Bonnier AB 2009: Tough year with positive surprises

In 2009, Bonnier AB's advertising revenues shrunk by slightly more than SEK 2 billion. Adjusted for variations in exchange rates as well as for acquisitions and divestments, the decrease amounted to slightly more than SEK 2.38 billion, which was 21 percent lower compared to 2008. Due to the acquisition of C More and unfavorable foreign currency exchange rates, write-offs for goodwill increased by SEK 249 million to a total of SEK 886 million. Even the net financial items decreased, which in turn meant a higher average debt level (primarily due to the acquisition of C More in December 2008) as well as a markedly higher interest rate in the new loan agreements set in June 2009. For the Group, the sweeping cost-savings program nonetheless counteracted some of the negative effects. After a marginal improvement during December, the yearly EBITA* was SEK 1.18 billion, compared to an EBITA of SEK 2.41 billion for 2008.

The business area Bonnier Books significantly improved its profit (+25 percent), achieving its best result ever. The profit for Bonnier Entertainment was very stable and the movie theaters had their best year yet. The other business areas went in the other direction, mostly due to lower advertising revenues.

By the end of December 2009, shareholders' equity had increased, including minority interests, to SEK 7.1 billion, a decrease of slightly more than SEK 1 billion compared to 2008. Net debt in relation to shareholders' equity, including minority interests (the gearing ratio) increased to 1.19 (1.06) by the end of December. Profit after net financial items decreased by SEK 1.7 billion, with a year-end result of SEK-228 million. This includes planned write-offs for goodwillof SEK 886 million (SEK 637 million). Profits excluding goodwill write-offs were at SEK 658 million (SEK 2.17 billion).

Books profits increased by 13 percent. EBITA was SEK 710 million (SEK 568 million), which was the business area's best result yet. Continued strong success in Germany is due in part to sales of Stephenie Meyer's Twilight series, which contributed greatly to the business area's increased profits. Even in Sweden profits increased and a larger market share was taken. In Finland, the U.K., Australia and the U.S. book sales  decreased; in 2008, Finnish Tammi had still gotten revenues from the final Harry Potter book. Norwegian Cappelen Damm continued to develop and held its position as a market leader.

Magazines profits decreased by 9 percent. EBITA was SEK -14 million (SEK 466 million). In Denmark and Sweden, profits were at the same level as losses in the U.S. American advertising sales continued to be very weak. Our operations managed to keep and in some cases increase their market share. In 2009, six titles were acquired that further strengthened our market position. Despite considerable cost-savings measures, the decrease in advertising revenues reduced profits.

Broadcasting & Evening Papers profits increased by 24 percent. The acquisition of C More accounts for 29 percent of the increase. EBITA was SEK 991 million (SEK 1.37 billion). C More, which was acquired at the beginning of December 2008, has developed strongly. For TV4, MTV Media and Expressen, lower advertising sales resulted in lower profit levels for 2009. But it should be noted that TV advertising sales haven't been hit as hard as those for print.

Entertainment profits increased by 6 percent. EBITA was SEK 255 million (SEK 251 million). SF Bio continued its strong ticket sales and reported its highest profits ever in 2009. The films that had the most viewers during the year were The Girl with the Dragon Tattoo, The Girl Who Played with Fire and Harry Potter and the Half-Blood Prince. Swedish film company Svensk Filmindustri finished the year off strong with its distribution contract for Fox's Christmas blockbuster Avatar in Norway, Denmark and Finland. At the end of the year Bonnier Amigo Music was sold.

Business Press profits decreased by 25 percent, but with divestments accounted for, the decrease was only 17 percent. EBITA was SEK 62 million (SEK 194 million). In terms of percent, this business area was hardest hit by weak advertising sales. Profits for Swedish DI-gruppen have more than halved. While the market was tough in Denmark, in the Baltic countries it was nearly in free fall. During the spring and summer, the Croatian business.hr and the Latvian Diena and Dienas Bizness were sold. Significant cost-savings measures were carried out in 2009, primarily within operations in Central and Eastern Europe.

Morning Papers profits decreased by 13 percent, in the wake of extremely weak advertising sales. EBITA was SEK -375 million (SEK -161 million). The number of printed copies has had a stable development during the year. Considerable restructuring costs have negatively affected profits even during 2009. Stockholm City, among others, was restructured and during autumn moved operations to the business area Magazines. But as reported earlier, the decrease in advertising sales have hit print media hardest.

Other includes common Group activities and functions. The effect on the Group's EBITA of these activities was SEK -445 million (SEK -278 million).

*EBITA is the operating profit before capital gains/losses, share of profit/loss in associated companies and goodwill as well as other acquisition-related write-offs and depreciations.