyróżnienie Sformatowano: Angielski (Wielka As revenue from construction accounts for less than 10% of total revenue, the Group, in accordance Brytania), Wyróżnienie with IFRS 8, is not obliged to report on this segment. The proportion of other sales in total revenues is Sformatowano: Angielski (Wielka insignificant too. Brytania), Wyróżnienie Sformatowano: Angielski (Wielka The Group mainly operates in Poland. Revenue, outlays and assets related to segments outside Brytania), Wyróżnienie Poland account for less than 1% of relevant figures. Sformatowano: Angielski (Wielka Brytania), Wyróżnienie Sformatowano: Angielski (Wielka Brytania), Wyróżnienie
11 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a Comments to the abridged individual quarterly report for the fourth quarter of 2008
I. Accounting Rules The financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) and on the basis of a historic cost rule. The financial statements present amounts in thousand PLN.
II. Key changes to estimates, including corrections due to provisions, deferred income tax provision and assets, and adjustment deductions to assets The Company established: Provisions for future payables: PLN 302,000 Provisions for remuneration under specific work contracts: PLN 570,000 Deferred income tax provision: PLN 258,000 Deferred income tax assets: PLN 206,000 Estimation of income based on contracts made proportionally to costs borne: PLN 3,221,000.
The Company released: Provisions for future trade payables: PLN 643,000 Provisions for remuneration under specific work contracts: PLN 959,000 Deferred income tax provision: PLN 879,000 Deferred income tax assets: PLN 342,000 Estimation of income based on contracts made proportionally to costs borne: PLN 10,778,000.
12 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a Strona 5: [1] Usunięto dtumanowicz 2009-09-29 13:03:00 Smaller income of the Capital Group of ATM in 2008, in comparison to the last year, resulted mainly from information on approaching economic slow-down, in particular in the last quarter. Big uncertainty as to further development of macroeconomic situation in Poland and possible reduction of the advertising market caused that issuers were careful while concluding new contracts. Given an expected drop of income from advertisements, televisions verify their budgets and aim at increasing the value of their own equipment contribution in the productions. Excessive precautionary measures of TV broadcasters caused that several large projects planned for 2008 will be carried out later. In spite of inconvenient market situation, in December 2008 large flexibility of ATM Group companies and wide production capacities contributed to the conclusion of a production agreement on a new large-budget project, the TV series "Tancerze", which will be presented in spring by TVP 2. The series will be mostly produced in the new studio in Bielany Wrocławskie, where the film set being one of the biggest in Poland prepared specially for the purpose of TV production was constructed.
Slightly smaller sales profitability in comparison to 2007 was mainly an effect of the commencement of several new large-budget productions in 2008 by ATM Capital Group companies (constituting a half of productions planned for 2008), which, comparing to the on-going projects, record much smaller profitability because of high initiation costs (e.g. "Fabryka Gwiazd", "Fort Boyard", "Tancerze", "Doręczyciel"). If continued, next series will generate bigger profitability.
ATM Investment recorded much smaller income than planned because of unrealised sale of one-family houses in Bielany Wrocławskie, constituting the last stage of the company's investment consisting in the construction of a housing estate (after the end of the project the company does not plan to continue such an activity). The postponement of the sale of most houses to 2009 is caused by the general situation in the housing market, which records much a smaller demand for apartments than still a year ago.
Loss generated by A2 Multimedia and Profilm Agencja Filmowa had a significant impact on results of the Capital Group of ATM. As at 31 December 2008, A2 Multimedia recorded the loss of PLN 3.2 million, a half of which was charged to the Capital Group of ATM. In the fourth quarter, the loss of the newly established company amounted to PLN 0.5 million. The specific character of the operation of A2 Multimedia is connected with a need to bear high initiation costs at the beginning stage of the company's development. After the exact identification of all opportunities and threats related to further activity, as at the end of 2008, after the verification of an earlier strategy, the company's new business plan adjusted to changing market conditions and experience gained was prepared for the nearest year. Although the plan does not provide for positive profitability in 2009, in the shareholders' opinion, A2 Multimedia as a "start–up” in a continuously developing market is still a project that needs investments. This is proven by the latest award granted to A2 Multimedia for the best web site in the prestigious competition Webstarfestival. The web site of "Klatka B”, the mini series produced by A2 Multimedia and broadcasted in the Internet since June 2008 in the platform www.tivi.pl was appreciated by Internet users and rewarded with the Internet User WebStar award in the category of Entertainment. We believe that A2 Multimedia has a real chance to achieve a leading position in the market as an entity specialising in the production and distribution of Internet-dedicated formats.
The loss of PLN 0.6 million recorded by Profilm Agencja Filmowa Sp. z o.o. as at 31 December 2008 is connected with the company's great involvement in the large-budget production of the feature film "Miasto z Morza", which is to generate income from distribution only in the third quarter of 2009. The production of the film is mostly financed by the National Institute of Film Art, which is a very good source of finance for the company. Funds granted by the Institute shall be returned, but only when Profilm earns high income from the film. This reduces the company's risk related to the market failure of the project and allows for the execution of niche non-commercial productions. This year, given the commencement of several important projects, Profilm AF Sp. z o.o. should generate a significant growth of income relation to 2008. Bigger overhead costs both in the fourth quarter and the whole year 2008 in comparison to the same periods of 2007 are connected with the intensive development of Grupa ATM. WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a The growth thereof is influenced by such factors like: the entrance of new products to the Group's t t th t bli h t f ffi f ATM G S A i W t th d f 2007 bi activeness of the International Section at TV fairs. Outsourcing expenses, as well as business trip costs also increased, which is connected, without limitation, with the territorial development of the Group: companies in Sopot and Warsaw.
In 2008, Grupa ATM still expanded its project, initiated in 2007, consisting in the construction of its own programme library, i.e. the base of scripts, constituting a ready base for new productions in the case TV broadcasters find them interesting. At the initial stage, the project generates large expenses which are not reflected in income. In the last months, we managed to interest broadcasters with several scripts, thus we hope to launch the production still this year. For ATM Grupa S.A., 2008 was mainly the year of intensified investments. The development of the existing projects was to minimise the impact of economic slow-down on the Company's profitability. It also allowed for the execution of a strategy consisting in the improvement of the quality of the Company's products (mainly owing to the introduction of HD technology). The possession of the advanced TV equipment and modern studio increases the competitiveness of Grupa ATM and allows for the execution of large and demanding undertakings.
Strona 6: [2] Usunięto dtumanowicz 2009-09-29 13:09:00 Series ("Pierwsza Miłość", "Złotopolscy", "Ranczo") and entertainment programmes ("Fabryka Gwiazd", "Kłamczuch", "Happy Hour", "Orzeł czy reszta") produced by the ATM Group companies had the biggest share in income of the fourth quarter.
The series "Pierwsza Miłość" has been produced by ATM Grupa S.A. since 2004. In spite of large competition of programmes broadcasted at the same time, the soap opera enjoys continuous popularity among the audience and is one of the three most popular programmes of Telewizja Polsat. Its market share is by 7 percentage points above an average market share of the broadcaster.
The series "Ranczo" enjoys great popularity among the Polish audience. In February 2009, it was awarded with Telekamera in the category of a comedy series. The production defeated its competitors (including "Niania" and "39 i pół" ) by obtaining over 116 000 votes. The series has been produced by Studio A and broadcasted by TVP1 since 2005. Since 1 March 2009, viewers may see new episodes of the fourth series every Sunday. "Ranczo" was also awarded with a special reward, Super Telekamera, granted only for the second time. The winner of that reward was selected via SMSes from among all prizewinners. The great popularity of the series is also confirmed by the fact that even repeated episodes of "Ranczo" were the most often watched series in Poland in the last quarter, given the market share of over 40%.
The series "Złotopolscy" has been produced by M.T.ART for TVP2 for over 10 years. ON 21 December 2008, the 1000th episode of the series was broadcasted. In spite of the long period, the soap opera still enjoys great popularity and M.T.ART Sp. z o.o. receives further orders for the production of new episodes.
The income of the fourth quarter of 2008 was also significantly influenced by the entertainment programme "Fabryka Gwiazd" produced in cooperation with Endemol. This show, which is popular abroad, was not an expected success in Poland. Thus, we do not expect it to be continued this year.
In December 2008, ATM Grupa S.A. produced the second series of the TV quiz "Kłamczuch" for Polskie Media S.A., based on the popular licence ”Dirty Rotten Cheater”. The quiz has already won a group of viewers, thus we are getting ready to the production of further series of the programme. A significant item of the income of the fourth quarter was generated by the production of "Orzeł czy reszta” and "Happy Hour” realised by Studio A.
In the fourth income, the Group started recording the first income from the production of a twenty- episode series "Tancerze", which will be broadcasted by TVP 2 from April. "Tancerze" is the Polish
version of the Spanish series "Un Paso Adelante", a licence to which has been already sold to over 20 WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a countries all over the world (including France, Brazil, Italy, Switzerland). The series is directed by Bruce Parramore and the format is adjusted by Renata Frydrych. ATM Grupa S.A. produces the series are deeply convinced that "Tancerze" will be appreciated enthusiastically like in other countries where the series has been already broadcasted. Most income from the series will be generated this year. ATM Grupa S.A. has a guaranteed right to acquire a licence for further 100 episodes of the series. If "Tancerze" achieves the expected good audience ratings, we assume that the second series will be produced still this year.
WorldReginfo - 738dcbbe-546e-481c-b173-0c316367f54a