Independent News & Media Plc Annual Report

Independent News & Media Plc Annual Report

INDEPENDENT NEWS & MEDIA PLC MEDIA & NEWS INDEPENDENT INDEPENDENT NEWS & MEDIA PLC ANNUAL REPORT ANNUAL REPORT 2009 REPORT ANNUAL INDEPENDENT NEWS & MEDIA PLC Independent House, 2023 Bianconi Avenue, Citywest Business Campus, Naas Road, Dublin 24, Ireland. Tel + 353 1 466 3200 Fax + 353 1 466 3222 Email [email protected] www.inmplc.com KEY PERFORMANCE INDICATORS REVENUE BY MARKET OPERATING PROFIT* 23% BY MARKET** 28% Australasia 45% Australasia Ireland 28% 52% 45% Ireland 23% South Africa 17% 52% South Africa 25% 10% United Kingdom 10% 25% 17% 1,611.5 1,635.7 1,673.5 1,476.6 1,255.9 9.8 10.9 11.8 7.9 3.0 311.6 329.5 349.2 290.3 177.2 REVENUE (€M) OPERATING PROFIT* DILUTED EARNINGS* (€M) PER SHARE (CENT) * BEFORE EXCEPTIONAL ITEMS. ** EXCLUDES UK. Produced by Murray Consultants Limited ANNUAL REPORT 2009 01 CORPORATE PROFILE INDEPENDENT NEWS & MEDIA PLC (INM) IS A leadinG inteRnatiOnal newspapeR and COmmUnicatiOns GROUP. Its main inteRests ARE LOcated in AUstRalia, IReland, New Zealand, NORTHERN IReland and SOUTH AFRica. THE GROUP Has maRKet-leadinG newspapeR POsitiOns in AUstRalia (REGIOnal), IReland, New Zealand, NORTHERN IReland and SOUTH AFRica and Has estaBlisHed A stRONG and GROwinG Online PResence, inclUdinG maRKet-leadinG Online POsitiOns in eacH OF OUR main maRKets and OVER 100 editORial and classiFied sites. IN AUstRalasia, INM IS THE laRGest OUtdOOR adVERtisinG OpeRatOR and alsO THE leadinG RadiO OpeRatOR, witH OVER 130 statiOns and an AUdience OF almOst siX milliON peOple. IT alsO Has leadinG OUtdOOR adVERtisinG POsitiOns in HONG KONG and IndOnesia and IS THE laRGest newspapeR COntRact PRinteR ON THE island OF IReland. FROM its newspapeR ORIGins in IReland, it Has GROwn and EVOLVed TO BecOme A GEOGRapHicallY and media diVERse GROUP witH maRKet-leadinG BRands, and TOdaY manaGes GROss assets OF €2.1 BilliON, REVenUE OF €1.3 BilliON and emplOYS appROXimatelY 8,000 peOple WORldwide. FURTHER inFORmatiON is AVailaBle ON THE GROUP weBsite WWW.INMPLC.COM CONTENTS 01 Corporate Profile 12 Operations Review: South Africa 02 Chairman’s Statement 14 Operations Review: United Kingdom 03 Chief Executive’s Review 16 Operations Review: Australasia 07 Financial Review 18 Corporate Social Responsibility 10 Operations Review: Ireland 21 Financial Statements 02 INDEPENDENT NEWS & MEDIA PLC CHAIRMAN’S STATEMENT ‘2009 was A YeaR OF PROFOUnd CHanGE and UnpRecedented CHallenGes FOR OUR indUstRY and OUR GROUP. NOtwitHstandinG THE impact TO SHAREHOldeR ValUE I am CONFident THat THE measURes we HAVE taKen TO deleVERAGE and RepOsitiON Independent News & Media in 2009 will enaBle US TO taKE maXimUM adVantaGE OF THE OppORTUnities THat will ARise as THE GLOBal ecONOMY RecOVERS.’ 2009 was an extraordinary year by any shareholders. On behalf of the Board and acknowledge the invaluable contribution measure. Overall, the Group delivered a our committed management team, I would of the Directors who retired following last resilient performance against extremely like to assure our shareholders that we are years’ Board reorganisation and to challenging market conditions with not, and will not be complacent, about the recognise their dedicated service over many Revenues of €1,255.9 million and strong role your support played in our return to years. I would like to extend my gratitude to Operating Profit, before exceptional items, financial stability and our capacity to Ken Clarke – who retired from the Board at of €177.2 million. Each of INM’s operations reposition your Group on a trajectory to year-end to focus solely on UK politics – for achieved solid market share advances and enhanced shareholder value. his strategic insight and distinctive service to your Group. Board refreshment will continue continued efficient cost management. Notwithstanding the constraints to an to be a priority in the year ahead. Following the successful conclusion of early resumption of dividend payments, our complex debt refinancing last year, your Group’s focus is to bring about a INM, as a global media group, has distinct our objective in 2010 is to build on the reconfigured Balance Sheet and a advantages – geographic diversity, real progress achieved by your Group, resumption of dividends when economic complementary media platforms and to drive the underlying profitability of its and other circumstances allow. This will innovative production techniques – all of businesses and to restore and maximise be facilitated by our compelling operating which enable us to deliver market-leading shareholder value. leverage which in the event of even a products more competitively than most of modest economic upturn would generate our peers. The fundamentals of our In last years’ Annual Report, our outgoing the cashflows necessary to reduce debt business remain strong and as global Chief Executive, Sir Anthony O’Reilly, on a sustainable basis. Your management conditions stabilise and consumer sentiment surmised that 2009 would be one of the team is committed to this objective and to turns a cautious corner, these will be the toughest years ever in the history of the the restoration of shareholder value. pillars of future growth. Group, which it turned out to be, as well as for our sector and for the global economy. I should add that in grasping the reins of the As we move forward to embrace the That was certainly the reality for any Group last May, our new Chief Executive, challenges that lie ahead, I would like to company seeking to refinance in the midst Gavin O’Reilly, has demonstrated tenacity acknowledge the continuing contribution of the worst credit crisis in living memory. and resolve in negotiating, together with of our 8,000 staff across the globe; the In the interim, we have successfully Donal Buggy, Group Chief Financial Officer, loyalty and support of the millions of completed our refinancing and with it a 4 ½ year bank facility that will extend our consumers who enjoy our products each enhanced your Group’s financial stability debt maturity profile to 2014. There’s no week; our advertisers who despite ever and its future prospects. doubt the successful navigation of these tighter budgets see the merit of our powerful negotiations owe greatly to the drive, vision media franchises and finally to our Over prior years, INM consistently delivered and absolute commitment demonstrated shareholders for their ongoing support growth and shareholder value. 2009 posed by Gavin, his management colleagues and and commitment as we seek to restore an entirely new and even more daunting set the Board. and maximise shareholder value. of challenges. With the support of our loyal shareholder base and the co-operation of I now return to a theme that I have alluded To these and all our stakeholders I express our Banks and Bondholders we adopted to over the past several years, that of Board my gratitude and that of the Board of INM. and implemented a clear strategy of refreshment. The appointment of Lothar deleveraging our Balance Sheet and Lanz and that of Bengt Braun, post negotiated, on a consensual basis, our way year-end, are most welcome and further through a complex restructuring of our debt. enhance the depth and international media expertise of our Board. On behalf of all our None of this would have been possible shareholders, I would again like to without the unstinting support of our DR. Brian HillerY Chairman ANNUAL REPORT 2009 03 CHIEF EXECUTIVE’S REVIEW ‘WitH OUR REFinancinG SUccessFUllY COmpleted and A new 4 ½ YeaR BanK FacilitY in place, 2010 IS ABOUT BUildinG ON THE MORE POsitiVE MOmentUM we ARE seeinG, FURTHER de-RISKinG BOTH OUR Balance SHeet and OpeRatiOns, and POsitiVelY RepOsitiOninG OUR BUsinesses FOR SUstainaBle GROwtH in THE anticipated UptURN, all OF WHicH impROVE THE EQUitY inVestment case and enHance SHAREHOldeR RetURns.’ In this – my first review to you as Chief PERSPECTIVE ON INM POST-2009 investments in areas like image search and Executive – it would be so easy to reach for mobile VoIP through www.imprezzeo.com clichéd lines about what a baptism 2009 Despite some rather dramatic media and www.truphone.com respectively. turned out to be. I shall resist that urge. coverage of our Company in 2009, I think a certain perspective is needed to assess While none of these progressive factors can Instead, after such an incredible year of mitigate the sobering impact of an heightened dramas, disappointments and our underlying performance. Despite an approximate €400 million (circa. 25%) extraordinarily tough 2009 for each of our seismic changes, the very sobering business units, it is gratifying to observe that experiences of 2009 have only reinforced contraction from our record 2007 Revenues of €1.67 billion – as a result of the worldwide most commentators and media analysts are my utter determination to re-build the equity describing 2009 as a trough year for INM value of this great Company. advertising recession – INM still managed to deliver an underlying Operating Profit of and that is entirely consistent with the more The dramatic consequences of the financial €177.2 million in 2009. This relatively resilient positive trend lines that we have seen in the tsunami that followed the collapse of performance was facilitated by a continuing, first 16 weeks of 2010. Lehman Brothers and the subsequent underlying cost reduction programme that withdrawal of credit are painstakingly clear delivered total cost savings in 2009 of IMPROVING THE EQUITY to all of us as individual shareholders. The €107.6 million. INVESTMENT CASE unusual and startling circumstances that The positive impact of this radical and led to, and the final results of, the 2009 With our Refinancing successfully durable shift in INM’s cost profile and our financial restructuring was an extremely completed and a new 4 ½ year bank facility consistent delivery of industry leading EBIT agonising episode in the annals of our in place, 2010 is about building on the more margins – currently 14.1% – is that the Company – but based on the very real positive momentum we are seeing, further majority of any incremental revenue now constraints and unusual external challenges, de-risking both our Balance Sheet and flows through to our bottom line.

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