TELEGRAAF MEDIA GROEP (TMG)

Transcription

Annual Report 2007
‘MARGIN IMPROVEMENT
ESSENTIAL’
Ad Swartjes - CEO
‘FINANCIAL POLICIES
SHARPENED’
Fred Arp - CFO
‘PUBLISHING IS
TEAMWORK’
Patrick Morley - COO
This annual report is a translation of the
original text in Dutch, which is the official
version.
In case of any discrepancies the Dutch
version will prevail.
The annual report is available in English at:
www.tmg.nl
For more information:
corporatecommunication@tmg.nl
cREDITS
a publication of Telegraaf Media Groep N.V., Amsterdam
editorial Corporate Communication - Telegraaf Media Groep N.V., Amsterdam
editorial financial information Concernfinanciën en Administratie - Telegraaf Media Groep N.V., Amsterdam
textual advice Smink, van der Ploeg & Jongsma, Amstelveen
english translation Vertaalbureau Bothof, Nijmegen
concept, design, illustrations and art-direction Veldsvorm, Amsterdam
cover and annual report Veldsvorm, Amsterdam
layout of the financial statementsReclameafdeling De Telegraaf, Amsterdam
photography Corbis | Stockxpert | Victor Nieuwenhuijs | Own photography
printing and binding Gravo Groep B.V., Purmerend
paper cover: Arctic, 300 grams | inside: Arctic, 130 grams
typefaces Helvetica Neue, Garamond, Syntax
Amsterdam, March 2008
TMG Annual Report 2007
Telegraaf Media Groep N.V.
Visiting address
Basisweg 30, Amsterdam, the Netherlands
Mail address
P.O. Box 376, 1000 EB Amsterdam,
the Netherlands
Phone: +31(0)20-585 9111
4
Content
Chief Executieve Officer
06
Annual Report
20 Ad Swartjes
‘Farewell to the yes, but… culture’
06
Profile and Core Values
08
Mission and Vision
09
Strategy
motion over the past few years that are designed to produce a
10
Objectives
visible improvement in operating results in 2008. Significant strategic
12
Management info
12
Members of the Executive Board
13
Members of the Supervisory Board
14
Report of the Supervisory Board
16
20
Interview Ad Swartjes
Interview Fred Arp
Consolidated Keyfigures
32
Interview Patrick Morley
36
Corporate Affairs
The Netherlands
38
Interview Rob Eijkelenkamp
44
Print
50
Interview Ab Trik
52
Broadcast
53
Narrowcast
53
Internet
54
Cross-media
54
Other Activities
55
Participating Interests
56
International
56
Interview Peter Tordoir
58
Telegraaf Media Sweden
59
Telegraaf Media Ukraine
60
Telegraaf Media Belgium, Denmark en France
62
Participating Interests International
64
Riskmanagement
66
Corporate Governance
71
Financial Statements
125
134
sale of the company’s operations in Limburg, as well as its interests
in ANP, SBS and Wegener, and the option…
Consolidated Information
28
38
steps were taken by bundling operations in the Netherlands, the
Report of the Executive Board
24
28
Telegraaf Media Groep (TMG) put a large number of changes into
Other Information
Products and activities
138 Keyfigures
general manager Telegraaf Media Nederland
38 Rob Eijkelenkamp
‘Creating a unificated culture’
Realising a sizeable increase in revenue and returns in a market
with modest growth. That is the challenge facing Telegraaf Media
Nederland, which was created in 2007 by clustering operations in
the Netherlands. Standardising methods, centralising operational
activities and making choices on the basis of the existing portfolio
are key policy directions for the coming years. ‘The objectives …
5
Content
24
Chief Financial Officer
Fred Arp
‘Critical shareholders keep us focused’
After many years of profitability and growth, decreasing profitability
forced Telegraaf Media Groep to face up to facts. Change was
essential. That process is now in full swing. The emphasis is on
cost reduction to an important degree. The objective is to achieve
improved margins. Furthermore, increased revenues will have to be
realised over the coming years, with or without…
Chief Operating Officer
32 Patrick Morley
‘Whenever just a single person drops the…’
Following years of focusing on the returns achieved by separate
business units, TMG’s attention is once again focused on the
strength of the organisation as a whole. A key factor here is the
collaboration between the business units within the chain. The
search for the optimal combination of costs, quality and reliability
continues unabated. Teamwork, the continuous interplay…
CEO Sky Radio Group
50 Ab Trik
‘You’ve got to have radio in your blood’
TMG took advantage of the new rules that apply to media
concentrations in taking over the Sky Radio Group, the most
successful radio operation in the Netherlands. Sky Radio 101 FM is
the radio station that attracts the highest number of listeners on a
weekly basis in the Netherlands. The result of staying close to the
market and continuous improvement. ‘Producing radio…
CEO Keesing Puzzles & Games
56 Peter Tordoir
‘Flexible, enterprising and international’
Keesing’s involvement in the puzzle magazine sector dates back to
the thirties. Initially in the Netherlands and eventually followed by
Belgium, France and Denmark. Its market leadership positions will
be further expanded upon. In print publications, but primarily in the
digital market segment as well. With puzzles, but increasingly with
games. Based on extensive knowledge of…
6
Profile
PROFILE
TMG (Telegraaf Media Groep N.V.) is the largest media
group in the Netherlands with market leadership positions
in relation to daily newspapers, magazines, online and
offline media and radio.
TMG is the largest newspaper publisher in the Netherlands
with the prominent De Telegraaf and Sp!ts daily newspaper
titles and has garnered a strong position in the Randstad
and surroundings with regional dailies, local newspapers
and free local papers.
TMG has a strong market position in the Netherlands in the
magazine segment on the basis of general interest titles
and on the basis of titles aimed at specific target groups.
In the Dutch radio market, TMG holds a majority interest in
the Sky Radio Group, a market leader among commercial
radio stations.
TMG is furthermore increasingly active in new, mostly digital,
forms of media via the Internet, mobile telephones, narrowcasting and cross-media.
On the international scene, TMG has gained a position in the
trade fairs and events segment through its participation in
the Expomedia Group plc, and in radio and television via
an option on 12% of the share capital with voting rights in
ProSiebenSat.1 Media AG, the newly formed ProSiebenSat.1
and SBS Broadcasting S.à.r.l combination.
Outside the Netherlands, TMG is active in Belgium, France,
Sweden, Denmark and Ukraine: partly on the basis of multimedia publishers focused on general or specific interest
target groups and partly in specialised niche markets such
as puzzle magazines.
TMG employs about 3,600 people and achieved € 738.8
million in revenues during 2007.
The shares in Telegraaf Media Groep N.V. are traded on
the NYSE Euronext Amsterdam stock exchange.
Core Values
CORE VALUES
like to support them by optimising contacts with existing
TMG is a self-confident enterprise with a strong identity.
and potential clients and creating greater flexibility in this
Enterprise is focused on the long term with multimedia
respect, through divergent media forms.
products for consumer markets. TMG is solid, financially strong and publicly traded. The company’s policy is
TMG wants to provide, from large involvement, detached and
characterised by its business-like, committed, upright and
independent information and entertainment to consumers,
change-oriented enterprise. Focused on responding to
using various forms of expression, thus ensuring that infor-
client desires and needs. Flexible, skilful and sensible.
mation is always accessible anywhere. Intentional, focused
on the interests of the general public or narrowly defined
TMG is a reliable and committed employer with a social
groups of readers, informative and entertaining.
outlook. Employees are offered extensive development
opportunities and good income. In exchange, TMG expects
In terms of our shareholders, profitability, predictability and
its employees to proactively handle changes, to want to
integrity are first and foremost. TMG is solid and, for an
further develop themselves and to businesslike contribute
important portion of its operating result, dependent on the
to the development of the enterprise in a drastically changing
Dutch economy.
marketplace.
TMG wants to provide its shareholders a good return on
their investment.
TMG adopts a client-oriented, businesslike approach in
relation to suppliers of products and services. TMG would
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8
Mission | Vision
VISION
In the Dutch domestic market, TMG wants to be the leading
provider of information and entertainment, including news,
music, puzzles and games for general and/or specific public
interest groups and communities. Advertisers will be offered
solutions that enable them to communicate with these public
interest groups and communities, with or without the
integration of multiple media types (cross-media). TMG
wants to be a focused media player in Europe, specialised
in servicing and reaching specific target groups via relevant
media and content.
MISSION
TMG is actively engaged in finding and creating loyalty
among general and/or specific public interest groups and
communities and in exploiting their media time.
•
Finding users, readers, listeners and viewers by
providing general and customised media products, by
leveraging the reach of strong TMG brands and by crosspromotion in various media platforms.
•
Creating loyalty by providing attractive content and
applications in the area of information and entertainment,
including news, music, puzzles and games. Made for and
by users.
•
Exploiting the reach among public interest groups, in
which revenues are increasingly expanding in comparison
to traditional consumer and advertising revenues.
Strategy
STRATEGY
creates opportunities for synergy, varying from integrated
TMG’s enterprise strategy consists of the following
product concepts and propositions that combine ‘old’
elements:
and ‘new’ media to the cross-promotion of strong
1. TMG is an operator of media platforms involving service
to broad public interest groups, whereby advertisers
brands.
4. Reducing fixed costs in core operating units is crucial
are offered reach on the basis of integrated media
for TMG to be able to adapt to the new reality and to
concepts centred on information and entertainment,
be able to continue to invest in growth in the areas of
including music, puzzles and games.
2. To expand reach, TMG is developing a portfolio of
print, internet and digital.
5. Limited growth opportunities in the Dutch domestic
different types of media companies that complement
market and a playing field that is increasingly transcending
print media and/or are innovative in relation to the
borders are the driving force behind TMG’s expansion
publishers of print media (internet, digital).
3. Reaching the same general or specific public interest
groups and communities via multiple media platforms
beyond Dutch borders. The focus here is on Europe with
the emphasis on itself developing media and other
markets.
9
10
Objectives
OBJECTIVES
TMG’s enterprise objective is to achieve an average net
return on equity of at least 12% on the basis of developing
and offering media products.
In terms of the objectives as per the end of 2009, this
translates into realising yearly revenues exceeding € 800
million with a normalised EBITA margin (EBITA/revenue of
15% (2007 revenue: € 738.8 million, more than a 7% margin).
A significant portion of the improvement in margin is initially
derived from cost reductions that also produce the greatest
value for the enterprise. The growth in revenue to a significant
extent is derived from digital media, including acquisitions
and by obtaining a ‘fair share’ of the advertising market.
Objectives
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12
Executive Board
MEMBERS OF THE EXECUTIVE BOARD AS AT 31 DECEMBER 2007
A. J. Swartjes (1949), CEO
Mr A.J. Swartjes is Chief Executive Officer since 1 January
2005. From 1991 until 2005 he was a member of the holding
company board. This form of management ceased in 2005.
He joined the Telegraaf Groep in 1978, and has held various
positions since that time. From 1974 to 1978 he worked at
Reader’s Digest and Colgate/Palmolive.
Mr Swartjes studied Economics at Erasmus University
Rotterdam.
F. Th. J. Arp (1954), CFO
Mr F.Th.J. Arp is Chief Financial Officer since 1 January 2005.
Mr Arp was holding company director from 1 July 1997 to
January 2005. From 1991 until 30 June 1997 he was a partner
in the Deloitte & Touche Registered Accountants firm.
Before that, he worked in the firm’s accounting practice.
Mr Arp studied Business Economics and Accountancy at
Erasmus University Rotterdam.
P. Morley (1956), COO
Mr P. Morley is Chief Operating Officer since 1 December
2007. Before, he was director at Wolters Kluwer Nederland.
Before that, mr. Morley was Chief Operating Officer at Telfort
and member of the Executive Board at KPN. He studied
mathematics and electrical engineering at Trinity College in
Dublin.
Supervisory Board
MEMBERS OF THE SUPERVISORY BOARD AS AT 31 DECEMBER 2007
A.J. van Puijenbroek, chairman
Mrs M. Tiemstra
Age 60
Age 53
Nationality Dutch
Nationality Dutch
Profession/Principle position
Director, N.V. Exploitatiemaatschappij Van Puijenbroek
Associate Boer & Croon Executive Management, Former
Ancillary positions Chairman, Stichting Beheer van Prioriteits-
executive board member of Eureko B.V., Ancillary positions
aandelen TMG N.V. (TMG priority share management trust),
member of the Executive Board Koninklijke Nederlandse
Secretary of Stichting Preferente Aandelen TMG N.V. (TMG
Munt
preference shares trust), Supervisory Board member of
First appointment 05 June 2003
B.V. Textielfabrieken H. van Puijenbroek
Current term 2007 – 2011
First appointment 15 May 1975
W. van Voorden, Deputy Chairman
L.G. van Aken
Age 66
Nationality Dutch
Age 65
Ancillary positions
Nationality Dutch
Executive Board member, Stichting Beheer van Prioriteits
aandelen TMG N.V. (TMG Priority share management trust)
Ex-Chairman of the Supervisory Board for Health Care
Executive Board member, Stichting Administratiekantoor
Insurance (CTZ), Professor Emeritus, Erasmus University
Boekanier (administrative/managerial office), Executive
Rotterdam, Professor Emeritus, University of Tilburg
Board member, Stichting Administratiekantoor van aandelen
Ancillary positions Supervisory board member at Batenburg
in H.J. Wols Holding B.V. (share trust office), Chairman of
Beheer N.V. and Panteia B.V., Executive Board member,
Stichting-Telegraafpensioenfonds (Telegraaf pension fund
Stichting Administratiekantoor Ballast Nedam N.V.
trust) 1959
First appointment 30 May 2002
H.L. Weenen, secretary
J.G. Drechsel
Age 63
Age 52
Nationality Dutch
Nationality Dutch
Profession/Principle position CEO BCD
Ancillary positions Supervisory board member at TRX
(chairman) and Eneco
First appointment 26 September 2007
Current term 2007-2011
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14
REPORT OF THE SUPERVISORY BOARD
auditor at the time, Deloitte Accountants B.V., and the 2007
We hereby present the report, the balance sheet as at 31
Management Letter was discussed with the current KPMG
December 2007 and the income statement for 2007 with
chartered auditor.
explanatory notes, as compiled by the Executive Board.
During the year under review, we discussed the performance
The financial statements have been audited and approved
of the Supervisory Board, as well as the performance of
by KPMG Accountants N.V. in Amsterdam, as stated in the
its members, in accordance with the target board member
auditor’s opinion included in this report.
competency profiles and the current composition of the
Board. We discussed the management model, and the
The Supervisory Board discussed the financial statements
composition as well as the performance of the members
with the auditor during the annual meeting, after which we
of the Executive Board, in the absence of Executive Board
signed the financial statements. The Supervisory Board met
members.
with the Executive Board ten times during the past year.
Topics such as strategy, internal risk management and control
The Central Works Council and the Supervisory Board jointly
systems and financial matters were addressed during these
decided to appoint a sixth Supervisory Board member with
meetings.
the assistance of an external agency. During the Special
During the year under review, particular attention was
J.G. Drechsel was appointed to the Supervisory Board
Meeting of Shareholders held on 26 September 2007, Mr.
devoted to the following subjects: the divestment of our
by the shareholders. In addition, during this meeting we
participation in Wegener N.V. and SBS Broadcasting S.à.r.l,
announced the arrival of Mr. P. Morley, M.Sc., COO of the
the ProSiebenSat.1 option scheme, portfolio adjustments,
Executive Board, effective 1 December 2007.
including acquisitions and divestments, TMG’s share buy
back and the organisational structure of the print and
We established the remuneration of the Executive Board on
digital operations in the Netherlands.
the basis of our remuneration policy. During the meetings
held on 19 April 2007 and 26 September 2007, the share-
We consulted with the head of Group Internal Audit and the
holders approved the individual financial arrangements for
external auditor on two occasions. The 19 April 2007 Annual
bridging the period between the ages of 62 and 65 for
General Meeting of Shareholders approved the appointment
current Executive Board members. The payment of individual
of KPMG as TMG’s new auditor. The audit report concerning
members of the Executive Board is recorded in the 2007
the 2006 financial statements was discussed with the
annual report.
15
One of our members took part in a consultative meeting
with the Central Works Council during the year under review.
On 13 January 2008, Mr. J. Olde Kalter, former member of the
Executive Board and Executive Editor of the De Telegraaf
daily newspaper, unexpectedly died at the age of 63. It is
with much respect that we look back on a valuable and
enjoyable working relationship with Mr. Olde Kalter.
We would like to express our gratitude to the Executive
Board and all of the Group’s employees for the manner in
which they discharged their duties in 2007.
We recommend that:
18 January 2007
1. The 2007 financial statements be approved as set out
in the documents presented.
2. The Executive Board be granted discharge for the policies
TMG and PCM end study into
distribution partnership model
pursued in 2007.
3. The members of the Supervisory Board be granted
discharge for the supervision conducted in 2007.
4. For the 2007 financial year, a cash dividend be adopted
In April 2006 Telegraaf Media
Groep N.V. (TMG) and PCM
Uitgevers B.V. (PCM) started
of € 1.00 per share of € 0.25 nominal value (2006: cash
up a study to explore the
dividend of € 0.50 per share of € 0.25 nominal value).
possibilities of a distribution
partnership.
The findings have meanwhile
The dividend will be made payable on 24 April 2008 at the
revealed that, whilst economies
ABN AMRO Bank N.V. in Amsterdam.
of scale are possible through
On behalf of the Supervisory Board,
capacity utilisation, a merger
A.J. van Puijenbroek, Chairman
would also be a major operation
Amsterdam, 13 March 2008
involving significant risks
more efficient and effective
regarding the quality of delivery
- risks that the publishers
certainly cannot afford to take
at the present moment. The
distribution businesses will
therefore remain independent,
whilst continuing to pursue
cost optimisations by adjusting
services and processes.
16
INTRODUCTION
revenue is largely derived from acquisitions and price
Following years of major reorganisations, optimisation,
increases and therefore marginally or not at all due to an
portfolio changes and cost control improvements, 2007
increase in volume. The growth in digital reach was only
was primarily characterised as a year in which previous
transformed to a limited extent into revenue during 2007.
acquisitions were streamlined and integrated, the strategic
In the past five years, TMG’s revenue dependence of news-
directions for internal production units were identified and
paper products is decreased about 20 percent points to
– in part based on the reorganisation of publishing
approximately 60%.
operations in the Netherlands – TMG is on it’s way as an
organisation to realise the enterprise’s ambitious financial
The net profit realised in 2007 was the highest ever earned
objectives by the end of 2009.
by the company throughout its 115 years of existence.
In January 2008, TMG reported that the 2007 normalised
Change
operating result before amortisation rose in comparison
The digital world is changing day by day. Currently there
to 2006, but also that this only represents a 7% operating
are four free newspapers in the Netherlands and advertisers
margin. To guarantee continuity and a meaningful growth
have a wide range of options in terms of exposure (ranging
in operating result per share, this margin must increase
from media to the Internet, from sport sponsorship to
significantly.
events) and consumers are using increasingly divergent
The increase in the aforementioned operating result is for
forms of information, free or paid and on the basis of new
the most part due to portfolio changes and cost savings,
forms of payment or not. Furthermore, the entry of non-
and in minor part due to an increase in revenue. The increased
traditional publishers into the marketplace, such as cable
companies, is a reality. The importance of media and
information is undiminished and the need for differentiating
content will always remain.
2. Investment in Existing Brands and Products (Print and
Digital);
3. Exploitation of Opportunities for Synergy;
4. Investment in New Products (Print and Digital);
At the same time, the arrival of the new media world means
5. Exploitation of New Publishing Knowledge Abroad.
that cost increases in traditional media can no longer, or
only marginally, be passed on, that a head start related to
These policy directions are further detailed below:
a specific concept can become lost ground within a very
1. Cost Efficiency
short period of time and that distribution forms will emerge
TMG will produce existing print products at lower cost
that lie outside the primary expertise of the traditional
and with greater variable costs. The personnel costs in
publisher. Thus is why cost savings, realisation of synergy
this, forms the largest managable part. Due consideration
within the existing portfolio and multimedia use, or reuse,
must be given to the provisions of the Collective Labour
of content is more important than ever.
Agreement (CAO) in this respect, as a result of which the
Policy directions
company is forced to reduce the number of employees,
instead of offering employment to a larger number of
In principle, TMG’s business units are in the process of
people at a reduced level of compensation.
optimising, innovating and internationalising. TMG’s business
2. Investment in Existing Brands and Products
units use the following policy directions to address the current
TMG will invest in existing print products and create a
and future requirements and demands of stakeholders:
digital environment for them. This results in different
1. Cost Efficiency;
business models related to the news domain, as well as
puzzles, games, local information and specific segments.
3. Exploitation of Synergy
TMG will put a maximum focus on exploiting opportunities
for synergy in relation to revenue generation as well as cost
savings. The organisation in the Netherlands was restructured for this reason as well. The divestment of existing
products to the extent they lack prospects for achieving
sufficient margin over the medium and long term is part of
this. In addition, services that are not part of the core business
are divested when they do not add sufficient value to the
core business and/or when their production costs are
higher than the market norm.
4. Investment in New Products (Print and Digital)
TMG will add new media or media concepts to the portfolio.
These primarily consist of products of the ‘younger media
type’ (radio and narrowcasting tv), but also products in the
area of puzzles & games or newspapers and magazines.
5. Exploitation of New Publishing Knowledge Abroad
Opportunities to create increased scale on the basis of
dailies and to do more than is currently the case in the area
of radio and/or television are limited in the Netherlands.
Given the – by definition international – digital developments,
TMG is also exporting its publishing expertise abroad.
TMG is operating with multimedia publishing companies
in Sweden and Ukraine, and in niche markets in Belgium,
France and Denmark.
17
18
Most relevant developments in 2007
as well as building things up and that places heavy demands
1. The sale of the interests in SBS and Wegener contributed
on employees. As TMG’s Executive Board we are very
to the fact that the company achieved the highest net
profit in its existence.
appreciative of the enthusiastic contribution made by
employees and also of the fact that many of TMG’s products
2. The minority interest in SBS Nederland (acquired in 1996
play a leadership role in the marketplace. Without the
and limited due to government restrictions), was swapped
contribution of employees this would not be possible.
for a position in SBS Broadcasting S.à.r.l (20%) in 2005.
TMG products determine the topics for today’s discussion,
In 2007 this interest was cashed out for an amount of
provide information, entertain and thereby make creative
€ 433 million, linked to an option on 12% of the share
use of all existing and new facilities within TMG. This is what
capital with voting rights in ProSiebenSat.1, the newly
TMG is good at and this is where our passion lies.
formed ProSiebenSat.1 Media AG and SBS Broadcasting
TMG is an enterprise that rapidly anticipates the wishes of
S.à.r.l combination. This transaction is further explained
advertisers and consumers alike. The fact that commitment,
further on in this report.
solidarity and reliability, TMG’s soul, are still valued as much
3. The creation of Telegraaf Media Nederland, in part for the
purpose of achieving cost reductions and strengthening
market positions.
4. TMG’s print titles were under volume as well as price
as in the past does us proud. The Executive Board would
like to thank all employees for this.
Outlook
pressures. This is structural in nature and is evident on
The year 2007 closed with an normalised EBITA margin of
the advertising, as well as the consumer side. This is why
7.2% on revenue of € 738.8 million. The target for the end
further cost savings and reorganisations are essential.
5. Various initiatives are underway that will lead to the
of 2009 is to achieve an normalised EBITA margin of 15%
on revenue of at least € 800 million. This margin is after
outsourcing of services. Further steps have been imple-
deduction of overhead and profit appropriation. In concrete
mented in relation to IT and Logistics components.
terms this represents an increase of approximately € 53 million
To our employees
TMG has become a multimedia enterprise in just a few short
to approximately € 120 million. Concrete short and medium
term period projects have been defined.
Approximately two thirds of this major increase will come,
years. With this expansion came the need to make a transition
according to the expectations, from organic improvements
from an informal family-based culture to an innovative
in margin and approximately one third will come from
business culture. This created a lot of change and will involve
acquisitions. The organic growth in margin is derived from
still more. TMG is in the process of breaking things down,
the divestment of loss-making activities, an increased share
19
in advertising revenue (digital) and further cost reduction by
merging newspaper and magazine publishing operations,
and lowering distribution and printing costs. Last January’s
press release following the New Year’s speech announced
a significant increase in the operating results for 2008. In
concrete terms this represents an expected increase in the
normalised EBITA margin from 7% to 9 - 10%, mainly to be
achieved on the basis of cost reductions, divestment of lossmaking activities and to a limited degree from acquisitions.
Thereby is considered as an assumption a slight increase in
advertising and circulation revenue in comparison to 2007.
9 March 2007
The first two months of 2008 show a less favourable development in relation to advertising revenue in print, however,
Telegraaf Media Groep to sell
namely a limited decreasing level of revenue compared to
stake in Wegener
the first two months of 2007. The revenues in circulation and
in radio were limited higher. If and insofar as this trend is
Telegraaf Media Groep (TMG)
turning out to be representative for all of 2008, this will of
and Mecom Group plc (Mecom)
course affect the projections indicated for 2008. At this
have reached an agreement on
moment there is no reason to adjust the objectives.
Mecom’s acquisition of TMG’s
interest in Wegener of nearly
Actions that further affect the development of the net profit
24% for an amount of € 158.9
per share include decisions related to the disbursement of
million.
liquid assets, including the effect of the ProSiebenSat.1
option agreement, share buy back and/or an extra dividend.
TMG’s interest consists of
Executive Board Telegraaf Media Groep
for ordinary shares, each with
A. J. Swartjes, Chairman
a nominal value of € 0.30,
representing a stake of 23.9%.
10,594,763 depositary receipts
The price agreed between the
parties amounts to € 15 per
depositary receipt. In addition,
Wegener’s dividend distributions for the year 2006 will
accrue to TMG, while under
certain circumstances TMG may
be able to claim a maximum
premium of € 1 per depositary
receipt.
In conformity with the IFRS
principles, the interest has been
valued on TMG’s part at ‘fair
value’ (market value), being
€ 116.4 million (€ 10.99 each,
price as at 31 December 2006).
20
Interview Ad Swartjes | CEO
T
elegraaf Media Groep (TMG) put a large number of
changes into motion over the past few years that
are designed to produce a visible improvement in
operating results in 2008. Significant strategic steps were
taken by bundling operations in the Netherlands, the sale
of the company’s operations in Limburg, as well as its
interests in ANP, SBS and Wegener, and the option on a
participating interest in ProSiebenSat.1. Less visible is the
transition to a culture in which people are held accountable
for results and are compensated on a variable basis.
In spite of the major changes that were initiated in 2007,
Chairman Ad Swartjes is not satisfied with the progress
made in 2007. As far as he is concerned, things could be
moving along more quickly than they are, although he is
aware that the translation of policy into actual improvements
to the bottom line takes time. ‘We have implemented
important changes over the past few years. However, the
‘Increase the flexibility
of the organisation’
impact of these changes on the bottom line is not yet
acceptable. In 2007, we once again took the necessary
measures and many actions were initiated that are not
expected to impact operating results until 2008.
The integration of acquisitions and the creation of greater
of 15% return (normalised EBITA margin) on € 800 million
focus for the Sky Radio Group and Keesing Puzzles & Games
revenue by the end of 2009. From editors to operational
are only expected to be fully reflected in the operating
staff, from ICT personnel to printing staff and from those
results in 2008. While from an organisational perspective,
responsible for distribution to delivery staff, everyone is
the bundling of operations in the Netherlands was initiated
accountable. On the print as well as on the digital side.
in 2007, from an operational perspective this intervention
Refusal to accept accountability is no longer an option.’
only came into its own in 2008. Another important factor
is that we bade farewell to the ‘yes, but…’ culture in 2007.
Media operations form the core
For too long the organisation had harboured a culture that
Over the past few years, TMG has worked hard to develop
time after time accepted that commitments were not
a clear overview of the organisation’s core competences
respected, budget estimates not achieved and setbacks
and a strategy for the future. ‘The media domain is where
rationalised. We have now created clarity and made things
we excel. This is a highly dynamic market. The media’s
explicit. Rules have been defined and it is clear to everyone
influence on society is greater than ever. The media is with
what is to be accomplished. A financial target has been set
people from the moment they get up until the time they go to
‘Farewell to the
yes, but…
culture’
bed. We maintain strong brands in this
Furthermore, the new Interim Act on
market and we are in leading market
Media Concentrations [Tijdelijke Wet
positions. Our strategy is focused on main-
Mediaconcentraties] for the first time
taining and, where possible, strengthening
in decades provides TMG with room to
these positions. In the future we want to
grow its market share in the Netherlands
have a position in a rapidly changing media
market and provides opportunities for
landscape that is at least as strong as our
creating a position in other media types,
current position. The implementation of the
in addition to daily newspapers.
plans to achieve this is in full swing. We
‘In addition to print media, we now also
are expanding the portfolio, strengthening
have the opportunity to invest in radio and
market positions and reducing costs.’
television. We had asked for this in vain
for decades. With regard to commercial
television the die is cast, but with regard
Growth within and outside the
Netherlands
to radio we have garnered a strong position
Telegraaf Media Nederland was created
Group.’
through the acquisition of the Sky Radio
in 2007 and maintains a focus on
strengthening collaboration. Between
However, TMG also wants to continue to
geographical regions, as well as between
grow outside the Netherlands by exporting
various media types, such as print and
expertise developed in the Dutch market.
digital, for example. Furthermore, the
In 2007, a fundamental review of the
margins on products are subjected to
potential markets outside the Netherlands
greater scrutiny and the organisation is
was undertaken with the assistance of
being reviewed, title by title, for its
external consultants.
contribution to the profitability of the Groep.
‘We also intend to continue operating
21
22
outside the Netherlands. Probably in other
instilled in our genes. Professionalism
geographical areas and market segments.
and change-orientation are values that
For example, in Sweden we considerably
still require development. For employees
strengthened our position in the media
it means that they will have to focus
market for pleasure boats. The principle of
more on dealing with change, be focused
contributing to improvements in margins
on changes in the marketplace and
on the basis of more rapid and improved
exploit the opportunities that are inherent
performance also applies to operations
in such changes. The world is changing
in foreign markets. There too, lack of
rapidly and we must keep pace.’
accountability is not an option,’ says Ad
Swartjes.
Increase flexibility
Objectives-based
compensation
All segments of the organisation will be
In order to speed up the culture change
required to contribute to the realisation
process, much effort is being devoted
of the objectives formulated for 2009.
to this topic in terms of training and a
Objectives that the Executive Board has
bonus system has been instituted for
deliberately formulated strongly in order
several hundred managers within the
to provide the organisation with a clear
organisation. Under this compensation
benchmark as a basis for the essential
system, salary is partly dependent on
change process. ‘To participate in a media
personal objectives, business objectives
world undergoing drastic changes, we
and the performance of TMG as a whole.
must increase the flexibility of the
‘This is a way of making people more
organisation. In 2007, we formulated four
aware of their own role in the realisation
core values for the enterprise: profes-
of the Groep ’s objectives. We are all in
sionalism, change-orientation, integrity
this together.’
and reliability. Integrity and reliability are
23
21 June 2007
Sp!ts acquires Carp
BasisMedia B.V. (publisher of
free daily Sp!ts) and Aromedia
(publisher of Carp and Sum)
have reached an agreement
on the acquisition of Carp by
BasisMedia as per July 1st
2007. Through this acquisition,
Carp gains a shareholder with
a solid position among starters
and young professionals. For
BasisMedia B.V., the acquisition
signifies a key step in the
continuing development of its
‘Career’ pillar.
In addition to a magazine with a
biweekly controlled circulation
of 135,000 for well-educated
professionals up to the age of
37, the Carp brand consists of a
website, newsletter, events and
personal e-mail service. Using
these channels, Carp informs
its target audience about
matters regarding labour market
communication, career planning
and personal development.
24
Interview Fred Arp | CFO
A
fter many years of profitability and growth,
decreasing profitability forced Telegraaf Media
Groep to face up to facts. Change was essential.
That process is now in full swing. The emphasis is on cost
reduction to an important degree. The objective is to achieve
improved margins. Furthermore, increased revenues will
have to be realised over the coming years, with or without
acquisitions. The 7% operating margin achieved in 2007
must be increased to 15% by the end of 2009. There no
longer is any room for unaccountability. Shareholders are
rightly keeping a critical eye on the process.
For years, TMG, in particular the De Telegraaf daily news-
Today about 40% of revenues is derived from other sources
paper, was able to achieve continuous growth in revenue
than newspapers.
and operating results. Revenue from subscriptions and
advertising balanced each other out reasonably well. A drop
From 7% margin to 15%
on the one side was offset by improvements on the other.
The next step in the process is to increase the operating
This pattern came to an end around 1999.
margin (normalised EBITA) from the current 7% to 15% on
revenues of € 800 million by the end of 2009. In relation to
Fred Arp, Chief Financial Officer: ‘Even in case of strong
operations in the Netherlands, this measure will in the first
economic growth we can no longer automatically assume
instance have to be achieved on the basis of cost reduction
that there will be an increase in advertising revenues. And
(working more efficiently and with standardised processes),
in a market under pressure, circulation revenue no longer
strengthening of market positions (better marketing and
increases either. Given an average yearly cost increase of
acquisitions) and bundling of digital operations (share infra-
3% due to wage increases and inflation, combined with a
structure and knowledge). Outside the Netherlands the
declining trend in print revenues, we will lose ground at a
possibility of expanding into other geographical markets and
rate of € 10 to € 15 million per year if we do not intervene.
In order to bring about a turnaround in this situation, costs
will have to decrease and we will need to lessen dependence
on markets that are under pressure. We laid the foundation
for change in 2005 and 2006. Significant progress in the
implementation of that policy has been made in 2007.
‘There no longer is room
for unaccountability’
‘Critical
shareholders
keep us
focused’
strengthening positions in certain market
to the distribution of free local newspapers.
segments will be investigated. Initial
In 2008 the DistriQ transport function will
measures were already taken on this basis
also be outsourced. During the second
in 2007. ‘We disposed of non-profitable
half of 2007 we also invested in a new
components such as Sky Radio Hessen
Corporate Procurement Department that
partly and the Keesing Media Group’s
bundles the purchasing activities for the
publisher of hobby magazines in France
entire Groep,’ according to Fred Arp.
completely. We developed projects
designed to achieve better margins. The
In addition to the profitability of operations
Wegener are concerned. The sale of the
magazine titles and De Telegraaf will have
and the cost structure, elements such as
participating interest in Wegener further-
to improve their level of collaboration in
the strategic value of participating interests,
more also contributed to reducing the
order to increase the reach among specific
the tax structure and the capital structure
dependence on newspapers. A greater
target groups. This is how we will be able
were also carefully reviewed. The criteria
international spread is now inherent in
that participating interests are expected
the fiscal structure.
to share knowledge and resources.
to meet are that they must serve a strategic
Another measure consists of outsourcing
purpose and generate an acceptable level
Growth through acquisitions
operations that we are not capable of
of revenue. If that is not the case, the
Over the coming years, growth will in part
doing better ourselves. This happened
participating interests will be disinvested.
have to come from acquisitions. Growth
in 2006, when a number of ICT functions
This has since been the case as far as
in print market share and generating
were outsourced and in 2007 in relation
the participating interests in ANP and
greater output from the digital world are
25
26
ways of increasing revenues to € 800 million
in 2006 and another more than 4% up
in 2009. ‘We are striving for a number 1 or 2
until March 2008). Furthermore, a cash
position in our core segments. Where
flow-based dividend policy has been
organic growth is not feasible, we intend
implemented with the aim of providing
to achieve growth through acquisitions.
progressively increasing payments,
For example, in 2007 we acquired Carp to
assuming growing cash flows of course.
strengthen our position in the personnel
‘If at any one time our liquid assets are
market,’ says Fred Arp. The criterion that
not directly appropriated, we will opt for
an acquisition must meet is that the net
an additional dividend and/or a share buy
return on invested capital must be at least
back,’ Fred Arp explains. The growing
12%. If borrowed capital is used for
focus on shareholders is also related to
financing purposes, it must not exceed
the changing composition of the share-
the maximum of 2.5 times the EBITDA.
holder complement. ‘Traditionally our
‘In principle, we are not opposed to using
shareholders have been family members
borrowed capital for financing purposes,
with a long term focus.
however, we do not want to become
Today, shareholders are apt to assess
dependent on financiers. At this time
management’s performance and that of the
almost nothing has been financed using
enterprise with a more critical eye. That
external sources. Given the cash position
forces us to adopt a tighter management
acquired through the sale of the interest
approach that, more than previously, is
in SBS and Wegener, this is a logical
focused on optimising financial policy.’
situation for the time being,’ says Fred Arp.
Shareholder interests
Achieving our objectives step
by step
Over the past few years, TMG’s Executive
The current year, 2008, will to a large
Board has devoted significantly more
extent be characterised by the realisation
attention to investor relations. Contacts
of the 2009 objectives. ‘We specifically
have been intensified, more time is spent
defined stringent objectives, whereby we
on road shows and there clearly is a more
took a look at the international ‘peer group’
proactive approach to shareholders. In
of media companies and concluded that
addition, the company pursued a proactive
these objectives keep pace with the
policy of purchasing company shares (5%
development of these companies. The 15%
operating result target will be achieved
step by step. In 2008, about 75% of the
improvement in margins will come from
cost reductions and process optimisation,
and 25% will come from growth. In 2009,
improvement in operating results must
primarily be derived from growth in
operations. Organically and through
acquisitions. We therefore consider the
15% target associated with € 800 million
in revenues a feasible target, provided
that economic trends do not let us down.’
27
27 June 2007
TMG acquires right to invest
in combined ProSiebenSat.1 /
SBS Broadcasting Group
(‘TMG’) and Lavena Holding
5 GmbH (‘Lavena’), an entity
controlled by funds advised
by Kohlberg Kravis Roberts &
Co. (‘KKR’) and funds advised
by Permira (‘Permira’), have
reached agreements in which
TMG is being granted an option
to acquire 12% of the voting
shares in ProSiebenSat.1
Media AG (‘ProSiebenSat.1’),
subject to the completion of
the acquisition of the SBS
Group by ProSiebenSat.1 early
July 2007. Given the current
shareholders structure Lavena
would control 76% of the voting
shares in ProSiebenSat.1 while
Axel Springer AG and TMG
would hold 12%, in case TMG
exercises the option.
28
Consolidated key figures
In th
thou
ousa
sand
ndss of euross
2007
20
07
200
0066
Rev
even
enue
uess
Ope
pera
ratiting
ng res
esul
ultt
Fin
inan
anci
cial
al inc
ncom
omee and expe
pe es
penses
Res
esul
ultt beefo
fore
re tax
Inc
n om
omee ta
taxx
Gai
ainn on sal
alee of dis
isco
contin
inue
uedd ac
actitivi
vitities
es,, ne
nett of tax
Result of the yea
yearr
Minorityy interest
st
Result attribut
utable to sh
shar
a ehol
olders
rs off Te
T le
legr
grraa
aaff Me
Media Groepp N.V.
738 79
738,
7955
-27,760
420,368
68
392,
2,6088
-6,6
-6
,676
76
3 9,284
39
-813
400,097
67
678,144
-21
21,7
,785
9,5
,551
51
-122,2
,234
34
-7,
7 22
226
54,
4,189
49,
9 181
-418
49,599
Proposed
po
result appropriati
pp pr
p tion
on (no
not st
stated
ed inn th
thee fifina
nanc
ncial stattement))
Adjusted/released
dj
from reseerv
rves
es
Dividend pa
ppayment
paym
aym
(f
(from resultlt))
Pay-out
ayy
ratio
Cash flow from operating
op
g activi
vitities
es
350,097
50,000
12.5%
62,130
24,599
25,000
50%
60,195
8.00
1.24
1.00
3,594
0.97
1.18
0.50
3,782
Per share:
Result
Cash flow from operating
op
g actitivvities
Dividend
Fte at year
ye end
ye
Consolidated information
Financial Performance
The 8.9% increase in revenue to € 738.8 million is primarily
due to the fact that the participating interests Sky Radio
Results
Group and Keesing Media Group acquired in 2006 are
The 2007 and 2006 annual figures have been prepared in
consolidated in the figures for the full 2007 financial year,
accordance with the currently applicable IFRS guidelines.
and for 2006 from the moment of acquisition.
The changes in TMG’s portfolio during 2006 (the sale of the
The consolidated operating result declined by € 6.0 million
operations in Limburg and the acquisition of the Sky Radio
to negative € 27.8 million. Normalised for exceptional items
Group and the Keesing Media Group) make comparison
and amortisation, the consolidated operating result rose
with the 2007 operating results difficult. To allow for a
by € 5.7 million (12%) in relation to 2006, to € 53.3 million.
better comparison, the net results from discontinued busi-
This increase is due to a clear increase in the normalised
ness operations for 2007, as well as the comparative 2006
operating result before amortisation of the enterprises
figures, are reported separately in the consolidated income
acquired in 2006 (€ 13 million).
statement. Furthermore, certain revenue and expense items
Organically (excluding the activities of the Sky Radio
were reclassified, which also have been changed in the
Group, the Keesing Media Group and activities in Limburg),
comparative 2006 figures.
there is a decrease in the operating result before exceptional
items and amortisation from € 29.3 million in 2006 to
A net profit of € 400.1 million was achieved during 2007,
€ 21.4 million in 2007. This result decreased in particular
compared to a net profit of € 49.6 million in 2006. The sale
during the second half of the year in relation to the first half
of the interests in SBS Broadcasting S.à.r.l and Koninklijke
of 2007, as well as the second half of 2006. This is due to
Wegener N.V. in particular resulted in a gain of over € 411.6
disappointing revenue trends, but in particular incidental
million and resulted in the highest net profit ever earned by
costs in the amount of € 7.7 million, including € 2 million
the company throughout its 115 years of existence.
for creating the Telegraaf Media Nederland organisation,
€ 2 million to establish the procurement organisation which
in 2007 is not offset by any savings, € 1.2 million in transition costs for outsourcing the office automation functions
and € 1.0 million for hiring temporary agency personnel in
(NORMALISED) EBITA
In thousands of euros
Revenues
Other operating income
Raw and auxiliary materials
Personnel costs
Other operating expenses
Depreciation
EBITA
support of the distribution reorganisation.
2007
738,795
2,499
-61,352
-306,779
-326,183
-23,923
23,057
2006
678,144
6,038
-61,478
-302,403
-283,455
-28,343
8,503
Revenues increased by € 60.7 million to € 738.8
million in 2007, due to a € 19.2 million increase
in advertising revenue, a € 32.8 million increase
in circulation revenue (including the Keesing
Media Group) and a slight net increase of € 1.2
million in production and distribution revenue.
The significant increase in other revenue in the
amount of € 7.5 million includes revenue from
Normalisations
Restructuring costs
11,970
Employee profit-share
14,487
Pension schemes
1,205
Other
2,565
Total normalisations
30,227
digital activities, such as the Relatieplanet,
41,056
-4,609
2,642
39,089
Habbo.nl and the Pilarczyk Media Group.
Total operating expenses increased by € 63.1
million from € 706.0 million to € 769.1 million.
This increase includes an increase of € 20.5
million in amortisation (due to acquisitions)
Normalised EBITA
Amortisation
and impairment
Operating result
53,284
47,592
50,817
-27,760
30,288
-21,785
and an impairment including € 13.0 million
related to the Customer Relationship
Normalised EBITA =
Earnings before interest, tax and amortisation, excluding restrucuring costs,
employee profit sharing related to sale of investments and associates.
Management application (CRM application)
and the brand name from Sky Radio Hessen,
29
30
as well as an increase of over € 42.6 million in other operating
The 2007 cash flow exceeded € 430 million. € 62.1 million
expenses. The increase in other operating expenses to € 326.2
was derived from operating activities, fractionally higher
million is primarily due to the transfer of the free local paper
than in 2006. € 192.7 million of the € 604.1 million in revenue
distribution branch to Alfa and the outsourcing of office
derived from the sale of participating interests was used to
automation. Furthermore, the acquired companies contributed
redeem external financing, primarily that of the Sky Radio
to the increase as a result of the outsourced work.
Group.
The wages and salaries and associated social contributions
Revenues
comprise also expenses for the 2007 profit sharing scheme
Revenues rose by 8.9% from € 678.1 million in 2006 to
in the amount of € 14.5 million. There was a significant
€ 738.8 million in 2007. Important factors in this regard
increase in the cost of temporary agency personnel due to
included the increased revenues from paid subscriptions
the implementation of the CRM application and the
(€ 32.8 million), increased advertising income (€ 19.2 million)
reorganisation of the distribution activities. Restructuring
and other revenue (€ 7.5 million).
expenses dropped significantly from € 41.1 million in 2006
to € 12.0 million in 2007.
The result from associated participations increased by
€ 364.2 million to € 352.6 million, primarily realised by the
REVENUES (€ 738.8 MILLION)
sale of the participation in SBS Broadcasting S.à.r.l which
resulted in a gain of € 349.5 million and the sale of
the interest in ANP which resulted in a gain
of € 2.5 million.
Financial income increased by € 47.2
million in relation to 2006 to € 76.2
million, including the € 57.0 million
Advertisements
gain resulting from the sale of the
Subscriptions + single-copy sales
Wegener participation. The interest on
Third-party printing
the shareholder loans extended to SBS
Distribution
Broadcasting S.à.r.l was received up to
Other revenue
the date of the sale of SBS and amounted
to € 6.5 million. The revenue related to the
39.5%
sale of SBS has been invested in term deposits
1.1%
that produced over € 7.7 million in interest
5.9%
revenue. Financial expenses increased slightly to
€ 8.4 million of which the major portion (approx € 6.5
4.5%
million) is directly or indirectly related to the financing of
49.0%
the Sky Radio Group and the expansion of the share in this
participating interest from 28% to 85% in July 2007.
Similar to last year, there was a tax saving, although the
amount decreased from € 7.2 million in 2006 to € 6.7 million
in 2007.
€ 54.2 million of the Groep ’s revenue was generated abroad.
In 2006, foreign revenue was € 34.2 million (5.0%).
The record profits achieved by the enterprise are primarily
Revenue per employee (FTE) increased by € 25,000 to
due to the capital gain on the sale of participating interests
€ 202,000, an increase of 14.1%.
that are exempt from taxes. The effective tax rate on the
The net revenue, average number of person-years and
2007 operating result was negative 1.7%. In 2006, this was
revenue per employee trends over the past five years are
negative 16.2%.
as follows:
REVENUE PER EMPLOYEE
TMG revenue Average
ge amount
(x € 1 million)
n)
fte
200
003*
3*
683.6
2004*
4*
694.3
.3
200
005*
736.7
2006
678.1
2007
738.88
*Includingg Limburgg actiivi
vititiees
4,459
4,354
4,3
,317
17
3,82
3,
8266
3,66
6655
A erage
Av
agg revenue
p emp
per
mployee
ye
(x € 1.
1.000)
0))
153
159
171
177
202
20
Shares
In 2007, 2,499,200 ordinary shares were
withdrawn. This has resulted in a change in
the composition of the number of shares in
relation to 2006. The number of shares
consists of 50,000,000 ordinary shares
(2006: 52,499,200) and 960 priority shares of
€ 0.25 nominal value. Of the ordinary shares,
259,800 shares were bought back in 2007 but
have not yet been withdrawn. Of the ordinary
shares, 31,676,029 were converted into
depositary receipts as at 31 December 2007, amounting to
The revenue generated by the publishing segment rose by
6.5% in 2007 to € 621.0 million. Of this increase, 4.5% is
attributable to the full consolidation of the Keesing Media
63.4%, compared to 62.7% at the end of 2006.
Investment
Group B.V. (acquired in mid-2006) in 2007. Radio-related
The total amount invested in 2007 in property, plant and
revenue increased by 4 6.1%. This too is attributable to the
equipment, and in intangible assets (excluding goodwill)
full consolidation of the Sky Radio Group (acquired in April
amounts to € 17.7 million. These are investments in soft-
2006) in 2007.
ware (€ 7.1 million) as well as other tangible fixed assets
(fleet, office fixtures and fittings, and investments in hardware): € 10.6 million.
SEGMENT REVENUE
x € 1 million
Print
Daily
lyy newspapers
spap
sp
app
Regional
eg
newspapers
pape
pe
Free local papers
pape
pa
pe
Magazines
ag
Puzzle magazines
ga
ga
Other
The first six months of 2008, there will be
2007
2006
made no decision about a different size
of newspapers, including the concerning
329.4
108.1
55.0
61.7
49.1
17.7
621.00
45%
15%
7%
8%
7%
2%
84%
336.5
105.6
54.0
54.2
23.1
9.8
583.1
50%
16%
8%
8%
3%
1%
86%
net profit and depreciation and amortisation,
52.8
7%
%
36.1
5%
impairment included in the net result for the
44.8
44.8
8.3
11.9
11
.9
65.0
65
.0
6%
1%
2%
9%
43.2
8.3
7.4
58.9
58
.9
7%
1%
1%
9%
realised from the sale of the interests in SBS
738.
73
8.88
100%
10
0%
investments.
Dividend policy
The dividend is normally set within a bandwidth of 15% to 30% of the cash flow, with
cash flow being defined as the sum of the
normalised for the effects of revaluation and
Radio
Other activities
Distribution
Print third-party
-p ty
Other activities
year. In part based on the € 405 million gain
and Wegener, this would result in a dividend
of between € 1.36 and € 2.71 per share.
A dividend of € 1 per share is proposed in the
interest of reserving the investment resources
678
78.1
.1 100
00%
%
Shareholders’ equity
required for 2008, potentially including the
ProSiebenSat.1 call option. In addition,
company shares in the amount of over € 51.5 million were
Including the result achieved in 2007, the distributed dividend
bought back up to the middle of March. Last year’s dividend
in 2006 and the share buy back in 2007, shareholders’
was € 0.50 per share.
equity increased sharply from € 498.0 million at the end of
2006 to € 866.8 million at the end of 2007. The dividend to
be paid for 2007 has not yet been factored into equity. This
represents an increase of € 9.96 to € 17.43 per share.
31
32
Interview Patrick Morley | COO
‘Whenever just a single
the entire
F
ollowing years of focusing on the returns achieved
by separate business units, TMG’s attention is once
again focused on the strength of the organisation as
a whole. A key factor here is the collaboration between the
business units within the chain. The search for the optimal
combination of costs, quality and reliability continues
unabated. Teamwork, the continuous interplay between
components of the chain, is a central theme. ‘It is a relay
race. Whenever just a single person drops the baton, the
entire team suffers,’ according to Patrick Morley, Chief
Operating Officer.
Patrick Morley’s appointment to the Executive Board in
2007 makes him a newcomer to Telegraaf Media Groep.
network and highly effective printing operations in Amsterdam
Prior to his transfer, he was Netherlands Director for
and Alkmaar. However, in all of these areas we must conti-
Wolters Kluwer. Before that he worked for KPN.
nuously ask ourselves: are we delivering optimal quality
His main task within TMG will be to continue to improve the
and reliability at the best possible price? We sold the free
organisation’s operational processes. ‘TMG is a phenomenal
local paper delivery operation to a third party that has
enterprise with a good working atmosphere. People are
provided us with quality and reliability guaranteed at a
committed and motivated. No matter what scenario
good price. Based on similar conditions, we are investigating
management is focused on, it is important to always keep
the possibility of outsourcing the high-level distribution
this in mind.’
operations in the Netherlands to a third party that is capable
Price, quality and reliability
Patrick Morley is impressed by what he has seen within
TMG. ‘The national dailies, regional dailies and free local
of doing this more efficiently, while maintaining quality and
reliability.’
Chain management
newspapers, provide TMG with refined coverage of the
The key concept that drives how Patrick Morley views the
market for print media. We possess an intricate distribution
organisation is chain management. ‘The intelligence of this
person drops the baton,
team suffers’
‘Motivating people’
enterprise is related to defining and
This involves teamwork that requires
‘This is primarily a way of managing. The
reaching target groups. The editors sense
continuous interaction. And for each phase,
chain is as strong as its weakest link. No
this and create content. The printer and
the question that needs to be answered
matter where you are positioned within
production units carry this out, and the
is whether optimal price, quality and
the chain, you are part of the chain.
distribution units deliver it to the client.
reliability are being provided Management’s
Every phase of the chain must be aware
All phases of the chain are characterised
task is to ensure this is so.’ In terms of the
of the importance of its actions for the
by reaching the client. In that chain, the
culture of the organisation, this means
next link in the chain. This means that
newspaper delivery person on a bicycle
that every segment of the chain must be
you must not only think about how to
is just as important as the executive editor.
aware of its role as part of the whole.
pass your baton to the next link, but it
33
34
also means staying in touch with the
printing operations and by outsourcing the
previous phase. We have to perform
delivery of free local newspapers. We will
better as an overall organisation in order
continue this process in 2008.’
to be able to realise the financial objective
of achieving a 15% margin on € 800
Motivating people
million in revenue by 2009. The operating
TMG will continue to develop the chain
results must therefore be increased and
management and management by
improving the management of the entire
business unit concepts in 2008. ‘We have
chain is of key importance in this regard.’
to improve and become more cost effective
Management by component
in all segments of the chain. We must
improve efficiency in production and
In addition to being aware of one’s role
distribution in order to save costs.
within the chain, it is also important to
And increase the effectiveness of our
manage the decisions that are taken
sales organisation in order to increase
within each segment. Patrick Morley:
revenue. We will subject the current
‘You have to make choices between
portfolio to intense scrutiny and possibly
scarce resources in each phase. The
undertake some acquisitions in order to
editor decides on the news, for example.
create a more balanced division between
Other units, for example, select projects
organic growth and acquisition-based
and share resources. The coordination
growth. In terms of managing the chain,
of such decisions, based on the interests
we will not only be reviewing print
of the chain as a whole, is something
products and digital media, but all media
that will be given greater attention. The
types across the full breadth of the
trends in the market over the past few
organisation, as well as potential cross-
years are clearly forcing us to make
media opportunities. Management based
choices. The urgency has increased and
on statistical analysis represents one
coordination and control is therefore
policy aspect in this regard. However,
even more important. Not only in relation
ultimately it is not only about the figures.
to print products, which have been under
It is just as important to motivate people.
pressure for a longer period of time, but
TMG has always been at the head of the
elsewhere as well.
pack due to the spirit, commitment and
Every segment of the chain will have to
quality of its people. This employee
become more efficient if we are to achieve
commitment and competence is the
the financial objectives. We took a step in
strength of the enterprise,’ concludes
that direction in 2007 by reorganising our
Patrick Morley.
35
29 June 2007
Sanoma Uitgevers sells its
puzzle magazines to Keesing
Dutch-based Sanoma Uitgevers,
part of Sanoma Magazines,
and Keesing Media Group BV
(Keesing), part of Telegraaf
Media Groep N.V. announced
today that Sanoma Uitgevers
has sold its puzzle magazines in
the Netherlands to Keesing. The
acquisition involves all activities
of the puzzle cluster and 23
employees. Sanoma Uitgevers’
puzzle portfolio consists of
brands as Puzzelsport, Bingo!
and 10 voor Taal.
36
Consolidated figures
corporate affairs
Four core values were identified in 2007, i.e. change-orientation,
Human Resource Management (HRM)
These core values have been incorporated into the manage-
The year 2007 for the HRM department was primarily
ment competency profiles, the performance management
characterised by the Focus Project and the creation of
cycle and the Management Development Programme. The
the Telegraaf Media Nederland organisation that resulted
change management project will continue to be pursued in
from it. Telegraaf Media Nederland’s new management
2008.
team was appointed in the spring and officially started
integrity, professionalism and commitment.
working on the design of the organisation on 1 September
Management development
2007.
In part due to the creation of Telegraaf Media Nederland,
Employment
was clear internal rotation. 31 key positions were filled by
Employment in the enterprise increased during 2007 due to
internal and 6 by external candidates.
the acquisition of a puzzle portfolio by the Keesing Media
Furthermore, a new high potential programme was initiated,
Group, Pilarczyk and WebRegio (digital), and Carp (personnel
as well as a basic training programme for TMG managers.
market). This was offset be a reduction in employment due
Both training programmes were developed and are being
to reorganisations and the disinvestment of the free local
delivered in close cooperation with internal and external
paper distribution operation (DistriQ), Les Editions de Saxe
experts.
the mobility of key officers has increased. In 2007, there
and Sky Radio Hessen.
On balance, the group-wide FTE count decreased from
An optimisation project was initiated at the end of 2007
3,782 at the end of 2006 to 3,594 by the end of 2007.
in relation to the absenteeism and reintegration policy.
Terms and conditions of employment
The objective is to enable supervisory personnel to better
assume their responsibilities in the area of occupational
All Collective Labour Agreements (CAOs) expired in 2007 and
health and the employability of their employees with the
new agreements were in the process of being negotiated.
support of a case manager and absenteeism counsellors.
On average, wages are expected to rise by 2.75% per year
In addition, to support supervisory personnel, a company
during 2007 (as of July) to 2009, inclusive.
physiotherapy pilot has been set up in a number of operating
companies. The duration of the pilot is one year. The idea
A final agreement was reached in July 2007 about a some-
is that if complaints are addressed earlier on, the employee
what more austere renewed 2006-2007 Social Plan that
is better able to make a motivated contribution to TMG.
applies to all 100% TMG operating companies. In view of
the Social Plan’s current term, initial discussions were held
Environment
in relation to the 2008 Social Plan. The parties had not yet
New Energy Saving Programmes have been set up in
reached agreement by the end of 2007.
Alkmaar and Amsterdam. Implementation of these
Culture
Energy acquisition contracts were centrally concluded,
TMG is experiencing a rapid transition from a publisher to
whereby, in addition to negotiating favourable pricing for
a multimedia enterprise. In this context, management and
all business units of TMG’s branch offices, ‘green’ power
employees need different competencies and must assume
will be used.
programmes will begin in 2008.
a different attitude. In 2007, a culture change from an ‘informal
The regular audits conducted by the Environmental Service
family’ culture to a ‘business, innovative’ culture was initiated.
confirm that all legislative regulations are met.
Consolidated figures
Corporate procurement
The goal of the Corporate Procurement unit is to contribute
to TMG’s operating results by reducing costs, exploiting
the synergy between the various working companies and by
increasing supplier involvement. Corporate Procurement has
gone through a professionalisation process that resulted
in the consolidation of the decentralised purchasing units
under central management. The procurement policy is
focused on more intensive collaboration with a selected
number of preferred suppliers, so that suppliers are able to
proactively contribute their thinking to the quality, flexibility
and cost control processes.
2008 will be a year in which the impact of the results
achieved will become visible.
Employee participation
The 15 members of the Central Works Council (COR) have
set themselves the target of not only simply promoting the
interests of employees, but of acting as chosen
representatives who take the mandate specified in the
Works Councils Act (Wet op de Ondernemingsraden (WOR))
very seriously indeed. This is an important starting point in
view of the change process currently underway within TMG.
The effort and professionalism of the COR contributes to
the quality of the decision-making process and to the
commitment and confidence of employees. The Executive
Board appreciates the COR’s judgment and mutual consultations are taking place in a constructive atmosphere.
The creation of Telegraaf Media Nederland was an important
subject for the COR during 2007. In addition, the COR
provided advice on matters such as acquisitions,
organisational changes in DistriQ, renewal of the Social Plan,
a proposed new group profit sharing scheme and the
appointment of a new COO. Based on its strengthened
right of recommendation, the COR also participated in the
selection of Mr. J.G. Drechsel as a new member of the
Supervisory Board.
37
38
‘Creating a
R
ealising a sizeable increase in revenue and returns
Standardisation and control
in a market with modest growth. That is the
‘The market for personnel adverts is levelling off, the
challenge facing Telegraaf Media Nederland,
emergence of new free daily newspapers has put rates under
which was created in 2007 by clustering operations in the
pressure, the market leaders in online media offer little room
Netherlands. Standardising methods, centralising
for price gains and advertisers in the online classified adverts
operational activities and making choices on the basis of
market segment are increasingly reluctant to pay for adverts.’
the existing portfolio are key policy directions for the
coming years. ‘The objectives are clear, everyone is
These are but a few of the challenging market trends facing
convinced of the necessity; we must now work together
Telegraaf Media Nederland. ‘The media expenditures market
to produce the required results,’ says General Manager
is limitedly increasing every year. The thing that therefore
Rob Eijkelenkamp.
offers the greatest opportunity for improvement is to expand
the portfolio to include new products and to realise
Rob Eijkelenkamp was actively involved in key developments
improvements on the cost side. Improved chain management
within TMG, operationally as well as on a more strategic
and tighter control on the basis of standardisation and
level, both as Director of the Sp!ts daily newspaper and as
optimisation. Standardisation produces uniform processes.
Chief Synergy Officer. This experience provided him with
This makes it easier to combine activities and to link new
the necessary foundation for meeting the challenges that are
activities to them,’ according to Rob Eijkelenkamp.
now awaiting him. The Dutch print and media operations
will have to contribute to Telegraaf Media Groep’s 2009
A different aspect of the process involves the optimisation
financial objectives.
of the portfolio by subjecting all publications to a critical
Across the full breadth of the organisation and in all media
review and to judge them on the basis of performance and
types included in the Dutch organisation. The quality of our
strategic interests. This can result in the rejection of titles
brands, products and people provides us with a good starting
that are not sufficiently profitable. But it can also result in
point for improving profits, albeit at a time when growth
strengthened regional market positions by filling in any
projections for the Dutch economy are being tempered and
white spaces, by centrally controlling the digital publications
results will have to be achieved in a highly competitive market.
of regional titles or by supplementing digital titles with
unificated culture’
Jointly working to develop
solutions
to a performance-based management
The necessity for improvement produced
approach. By providing people clarity
a clear, concrete financial objective and
in terms of their objectives and then
has put an awareness-creating process
compensating them on the basis of the
into motion. ‘The organisation under-
realisation of these objectives.’
stands where we want to go. The next
hold that decision. We are also migrating
step is to continue to implement this
Making choices
vision on a project basis. We have become
The continued implementation of the
a single publisher in the Netherlands with
structure created in 2007 is a key under-
many divergent forms of expression.
taking for 2008. This will require choices
We must now unify the organisation and
to be made in terms of the product portfolio.
work on a process of integration. We
The current products and media will be
centralised editorial content. An important
are conscious of the fact that we must
reviewed to determine opportunities for
step as well, is the bundling of knowledge
work better together. We are also aware
improvement and organic growth. In
in the area of technology and marketing
of the fact that the majority of costs is
addition, opportunities for growth on the
digital media, and more emphatically
incurred internally. Solving the problem
basis of acquisitions will be investigated,
communicating the company’s market
therefore is a joint enterprise as well.
because experience has shown that
leadership in that area to the market.
‘The objective is to ensure that every
manifestation, in whatever form of
publication, becomes profitable. Control
and centralisation are important instruments
in this regard, provided that flexibility and
entrepreneurship are not sacrificed.
‘Jointly working to
develop solutions’
We want to increasingly move towards
the centralised control of supporting and
operational processes, such as IT,
administration, distribution and HR policy.
When you discuss these things together,
this approach often yields results more
Objectification is the starting point for tight
it becomes clear pretty quickly that the
quickly than in-house development,
issues are the same everywhere and that
especially with digital media products.
you are therefore able to work together to
‘The ultimate goal is to realise the 2009
cost control policy.
The financial objective at the TMG Groep
develop solutions. By adopting a change-
financial objectives on the basis of leading
level of 15% return on € 800 million revenue
oriented attitude it then becomes a
market positions.
by 2009 is the big stick and creates a lot
question of jointly – in a very business-like
Because market leadership provides
of clarity.’
manner – making choices, identifying
access to optimal returns,’ according to
who should make the decision and then
Rob Eijkelenkamp.
39
40
The Netherlands
The advertising market
The free local newspaper, Sp!ts, is aiming for maximal reach
The overall net advertising expenditures in the Netherlands
in the national niche markets of students and young
in 2006 rose by 4% to € 4.5 billion (2005: € 4.3 billion).
professionals by focusing on news and entertainment. HDC
A further increase of over 2% to € 4.6 billion is projected
Media is focused on strong and profitable regional titles.
for 2007.
Holland Combinatie is striving for local market leadership in the
Telegraaf Media Nederland
is to strengthen markets and products in support of Telegraaf
A programme of organisational change for a substantial
Media Nederland.
‘Greater Randstad’ region. Telegraaf Tijdschriften Groep’s task
part of the publishing activities in the Netherlands was
introduced in early 2007 under the project name ‘Focus’.
The internal focus will be on achieving a competitive cost
level, by means of maximising collaboration and synergy in
The objective of the programme is to achieve higher returns
the various sub-sectors. Together with the production units,
on the basis of creating more synergy and efficiency and a
further work is underway to develop market-based pricing
better internal revenue target setting process for print, as
and quality standards for the production units and a further
well as for digital products.
refinement of the rate structure.
Aside from product renewal, the emphasis is also on cost
reduction in relation to print media in this context, while
Digital media
in the case of digital products, there is a push to increase
Telegraaf Digitale Media Nederland consolidates the
revenue. The latter is realised on the basis of acquisitions
organisation’s digital activities. Existing activities have been
on the one hand and better exploitation of the current
extricated from the publishing houses and distributed across
market position on the other.
five business units. Online Marketing & Sales, Media-
The project phase was finalised in the second half of 2007,
Mobile Publishing.
technologie, Database Publishing, Beeld & Geluid, Web &
and resulted in the emergence of a new organisation named
The set up and design of this new organisation was not yet
Telegraaf Media Nederland on 1 September 2007.
fully completed by the end of 2007.
The activities of Uitgeversmaatschappij De Telegraaf,
BasisMedia, HDC Media, Holland Combinatie, De Telegraaf
Digitale Media is required to contribute to achieving a
Tijdschriften Groep and All Connected Media will be joined
maximum share in media consumption. Growth in digital
in the new organisation, while retaining existing consumer
media is to be achieved by means of independent
brands. This involves some hundred print titles, one hundred
development and acquisitions. A revenue of € 38.5 million
Internet sites, video production houses and ‘Out-of-Home
(2006: € 34.3 million) was realised in 2007
TV’ networks.
Print media
The scope consists of the overall addressable digital
market, which is projected to reach € 3.1 billion in 2009
Telegraaf Media Nederland intends to realise a vital market
and which includes the following:
leadership position in the Dutch print media market on the
•
Internet (models: advertising and user paid)
basis of national, regional and local brands in relevant
•
Lead generation, database marketing and the facilitation of e-commerce
markets or target groups such as personnel, cars, finance,
women, travel, entertainment, retail and telecom.
Telegraaf Media Nederland intends to meet its objectives by
•
Digital tv and Web tv
•
TV production and digital content
•
Narrowcasting and Broadcasting
means of a maximal share of consumer media consumption.
Based on optimal collaboration and synergy, the business
TMG enjoys a strong position in digital media in the
units are anticipating the key advertising and consumer
Netherlands. Its more than 100 Internet sites reach half of
trends. The largest business unit and market leader,
the Dutch population who are 13 years and older, every
De Telegraaf, is striving to stabilise its circulation and reach
month.
across a broad, national target group with its daily newspaper and associated component brands.
41
The Netherlands
2 July 2007
Joint Venture TE2 terminated
The Boards of both Expomedia
Group PLC (Expomedia) and
Telegraaf Media Groep (TMG)
jointly announce the termination
of Telegraaf Expomedia Events
(TE2), a Joint Venture established
by both companies in 2004.
This being due to the fact that
the combination of activities of
the Joint Venture turned out to
be financially non-viable. Also
this decision follows Expomedia
‘s previously announced policy
of focussing on its core markets
of Russia, India, Poland, UK
and Germany.
In The Netherlands TMG will via
it’s subsidiary Telegraaf Events
B.V. further develop the
successful and profitable portfolio of exhibitions and events
in the areas of automotive
(402EVENTS.COM B.V., 100%),
fashion (Modefabriek B.V., 50%)
and home and decorations
(Ludique Events B.V., 50%).
42
The Netherlands
Highlights by business unit
Online Marketing & Sales
One of Digitale Media’s spearheads is to increase the return
on its existing Internet sites. The over 100 Internet sites
must improve their collaboration and knowledge sharing,
link their reach, jointly build up and enrich client knowledge
and operate as a single powerful entity in the national
advertising market. Enhanced synergy here leads to
increased returns.
Database Publishing
As of September 2007, Telegraaf Classified Media’s
operations continued under the name Database Publishing.
This reflects the goal of broadening the field of operations,
but also indicates that the market is undergoing significant
change. New business models are emerging in a number of
markets, whereby revenue is generated from other than
customary sources. The paid listings model is consequently
under pressure in the housing market as well as at
Speurders.nl.
Beeld en Geluid
This unit, which incorporates Librium TV (84%), Telegraaf
Productiehuis and Pilarczyk Media Group (75%), is responsible for implementing the convergence strategy, in which
43
The Netherlands
the transition from ‘text and still images’ to ‘moving images
and sound’ is a central theme. The unit is actively involved
in the exploitation of various channels (Out-of-Home TV and
WebTV) and in the creation, purchase, editing and exploitation
of ‘moving content’.
Web & Mobile Publishing
This unit incorporates Internet activities related to news,
entertainment and communities. Among others this includes:
Sugababes/Superdudes, WUZ (Wat U Zegt [What You’re
Saying]), linked to the well-known page in the De Telegraaf,
GSMedia (40%), which includes labels such as GeenStijl
and Dumpert.
Mediatechnology
The Mediatechnology unit carries ultimate responsibility for
all digital publication platforms, provides direction for internal
media technology policy and is the technical execution
producer.
This unit is required to make an important contribution to
6 July 2007
the synergy objectives of Telegraaf Media Nederland. The
exploitation of economies of scale and the bundling of know-
TMG increases interest in Sky
ledge are designed to produce cost savings for Digitale
Radio to 85%
Media’s 100 Internet sites. The unit was still developing at
the end of 2007.
By acquiring the interest of the
non-strategic financial shareholders in the Sky Radio Group,
the Telegraaf Media Groep
(TMG) has increased its interest
in the Netherlands’ most
successful group of commercial
radio stations from roughly 28%
to 85%. Veronica Holding and
management hold the remaining
15%.
44
Print
NEWSPAPERS
PAID DAILIES
adverts by 12% and family notices by
In the consumer market, the Dutch daily
The overall circulation of paid Dutch
2%. The last few months of the year
newspapers are represented by products
daily newspapers in 2007 (1 October
showed some improvement.
that are different in nature, scope and
2006 to 30 September 2007, inclusive)
The national dailies performed worse in
publication frequency and are
decreased by 2.9% to 3.7 million copies
the advertising market than the regional
segmented by region and by free or paid
per day (2006: 2.1% decrease to 3.8
dailies. While the regional dailies lost 3%
subscription. The overall daily newspaper
million copies).
of their volume, the national dailies lost 8%.
The foreign portion of the circulation
Uitgeversmaatschappij
De Telegraaf
market, after the introduction of two
free newspapers in the first half of 2007,
accounted for 5.4 million copies in the
third quarter of 2007 (2006: 4.7 million).
The performance of the Dutch daily
newspapers in the consumer market
nowadays is not only assessed on the
basis of movements in the circulation
of paper products, but on the trend in
digital forms of publication as well.
decreased by 2.2% to almost 39,000
copies per day. Last year the decrease
was 1.9%, falling to almost 40,000
The normalised operating result of
copies.
Uitgeversmaatschappij De Telegraaf
decreased slightly in 2007. Advertising
The composition of the circulation is as
revenue also exhibited a slight decline.
follows: subscriptions: 90.5% (2006:
While the subscription revenue rose by
Figures recently released show that the
90.1%); single copy sales: 7.7% (2006:
2%, and the single copy revenue declined
Dutch newspaper sites collectively are
8.1%) and other distributions: 1.8%
by 1%. Digital revenues increased
accessed 14 times per month and reach
(2006: 1.8%).
significantly.
during the same period. The cumulative
The national dailies decreased by 4.1%
Circulation
reach of all daily newspaper sites incre-
(2006: -/- 1%) and the regional dailies
As it did in 2006, the Dutch economy
ased from 35% in January to 64% for the
decreased by 1.4% (2006: -/- 3.3%).
grew by 3% in 2007. The continuing high
year as a whole.
The total advertising volume, expressed
level of economic activity ultimately had
Within the global Dutch advertising market,
in millimetres of paid dailies, decreased
a positive impact on the De Telegraaf
the portion related to daily newspapers
by 4% in 2006. This excludes the Sunday
daily newspaper circulation figures.
35% of all Dutchmen 13 years and older
amounted to € 859 million in 2006 (2005:
editions. Only the personnel adverts rose
It’s true that circulation during the 2007
€ 844 million). An increase of 3.5% to
by 23%. In the other categories, brands
circulation year (4th quarter of 2006 to
€ 889 million is projected for 2007.
and services decreased by 6%, classified
the 3rd quarter of 2007, inclusive) still
45
Print
declined by 2.8%, however the long-
due to the start-up of a new Customer
term trend reversed by mid-2007 and
Relationship Management system. The
the circulation once again exhibited a
number of delivery complaints started
fractional increase. The share of the De
to decline in the fall, but the internal
Telegraaf daily newspaper in the paid
standard was not met in 2007. Additional
dailies subscription market rose slightly
actions will be taken in 2008 to bring the
in the third quarter of 2007 (source: HOI,
quality of newspaper delivery back to the
excluding Sunday edition).
desired level.
The number of permanent De Telegraaf
De Telegraaf is increasingly involved in
daily newspaper subscriptions, including
the sale of books, DVDs, tickets and,
weekend subscriptions, reached a record
since the end of 2007, wine as well. More
high of over 610,000 during the last
than a quarter of a million books were
quarter of 2007. The number of weekend
sold in 2007. With 23,000 copies sold,
subscriptions rose to over 60,000.
the book about Maxima has become a
Single copy sales were affected by the
bestseller in its own right.
free newspapers in 2007. National single
copy sales from Monday to Saturday,
16 July 2007
TMG increases its share in
Media Librium
The circulation forecasts for 2008 are
inclusive, declined by 8.1%, while the
a stretch. The European Football
TMG (Telegraaf Media Group)
number of copies sold abroad stayed
Championships and the Olympic Games,
has expanded its existing
virtually at the same level.
depending on the results achieved by the
interest in Media Librium from
As of 1 April 2007, the single copy price
Dutch teams, are expected to significantly
40% to 84% by acquiring the
of the Saturday and Sunday editions
boost circulation. Furthermore, quality
shares of non-strategic parties.
increased by 10%. The cost of a
improvements are designed to minimise
The remaining shares belong
subscription was increased by 4.5%
the loss of subscriptions.
to Media Librium management.
effective 1 October.
Advertising
This transaction is in keeping
with TMG’s digital strategy and
In order to remain competitive in the
the ambitious objectives that
advertising market, a policy of restraint
were recently announced. In the
was adopted in relation to pricing trends.
coming period, maintaining and
Based on equal volume, advertising
further expanding its leading
revenue declined.
position in the market will be
the focus of Media Librium’s
The fact that De Telegraaf is operating in
activities, as well as higher
a competitive market became abundantly
turnover and results.
clear this year. Newspapers and newcomers to the market are all competing
for the same advertising revenues.
Particularly advertisers in the Top 50
expect a special approach in the form
of customised concepts or cross-media
propositions. Revenue in this category
consequently clearly increased. Market
growth in the personnel adverts category
The quality of newspaper delivery
outpaced that of the De Telegraaf. The
operations was under pressure in 2007,
number of classified adverts once again
primarily due to the growing shortage of
declined.
newspaper delivery personnel, but also
46
Print
Editorial board
Under the title ‘Laat Nederland Rijden’,
distributed within the same distribution
De Telegraaf has been able to maintain
attention was focused on the problems
window as Sp!ts and partially via the
its market leadership position in 2007
that characterise driving in the Netherlands.
same channel. In spite of this, adverti-
without challenge.
This caused the social debate surrounding
sing revenue and the operating result
The magazine VROUW was launched at
this theme to intensify. In addition, the
both clearly increased.
the start of 2007. Due to the fact that this
intensive focus prior to the Christmas
magazine is distributed as part of the
season on the work performed by the
Saturday edition, the magazine became
Dutch Military in the Afghan Province of
the largest women’s magazine in the
Uruzgan, created a sense of appreciation
Netherlands at its initial introduction.
for the mission among supporters and
Advertisers quickly caught on to this fact
opponents alike.
as well, and the advertising revenues
generated by this publication are
Internet
consequently exceeding expectations.
The number of visitors to the De Telegraaf
An Internet extension was added to the
Internet sites continues to rise.
magazine during the course of the year.
De Telegraaf appears to be an obvious
brand that is consulted daily. Advertising
The Wat U Zegt [What You’re Saying]
revenue is rising in tandem. The news-
page has been renovated and the website
paper/website combination appears to
www.wuz.nl has been linked to this page
continue to be highly complementary in
due to the need for readers to contribute
terms of readers and visitors.
news themselves or to react to the news.
The average daily number of unique
The addition of the Carrière page in the
visitors to telegraaf.nl website in 2007
Sp!ts was able to successfully differentiate
Saturday edition provides readers with
was over 550,000; in January 2008 the
itself from the competition in terms of its
news and information about work and
number of unique visitors to the site rose
editorial formula, as well as its
income. The expectation that this group
to almost 700,000 per day. Weekdays
communication approach to consumers
of readers would also attract specific
enjoy greater popularity than weekends
and advertisers. Restyling of the product,
advertisers appears to have been borne
in this respect.
a new and multimedial proposition: News
& Entertainment and Careers, and a new
out.
The revenue generated on the basis of
campaign with a new slogan contributed
The editorial board highlighted an important
cross-media propositions is also
to these results.
theme several times during the past year.
increasing. This is due to the increased
effectiveness of the concepts developed
Sp!ts’ circulation rose somewhat in 2007
by the department specifically created
to an average of 421,700 copies per day
for this purpose.
FREE NEWSPAPERS
of issue. Improvement of the quality of
distribution was one of the key spearheads in 2007.
The total daily circulation of free newspapers, after the introduction of two free
In the advertising market, Sp!ts garnered
newspapers, consisted of over 1.7 million
market share in the all important national
copies in the third quarter of 2007 (2006:
advertisers and personnel categories.
4th quarter 2005 to the 3rd quarter 2006,
The growth in the personnel advertising
inclusive, over 865,000 copies).
market also had a positive impact on the
BasisMedia
The competition experienced by Sp!ts
results achieved by the InfoPinnacle and
SmartEvents participating interests. The
second edition of the Sp!ts CareerEvent
sharply increased over the past year.
held in November was completely
Two new free newspapers are being
sold out. With the acquisition of Carp,
47
Print
BasisMedia strengthened its position in
HDC Media’s publications compared
parties within Telegraaf Media Nederland.
the ‘Young Professionals’ market. The
favourably with other daily newspaper
In this respect attention will be focused
magazine has since undergone a restyling.
publishers. More effective canvassing
on new developments and initiatives. In
In 2007, Sp!ts expanded its narrowcasting
and strengthening of newspaper loyalty
addition, inadequately performing titles
kept the decline in subscriptions to
will be subjected to a critical review.
The recently announced participation
activities in collaboration with Media
below 1% and some publications even
Librium and is negotiating with major
experienced an increase. This result was
in WebRegio is expected to assist HDC
suppliers concerning the delivery of
achieved in spite of the unacceptable
Media in strengthening its regional posi-
narrowcasting services.
distribution quality. There was, however,
tion and responding to the requirements
a drop in single copy sales. The increase
and demands of a changing market.
REGIONAL DAILIES
in revenue was due to a price increase.
The regional dailies have also had to deal
with the increased competition generated
There was a slight decline in the revenue
by the unabated surge in the availability
generated in the advertising market from
of free information, including the Internet,
local and national adverts. Personnel
as well as regional and national radio,
adverts, however, produced significantly
television and free local papers.
more revenue than in 2006. The prospects
for a further increase in personnel volume
The regional dailies circulation market
deteriorated during the latter part of 2007.
declined by 1.6% during the third quarter
of 2007 in relation to the third quarter
Since 2003, HDC Media has implemented
of 2006, to a circulation of 1.6 million
various reorganisations.
copies per day.
HDC Media
8 August 2007
As a consequence, the number of jobs
Univocal identity for all TMG
decreased by over one third and personnel
companies
costs significantly decreased over the
In comparison with other regional and
past few years. There was a further
Aiming to clearly and transpa-
national newspapers, developments at
decrease in 2007 as well. In addition, a
rently put TMG (Telegraaf
HDC Media were favourable.
cost savings programme led to a slight
Media Groep) on the map
The operating result doubled in comparison
decrease in other indirect costs.
as the largest Dutch media
to 2006, with fractionally higher advertising
company, both nationally and
and circulation revenue.
The intent is to reduce the editorial
The circulation trends registered by
department’s personnel complement by
logo will be rolled out in all TMG
30 FTE. The outcome of an editorial
companies.
review completed in 2007 is expected
By implementing the logo
internationally, the TMG group
to contribute to the optimisation of the
company wide, combined with
titles’ content. This is expected to result
the relevant company name or
in an even better alignment with regional
activity, a univocal identity for
needs and readers’ wishes.
all TMG companies is created.
The brand TMG forms a crucial,
The profitability of the Almere Vandaag
leading and binding factor for,
publication improved as a result of actions
among other things, the finan-
such as a reduction in the number of
cial, labour and international
publication days by one (Tuesdays).
market and also the b-to-b
Various books were successfully published
market of underlying
and a number of less profitable supplements
brands. However, consumer
have been removed from the market.
brands remain unaltered but will
The future will more than ever before be
get a TMG endorsement.
characterised by collaboration with other
48
Print
FREE LOCAL PAPERS
interest magazines, valued at € 347
The Dutch free local papers advertising
million in 2006, remained virtually the
market was valued at € 614 million in
same as in 2005 (€ 349 million). The size
2006, representing an increase of over
of the market is expected to be the same
4% in relation to the previous year (2005:
as in 2006.
€ 588 million). An increase of 4% to € 639
million is projected for 2007.
Holland Combinatie
Telegraaf Tijdschriften Groep
TTG revenue clearly increased in 2007.
New projects, organic growth, improved
The Holland Combinatie’s operating result
distribution margins and the discontinuation
clearly improved, with a fractional rise in
of the loss-making Starstyle magazine
advertising revenue and direct cost
resulted in a significantly improved result.
savings.
Unfortunately, the margin is still below the
The rise in advertising revenue is the result
margin of the average magazine publisher.
of an increase in the volume of mid-week
In the circulation market, the revenue
publications during the first half of the
derived from subscriptions levelled off,
year and an increase in the average price
while the revenue generated by single
of advertising space during the second
copy sales increased somewhat. The
half of 2007. The weekend publications
have gone through a difficult year:
volume as well as the price of advertising
space dropped. In general, advertising
rates are under a great deal of pressure
in local markets.
Based on reader surveys, the design and
formula of weekend publications will be
fundamentally changed. As an extension
to and to strengthen mid-week and other
publications, and due to direct, local
competition, a number of websites with
local information will soon be introduced.
To achieve further growth, Holland
Combinatie will focus on acquisitions or
the in-house publication of new titles
recovery of the advertising market
within and outside the distribution region.
continued during the year. Publications
MAGAZINES
showed significant improvements, while
publications. In addition, the introduction
The total circulation of general interest
Privé is altogether successful.
of the glossy magazine, Stijl ontmoet Stijl
such as CosmoGIRL!, Residence and JAN
Wonen, is an example of such collaboration.
magazines in the Netherlands (excluding sponsored and daily magazines) in
Two new publications were successfully
the third quarter 2007 was 27.1 million
launched in 2007. The more important
This magazine appeared twice in 2007.
copies. In the third quarter 2006 this was
of the two was VROUW, a Saturday
AM van Gaal Media (20%)
26.1 million copies. The market is divided
supplement to the De Telegraaf. VROUW
TMG holds a 20% interest in AM van Gaal
into multiple segments that almost all
demonstrates that good collaboration
Media, a publisher of general interest
experienced growth.
between the newspaper and the magazine
magazines primarily aimed at women.
The Dutch advertising market for general
groups can lead to new and successful
AM van Gaal publishes the AM Magazine,
Print
Keesing Puzzles & Games
potential for further internationalisation. In
At the beginning of 2007, it looked like
July 2007, Keesing acquired the puzzle
2007 would turn out to be a difficult year
activities of Sanoma in the Netherlands.
for Keesing’s puzzle activities due to the
The emergence of the titles Puzzelsport,
overabundant supply of popular Sudoku
Bingo!, Tien voor Taal and Jan
publications. As indicated earlier, this
Meulendijks resulted in a strengthened
relatively new and successful segment
position in the Dutch market.
attracted many non-traditional competitors.
Les Editions de Saxe (EDS) was divested
at the end of 2007. This company did
not fit into the strategy and was not
profitable.
Not only the Sudoku publications, but also
the traditional puzzle publications
suffered as a consequence, particularly in
France. In the meantime, quiet is returning
to the market, also in France.
Keesing’s strategy is focused on puzzle
activities. In addition to the annual print
circulation of 65 million puzzle magazines,
Keesing puzzles now also appear in many
daily, weekly and monthly magazines
throughout Europe. Furthermore, Keesing
has been active over the past few years
as well as, since March 2007, the
Catherine magazine.
in the area of digital puzzles and games
for the Internet and the mobile telephone.
The digital games market is a growing
PUZZLE MAGAZINES
segment and Keesing intends to
increasingly focus on that segment.
The traditional puzzle market, originally a
very stable one, has expanded
The positions in the countries in which
substantially as a result of the introduction
Keesing’s products are distributed are
of logic puzzles such as Sudoku, but has
being further strengthened, while policy
also become less stable as a result.
is also being reviewed in terms of the
49
50
Interview Ab Trik
T
MG took advantage of the new rules that apply
to media concentrations in taking over the Sky
Radio Group, the most successful radio operation
in the Netherlands. Sky Radio 101 FM is the radio station
that attracts the highest number of listeners on a weekly
basis in the Netherlands. The result of staying close to the
market and continuous improvement. ‘Producing radio
runs in our blood,’ according to director Ab Trik.
Sky Radio was created in 1988 as part of Rupert Murdoch’s
FM on the 50+ age group and more affluent individuals.
Sky Television UK. The station originally broadcast only
This makes us the most successful radio group in the
over cable, but still managed to reach a large public
Netherlands with a combined market share of 18.8%,’
audience. Sky Radio is the creator of Radio 538, which
according to Ab Trik, a radio enthusiast in heart and soul.
later, when broadcasting frequencies were reallocated, was
‘Radio is always accessible and can be plucked out of the
forced to be sold to the then minority shareholders in
air anywhere for free. Radio is image and sometimes simply
Radio 538. Furthermore, Sky Radio Group owns New Radio
habit. You need to ensure that your station is the first station
Veronica, created in 2003 with Veronica Holding as a joint
people turn to. This means that you must have a profile. In
shareholder. The Sky Radio Group was acquired in 2006 by
a segmented and free market it is after all very easy to
a consortium led by TMG and was subsequently integrated
switch to something else. You therefore have to be in tune
into TMG on a phased basis. 85% of the shares are now
with people’s tastes and the music that they would like to
held by TMG, 10% by Veronica Holding and 5% by
hear. We work on this on a continuous basis.’
management.
Big target group
Over the past few years, Sky Radio Group has grown into a
Close to the product
Ab Trik describes the Sky Radio Group as an enterprise
with young creative people with a heart for radio. ‘You
commercial radio enterprise with the largest weekly reach
can’t sell radio advertising time unless it runs in your
in the Netherlands. With 3.5 million Sky Radio, 1.8 million
blood. We have a relaxed, flat and mostly informal orga-
Radio Veronica, 800,000 Classic FM and roughly 350,000
nisational structure, however, people must deliver perfor-
TMF Radio listeners, the overall weekly reach is almost 5.5
mance. Everyone is on top of this. There is a tremendous
million listeners. ‘We get a terrific kick out of this,’ says
degree of social control and we draw each other’s attention
Ab Trik. ‘Like TMG, we are focused on a big target group.
to our responsibilities. We listen to
We have a well-distributed portfolio of radio stations.
each other and to the programmes.
TMF radio is focused on the 15-25 age group, Sky Radio
Everyone keeps his/her hands in
and Radio Veronica on the 20-49 age group and Classic
things and we are very close to the
Constant
Interview Ab Trik
‘You’ve got to have radio
in your blood’
product. And this works. The advertising sector selected
frequencies. The current terms run until 2011. According to
us as number 1 in the world of radio, with the best sales
Ab Trik, FM will by far remain the most important distribution
operation according to advertisers and media planners.
system for radio over the next 15 years.
Radio is like a football club. You are continuously judged
on your performance. Radio listening data is published 12
Focus on digital
times a year and you are sure to notice if the data is not
The Sky Radio Group succeeded in strengthening market
good. Revenues are directly related to radio listening data.
share for all stations in 2007 and also made a good start
This definitely keeps you on your toes.’
in this respect in 2008. Minor programming changes have
The radio market was highly dynamic in 2007. Multiple
for Sky Radio 101 FM: ‘Music that makes you feel good’.
been implemented and a new slogan has been introduced
stations changed hands and TMG increased its interest in
New measures were also implemented in collaboration with
the Sky Radio Group to 85%. What remained is the scarcity
TMG. The financial editorial staff of the De Telegraaf daily
in FM frequencies. Not much change is expected in that
newspaper, for example, prepares the financial news for
situation due to the related technical constraints. The
Classic FM broadcasts, a station that with cable frequencies
implementation of Digital Audio Broadcasting (DAB) is a new
alone reaches considerably more listeners than Radio 4,
development. The government wants to divide the DAB
which can be reached anywhere via the FM band. In terms
frequencies on the basis of an auction, possibly as early as
of digital media, the Sky Radio Group also runs on TMG’s
this year. The question, however, is to what extent market
digital platform and selling advertising is a joint effort.
players will express interest. Even in the British market,
‘Digital media is a trend that we will be looking at very closely.
where DAB enjoys relatively large success, market players
This will take the full attention of the digital director that
are highly critical. One of the major impediments is the lack
of DAB receivers. Another development
in the Dutch radio market is the
Constant fine-tuning. That is the core of our profession,’
announcement of the method that will
says Ab Trik.
be used to redivide the current FM
fine-tuning
we just appointed. Just like radio broadcast via the ether,
digital media will be primarily brand and content-driven.
51
52
Broadcast, Radio, Television
TELEVISION
The Dutch market for television expenditures was valued at € 810 million in 2006
(2005: € 779 million). Expenditures in
2007 are projected to go up by 2.0% to €
826 million.
SBS Nederland
ProSiebenSat.1 is represented in the Dutch
market by three commercial television
channels. SBS 6, Net 5 and Veronica. On
the viewer market, the market share of the
above mentioned commercial television
channels rose from 24.5% in 2006, to
26.3% in 2007. The market share for the
RADIO
individual stations was: SBS 6 12.5%
Group’s radio stations was good. With a
(2006:12.2%), Net 5 7.2% (2006: 6.5%),
The Dutch radio advertising market was
joint 18% to 20% market share in the total
Veronica 6.6% (2006: 5.8%).
valued at € 262 million in 2006 and rose
radio listeners market, Sky Radio Group
3.5% in relation to 2005 (€ 253 million).
accounted for approximately 25% of
In the advertising market SBS Nederland
No growth is projected for 2007 in
national radio expenditures.
achieved a larger market share than the
total viewer market share was.
comparison to 2006.
An important challenge is to realise
maximum collaboration between the
NARROWCAST
Subject to the constraints imposed by
Sky Radio Group, with its own creative
Narrowcasting is a digital data distri-
Dutch cross-ownership rules, in 2006
culture, and other TMG units.
Sky Radio Group
bution technology that is characterised
by its ability to transmit different data
TMG acquired an interest in the Sky
Radio Group of over 28%. Following a
In Germany, 49% of the interest in Sky
streams from a single location (the
change to this law in June 2007, TMG
Radio Hessen was sold.
studio) to different external points
exercised its option to expand its interest
to 85%.
simultaneously. This is in contrast to
broadcasting. The distinct advantage
of narrowcasting lies in the fact that it
The acquisition of the largest radio station
affords the possibility of programming
in the Netherlands means that TMG will
and advertising that is geared to visitors
control three popular radio channels, each
at specific locations at specific points
with its own target group, Sky Radio
in time.
101 FM, Radio Veronica, Classic FM and
TMF Radio. Jointly, these channels reach
The market is still young, small in size,
almost 5.5 million Dutch listeners per week.
but highly promising. The total advertising
As a result of increased and aggressive
includes narrowcasting, as well as bus
competition, the price of radio advertising
shelters and billboards was valued at € 164
in the Dutch market came under pressure
million in 2006. A market-size increase
market for ‘Out-of-Home’ media, which
in 2007.
of 1.7% to € 167 million is projected for
2007.
Despite this development, Sky Radio
Group’s results for 2007 were satisfactory.
The radio listening data for the Sky Radio
Narrowcast | Internet
Librium TV
for synergy and expect this to have a
Habbo.nl once again showed conside-
In 2007, TMG expanded its interest in
positive impact on the operating result.
rable growth in the number of unique,
Media Librium from 40% to 83% by
buying out two non-strategic shareholders.
INTERNET
The Dutch market for online display
and especially, paying visitors during
2007. During the year, Habbo.nl was
confronted with the theft of virtual
In 2004, Media Librium was one of the
advertising (excluding search engines,
property. The first arrest for virtual theft
first professional organisations to initiate
email and affiliated marketing) in 2007
became world news.
development of digital ‘Out-of-Home’
was valued at € 137 million compared to
media (= narrowcasting) networks. The
€ 97 million in 2005. In 2007, this market
first such network is the Librium.TV
is expected to grow by 10% to € 151
network in McDonald’s restaurants. This
million. Due to a shift to and an increase
network remains the reference case study
in other online resources, the growth in
for many new initiatives. Communication
online display adverts clearly levelled off
via digital screens is becoming an
in 2007.
accepted phenomenon. Media Librium in
this respect is focused on networks with
Internet and TMG
TMG’s total Internet revenue in 2007
amounted to over € 30 million (2006: over
€ 27 million).
Revenue in the business-to-business
market grew from over € 18 million in 2006
to almost € 19 million in 2007, while the
business-to-consumer market grew from
€ 9.6 million to € 11.7 million.
The successful and controversial site
The Relatieplanet.nl and Iwannadate.nl
Geenstijl.nl also once again experienced
(70%) dating sites also experienced sharp
considerable growth in 2007. Dumpert.nl
growth in 2007. The same applies to the
was introduced in 2007 and with a reach
sites Botentekoop.nl, Nieuweboten.nl
of over 10% of the 13-34 age group was
and CampersenCaravans.nl, which are
an instant success in Dutch WebTV.
published by Bohil B.V.
During the year under review, TMG
converted its majority interest in
viewers that are spending some time at a
Sugababes.nl B.V. publisher of the
specific location. Examples include the
popular Dutch websites for young people
networks at McDonald’s restaurants (170),
in the 13-20 age bracket – sugababes.nl
hairdressing salons (250), bus stations
and superdudes.nl – into full ownership.
(250), metro stations (3), shopping centres
(30), gas stations and in media and
advertising offices.
Many advertisers have found their way to
various DOOHM (digital Out-of-Home
media) networks. Nielsen Media identified
Librium.TV as a market leader in 2007.
Librium.TV and Telegraaf Media Nederland
are exploiting all possible opportunities
53
54
Crossmedia | Other activities
CROSS-MEDIA
The term multimedia is understood
OTHER ACTIVITIES
During the first half of 2007, in addition
to providing its regular services, TMI was
to apply to content presented as any
All Connected Media (ACM)
combination of audio, moving/still
In the process of bundling TMG’s digital
of existing generic ICT (hardware and
images and text.
activities in the Netherlands into Telegraaf
database) and office automation services.
The term cross-media applies when the
Media Nederland, most of the business
The initial phase and the transfer were
presentation of content for a certain
units of ACM, a fully owned TMG subsi-
completed by mid-2007. The follow-up
subject is strengthened through the
diary, were incorporated into that
phase, consisting of changes that are
application of different media types
organisation as well.
designed to lead to improved and flexible
(newspaper, radio, Internet, etc.) to
Only Mobillion, a market leader in the
service delivery combined with a reduction
those aspects in which each of the
Netherlands in the area of value-added
in costs, is scheduled to run until the end
media types excels.
mobile services, survived as an
of 2008.
independent entity in order to continue to
also involved in guiding the outsourcing
Telegraaf Productiehuis was established
be able to offer its services internally as
Printing facilities
to leverage the unique knowledge,
well as to third parties.
During the past year, Telegraaf Drukkerij
contacts and icons of the De Telegraaf’s
editorial staff for the production of
MediaPact
television programmes. Good examples
In 2006, DataWire consolidated its
include the Voetballer van het Jaar
syndication activities (editing, storing,
[Footballer of the Year] Gala and the
distributing and selling existing editorial
Schaatser van het Jaar [Skater of the
content and content from other sources)
Year] Gala. Both events are broadcast
and archival operations in support of TMG’s
live by TROS, as well as Bureau Van den
publishers into the company MediaPact.
Heuvel, a programme on crime produced
In 2007, MediaPact’s operations were
by crime reporter John van den Heuvel.
sold to the Algemeen Nederlands
Wilma Nanninga’s real life soap was
Persbureau (ANP) [Netherlands Press
broadcast via RTL. In addition, a number
Agency].
of WebTV productions were produced
that were journalistic as well as commercial
DataWire Sport B.V.
in nature. An internal professional IPTV
DataWire Sport B.V., a joint venture
studio was set up for this purpose.
between DataWire B.V. (70%) and ANP
In October, TMG acquired a 75% interest
and other sports information. DataWire
in Pilarczyk Media Groep, a producer of
Sport B.V. is in a unique position in
multiple TV programmes on cars, films,
the Netherlands in the area of amateur
dealer presentations, commercials and
sports results. At the balance sheet date,
websites for clients in the automobile
DataWire was recorded as an ‘asset
industry.
classified as held for sale’.
Groep felt the impact of the reorganisation implemented at the end of 2006.
(30%), is a supplier of sports results
This acquisition is consistent with the
Employees had to adjust to new working
objective of acquiring a position in audiovisual content and the goal of acquiring
a strong position on this basis in the
advertising market in a number of markets,
including the automobile market.
INTERNAL PRODUCTION
UNITS
ICT
schedules and to different, multifunctional
work tasks. A training programme was
started to support employees in their
new tasks.
The goal of Telegraaf Media ICT (TMI)
is to deliver flexible, high-quality ICT
A great deal of emphasis was put on
management and development services
cost control and, in consultation with
at market-compatible price levels.
clients, on the search for more efficient
Participations
production methods. The sale of residual
operations to a third party and the
since 2006. Given the shortage of news-
printing press capacity was successfully
completion of preparations to dispose of
paper delivery personnel, the services of
pursued, particularly by the printing
the Transport unit.
temporary Polish workers and TNT postal
workers were used in problem areas as an
operation in Alkmaar.
In December, the employees of the new
interim measure. In addition, arrangements
In association with TMG publishers, a
newspaper delivery organisation, as well
were made with the The Hague City
number of short and long-term scenarios
as the newly created Support Unit, were
Council concerning the use of welfare
were developed based on ideas and
hired. The latter concerns the implemen-
recipients as newspaper delivery personnel.
requirements concerning the newspaper’s
tation of a portion of the coordination
The negative trends related to news-
format. Decisions concerning the deve-
function in the context of the chain
paper deliveries persisted until October
loped options will be made in the not too
management approach.
2007 and have since started to improve
The new structure was effective 1 January
due to the measures implemented.
distant future.
Distribution
2008 and the newspaper distribution
activities will be continued under the
In addition to the abovementioned
A management change took place at
name TMG Distributie.
trends, a cost savings project was
DistriQ in 2007 and its tasks were
The adjustment to DistriQ’s core tasks
initiated in 2006. This project was
reajusted. A reorganisation has been
had a far-reaching impact on the unit’s
completed in 2007 and resulted in
targeted savings of over € 10 million.
PARTICIPATING INTERESTS
Koninklijke Wegener N.V.
TMG’s interest in Wegener was sold
during the course of 2007. The interest
consisted of 10,594,763 depositary
receipts for ordinary shares with a
nominal value of € 0.30 (a 23.8% interest) and 2,593,030 depositary receipts
for cumulative financing preference
shares with a nominal value of € 0.30.
The equity interest including these preference shares was 25.0%.
The sold ordinary shares, including the
agreed upon premium of a maximum of
€ 1 per depositary receipt and dividend
over 2006, amounted to € 171.5 million.
The preference shares were sold for
€ 20.1 million.
underway since April as a consequence.
personnel. Whereas more than 550 FTE
The objective is to create a more efficient
were employed by DistriQ in 2006, that
ANP
distribution organisational structure
number declined to just over 400 in
The 8.84% interest in ANP Holding B.V.
focused on the core activity: high-quality
2007. Over time the newspaper distri-
was sold in 2007.
newspaper delivery at low cost. With
bution business, including the Support
respect to existing activities, a strategy
Unit, is expected to employ an estimated
has been developed for each activity.
135 FTE.
This produced several results, including
A negative trend in the number of delivery-
the disposal of door-to-door delivery
related complaints has been developing
55
56
‘We are flexible,
enterprising and
K
eesing’s involvement in the puzzle magazine
sector dates back to the thirties. Initially in the
Netherlands and eventually followed by Belgium,
France and Denmark. Its market leadership positions
will be further expanded upon. In print publications, but
primarily in the digital market segment as well. With
puzzles, but increasingly with games. Based on extensive
knowledge of target groups and distribution channels.
‘We are flexible, enterprising and maintain an international
perspective,’ says General Manager Peter Tordoir.
In 1911, Isaac Keesing, inventor and a former financial
journalist, started his first business in Amsterdam. He dealt
in stock exchange information. In the thirties he came
across puzzle magazines in Germany and subsequently
we want to increasingly move to digital in tandem with our
introduced the Denksport [Thinking Sport] magazine in the
target groups. All of our supporting databases are already
Netherlands. Keesing entered the French market during
digital. By adding an additional layer we can make them
the fifties, via Flanders and Brussels. Denmark came later.
interactive.’ By entering the much broader online games
Keesing remained a family business until NPM Capital
segment, Keesing wants to reach much broader target
acquired a portion of the company’s shares in the nine-
groups. ‘The population is ageing, people have more time,
ties. The company was acquired by TMG in 2006. Tordoir
including media time. Even older persons are no longer
characterises the former company as a ‘small media
digitally challenged. We will be participating in this shift,’
conglomerate with puzzle magazines as its core business’.
says Peter Tordoir.
Greater focus has been created in the past few years. The
core remained: an innovative and international publisher of
Keesing wants to maintain its market positions in puzzle
puzzle magazines, with market leadership positions in the
magazines and where feasible strengthen its positions on
Netherlands, Belgium, France and Denmark.
the basis of acquisitions. ‘95% of puzzle magazine sales
consists of single copy sales. Keesing possesses extensive
An eye for target groups
knowledge about distribution channels and the retail trade.
According to Tordoir, Keesing’s strategy is now focused on
The market will be forced to consolidate, because there are
strengthening its market positions, further internationalisa-
too many titles at present. Just like any other brand-name
tion and the digitisation of its activities, particularly online
item, magazines are also focused on gaining a prominent
games. ‘Keesing’s target groups are looking for relaxation.
They are not readers, rather they are puzzlers. They want
to escape from the daily routine for a short while or engage
in some mental exercise. We want to consolidate our
market positions in paper-based publications. In addition,
‘Our target groups are
looking for relaxation’
57
international’
place on store shelves. In the Netherlands alone, Keesing
lot of activity on the Internet in the area of games,’ Tordoir
already publishes 1,200 issues per year. That requires a
says with conviction.
significant proportion of the space available in stores. The
Furthermore, Keesing wants to acquire a position in
market wants to see fewer titles. This means that portfolio
markets outside the Netherlands, where the company is
management and the position in the retail network are key.
not yet active. A trial is currently underway in Poland and
This does not need to adversely affect our profitability.
Keesing wants to explore opportunities in other European
More digital products
of small-scale local distribution networks and by using
Based on its knowledge of the puzzles market, Keesing
editorial content in France and the Netherlands. But also
also wants to expand its market positions in the digital
on the basis of games, which are much easier to sell in
games segment. ‘We have knowledge about target groups
international markets.
and user markets that few developers of games possess.
markets, together with TMG. With puzzles, on the basis
We are much closer to the consumer than the developers
Improving profitability in 2008
of games. We intend to enter that market with caution and
2007 for Keesing was characterised by changes within its
perhaps make an acquisition in order to create a position
own organisation. In France, less profitable operations were
for ourselves. That will likely not be without a struggle,’
sold. The organisation was adjusted in the Netherlands and
Tordoir expects. He sees opportunities for synergy within
Keesing’s market position was strengthened through the
TMG, especially in relation to digital products. By leveraging
acquisition of Sanoma’s puzzle magazines. Achieving
visitor traffic on Internet sites and TMG’s sales organisation.
improved operating results, in part on the basis of the
‘We have much to learn from TMG in the area of digital
actions implemented in 2007, is key for 2008. In addition,
development, but above all there is a lot that we can do
the magazines acquired in 2007 will be included in the
together.’ Provided that the sites are properly linked, TMG
operating result for the full year and a careful step will be
has tremendous reach via the Internet. And there will be a
made into the digital games segment.
58
International
INTERNATIONAL
Sweden
TMG’s objective is to realise a larger share of the Groep ’s
The Swedish economy once again exhibited clear growth in
total revenues abroad.
2007, resulting in a renewed increase in media
expenditures. The Internet experienced the most rapid growth,
Following a thorough assessment and analysis, a decision was
while magazines – the segment in which TMG operates in
taken to further refine the international strategy pursued up
Sweden – lagged behind at the market average.
until now.
The current range of international activities is broad and
The Swedish TMG titles – in segments such as women,
offers limited opportunities for differentiation. Its focus is
interior design and boating performed better than the
predominantly on a number of target groups, includes
market. The existing portfolio once again garnered market
broad content and involves the use of multiple media types.
share with clear organic growth in advertising income.
Focus, coherence and synergy are therefore not as easily
Including acquisitions and new introductions, advertising
attained, while these aspects are conditions for a successful
income grew sharply.
international expansion that meets TMG’s ambitions and
goals.
The new Segling sailing magazine was added to the boating
portfolio at the beginning of 2007. In mid-2007, TMG also
Following an extensive analysis of elements such as environ-
acquired a leading boating Internet site, Marineguiden.se
mental trends, competition, business models and core
which gave the Swedish subsidiary a clear market leader-
competencies, clear options for the target groups, related
ship position in this market segment, in print as well as
content and the most suitable media types to which TMG
online.
wants to limit itself were identified as a means for expanding
and accelerating growth in the international domain on the
The Cosmopolitan and Residence titles once again
basis of a focused strategy.
managed to realise significant growth in the advertising
This strategy will be further developed in 2008.
market in the women and lifestyle segment. The magazine
International
Plus was launched in this segment as a joint venture with
revenue generated by the titles acquired by TMG in 2005,
Bayard/Roularta. During the first quarter of 2008, Plus was
grew at an above-average market rate.
retired from the market due to disappointing advertising
income. The start-up costs of new activities resulted in a
slight loss during 2007.
Ukraine
At the beginning of 2006, TMGua took over the free
newspaper Obzor and after a restyling in 2007, the paper
was re-launched, together with an increased publication
frequency (from 3 to 5 times a week). Since then, advertising
Following 35% growth in 2006, the advertising market
sales have grown exponentially. An Internet site associated
exhibited a more modest growth of 25% in 2007. Now that
with this newspaper was launched in 2007.
the political situation has stabilised, a new cabinet was
In September 2007, TMGua launched the Emarket.ua buy
formed in December, the projected growth for 2008 is of
and sell site. This website managed to garner the ‘number
the same magnitude as that of 2006. At the end of 2007,
2’ position in the marketplace within two months. The site
TMG Ukraine (TMGua) was involved in three activities:
provides a solid foundation for the continued development
magazines, a free newspaper with an associated news site
of digital activities.
and a Ukrainian version of Speurders.nl.: Emarket.ua
Finally, TMGua is a 24% participant in Gala Media, one of
Quite a few new magazines were launched in the Ukrainian
the largest radio stations in the Ukraine. Gala is developing
market in 2007. International publishers are concentrating on
in line with the vigorously growing radio market and the
creating market share in this market, which is still relatively
collaboration among the various TMGua and Gala media
small and therefore has exceptional growth potential.
units is intensive and fruitful, particularly in the area of
cross promotion.
TMGua’s magazine portfolio was expanded in 2007 with
the launch of Glance, a title in the so-called ‘celebrity’
The start-up costs of new activities resulted in a loss
segment. Glance was well-received by the market. The
during 2007.
59
60
International
Belgium, Denmark and France
In 2007, Keesing disposed of Les Editions de Saxe,
Outside the Netherlands, TMG’s subsidiary Keesing Puzzles
publisher of hobby magazines. The disappointing trends
& Games is active in France, Belgium and Denmark. The
of this business unit identified earlier persisted with even
Polish market was also broached in 2007 and the results of
greater intensity during the first half of 2007. A decision
this incursion are expected to manifest themselves in 2008.
was consequently taken to sell Les Editions de Saxe. This
transaction was completed during the month of November
The traditionally stable puzzle market was thrown into
of the year under review.
turmoil by the rapid emergence of logic puzzles such as
Sudoku. Keesing has developed a strong position in this
One important development within the Keesing Media Group
new logic puzzles segment in all markets in which the
is the implementation of the so-called SPS system. This
company operates.
system permits Keesing to generate puzzles in a rapid and
The entry of many non-traditional competitors in 2006 and
flexible manner, and at low cost, for the various international
for part of 2007 put the profitability of the company under
markets in which the company currently operates or
pressure. However, the prediction made in last year’s
intends to operate over the coming years.
annual report that competition would return to pre-Sudoku
levels manifested itself in the second half of the year under
Keesing focused on possible takeover candidates in the
review. The margins of the various Keesing companies
online games segment during the year under review. This
exhibit a clear positive trend.
focus is expected to lead to actual acquisitions in 2008.
61
International
31 August 2007
Alfa Groep acquires door-todoor distribution activities of
DistriQ
Alfa Groep and DistriQ reached
an agreement on the acquisition
of the door-to-door distribution
activities of DistriQ by Alfa Groep
as per 1 October 2007.
DistriQ is the distribution
company of TMG (Telegraaf
Media Groep). The activities of
DistriQ consist among others of
the distribution and delivery of
the free regional and local doorto-door papers of TMG and
unaddressed mail from external
customers.
Therefore DistriQ possesses a
delivery organisation within the
distribution area of the local
and regional media of TMG.
62
Participating interests
SBS BROADCASTING S.À.R.L (20%),
PROSIEBENSAT.1 MEDIA AG (12% SHARE
OPTION WITH VOTING RIGHTS)
ProSiebenSat.1 from KKR/Permira. The option price
amounts € 34.71 per share minus dividends payable in the
period between 6 March 2007 and the exercise date of the
option. Over fiscal year 2006 a dividend of € 0,87 has been
paid, over fiscal year 2007 a dividend of € 1,25 has been
Introduction
proposed. The call option can be exercised from 1 June
In May 1996, when SBS 6 was introduced to the
through 15 June 2008
Netherlands, TMG acquired a 30% interest in this
commercial television station. Due to cross-ownership
Directly linked to this option is the right of Lavena Holding
restrictions, TMG was not permitted to acquire a larger
4 GmbH – the company via which the investment funds
interest. This initiative was and still is consistent with
advised by KKR and Permira control their majority interest
TMG’s strategy to proactively track the changing media
in ProSiebenSat.1 – to in case TMG does not exercise its
behaviour of consumers and advertisers and in addition,
call option, possibly sell 12% of the voting shares to TMG
to become less dependent on print products.
at a put price of € 28.71 per share, minus any distribution
beyond the average dividends received during the period
In 2005, SBS Broadcasting S.A., the international parent
between 2 March 2007 and the date on which the put
company of SBS with commercial radio and television
option is exercised. The option can be exercised during the
stations in multiple European countries, was taken over
period of 1 to 15 August 2008, inclusive.
by investment funds advised by Kohlberg Kravis Roberts
& Co (KKR) and Permira Advisers LLP (Permira), herein-
In addition to the option on 12% of the voting shares, TMG
after KKR/Permira. In the meantime, the SBS 6, Net 5
acquired two seats on ProSiebenSat.1’s Aufsichtsrat
and Veronica (channel and magazine) television
(Supervisory Board).
stations had become part of SBS.
Since July 2007, two TMG representatives have participated
Activities in the Netherlands at that point were owned by
in the deliberations of the Aufsichtsrat.
SBS Broadcasting S.A. (63%), TMG (27%) and Veronica
Holding B.V. (10%).
The Dutch regulations concerning cross-ownership were
only changed and liberalised effective mid-June 2007,
At the end of 2005, TMG swapped its 27% share in SBS
in other words after the decisions concerning the above
Nederland, increased by a one-time cash investment
mentioned transaction had been taken, with the coming
of approximately € 18 million, for a 20% interest in the
into effect of the Interim Act on Media Concentrations
international parent company SBS Broadcasting S.à.r.l
[Tijdelijke Wet Mediaconcentraties].
(SBS). The other 80% of the shares was held by KKR/
Permira. TMG declared the transaction to be consistent
Strategic considerations
with its international ambitions and TMG at the same
The exercise of its option right provides TMG with an
time acquired a share in SBS’ international growth, and
opportunity to participate in an international media
furthermore gained access to a broader international
combination with a strong market position and strong
media platform.
financial results. In that case TMG also participates in the
2007 Events
opportunities for synergy that are created on the basis
expected international growth and the exploitation of the
KKR/Permira acquired a majority interest in the leading
of the formation of the new ProSiebenSat.1 television
German media group ProSiebenSat.1 Media AG
combination. A move like this is also consistent with TMG’s
(ProSiebenSat.1) at the end of 2006. This group consequently
international and multimedia strategy.
made a bid on all SBS shares in the spring of 2007. After
investigating various options, TMG decided to sell its 20%
According to the 2007 interim figures published on 4 March
interest in SBS to ProSiebenSat.1. This transaction
2008 by ProSiebenSat.1, revenues grew by 29.0% to € 2.7
involved an amount of € 433 million.
billion (2006: € 2.1 billion). These results reflect the initial
Together with the sale of the interest in SBS, TMG acquired
consolidation of SBS Broadcasting, acquired by
a call option on 12% (13,127,832) of the voting shares in
ProSiebenSat.1 in July, as well as the strong growth of the
63
Participating interests
company’s international business and the organic growth
in part due to the decreased price of the preference shares
of the German-language segment.
and in part due to an adjustment made to the multiples
used in the valuation of television companies.
EBITDA after deducting non-recurring items (recurring
EBITDA) rose by 36.3% and amounted to € 661.9 million
The positive results achieved during 2007 and the expected
(2006: € 485.6 million). However, a fine imposed by the
further improvements in ProSiebenSat.1’s operating results,
German Federal Cartel Authority partially negated the
as well as a recent valuation completed for TMG by an
positive effects of the SBS consolidation.
independent third party, confirm TMG’s earlier expectations
After the deduction of this non-recurring € 120 million item
concerning ProSiebenSat.1.
and other non-recurring items, the EBITDA rose by 8% to
€ 521.3 million (2006: € 482.9 million).
TMG is currently considering various options with regard to
the acquired ProSiebenSat.1 position.
The January to December pro forma figures for the new
combination indicate that the 2007 consolidated revenues
A more specific decision will be taken during the second
rose by 4.2% to € 3.2 billion (2006 pro forma: € 3.1 billion).
quarter of 2008.
The recurring EBITDA rose by 13.2% to € 783.2 million
(2006 pro forma: € 691.8 million).
Expomedia Group PLC (20%)
TMG acquired its interest in Expomedia in 2005. The aim
Renewed growth in revenues and profitability is expected
of the transaction was to acquire the opportunity to profit
for the current year. These projections are based on the
from the growth in the trade fairs,
consolidation of SBS over the entire year and leverage of
events and conferences segment and
the synergy potential. Although economic prospects are
to obtain access to new markets.
9 October 2007
In addition to developed media
uncertain, ProSiebenSat.1 has not observed any signs of a
decline.
markets (United Kingdom and
acquires majority interest in
ProSiebenSat.1 anticipates deriving synergy benefits in the
Germany), Expomedia is also active
TV-producer
€ 80 to € 90 million range from the integration of SBS into
in attractive growing media markets,
ProSiebenSat.1, starting in 2010. Two thirds of this amount
such as Poland, Russia and India.
will be derived from cost savings and one third from
has signed a letter of intent to
revenue increases. The Group expects to be able to realise
In 2007 the company once again
synergy benefits amounting to € 40 million in 2008.
realised a considerable increase in
Pilarczyk Mediagroep (PMG)
revenue in its core markets. The policy
and Carmichael & Pilarczyk B.V.
The price of listed preference shares (without voting rights)
initiated in 2006 to increase the focus
(C&P), respectively a producer
recently declined sharply. It is clear from the above figures
on larger product market concepts
of television programmes such
obtain a controlling interest in
that there is a discrepancy between the enterprise value
that offer greater opportunities
as RTL Autowereld, Gek op
calculated by means of the stock price of the preference
clearly produced results in 2007.
Wielen, RTL Transportwereld
shares and the actual underlying value. TMG has an option
Following the start-up losses incurred
and a producer of films, dealer
on shares with voting rights.
during past years, Expomedia
presentations, commercials and
achieved a positive result in 2007.
websites for customers in the
Funds of KKR and Permira have adjusted the value of the
investments in ProSiebenSat.1 effective at the end of 2007,
car-industry.
64
Riskmanagement
SPECIFIC RISK’S CONNECTED TO TMG
possible to achieve synergy among various printing units
TMG conducts risk management workshops at the Groep
coordinated market approach in the Netherlands.
level and for all operating companies as a structured method
TMG has appointed specific project groups focused on
for gaining and maintaining insight into current and future
realising these opportunities for cooperation across the
and between printing units and digital units, by adopting a
risks. TMG makes a distinction between strategic and
organisational boundaries of business units. Furthermore,
operational risks in this respect. Based on the outcome of
the structure within Telegraaf Media Nederland has been
these workshops, actions are formulated to mitigate the
designed in order to promote cooperation between business
identified risks.
units.
Strategic risk management
3. Inadequately developed ‘SMART’ culture
Strategic risk management is integrated into TMG’s planning
TMG is in the middle of a transition from a family culture to
and control cycle. Risk management is part of the annual
an innovative business culture. Work continued in 2007 to
plan of the Groep, as well as the operating companies
build on the start made in 2006 to identify four core values
belonging to the Groep. The Executive Board, together with
(professionalism, commitment, change-orientation and
Groep staff members, prepares a Groep level risk report.
integrity) and the refinement of a number of instruments
The management boards of the operating companies prepare
designed to promote professionalism and change-orientation,
a similar report for their own business units.
including a performance management evaluation process
The actions formulated on the basis of these reports are
in which managers are compensated on the basis of results
subject to periodic reporting. Risk management is part of
achieved. The recruitment of senior management and
the performance evaluation of management board members.
managers from outside the enterprise is designed to further
At the end of 2007, the following five risks were identified
programme has been set up to further promote the change
as the most important future risks for TMG:
in culture.
promote the desired culture. An internal communications
1. Insufficient ability to rapidly anticipate shifts in the
consumer and advertising markets caused by the impact
4. The inadequate or lagging realisation of the identified
of digital media.
cost saving opportunities in the traditional publishing
The largest portion of TMG’s revenues and operating result is
houses.
dependent on traditional businesses that are still immersed
The creation of Telegraaf Media Nederland, which clusters
in the transition process to the Internet/digital media. TMG
all printing activities, and the focus on EBITDA targets on
has implemented a number of actions designed to accelerate
the basis of highly detailed margin improvement projects,
matters in this area, including:
including a refined price list, are designed to make a significant
•
Formulation of specific Internet revenue targets;
contribution to the mitigation of this risk and to reducing fixed
•
•
Creation of business development positions in all business
costs. Furthermore, starting in 2008, the EBITA margin will
units focused on the development and/or acquisition of
be managed more tightly and on a monthly basis as part of
Internet concepts/products;
the performance management process and, where necessary,
Consolidation of the advertising sales for TMG’s total
business units are required to formulate additional actions
online reach into a centralised sales unit.
in order to ensure estimated margins are safeguarded.
2. Insufficient ability to effect the envisioned synergy
5. Insufficient coherence in providing direction to the
between various business units.
various business units by TMG Corporate.
TMG has acquired a number of business units on the basis
Due to the transition of TMG from a company that is highly
of the view that synergy exists and is created by servicing
dependent on a single product to a cross-media enterprise,
target groups using various forms of information and enter-
the recent additions of substantive business units and the
tainment including news, music, puzzles and games. From
focus on clear management through objectives, there is a
the chain management perspective, supplementary positive
need to refine TMG’s role and the direction it provides to
cooperative synergies among newspaper publishers, printers
business units and to align this with the Groep’s new identity
and distributors can also be achieved, and it is furthermore
and areas of particular interest. The initiatives started up in
Riskmanagement
2007 include, but are not limited to an ‘internal governance
volume and on in-house execution in relation to its printing
project’, the formulation of refined procedures, and the
operations, distribution and facilities services units. At the
intensification of the performance management process.
present time, activities are in all cases assessed to determine
Operational risk management
At the end of 2006, TMG initiated an Internal Control Project
whether they can be outsourced, which improves the flexibility
of costs. The divestment of the free local newspaper
delivery operations in 2007 is an example of this.
at the Groep level, with the objective of highlighting the
operational risks for each process in a structured way.
The right people in the right position
This means the retention of the right people, because in a
Risk analyses were carried out. A best practice was created
rapidly changing media market having the proper
for each process, for primary as well as supporting processes.
combination of competences is more important than ever.
Based on the process-related activities, the key risks and
The appointment process was refined for all key positions
the expected control measures are identified as part of the
in 2008. The standard that applies to management appoint-
best practice.
ments is that they take the assessment results and the
scores of the Management Drives Profile into account. A
In 2007, risk analyses, including the identification of the
management competence profile was developed in 2007.
degree to which risks are controlled, were carried out for the
This profile is used as a basis for classifying positions,
advertising, financial management, personnel & organisation
recruitment and selection, professionalisation and the
and procurement processes. Implemented actions resulted
evaluation of managers in relation to key positions.
in further improvement in the management and optimisation
A TMG-wide analysis was carried out to determine how
of primary and supporting processes. The risk analyses
operating companies conduct the performance management
concerning the circulation and editorial processes will be
process. A TMG-wide performance management policy was
completed in 2008.
developed and approved on the basis of this analysis. The
Due to the fact that TMG is operating in a dynamic environ-
as clear criteria and guidelines for various performance
basic premise underlying this policy includes elements such
ment and the organisation is in full motion, its processes
evaluation meetings and an unambiguous process with
are subject to continuous change. The optimisation of the
concrete deadlines. This policy will be implemented in 2008.
internal control system therefore continues to be an important point of attention.
Although proper and effective risk management and control
The further development and implementation of the
provide an absolute guarantee for achieving the enterprise’s
systems are in place, it is not possible for these systems to
operational risk management process is assigned to the
objectives, nor can they completely prevent substantive
business units.
errors, losses, fraud or a violation of laws and regulations.
Progress related to specific risks identified
in the 2006 Annual Report
Flexibility, time to market and shorter product lifecycles
Telegraaf Media Nederland’s coordinated approach to its
development activities is designed to make an important
contribution to the mitigation of this risk. The Sky Radio
Group, Keesing Puzzles & Games and TMG International
are also specifically focusing on business development
activities and shorter cycles for new, innovative concepts
that fit into the Internet/digital market.
High fixed costs combined with stagnating circulation and
advertising markets
Until recently, TMG was primarily focused on growth in
65
66
CORPORATE GOVERNANCE
The Executive Board and the Supervisory Board support the
basic principle of the Corporate Governance Code, namely
that the company is a long-term cooperative relationship
among all parties involved. Interested parties are the groups
and individuals who either directly or indirectly influence
or are influenced by the achievement of the company’s
objectives, such as employees, shareholders and other
providers of capital, suppliers and customers as well as the
government and civil society organisations.
The Executive Board and the Supervisory Board bear
complete responsibility for balancing these interests, with
a view to the continuity of the company. The Code came
into force effective from the financial year that started on
or after 1 January 2004. This chapter will describe the
approach that Telegraaf Media Groep N.V. has taken in
order to comply with the code. The shareholders approved
any deviations from the code during the General Meeting of
Shareholders.
BEST PRACTICE PROVISION II.1.1
Maximum appointment term of 4 years.
According to company policy, a Board member is an
employee of the company with a permanent appointment.
Periodic appointments create the risk of conflicts of interest,
between the long-term interests of the company and
short-term interests because of the reappointment of the
Board member. Shareholders can exert their influence
annually during the General Meeting as regards granting
of discharge to the Executive Board under the Corporate
Governance code. The Supervisory Board annually evaluates
the Executive Board’s performance.
PRINCIPLE II.2. REMUNERATION II.2.7
The remuneration policy contains a fixed component and a
variable component. The variable component pertains to an
individual bonus and to the Groep profit share scheme that
applies to all employees. TMG does not have any option
schemes or remuneration in the form of shares. In the
General Meeting, the shareholders agreed to the Executive
Board’s remuneration policy.
Maximum remuneration in the event of dismissal of directors.
This principle is only applied in part. Each member of the
Executive Board is an employee of the company. It is this
working relationship that determines the remuneration in
the event of dismissal, as the situation dictates, which
remuneration may be determined by the competent court.
67
BEST PRACTICE PROVISION III.2.1
The current composition of the management satisfies this
Independence of Supervisory Board members with the
best practice provision. It should be noted that Stichting
exception of not more than one person.
Beheer van prioriteitsaandelen TMG is entitled to recom-
Independent supervision will be adequately safeguarded if the
mend two of the five Board members for appointment to
majority of the Supervisory Board members can be deemed
the position of Board member, in consultation with the
to be independent according to III.2.2 (criteria for indepen-
Executive Board and the Supervisory Board. However,
dence). Because of its long-term vision, the company regards
such a recommendation is not binding.
it as very important to have more than one Supervisory
Board member with a high level of commitment to the
company due to experience or share ownership.
BEST PRACTICE PROVISION IV.2.8
Proxies
It is possible for the management of the trust office to
issue proxies to depositary receipt holders, even during
Maximum period of appointment for Supervisory Board
times of war. The practice of binding voting instructions
members.
from a depositary receipt holder to the management is not
This provision is not applied (see also the comments under
supported, as the Board is of the opinion that that those
iii.2.1). There are many positions within the company that
wishing to vote ought to be present at the general meeting
are occupied for longer periods. Experience and expertise
of shareholders. Holders of depositary receipts can freely
are extremely important. The connection with and know-
convert their depositary receipts into shares in order to
ledge of the company take precedence.
obtain voting rights.
BEST PRACTICE PROVISION III.5
BEST PRACTICE
PROVISION IV.3.1
Composition and role of the key committees of the
Supervisory Board.
Webcasting, etc., of meetings with
25 October 2007
The Code states that if the Supervisory Board consists of
analysts, presentations to analysts,
more than four members, it shall appoint an audit committee,
presentations to investors and
Keesing sells French publisher
of leisure magazines
a remuneration committee and a selection and appointment
institutional investors and press
committee. The current Supervisory Board has six members.
conferences.
In view of the commitment and wide-ranging expertise of
This provision will not apply as
Keesing Media Group, a subsi-
the members and the nature and scope of the company,
regards the so-called ’one-on-one’
diary of TMG (Telegraaf Media
meetings. However, group presen-
Groep), has sold Editions de
tations can be viewed via webcasts
Saxe S.A.S., located in Lyon.
(www.tmg.nl). After they are given,
The sale is effective as of
Any shares held by a Supervisory Board member in the
presentations will be posted on the
October 1, 2007.
company on whose Supervisory Board he/she sits are
Groep’s website.
The sale of this publishing
these committees will not be appointed.
long-term investments.
company for leisure magazines
The law provides adequate safeguards to prevent improper
is a logical consequence of
use of information or inside knowledge.
Keesing’s policy to concentrate
and digital games in Europe.
Rules governing ownership of and disclosure of transactions in securities by Supervisory Board members,
other than securities issued by their ’own’ company.
This provision is not observed: it represents too great an
invasion of Supervisory Board members’ privacy.
BEST PRACTICE PROVISION IV.2.2
Management of the trust office shall appoint the managers
of the trust office.
on publishing puzzle magazines
68
INFORMATION ON THE DIRECTIVE ON
TAKEOVER BIDS IN THE CONTEXT
OF ARTICLE 1 OF THE DECREE TO
IMPLEMENT ARTICLE 10 DIRECTIVE ON
TAKEOVER BIDS
•
The authorised capital of Telegraaf Media Groep N.V.
•
N.V. Exploitatiemaatschappij van Puijenbroek;
(‘TMG’) is € 50,000,000 consisting of:
•
Tweedy Browne Company LLC;
•
99,999,040 ordinary shares;
•
Navitas B.V.;
•
960 priority shares;
•
Cyrte Investments B.V.;
•
100,000,000 preference shares.
•
Aviva plc.
•
Stichting Administratiekantoor van aandelen Telegraaf
Media Groep N.V.;
Stichting Preferente aandelen Telegraaf Media Groep
N.V.;
•
Stichting Beheer van prioriteitsaandelen Telegraaf
Media Groep N.V.;
Each share carries a nominal value of € 0.25. Each share is
entitled to one vote.
Other than described in relation to priority shares above,
TMG’s issued capital is € 12,500,240 consisting of
the shares do not convey any special rights.
50,000,000 ordinary shares and 960 priority shares.
The TMG depositary receipts for ordinary shares are listed
TMG does not assign any rights to its employees to take
on the NYSE Euronext in Amsterdam, can be traded freely
out or acquire shares in the company’s capital or one of its
and converted without limitation.
subsidiaries, when control is not directly exercised by the
The Stichting Beheer van Prioriteitsaandelen Telegraaf
employees.
Media Groep N.V. (TMG Priority Share Management Trust)
owns the 960 TMG priority shares. Pursuant to TMG N.V.’s
As described above depositary receipts have been issued
articles of association, the Priority Share Management
in collaboration with the company.
Trust has a number of rights, including the right to issue
shares, grant rights to acquire shares, restrict or rule out
As far as TMG is aware, TMG’s shareholders are not party
the preferential right of subscription to ordinary shares,
to an agreement that could result in limiting the transfer
to determine the number of members on the Executive
of shares or the issue of depositary receipts for shares in
Board, to grant prior approval for certain decisions of the
collaboration with the company or in a restriction of voting
Executive Board, to reserve profit, to distribute dividend
rights.
in the form of shares and to propose mergers, spin-offs,
amendments to the articles of association or dissolution.
The two-tier board structure applies to TMG. TMG’s
Executive Board is appointed by the Supervisory Board.
The Stichting Preferente Aandelen Telegraaf Media Groep
The general meeting of shareholders is informed of any
N.V. has the right to acquire a number of preference shares
planned appointments. The Supervisory Board cannot
in TMG’s capital that corresponds to 50% of the total number
dismiss a member of the Executive Board before the
of ordinary shares issued, for the exercise of these rights.
general meeting of shareholders has been consulted about
The company does not impose any limitation on the transfer
Board has been given the opportunity to answer to the
of ordinary shares or on the issue of depositary receipts for
general meeting of shareholders.
the planned dismissal and the member of the Executive
shares in collaboration with the company. Priority shares
and preference shares (if issued) can only be transferred
Members of the Supervisory Board are appointed by the
with the approval of the Supervisory Board.
general meeting of shareholders on the recommendation
of the Supervisory Board. The general meeting of share-
Pursuant to the Wet op het financieel toezicht [Financial
holders and the Works Council can recommend persons for
Oversight Act] and the Besluit melding zeggenschap kapitaal-
nomination to the Supervisory Board. The Works Council
belang in uitgevende instellingen [Disclosure of Major Holdings
has a so-called strengthened right of recommendation for a
in Listed Companies Act] the following significant partici-
third of the members on the Supervisory Board. If a request
pations in TMG were reported to the Authority for Financial
is made to that effect, the Works Council can dismiss a
Markets (AFM) (source: www.afm.nl at 4 January 2008):
Supervisory Board member due to dereliction of duties,
due to other important reasons or due to drastic changes
or depositary receipts for shares that may be acquired, how
in circumstances as a result of which the company cannot
they may be acquired and the applicable price range, in
be reasonably expected to maintain the Supervisory Board
granting the authorisation (Article 13 of TMG’s articles of
member. The general meeting of shareholders can, on the
association at www.tmg.nl ). During the general meeting of
basis of an absolute majority of votes cast, representing at
shareholders on 19 April 2007, the shareholders authorised
least one third of the issued capital, rescind its confidence
TMG’s Executive Board up to October 2008, to buy back, on
in the entire Supervisory Board.
the stock exchange or otherwise, TMG’s shares or depositary
(See TMG’s articles of association at www.tmg.nl ).
receipts for shares up to no more than one tenth of the issued
capital at a price not lower than the nominal value and not
The general meeting of shareholders can only take a decision
higher than 10% above the average closing prices of the
to amend the articles of association on the basis of a proposal
depositary receipts for ordinary shares published in the Daily
submitted by the Priority Share Management Trust.
Official List during the five consecutive days prior to the date
of buy back.
Shares are issued on the basis of a decision taken by the
Priority Share Management Trust’s management board.
On 13 May 2007, TMG entered into an agreement with
The general meeting of shareholders can be requested to
Lavena Holding 4 GmbH that grants TMG the right (the
extend the Priority Share Management Trust’s appointment
Call Option) to acquire 12% of the share capital with voting
as the body authorised to issue shares, for a maximum
rights of ProSiebenSat.1 Media AG. The Call option can
period of five years each time (see Article 5 of TMG’s articles
be exercised as of 1 June 2008. The agreement contains
of association at www.tmg.nl ). During the meeting of 19 April
a provision on the basis of which the Call option expires
2006, the shareholders appointed the Priority Share
if a party (i) makes a public bid for TMG’s shares that is
Management Trust as the authorised body until 1 July 2008.
rejected by TMG; (ii) the public bid is accepted; and (iii) the
party as a result of the public bid acquires 50% plus 1 share
TMG is entitled to acquire paid up company shares or
in the issued capital of TMG.
depositary receipts for shares with due consideration to the
applicable legal provisions. Shares, other than for no value,
TMG has not negotiated any agreements with members of the
can only be acquired if the general meeting of shareholders
Executive Board or with any other employees that would grant
has so authorised the Executive Board. The authorisation
them the right to compensation in case their employment is
is valid for a period of at most 18 months. The general
terminated following the settlement of a public bid on TMG’s
meeting of shareholders must specify the number of shares
shares.
69
Financial Statements 2007
TMG Financial Statements 2007
73
consolidated income statement
Note
2007
2006
4
738,795
2,499
741,294
678,144
6,038
684,182
61,352
306,779
74,740
326,183
769,054
61,478
302,403
58,631
283,455
705,967
-27,760
-21,785
352,561
76,177
-8,370
420,368
-11,561
29,070
-7,958
9,551
392,608
-12,234
11
-6,676
399,284
-7,226
-5,008
13
–
399,284
54,189
49,181
400,097
-813
399,284
49,599
-418
49,181
Continued operations
Revenues
Total income
Personnel costs
Depreciation, amortisation and impairment
Total operating expenses
6
7
8
9
Operating result
Result from associates
Financial income
Financial expenses
Financial income and expenses
10
10
10
Result of continued operations, before tax
Income tax
Result after tax before gain on discontinued operations
Result of discontinued activities
Gain on sale of discontinued operation, net of tax
Result for the year
Attributable to:
Shareholders of Telegraaf Media Groep N.V.
Minority interest
Result for the year
Jaarrekening_2007_Engels.indd 73
Earnings per share
Result attributable to shareholders of ordinary shares
24
400,097
49,599
Weighted average number of ordinary shares
24
49,992,892
51,010,958
Basic and diluted earnings per share (EUR)
8.00
0.97
Basic and diluted earnings discontinued operations per share (EUR)
0.00
1.06
3-4-2008 15:46:04
74
consolidated balance sheet
as at 31 December
Note
2007
2006
14
15
16
17
429,603
112,155
22,626
7,293
571,677
423,095
126,937
89,078
154,691
793,801
18
16,401
54
17,576
119,486
496,025
11,992
661,534
11,069
2,326
19,950
130,786
67,347
17,294
248,772
1,233,211
1,042,573
12,500
854,315
866,815
13,125
484,916
498,041
4,021
870,836
6,487
504,528
25
27
28
29
38,074
29,684
10,201
33,892
111,851
208,484
24,980
21,595
42,831
297,890
25
30
21
21,760
226,630
2,134
250,524
23,759
213,110
3,286
240,155
362,375
538,045
1,233,211
1,042,573
assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments in associates
Other investments
Total non-current assets
Current assets
Inventories
Other investments
Tax receivables
Trade and other receivabels
Cash
Assets classified as held for sale
Total current assets
12
19
20
21
Total assets
equity and liabilities
Shareholders' equity
Issued capital
Other reserves
Attributable to equityholders Telegraaf Media Groep N.V.
22
Minority interest
Total shareholders' equity
Liabilities
Interest-bearing loans and borrowings
Post-employment benefit liabilities
Provisions
Deferred tax liabilities
Non-current liabilities
Accounts payable and other current liabilities
Liabilities classified as held for sale
Current liabilities
Total liabilities
Total equity and liabilities
75
consolidated statement of cash flows
Note
2007
2006
399,284
49,181
23,923
37,866
–
12,951
-10,788
1,981
-703
-411,561
–
-6,676
46,277
30,761
29,728
-10,489
1,806
-9,910
11,396
-4,976
–
-50,937
-6,065
40,495
-6,438
14,922
-3,114
24,392
-11,054
64,985
-1,369
-4,109
2,932
1,326
23,368
62,643
-2,452
-403
62,130
-2,596
148
60,195
21,016
913
-7,159
-10,504
-34,106
-2,936
413,035
191,047
2,618
15,400
2,272
591,596
1,254
2,451
-15,166
-14,290
-286,690
-4,105
–
–
169,904
6,735
35
-139,872
-25,000
-6,164
383
-192,746
–
-223,527
-23,100
-54,415
190,332
-7,809
24
105,032
Net increase (decrease) in cash
430,199
25,355
Cash at 1 January
Effect of exchange rate fluctuations on cash held
Change in cash classified as held for sale
Cash at 31 December
67,347
-83
-1,438
496,025
43,334
-232
-1,110
67,347
Cash flow from operating activities
Result for the year
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Revaluation of non-current financial assets
Impairment loss of intangible assets
Net financing costs
Share in result investments incorporated according to the ‘equity’ method
Gain on sale of property, plant and equipment
Gain on sale of non-current financial assets
Gain on sale of discontinued operations, net of tax
Income tax
15
14
14
10
10
5
10
11
Change in inventories
Change in trade and other receivables
Change in prepayments
Change in accounts payable and other current liabilities
Change in provisions and post-employment benefit liabilities
Paid interest
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Received for interest
Dividends received
Investments in intangible assets
Investments in property, plant and equipment
Acquisition of subsidiaries, net of cash acquired
Acquisition of minority interest
Divestment of minority interest
Divestment of other investments
Disposal of operation, net of cash disposed of
Divestments in property, plant and equipment
Change in other investments
Net cash from investing activities
Cash flows from financing activities
Dividends paid
Repurchase of own shares
Withdrawal of borrowings
Redemption of borrowings
Change in minority interest
Net cash from financing activities
14
13
76
consolidated statement of changes in equity
Attributable to equity holders of Telegraaf Media Groep N.V.
Note
Balance, 1 January 2006
Result for the year
IFRS adjustment
opening balance sheet
Foreign currency translation
Total income and
expense for the year
Capitalised development costs
Dividends paid to shareholders
Minority interest arising
on business combinations
Balance, 31 December 2006
Result for the year
Foreign currency translation
Total income and
expense for the year
Capitalised development costs
Dividends paid to shareholders
Withdraw of own shares
Minority interest arising
on business combinations
27
22
23
22
22
23
22
22
Issued Translation Other legal
capital
reserve
reserves
Treasury
shares
Retained
earnings
Total
Minority
interests
Total shareholders’
equity
13,125
268
1,625
–
515,450
530,468
688
531,156
–
–
–
–
49,599
49,599
-418
49,181
–
–
–
-232
–
–
–
–
-4,279
–
-4,279
-232
–
–
-4,279
-232
–
-232
–
–
45,320
45,088
-418
44,670
–
–
–
–
–
–
-191
–
–
–
–
-54,415
191
-23,100
–
–
-23,100
-54,415
–
–
–
–
-23,100
-54,415
–
13,125
–
36
–
1,434
–
-54,415
–
537,861
–
498,041
6,217
6,487
6,217
504,528
–
–
–
-159
–
–
–
–
400,097
–
400,097
-159
-813
–
399,284
-159
–
-159
–
–
400,097
399,938
-813
399,125
–
–
–
-625
–
–
–
–
-1,434
–
–
–
–
–
-6,164
54,415
1,434
-25,000
–
-53,790
–
-25,000
-6,164
–
–
–
–
–
–
-25,000
-6,164
–
–
12,500
–
-123
–
–
–
-6,164
–
860,602
–
866,815
-1,653
4,021
-1,653
870,836
notes to the consolidated financial statements
contents
page
78
86
88
90
90
90
90
90
91
91
92
93
93
94
96
97
99
99
Note
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Significant accounting policies
Segment reporting
Business combinations
Revenue
Personnel costs
Financial income and expense
Income tax
Current tax assets and liabilities
Discontinued operations
Intangible assets
Investments in associated companies
Other investments
Inventories
page
99
100
100
101
102
102
103
105
105
107
108
109
110
112
112
112
113
114
Note
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
Trade and other receivables
Cash
Assets held for sale
Dividend
Earnings per share
Share-based remunerations
Restructuring provision
Deferred tax assets and liabilities
Financial risk management
Off balance sheet liabilities
Investment commitments
Contingent liabilities
Related parties
Interests in joint ventures
77
78
1. significant accounting policies
Corporate information
the financial position of TMG. The comparative financial figures
2006 have been reclassified to conform with the current period
presentation.
Telegraaf Media Groep N.V. (the ‘company’) domiciled in
Amsterdam, the Netherlands is a media company with a leading
market position and recognized brands in the Netherlands.
The activities primarily are the publication of printed media and
the operation of, and participation in, digital media, radio and
television. The company’s shares are listed on the EuroNext stock
exchange in Amsterdam
The presentation of, and certain terms used in, the balance sheet,
income statement, statement of changes in equity and certain
notes has been changed in 2007 to provide additional and more
relevant information. Certain comparative amounts have been
reclassified to conform with the current period presentation.
None of the changes are significant.
The consolidated financial statements of the Company for the
year ended 31 December 2007 comprise the company and its
subsidiaries (together referred to as TMG) and jointly controlled
entities and TMG’s interest in associates.
Changes in accounting policy
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards
(IFRS) as adopted by the International Accounting Standards
Board (IASB) and as authorized by the European Commission,
and the interpretations of these standards by the IASB.
Following a broadening of TMG’s activities, changes have been
made with effect from 1 January 2006 in the presentation and
definition of the following accounting policies:
• Barter transactions were considered similar where advertisements
were exchanged within the same mediatype. As of 2007 the barter
transactions are similar where advertisements for the same
target group are exchanged, which reduced the other operating
expenses and revenue in 2006 by 11,123. In 2007, the change has
an effect of 12,557 on the other operating expenses and revenue;
• Mobillion’s revenue of SMS activities is recognised as a net
amount, whereas in 2006 this revenue was recognised as a
gross amount under revenue and other operating expenses.
The adjustment to the revenue and other operating expenses
in 2006 amounts to 33,345. In 2007, the change has an effect
of 26,942 on the revenue and other operating expenses.
Basis for preparation
Critical accounting estimates and judgements
The financial statements are presented in euros, rounded to the
nearest thousand. They are prepared on the historical cost basis,
except that the following assets and liabilities are stated at their
fair value: financial instruments available for sale.
In the process of applying TMG’s accounting policies, management
has made judgements, estimates and assumptions, which affect
the application of the accounting principles and on the amounts
recognised in the financial statements. The estimates and the
related assumptions are based on historical experience and other
factors, that are believed to be reasonable under the circumstances.
The outcomes of these form the basis for the evaluation of the
carrying value of assets and liabilities where this is not easily
apparent from other sources. The resulting accounting estimates
will, by definition, seldom equal the related actual results.
The financial statements have been compiled by the Executive
Board and together with the Supervisory Board signed on
13 March 2008.
Statement of Compliance
Non-current assets and disposal groups held for sale are stated at
the lower of the carrying amount and the fair value less costs to sell.
The principles for the valuation of assets and liabilities and the
determination of the result of the company financial statements
of Telegraaf Media Groep N.V., are in conformity with article 402,
Book 2 of The Netherlands Civil Code.
The accounting policies have been applied consistently for the
periods of 2006 and 2007 as presented in these consolidated
financial statements, with the exception of the following changes
in presentation and accounting policies.
Changes in presentation
The presentation of the income statement in 2007 is on continued
operations. The discontinued activities has a fractional effect on
These estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions of the estimates are applied in the period
during which the estimate is revised, if the revision only has consequences for the period in question. If the revision has consequences
for both the period under review and future periods, the estimate
is revised in both the period of revision and future periods.
The areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to the
consolidated statements are:
• intangible assets (useful life and impairment – see note 14);
• property, plant and equipment (useful life – see note 15);
• trade receivables (impairment – see note 19);
• post employment benefit liabilities (actuarial assumptions
– see note 27);
• income tax (rate and duration deferred tax – see note 11).
Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses or
income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
Judgements made by management in the application of IFRS that
have significant effect on the financial statements and estimates
with a significant risk of material adjustment in the next year are
discussed in the accompanying notes.
Unrealised gains arising from transactions with associates and
jointly controlled entities are eliminated to the extent of the
TMG’s interest in the entity. Unrealised losses are eliminated in
the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.
Basis of consolidation
The result of the subsidiaries acquired or disposed of during the
financial year are included in the consolidated financial statements
as of the effective transaction date. If necessary, changes have
been made to the figures of subsidiaries to align the accounting
principles with those of TMG.
The consolidated financial statements of Telegraaf Media Groep N.V.
and all its subsidiaries and joint ventures are incorporated in the
consolidation. The consolidation is based on the valuation and
the accounting principles of the parent company.
Subsidiaries
Subsidiaries are entities controlled by the company. Control exists
when the Company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. In assessing control, potential voting
rights that presently are exercisable or convertible are taken into
account. The financial statements of subsidiaries are included in
the consolidated financial statements from the date that control
commences until the date that control ceases.
Joint ventures
Joint ventures are those entities established by contractual agreement over whose activities TMG has joint control and in which
strategic decisions are taken by unanimous consent. The consolidated financial statements include TMG’s proportionate share of
the entities assets, liabilities, revenues and expenses with items
of a similar nature on a line-by-line basis, from the date that joint
control commences until the date that joint control ceases.
Associates
Associates are those entities in which TMG has a significant
influence, but no control, over the financial and operating policies.
Subsidiaries and joint ventures are no associated companies.
The consolidated financial statements include the TMG’s share of
the total recognised gains and losses of associates on an equity
accounted basis, from the date that significant influence commences
until the date that significant influence ceases. The difference
between the purchase price of TMG’s share and the fair value of
the identified assets, liabilities and contingent liabilities of the
associated company is goodwill. The goodwill is included in the
carrying amount of the investment and is tested for impairment
as part of the investment. An impairment is accounted for immediately in the income statement. When the TMG’s share of losses
exceeds its interest in the associate, the TMG’s carrying amount
is reduced to nil and recognition of further losses is discontinued
except to the extent that TMG has incurred legal or constructive
obligations or made payments on behalf of an associate.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated into euros at the
foreign exchange rate at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to euros at the foreign exchange
rate ruling at that date.
Foreign exchange differences arising on translation are recognised
in the income statement. Non-monetary assets and liabilities
that are measured in terms of historical cost in foreign currency
are translated at the exchange rate applying on the date of the
transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are translated to
euros at foreign exchange rates ruling at the dates the fair value
was determined.
Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on consolidation, are translated
to euros at foreign exchange rates ruling at the balance sheet date.
The revenues and expenses of foreign operations are translated to
euros at the date of the transaction. Foreign exchange differences
arising on translation are recognised directly in a separate component
of equity.
Foreign exchange gains and losses arising from a monetary item
receivable from or payable to a foreign operation, the settlement
of which is neither planned nor likely in the foreseeble future, are
considered to form part of a net investment in a foreign operation
and are recognised directly in equity in the translation reserve.
When a foreign operation is disposed of, in part or in full, the
relevant amount in the translation reserve is transferred to the
income statement.
79
80
Intangible assets
Goodwill
Goodwill represents amounts arising on acquisitions of subsidiaries,
joint ventures and associates. In respect of acquisitions, goodwill
represents the difference between the cost of the acquisition and
the fair value of the identifiable assets liabilities and contingent
liabilities acquired.
Goodwill is stated at cost less any accumulated impairment losses.
Goodwill is attributed to cash generating units and is not amortised.
Instead, it is tested annually for impairment (see accounting policy
on page 81). In respect of associates, the carrying amount of
goodwill is included in the carrying amount of the investment in
the associate.
Whenever an interest in a subsidiary, associate or joint venture is
sold, the corresponding goodwill is included in the determination
of the result of the transaction. Negative goodwill that arises during
an acquisition is included directly in the income statement.
The estimated useful lives are as follows:
8 - 50 years
•trademarks and publishing rights
5 years
•licences
3 - 5 years
•software
The amortisation method and estimated useful lives are assessed
annually.
Lease
Leases agreements, where TMG has substantially all the risks and
rewards of ownership are classified as financial leases. Upon initial
recognition the leased asset is measured at an amount equal to
the lower of its fair value and the present value of minimum lease
payments. Subsequent to initial recognition, the asset is accounted
for in accordance with the accounting policy applicable to that
asset. Other leases are operating leases, which assets are not
recognised in TMG’s balance sheet.
Other intangible assets
Other intangible assets concern licences, (internally developed)
software, trademarks and publishing rights. The other intangible
assets acquired by the TMG are stated at cost less accumulated
amortisation (see below) and impairment losses (see accounting
policy 81).
Owned assets
Property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses (see accounting policy on
page 81).
Property that is being constructed or developed for future use is
stated at cost until construction or development is complete.
Expenditure for development activities, whereby the research
results are applied to a plan or design for the production of new
or substantially improved products and processes, are capitalised
if the product or process is technically and commercially feasible
the expenses are estimated reliable, and TMG has sufficient
resources to complete the development. The capitalised costs
comprise the cost of material, investments, direct labour and an
appropriate proportion of overheads. With regard to the capitalised
internal hours, a legal reserve is stated. Other development
expenditure is recognised in the income statement as an expense
as incurred.
Subsequent expenditure
TMG recognises in the carrying amount of an item of property,
plant and equipment the cost of replacing part of such an item
when that cost is incurred if it is probable that the future economic
benefits embodied with the item will flow to the TMG and the
cost of the item can be measured reliably. All other costs are
recognised in the income statement as an expense as incurred.
Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised
only when it increases the future economic benefits embodied
in the specific asset to which it relates. In that case, the costs are
capitalised in so far as this increases the economic benefits.
Amortisation
Amortisation is charged to the income statement on a straight-line
basis over the estimated useful lives of intangibles assets unless
such lives are indefinite.
Other intangible assets are amortised from the date they are
available for use.
Depreciation
Depreciation is charged to the income statement on a straight-line
basis over the estimated useful life of each part of a property, plant
and equipment. Land is not depreciated.
The estimated useful lives are as follows:
20 - 25 years
•buildings
5 - 10 years
•machines and installations
5 years
•other tangible fixed assets
The depreciation method, estimated useful life and residual value
are assessed annually.
Other investments
Other investments are participations, prepaid operational leases
and long-term receivables. The participations, in which the TMG
does not have power of control, are valued at fair value.
3-4-2008 15:46:04
81
Prepaid operational leases comprise the purchased leaseholds
of the grounds on the campus in Amsterdam. These are amortised
on a straight-line basis over the duration of the leaseholds
concerned. Non-current receivables are initially recorded at cost
price less attributable transaction costs. They are then capitalised
at amortised cost, whereby a difference between the cost and
the redemption amount on the basis of the effective interest
method is included in the income statement over the duration
of the receivables.
Financial instruments
Inventories
Derivatives are recognised initially at cost; attributable transaction
costs are recognised in income statement when incurred.
Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are accounted for in income statement.
If the range of various estimates in fair value of financial instruments
is substantial, the probabilities of the various estimates can not
be reasonably assessed, is the financial instrument stated at cost
instead of fair value.TMG applies no hedge accounting.
Inventories are stated at the lower of cost or net realisable value.
The net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and
the selling expenses. The cost price of the inventories is based on
the ‘first in, first out’ principle (FIFO) and includes expenditure
incurred in acquiring the inventories and bringing them to their
existing location and condition.
TMG finite holds derivative financial instruments to hedge interest
rate risk exposures. Embedded derivatives are separated from
the host contract and accounted for separately if the economic
characteristics and risks of the host contract and the embedded
derivative are not closely related, a separate instrument with the
same terms as embedded derivative would meet the definition of
a derivative, and the combined instrument is not measured at fair
value through profit and loss.
Securities
Trade and other receivables are stated at cost less impairment losses.
Investments in debt instruments and shares
Financial instruments held for trading are classified as current assets
and are stated at the fair value, with any gain and loss recognised
in the income statement. If the range of various estimates in fair
value of financial instruments is substantial, the probabilities
of the various estimates can not be reasonably assessed, is the
financial instrument stated at cost instead of fair value.
Cash
Cash comprises cash balances and call deposits.
Impairments
When TMG has the positive intent and ability to hold financial
instruments to maturity, they are stated at amortised cost less
impairment losses.
Other financial instruments held by TMG are classified as being
available for sale and are stated at fair value, with any resultant
gain or loss being recognised directly to the shareholders’ equity,
except for impairment losses and, in the case of monetary items
such as debt securities, foreign exchange gains and losses. When
these investments are derecognised, the cumulative gain or loss
recognised directly to the shareholders’ equity is recognised in
Income statement. Where these investments are interest-bearing,
interest calculated using the effective interest method is recognised
in income statement.
The fair value of the financial instruments classified as held for
trading and available for sale is their quoted bid price at the
balance sheet date. Financial instruments classified as held for
trading or available for sale investments are recognised respectively derecognised by TMG on the date it commits to purchase
respectively to sell the financial instruments. Investments held to
maturity are recognised on the day they are transferred to TMG
and are removed from the balance sheet on the day they are
disposed of.
The carrying amount of TMG’s assets other than inventories and
deferred tax assets, are reviewed at each balance sheet date to
determine whether there is an indication of impairment. If such
indication exists, the asset’s recoverable amount is estimated
(see enclosed the policy for calculation of recoverable amount).
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable
amount is estimated at each balance sheet date to determine
whether there is an indication for impairment. An impairment
loss is recognised whenever the carrying amount of an asset,
or the cash-generating unit exceeds its recoverable amount
Impairment losses are recognised in the income statement.
Impairment losses recognised of cash generating units are allocated
first to reduce the carrying amount of any goodwill allocated to
cash-generating units and then, to reduce the carrying amount of
the other assets in the unit on a pro rata basis.
3-4-2008 15:46:04
82
When a decline in the fair value of an available financial asset has
been recognised directly in the shareholders’ equity, and there
is objective evidence that the asset is impaired, the cumulative
loss that had been recognised directly in equity is entered in
the income statement, even though the financial asset has been
derecognised. The amount of cumulative loss that is recognised
in income statement is the difference between the acquisition
cost and the current fair value, less any impairment loss on that
financial asset previously recognised in the income statement.
Calculation of recoverable amount
The realisable value of TMG’s investments in securities held to
maturity and receivables valued at the amortised cost of acquisition
is calculated as the present value of the expected future cash
flows, discounted at the original effective interest rate (i.e. the
effective interest calculated at the time at which these financial
assets are initially entered). Receivables with a short residual
term are not discounted to the present value.
For the other assets, the realisable value is the revenue value,
or the operational value if this is higher. When determining the
operational value the present value of the estimated future flows
is calculated using a pre-tax discount rate that reflects both the
current market valuations of the time value of money and the
specific risks related to the asset. For an asset that generates
no cash receipts which are significantly independent of those
of other assets, the realisable value is determined for the cashgenerating unit to which the asset belongs.
Reversal of impairment
An impairment loss for a security held to maturity or a receivable
carried at amortised cost is reversed if the subsequent increase in
recoverable amount can be related objectively to an event occurring
after the impairment loss was recognised.
An impairment loss in respect of goodwill is not reversed. In respect
of other assets, an impairment loss is reversed if there has been
a change in the estimates used to determine the recoverable
amount. An impairment is only reversed to the extent that the
asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Issued capital
TMG’s ordinary shares are designated as the Company’s equity.
Minority interests
Minority interests are the portion of the profit and loss and net
assets of a subsidiary attributable to equity interests that are not
owned, directly or indirectly through subsidiaries, by TMG. In the
event of both a written put and a call option on the shares, these
shares will be included in TMG’s economic interest, and not classified as a minority interest.
Treasury shares
When share capital recognised as equity is repurchased, the amount
of the consideration paid, which includes directly attributable
costs, is net of any tax effects, and is recognised as a deduction
from equity. Repurchased shares classified as treasury shares are
sold or reissued subsequently, the amount received is recognised
as an increase in equity, and the resulting surplus of deficit on the
transaction is transferred to/from retained earnings. Withdrawn
shares are deducted from issued capital for nominal value, and
the resulting surplus of deficit on the transaction is transferred
to/from retained earnings.
Interest-bearing loans and borrowings are recognised initially
at cost less attributable transaction costs. Subsequent to initial
recognition, interest-bearing loans are stated at amortised cost,
with any difference between cost and redemption value being
recognised in the income statement over the period of the
borrowings on an effective interest basis.
Share-based remunerations
Share-based remunerations are discounted at the (expected) present
value of the shares owned by the management at settlement date.
The grant date fair value of shares granted to management is
recognised over the period that the management is unconditionally
entitled to sell the shares to TMG. Expenses are recognised when
payment of shares is unconditional or realized. In the event of
both a written put and a call option on the shares, these shares
will be included in TMG’s economic interest. At the same time,
a management obligation is included. The valuation is the discounted
fair value of the shares at settlement date.
Post-employment benefit liabilities
The group has established various pension schemes, some under
its own management, with Stichting Telegraaf Pensioenfonds 1959
and some placed with external parties such as industry wide pension
funds and insurance companies.
a. Defined benefit plan
TMG’s net obligation in respect of defined benefit plans is calculated
separately for each scheme by estimating the amount of future
benefit that employees have earned in return for their service in
the current and prior periods. That benefit is discounted to determine its present value. Any unrecognised past servicecosts and
the fair value of plan assets are deducted hereon. The discount
rate is the yield as at the balance sheet date on AAA credit rated
bonds that have maturity dates approximating to the terms of
TMG’s obligations. The calculation is performed by a certified
actuary using the ‘projected unit credit’ method.
3-4-2008 15:46:04
In respect of actuarial gains and losses that arise while calculating
TMG’s obligation in respect of a plan, to the extent that any
cumulative unrecognised actuarial gain and loss exceeds 10 per
cent of the greater of the present value of the defined benefit
obligation and the fair value of plan assets, that portion is
recognised in the income statement over the expected average
remaining working lives of the employees participating in the plan.
Otherwise, the actuarial gain and loss is not recognised.
Where the calculation results in a benefit to TMG, the recognised
asset is limited to the net total of any unrecognised actuarial
losses and past service costs and the present value of any future
refunds from the plan or reductions in future contributions to
the plan. When the benefits of a plan are improved, the portion
of the increased benefit relating to past service by employees is
recognised as an expense in the income statement on a straightline basis over the average period until the benefits become
vested. To the extent that the benefits vest immediately, the
expense is recognised immediately in the income statement.
The result ensuing from the curtailment or termination of a defined
benefit plan is incorporated in income statement immediately
when the curtailment or termination exists. The result consists of
the change in the present value of the defined benefit obligation
and the fair value of plan assets and previous actuarial results and
past service costs which have not accounted for. A curtailment
exists if there is a material reduction in the number of employees
covered by the pension plan or if the plan changes substantially.
Determination of fair values
A number of TMG’s accounting policies and disclosures require
the determination of fair value, for both financial and non-financial
assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
When applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific
to that asset or liability.
The fair value of property, plant and equipment recognised as
a result of a business combination is based on market values.
The market value of property is the estimated amount for which
a property could be exchanged on the date of the valuation
between a willing buyer and a willing seller in an arm’s length
transaction after proper marketing wherein the parties had each
acted knowledgeably, prudently and without compulsion.
The market value of items of plant, equipment, fixtures and fittings
is based on the quoted market prices for similar items.
Intangible assets
The fair value of publishing rights and trademarks acquired in a
business combination is based on the discounted estimated royalty
payments that have been avoided as a result of the patent or
trademark being owned. The fair value of other intangible assets
is based on the discounted cash flows expected to be derived
from the use and eventual sale of the assets.
b. Defined contribution plan
Obligations for contributions to defined contribution plans are
recognised as an expense in the income statement as incurred.
The fair value of trade and other receivables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the reporting date.
Provisions
Derivatives
The fair value of interest rate swaps is based on broker quotes.
Those quotes are tested for reasonableness by discounting
estimated future cash flows based on terms and maturity of each
contract and using market interest rates for similar instrument at
the measurement date.
A provision is recognised in the balance sheet when TMG has a
present legal or constructive obligation as a result of a past event
and it is probable that an outflow of economic benefits will be
required to settle the obligation and can be reliably estimated.
If the effect is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and,
where appropriate, the specific risks related to the liability.
A provision for restructuring is recognised when TMG and the
employees council has approved a detailed and formalised restructuring plan and the restructuring has either commenced or has
been announced. Future operating costs are not provided for.
Accounts payable and other current liabilities are stated at cost.
83
Share based payment transactions
The fair value of share-based payment transactions is based on
the expected cash value of the cash flow from the subsidiary.
Factors affecting valuation include strike price of the instrument,
the expected cash flow from the entity and the discount rate.
Revenue
The revenues exclude value added tax and any discounts.
Revenues from the sale of goods are recognised in the income
statement when the significant risks and rewards of ownership
have been transferred to the buyer. Revenues relating to services
provided are included in the income statement in proportion to
performance in the same financial year.
3-4-2008 15:46:05
84
No revenue is recognised if there are significant uncertainties
regarding recovery of the consideration due, associated costs or
the possible return of goods continuing management involvement
with the goods.
Interest income is recognised in the income statement as it accrues
using the effective interest calculation method. Dividend income
is recognised in the income statement on the date the entity’s
right to receive payments.
Barter transactions
If advertisement space or time are exchanged or swapped for
advertisement space or time which are similar as regards the
nature, fair value and same target population, such an exchange
is not recognised as a revenue-generating transaction.
If this condition is not applicable, the exchange will be regarded
as a transaction which generates revenue. The amount of the
revenue is determined on the basis of the fair value of the goods
or services received, plus or minus any cash or assets which have
been received or paid for which can be transferred in cash.
If the fair value of the received goods or services cannot be reliably
determined, the revenue is determined on fair value of the
exchanged goods or services plus or minus cash or assets which
can be transferred.
Foreign currency gains and losses are reported on a net basis.
Government grants
Government grants are recognised in the balance sheet initially
as income when there is reasonable assurance that it will be
received and that TMG will comply with the conditions attaching
to it. Grants that compensate TMG for the expenses are recognised
in the income statements on a systematic basis in the same period
the expenses are made.
Expenditure
Lease payments
Payments made under operating leases are recognised in the
income statement on a straight-line basis over the term of the
lease. Lease incentives received are recognised in the income
statement as an integral part of the total lease expense.
Minimum lease payments from financial lease are apportioned
between the finance charge and the reduction of the outstanding
liability. The finance charge is allocated to each period during the
lease term so as to produce a constant periodic interest rate on
the remaining balance of the liability. Conditional lease payments
are incorporated by revising the minimal lease payments during
the remaining lease term as soon as the adaptation of a lease is
confirmed.
Result from associates concerns TMG’s share in the total result of
the associate, when TMG has significant influence. Result on the sale
of the associate is stated on the date the transaction is effected.
The financial income and expenses comprise interest payable
on borrowings calculated using the effective interest method,
interest income on funds invested, dividend income and foreign
exchange gains and losses.
Income tax
Income tax on the profit or loss for the year comprises current
and deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly in
shareholders’ equity, in which case it is recognised in shareholders’
equity.
Current tax is the expected tax payable on the taxable income for
the year, using tax rates enacted or substantially enacted at the
balance sheet date, and any adjustment to tax payable in respect
of previous years.
Deferred tax is provided using the balance sheet liability method,
providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. The following temporary
differences are not provided for: non tax-deductible goodwill,
the initial recording of assets or liabilities which affect neither
the commercial nor the fiscal profit, and differences related to
investments in subsidiaries in so far as these are probably not
going to be settled in the foreseeable future. The amount of the
provision for deferred tax liabilities is based on the way in which
the carrying amount of the assets and liabilities is expected to be
realised or settled, with the tax rates being used as determined
on the balance sheet date, or to which a material decision has
already been taken on the balance sheet date. A deferred tax asset
is recognised only to the extent that it is probable that future
taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.
The deferred tax liabilities and debts are balanced if there is a
legal entitlement to settle current and deferred tax. The income
tax is charged by the same Tax Authorities and TMG intends to
balance the amounts.
Segment reporting
A segment is a distinguishable component of TMG that is engaged
either in providing products and services (business segment),
or in providing products or services within a particular economic
environment (geographical segment), which is subject to risks
and rewards that are different from those of other segments.
3-4-2008 15:46:05
Assets classified as held for sale and discontinued operations
Then, on initial classification as held for sale, non-current assets
and disposal groups are recognised at the lower of carrying
amount and fair value less costs to sell.
Impairment losses on initial classification as held for sale are included
in profit and loss, even when there is a revaluation. The same
applies to gains and losses on subsequent re-measurement.
A discontinued operation is a component finished of TMG’s business
that represents a separate major line of business or geographical
area of operations, or is a subsidiary acquired exclusively with a
view of resale.
Classification as a discontinued operation occurs upon disposal or
when the operation meets the criteria to be classified as held for
sale, if earlier. A disposal group that is to be abandoned may also
qualify.
Cash flow statement
The consolidated cash flow statement is stated in accordance
with the indirect method. A distinction is made between the
operating, investment and financing activities. The pre-tax profit
is adjusted in the cash flow from operating activities for income
statement and changes in balance sheet which have no effect on
the cash flow for the year.
Effect of new accounting standards and interpretations
not yet adopted
Certain new standards, amendments to standards and interpretations are mandatory for TMG’s accounting periods on or after
January 1, 2008 or later periods.
The following standards are not early adopted by TMG:
• IAS 1 revised – Presentation of Financial statements
• IAS 23 revised – Borrowing Costs
• IFRS 3 revised – Business Combinations
• IFRS 8 – Operating segments
• IFRIC 11 – Group and Treasury share transactions
• IFRIC 12 – Service Concession Arrangements
• IFRIC 13 – Customer Loyalty Programmes
• IFRIC 14 – The limit on a Defined Benefit Asset,
Minimum Funding Requirements and Their Interaction
• IFRIC D 12 – Real estate Sales
• IFRIC D 22 – Hedges of a Net Investment in a Foreign Operation
TMG expects that the adoption of these new standards, amendments to standards and IFRIC interpretations in the future will
have no material impact on TMG’s financial statements.
85
86
2. segment reporting
Business segments
The group comprises the following main business segments:
-- Publishing: The publishing of national and regional newspapers, magazines, puzzle booklets and free door-to-door papers.
-- Radio: The operating of several radio stations in the Netherlands and Germany (until December 2007).
-- Other: Other activities include, among other things, the printing and distribution of newspapers, providing of office space and related facilities,
providing (internal) ICT services, organising exhibitions and trade fairs and the operating of mobile telephone services.
The activities sold in June 2006 include:
-- in the Publishing segment the activities of Media Groep Limburg, De Trompetter;
-- in the ‘other’ segment: the activities of Nieuwsdruk Limburg.
2007
Revenue from third-party transactions
Revenue from transactions with other segments
Total revenue
Segment result for amortisation
Amortisation and impairment
Segment result
Publishing
Radio
Other activities
Eliminations
Total
621,010
1,731
622,741
52,798
273
53,071
64,987
230,412
295,399
–
-232,416
-232,416
738,795
–
738,795
59,328
20,675
38,653
25,010
27,348
-2,338
-18,645
2,663
-21,308
–
–
–
65,693
50,686
15,007
Unallocated revenue and costs
Operating result
-42,767
-27,760
Income tax
Result of continued operations
352,561
67,807
6,676
399,284
Gain on sale of discontinued operations
Result for the year
–
399,284
Segment assets
Unallocated assets
Total assets
310,077
251,661
192,889
–
754,627
22,626
455,958
1,233,211
Segment liabilities
Unallocated liabilities
Total liabilities
166,851
80,867
50,557
–
298,275
64,100
362,375
Segment investments
Unallocated investments
Total investments
48,532
907
15,005
–
64,444
14,588
79,032
Unallocated depreciation and amortisation
Total depreciation, amortisation and impairment
24,021
27,990
22,554
–
74,565
175
74,740
2,478
134
965
–
3,577
88
3,665
Average number of FTEs
Unallocated FTEs
Total FTEs
3-4-2008 15:46:05
2006 1)
Revenue from third-party transactions
Revenue from transactions with other segments
Total revenue
Segment result for amortisation
Amortisation and impairment
Segment result
87
Publishing
Radio 2)
Other activities
Eliminations
Total
583,070
3,241
586,311
36,141
910
37,051
58,933
251,193
310,126
–
-255,344
-255,344
678,144
–
678,144
41,116
9,827
31,289
16,677
18,365
-1,688
-22,973
2,096
-25,069
–
–
–
34,820
30,288
4,532
Unallocated revenue and costs
Operating result
-26,317
-21,785
Income tax
Result of continued operations
-11,561
21,112
7,226
-5,008
Gain on sale of discontinued operations 3)
Result for the year
54,189
49,181
Segment assets
Unallocated assets
Total assets
294,190
275,263
190,803
–
760,256
89,078
193,239
1,042,573
Segment liabilities
Unallocated liabilities
Total liabilities
163,341
134,414
62,508
–
360,263
177,782
538,045
Segment investments
Unallocated investments
Total investments
108,885
278,867
16,547
–
404,299
8,942
413,241
13,776
18,960
25,854
–
58,590
41
58,631
2,425
76
1,222
–
3,723
103
3,826
Depreciation and amortisation
Unallocated depreciation and amortisation
Total depreciation and amortisation
Average number of FTEs
Unallocated FTEs
Total FTEs
Presentation of financial figures 2007 is on continued operations, comparative figures 2006 are reclassified.
As of 12 April 2006, Sky Radio Group was acquired.
3)
Primarily concerns the activities in Limburg which were disposed of on 13 June 2006.
1)
2)
Segment information is presented in respect of TMG’s business and geographical segments. The primary segmentation basis, business segments,
is based on TMG’s management and internal reporting structure. Distinction is made between publishing, radio and other activities because of
differences in risks and rewards. The intercompany financing is unallocated. The inter-segment pricing, principally the printing and distributing
of newspapers and the support of ICT projects and - infrastructure, are determined on at arm’s length basis.
Segment results, assets and liabilities include items directly attributable to the segment as well as, those that can be allocated on reasonable
basis. Unallocated items comprise primarily items allocated at group level. The increase in unallocated revenue and costs in 2007 is caused by
the employee profit share, Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected
to be in use for more than one reporting period.
88
Geographical segments
The presentation of information based on geographical segments, the geographical location of the clients is used for the segment’s yields.
The segments’ assets are determined on the basis of the geographical location of those assets.
The Publishing segment is mainly operating in the Netherlands. TMG publishes newspapers in the Netherlands, Sweden and the Ukraine.
Puzzle magazines are published in Belgium, France, Denmark and Poland. In view of their size, these are not designated as a separate segment.
As a result, the assets related to these activities are not presented separately.
Revenues, assets and investments are divided in geographical segments as follows:
2007
The Netherlands
Other countries
Total
2006
The Netherlands
Other countries 1)
Total
1)
Revenues
Assets
Investments
684,576
54,219
738,795
1,142,637
90,574
1,233,211
73,605
5,427
79,032
Revenues
Assets
Investments
643,954
34,190
678,144
994,881
47,692
1,042,573
394,895
18,346
413,241
As of 30 June 2006, Keesing Media Group was acquired.
3. business combinations
On 29 June 2007, TMG took over the puzzle magazines of Sanoma Uitgevers for 22,800. Various other smaller acquisitions also occurred
in 2007: Segling Magazine from Nakterhuset Forlag AB, Aromedia B.V. (Carp), Media librium B.V., Pilarczyk Mediagroep B.V. (PMG),
Carmichael & Pilarczyk B.V. (C&P) RTL FM and Onehello. Given the size of these acquisitions, no separate explanations for them are included
in the financial statements. If the acquisition of Sanoma Uitgevers’ Puzzle portfolio and the other acquisitions had happened on 1 January 2007,
the revenue and net result would have been 7,970 and 140 more respectively.
Sanoma Uitgevers’ Puzzelportfolio
Other acquisitions
Total 2007
Total 2006
Acquisition date
29 juni 2007
Result as of
Purchase price acquisition date
Balance
Other
acquired assets intangible assets
Goodwill
22,800
12,883
35,683
1,043
-1,648
-605
-368
-650
-1,018
8,982
3,681
12,663
14,186
9,852
24,038
292,861
584
-81,145
206,669
167,641
In 2006 TMG acquired Relatieplanet B.V. and IWD Nederland B.V. (1 January 2006, purchase price 20,526), Sky radio group (12 April 2006,
purchase price 189,100) and Keesing Media Group (30 June 2006, purchase price 83,235). The total cash flow for acquisitions of subsidiaries,
net of cash acquired, amounted 286,690.
89
Puzzle portfolio
Other
acquisitions
Total 2007
Total 2006
8,982
–
–
–
10
–
1,272
–
–
–
-1,650
8,614
3,681
2,942
–
–
11
410
305
-871
-190
–
-3,257
3,031
12,663
2,942
–
–
21
410
1,577
-871
-190
–
-4,907
11,645
206,669
3,763
8
9,072
1,809
26,286
6,475
-43,260
-1,032
-59,595
-24,872
125,524
Acquisition goodwill
Consideration paid in cash
14,186
22,800
9,852
12,883
24,038
35,683
167,641
293,165
Cash acquired
Net cash outflow
-1,272
21,528
-305
12,578
-1,577
34,106
-6,475
286,690
Intangible assets
Financial fixed assets
Assets held for sale
Inventories
Cash
Deferred tax
FM license liablities
Current liabilities
Net identifiable assets and liabilities
Sanoma Uitgevers’ Puzzle portfolio
On 29 June 2007, Keesing Media Group B.V. took over the activities involving the puzzle magazines of Sanoma Uitgevers by means of an asset/
liability transaction. Sanoma Uitgevers’ Puzzle portfolio comprises Puzzelsport, Bingo! and 10 voor Taal.
The effect of the takeover of Sanoma Uitgevers’ Puzzle portfolio on the consolidated assets and liabilities was as follows:
Intangible assets
Inventories
Cash
Acquisition goodwill
Total
Before
After
acquisition date acquisition date
–
–
1,272
-1,272
–
8,982
10
1,272
-1,650
8,614
–
–
14,186
22,800
The identified intangible assets with total value of 8,982 primarily involve brand names and publishing rights in the puzzle portfolio (5,865)
and subscription data (2,067). The amortisation period for the brand names and publishing rights is 10 years, and subscription data is fully written
down in 5 years.
If the acquisition of Sanoma Uitgevers’ Puzzle portfolio had happened on 1 January, the revenue and net result would have been 3,340 more
and 1,360 more respectively.
The goodwill acquired as a result of the takeovers is primarily attributable to the expertise and technical qualities of the employees from the
acquired companies and the synergy advantages that are expected to arise from integration of the companies with existing publishing activities
of TMG.
90
4. revenue
Advertisements
Circulation
Print third parties
Distribution
Other activities
Total
2007
2006
362,072
291,666
8,451
43,708
32,898
738,795
342,888
258,822
8,279
42,710
25,445
678,144
The revenue of 738,795 (2006: 678,144) includes barter transactions of 2,412 (2006: 2,290). The acquisition of Sky Radio Group, Keesing Media
Group, Relatieplanet/Iwannadate, based on the acquisition dates, have affected in 2006 the revenue of advertisement, circulation and other.
The other activities consist of SMS- and internetactivities.
5. other operating income
2007
2006
703
1,000
796
2,499
4,976
1,062
–
6,038
2007
2006
57,738
3,614
61,352
57,802
3,676
61,478
2007
2006
196,930
28,893
21,939
47,047
11,970
306,779
183,884
25,453
16,692
35,318
41,056
302,403
Note
2007
2006
14
14
15
37,866
12,951
23,923
74,740
28,882
1,406
28,343
58,631
Net gain on disposal of property, plant and equipment
Grants
Receipt of NDP contribution
Total
6. raw and auxiliary materials
Paper and Ink
Auxiliary materials
Total
7. personnel costs
Wages and salaries
Compulsory social security contributions
Contributions to pension schemes
Other personnel costs
Restructuring costs
Total
Note
27
28
The average amount of employees (FTE) is 3.665 (2006: 3.826).
8. depreciation, amortisation and impairment
Amortisation
Intangible assets impairment
Depreciation
Total
91
9. other operating expenses
Transport and distribution costs
Subcontracted work and technical production costs
Sales costs
Editorial costs
Research and development costs
Impairment of trade receivables
Other
Total
2007
2006
124,939
56,499
37,831
25,890
–
1,650
79,374
326,183
118,783
44,077
33,706
26,168
981
1,181
58,559
283,455
The other operating expenses of 79,374 (2006: 58,559) consist of IT expenses 21,557 (2006: 5,138), housing expenses 17,055 (2006: 16,454) and
other general expenses 40,762 (2006: 36,967). The increase of the IT expenses is arised by partially outsourcing of the IT activities at the end of 2006.
10. financial income and expense
2007
2006
354,542
-1,981
352,561
–
-11,561
-11,561
Interest income
Dividend income from other investments
Gain on sale other investments (2006: revaluation)
Other financial income
Financial income
19,027
125
57,019
6
76,177
16,036
2,451
10,489
94
29,070
Financial expenses
-8,370
-7,958
Gain on sale of the associates
Share of result associates
In July 2007, TMG sold its interest in SBS Broadcasting S.à.r.l. The associate was valued in accordance with the ‘equity’ method. The gain on
the sale of the interest amounted 349,544 and was recognised under ‘Result from associates’. For more information, see note 16.
In addition, TMG sold its interest in ANP holding. The investment was valued in accordance with the ‘equity’ method. The result from the sale
of the interest amounted to 2,500 and was recognised under ‘Result from associates’.
On 13 April 2007, TMG sold its interest in Wegener N.V. The gain on sale of this investment (including cumulative financing preference shares),
57,019, is recorded as financial income from gain on sale of other investments.
92
11. income tax
2007
2006
Current tax
Current year
Adjustment from prior years
-270
381
8,208
–
Deferred tax
Origination and reversal of temporary differences
Change in tax rate
Total income tax continued operations
-6,787
–
-6,676
-9,624
-5,810
-7,226
Tax on continued operations
Tax on discontinued operations
Income tax in consolidated income statement
-6,676
–
-6,676
-7,226
1,161
-6,065
Tax on gain on sale discontinued operations
Total income tax
–
-6,676
-762
-6,827
2007
2006
392,608
–
–
392,608
-12,234
4,413
50,175
42,354
25.5%
29.6%
100,115
-533
1,919
-108,456
-252
2,647
–
-2,116
-6,676
12,536
-732
1,552
-16,116
-505
2,248
-5,810
–
-6,827
Result continued operations before tax
Result discontinued operations before tax
Gain on sale of discontinued operations, before tax
Result before tax
Tax rate in the Netherlands
Income tax in the Netherlands
Effect of tax rate in foreign jurisdictions
Non-deductible expenses
Tax exempt revenues
Rate difference
Non-settled losses
Change in tax rate
Tax facilities
Total
The tax exempt revenues includes the gain on sale of SBS Broadcasting S.à.r.l. and Wegener and in 2006 the gain on sale of Media Groep Limburg.
Reconciliation of the effective tax rate
The effective tax rate on the result from all activities was negative 1.7% in 2007 (2006: negative 16.2%). The relationship between the tax rate
in the Netherlands and the effective tax rate on consolidated income is as follows:
In percentages
2007
2006
Domestic income tax rate
25.5
29.6
Tax effects of:
- Deviating rates
- Tax-exempt income and non-deductible costs
- Other effects
Effective tax rate
-0.1
-27.1
0.0
-1.7
-15.7
-30.3
0.2
-16.2
93
12. current tax assets and liabilities
The current tax asset of 17,576 (2006: 19,950) represents the amount of taxes recoverable in respect of current and prior periods that exceeds
payments.
The current tax liability of 7,247 (2006: 6,839) represents the income tax to be paid over current and prior years after deduction of payments.
13. discontinued operations
TMG discontinued or sold various activities during the financial year, including’ Editions de Saxe SAS from Keesing Media Group, 49% of the
interest in Sky Radio Hessen, the joint venture Telegraaf Expomedia Events and the distribution of free local newspapers. The discontinued
activities had a limited effect on TMG’s financial position, on account of which there is no separate explanation of them.
In 2006, TMG sold Media Groep Limburg B.V. (De Limburger newspaper and Limburgs Dagblad), Grafisch Bedrijf Media Groep Limburg B.V.
(newspaper printer Nieuwsdruk Limburg) and Uitgeversmaatschappij De Trompetter B.V. (publisher of free local newspapers) to the Mecom
Group PLC (Mecom). The transaction was concluded on 13 June 2006 with a sales value for the three entities of € 200 million.
The discontinued business activities involve publishing and other (Newspaper printing) segments.
Result of discontinued operation
Revenue
Expenses
Result from operating activities
Income tax
Income tax results from operating activities, net of income tax
Gain on sale of discontinued operation, net of income tax
Profit for the period
Basic and diluted earnings per share (EUR)
Cash flow of discontinued activities
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Net cash from discontinued activities
Intangible assets
Financial fixed assets
Inventories
Cash
Interest-bearing loans and other borrowings
Cash received
Discontinued cash
Net cash
2006
61,848
56,887
4,961
-548
-1,161
3,252
50,937
54,189
1.06
4,665
169,753
-149
174,269
2006
-23,328
-117,313
-4,035
-674
-10,572
-10,033
25,586
1,307
10,918
2,378
-125,766
179,937
-10,033
169,904
94
14. intangible assets
Trade- and
publishing
rights
Licences
Goodwill
Software
Assets under
construction
Total
Cost
Amortisation
Impairment
Carrying amount at 1 January 2006
15,824
1,531
–
14,293
–
–
–
–
249,700
107,577
–
142,123
21,743
9,205
–
12,538
9,577
–
–
9,577
296,844
118,313
–
178,531
Movement carrying amount
Investments
Acquisitions through business combinations
Divestments
Amortisation
Impairment
Assets under construction in use
Effect of change in foreign exchange
Transfer of assets held for sale
Total movement
2,295
77,993
-637
-3,036
-5,628
-896
–
-312
-374
69,405
–
123,667
–
–
-16,464
–
–
–
–
107,203
–
173,588
–
-114,277
–
-510
–
34
-850
57,985
5,468
4,944
-1
–
-6,790
–
188
-3
-1,050
2,756
7,403
–
–
–
–
–
-188
–
–
7,215
15,166
380,192
-638
-117,313
-28,882
-1,406
–
-281
-2,274
244,564
Cost
Amortisation
Impairment
90,702
6,108
896
83,698
123,667
16,464
–
107,203
278,139
77,521
510
200,108
32,814
17,520
–
15,294
16,792
–
–
16,792
542,114
117,613
1,406
423,095
Investments
Divestments
Amortisation
Impairment
Total movement
–
11,093
–
-5,340
-3,299
–
–
-1
2,453
–
464
–
-22,972
–
–
–
–
-22,508
–
37,165
-34
–
–
–
-67
-20
37,044
6,299
1,106
–
-9,554
-9,652
17,255
-5
465
5,914
860
–
–
–
–
-17,255
–
–
-16,395
7,159
49,828
-34
-37,866
-12,951
–
-72
444
6,508
Cost
Amortisation
Impairment
Carrying amount at 31 December 2007
98,002
7,656
4,195
86,151
124,131
39,436
–
84,695
315,139
77,477
510
237,152
57,099
26,239
9,652
21,208
397
–
–
397
594,768
150,808
14,357
429,603
Through business combinations 49,828 was acquired, which consist in addition to note 3, of goodwill relating to the acquired minority interest
Media Librium in 2006 (in 2007 consolidated by increase of the interest) of 7,338 and goodwill of share based compensation of 5,789.
Tradenames and publishing rights concerns acquired tradenames and publishing rights of Sky Radio Group and Keesing Media Group. Given the
strong alliance between brand names and publishing rights, these items are not listed separately. The amortisation of the brand names
(38,800) of Sky Radio Group is 50 years. The amortisation period of the other brand names and publishing rights ranges from 5 to 20 years.
The licences relate to the broadcasting rights of Sky Radio Group and are acquired under contract to 2011. The amortisation period amounts to
5 years. Licences include also the annual contributions of Sky Radio Group to the Telecom agency. The annual payments to the Telecom agency
until 1 September 2011 are recognised as 36,144 (2006: 46,001). The related non-current liability is accounted for in note 25.
95
Goodwill through business combinations major consist of Sky Radio Group (97,427) and Keesing Media Group (53,912). In addition, 12,000
(2006: 12,000) related to synergy effects in the Telegraaf Drukkerij Groep B.V. resulting from acquisitions.
In 2006, goodwill was divested as a consequence of the sale of the business activities relating to De Limburger newspaper (2006: 111,697).
Goodwill is believed to be indefinite and therefore not amortised.
All intangible assets at the end of 2007 have been acquired externally.
Intangible assets under construction
Information systems (partly self-developed) at Uitgeversmaatschappij De Telegraaf B.V. and Telegraaf Tijdschriften Groep. In 2007 the information
systems are used.
Impairment test for cash-generating units
The impairment test for intangible assets being allocated to cash-generating units, the lowest level within TMG for which there are separately
identifiable cash flows.
The carrying value of intangible assets attributed to the cash-generating units as at 31 December 2007 and 2006 is as follows:
Publishing
Radio
Other
Unallocated
Total
2007
2006
164,471
224,779
27,740
12,613
429,603
138,382
251,784
23,312
9,617
423,095
The recoverable amount of the cash-generating units is based on the value in use calculations. Those cash-flow projections based on actual
operating results and cash flow forecasts, the budget 2008 and the long-term plans up to and including 2010. The cash flows after 2010, which
are extrapolated on the basis of 0% growth, are also taken into account. The economic useful life is an estimate by the management relating to
the expected cash-generating period of the investment. The forecast cash flows are calculated based on a pre-tax discount rate of 8.0% (2006: 8.0%).
The discount rate and growth factors were determined on the basis of the risk profile for TMG as a whole. These assumptions have been applied to
all cash-generating units in TMG. The realisable value is equal to or higher than the carrying value, including goodwill, of the above reported entity.
In 2007 is an impairment of 9,652 for a CRM application and 3,299 for a trade name (radio) was stated as impairment loss. In 2006 an impairment
of 896 was adjusted on magazine titles (Publishing segment), primarily Ukrainian. During the course of the year, 734 was debited from goodwill
from acquisitions in 2003 by Paypernews (Datawire) and Esquire (magazine) in connection with the revaluation or termination of these activities.
96
15. property, plant and equipment
Land and
buildings
Machines and
installations
Other tangible
fixed assets
Assets under
construction
Total
Cost
Depreciation
209,800
127,658
82,142
267,954
210,278
57,676
141,569
117,232
24,337
3,008
–
3,008
622,331
455,168
167,163
Investments
Divestments
Depreciation
Total movement
474
1,530
-131
-10,027
-8,230
24
-4
849
-15,515
460
25
-312
-11,960
-8,600
5,214
–
-1,599
-16,772
9,960
2,069
-1,272
-1,630
-11,513
122
16
-3,524
-5,772
3,364
–
-44
-41
–
-5,360
–
-86
-2,167
14,258
3,624
-1,759
-23,658
-28,343
–
12
-4,360
-40,226
Cost
Depreciation
193,802
127,175
66,627
237,102
196,198
40,904
102,022
83,457
18,565
841
–
841
533,767
406,830
126,937
2,066
19
-1,051
–
-7,789
–
-12
-603
-7,370
558
–
-347
–
-8,756
710
-1
-11
-7,847
7,477
2,923
-1,556
-792
-7,378
–
-36
59
697
453
–
–
–
–
-710
-5
–
-262
10,554
2,942
-2,954
-792
-23,923
–
-54
-555
-14,782
190,762
131,505
59,257
238,233
205,176
33,057
98,052
78,788
19,262
579
–
579
527,626
415,469
112,155
Investments
Divestments
Depreciation
Total movement
Cost
Depreciation
Carrying amount at 31 December 2007
Property, plant and equipment consist of land and buildings, machines and installations of the printing facility and other equipment. The value in
case of the Real Estate Appraisal Act amounted approximately 107,500.
Assets under construction
The ‘assets under construction’ item concerns machines and/or installations at: Telegraaf Drukkerij Groep B.V., HDC Media B.V., DistriQ B.V.,
Telegraaf Media Ukraïne LLC.
97
16. investments in associated companies
TMG has the following investments in associates:
Equity interest
SBS Broadcasting S.à.r.l.
De Nationale Regiopers B.V.
Expomedia Plc
Media Librium B.V,1)
AM van Gaal Media B.V.
RKK B.V./C.V.
ANP Holding B.V.
1)
Location
2007
2006
Luxemburg
Almere
London
Amsterdam
Amsterdam
Vriezenveen
The Hague
0.0%
14.0%
20.0%
0.0%
20.0%
24.0%
0.0%
20.4%
14.0%
20.0%
40.0%
20.0%
24.0%
8.8%
2007
2006
–
18,688
–
3,938
22,626
61,432
18,412
6,180
3,054
89,078
100% consolidated as of 1 September 2007.
Carrying value
Expomedia plc.
Media Librium B.V.
Other
Total
TMG’s share in the total profit or loss from the above-mentioned associated companies over 2007 amounts to 1,982 negative (2006: 11,561 negative).
For associated companies which have been written to nil, a provision of nil was made for the participation in the additional losses. (2006: nil).
The 14.0% interest (2006: 14.0%) in the Nationale Regiopers is a partnership with other regional newspaper publishers in the Netherlands for
advertising sales. As a consequence of the economic interest in Nationale Regiopers TMG has significant influence.
The 8.84% shareholding in ANP Holding B.V. is included under associates because TMG and other publishers jointly own 30% of this company.
The ANP share is sold in July 2007.
Summary financial information on associates – figures are based on 100% participation:
2007
Expomedia Plc
Assets
Liabilities
Shareholders
equity
Revenues
Profit/loss
80,450
52,572
27,878
34,981
804
-33,674
1,527
26,225
1,002,956
3,288
30,801
-37,338
-2,204
-15,068
Listed value Expomedia as at 31 December is 63,334 (2006: 77,715)
2006
Media Librium B.V.
Expomedia Plc
2,715,393
5,990
71,899
2,749,067
4,463
45,674
3-4-2008 15:46:05
98
The 20.44% interest in SBS Broadcasting S.à.r.l., a holding company domiciled in Luxembourg, was sold by TMG in July 2007 for 433,444
(including shareholders’ loans and accumulated interest).
The holding in SBS Broadcasting S.à.r.l. was acquired in December 2005 in exchange for a 27% interest that TMG held in SBS Broadcasting B.V.
(the Netherlands). At the exchange transaction shareholders’ loans are obtained which were not valued.
The gain on sale of the 20.44% interest in SBS Broadcasting S.à.r.l. can be specified as follows:
Valuation interest in SBS Broadcasting S.à.r.l. in 2005 at acquisition
Share in result 2005
Carrying amount 31 December 2005
67,790
-917
66,873
Acquisition costs
Share in result 2006
Carrying amount 31 December 2006
1,894
-7,335
61,432
Share in result 2007 until sale
Carrying amount at sale
-2,040
59,392
Gain on sale of interest
Transaction costs
Gain on sale 2007, stated as result from associates
415,898
-6,962
349,544
The accumulated interest (17,546) on shareholders loans is received. The interest on these shareholders loans relating to 2007 (6,003) is stated
as financial income.
In 2007 the gain 349,544 on sale of SBS Broadcasting S.à.r.l. is realised and recognised. At the exchange transaction of SBS Broadcasting B.V. to
SBS Broadcasting S.à.r.l. in 2005 no gains are stated as a consequence of uncertainty of realising future economic benefits and the lack of cashflows.
The difference between the obtained shareholders’ loans and interest in SBS Broadcasting S.à.r.l. against ‘equity’ value and the carrying value
for exchange of interest in SBS Broadcasting B.V. amounted to approximately 124,000 positive. If a gain was recognised, the valuation of shareholders’
equity and the valuation of the associated company SBS Broadcasting S.à.r.l. amounted 124,000 higher after the exchange transaction.
This would not have an effect on the result 2006, but the result 2007 would amount to 124,000 lower.
In exchange for selling its interest in SBS, TMG also received a call option for 12% of the ordinary voting shares in the ProSiebenSat.1-SBS Broadcasting
combination. TMG has the right to exercise this call option on 1 June 2008 for a price of € 34.71 per share minus the dividend paid out during
the period between 6 March 2007 and the option strike date, resulting in a estimated purchase price of approximately 456,000 (before dividend).
In the case TMG is not exercising its call option, Lavena Holding, (majority shareholder in the ProSiebenSat.1-SBS Broadcasting combination)
has a put option for the same 12% of the ordinary voting shares. These must be exercised in the period 1 – 15 August 2008 at a fixed price of
€ 28.71 per share minus the dividend payments. Resulting in an estimated purchase price of approximately 377,000 (before dividend).
The initial valuation of the call option is at fair value nil, because the exercise price of the option equals the fair value of the shares at moment of
obtaining the shares. The call option is not negotiable. The initial valuation of the written put-option is nil. The exercise price is below fair value of
the shares at the moment of writing the put option. After initial valuation the option has to be valued at fair value. The underlying shares are
not listed. The fair value has to be measured reliable with reasonable assurance. While the range of various estimates in fair value is substantial,
is no reasonable assurance obtained. The valuation is continued on initial valuation nil. TMG has no indication, based on a 5 years result forecast
of ProSiebenSat.1-SBS Broadcasting combination, that the fair value has changed.
The voting shares of ProSiebenSat.1-SBS Broadcasting differ from the non-voting shares in ProSiebenSat.1-SBS Broadcasting that are listed on
the stock exchange. For this reason, a comparison between the specified shares is not possible.
3-4-2008 15:46:05
99
17. other investments
Non current investments
Interest in Wegener:
-(Depositary receipts for) ordinary shares
-Preference shares
Prepaid operational lease
Non-current receivables
Total
2007
2006
–
–
4,650
2,643
7,293
116,437
18,151
4,887
15,216
154,691
Besides the investments in associated participations indicated in note 16, TMG had an interest (2006: 23.8%) in Wegener N.V. The interest was
sold on 13 April 2007 for 171,530 including dividend 2006 and an € 1.00 maximum premium per receipt (fair value at the end of 2006: 116,437).
TMG also had cumulative financing preference shares, which were sold in 2007 for 20,100 (2006: 18,151).
This interest in Wegener (shares only) is not designated as an associate because TMG has no significant influence on the company’s policy.
TMG has designated the participation to be a financial asset valued at fair value with the changes of value directly in income statement.
The fair value is based on the listed market price as at the balance sheet date without deduction of transaction costs.
The ground lease included under ‘prepaid operational lease’ is amortised using the straight-line method for the term of the underlying ground
lease contracts. The final instalment expires in 2039.
In 2006 an non-current receivable of 11,260 of accumulated interest of shareholders’loans SBS Broadcasting S.à.r.l. stated. The interest of
shareholders’loans fall due to the sale of the interest in SBS Broadcasting S.à.r.l.
18. inventories
Raw materials
Auxiliary materials
Total
2007
2006
14,376
2,025
16,401
7,982
3,087
11,069
2007
2006
86,710
12,946
19,830
119,486
88,629
24,096
18,061
130,786
19. trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
Total
Trade receivables are shown net of impairment losses. During the current year, such losses amounted to 5,410 for bad debts (2006: 9,396).
For more information see note 31, Financial risk management.
Fair value
For current receivables, the nominal value is considered to reflect the fair value.
100
20. cash
Bank
Call deposits
Total
2007
2006
44,855
451,170
496,025
67,329
18
67,347
Of the above-mentioned cash, an amount of 451,170 is placed in deposits that are not freely available. If necessary, the deposits can be immediately
accessed under the terms of the penalty clause. The weighted average remaining term of the deposits is 2 months. The fair value is deemed
equal to the nominal value.
21. assets and liabilities held for sale
Assets
Associates’ assets held for sale
Total
Liabilities
Associates’ liabilities held for sale
Total
2007
2006
809
11,183
11,992
6,605
10,689
17,294
2007
2006
2,134
2,134
3,286
3,286
The property, plant and equipment concern company premises and hardware.
The associates held for sale concern Datawire B.V. and Keesing Reference Systems B.V. (2006: Datawire B.V. and Keesing Reference Systems B.V.).
The intention is that the sales transactions are completed in 2008. The expected fair value of these assets is on or higher than the carrying value.
101
22. shareholders’ equity
Issued capital
At 31 December 2007 the authorised share capital comprised 200,000,000 ordinary shares, preference and priority shares (2006: 200,000,000),
which were issued and paid up as follows:
Number of shares
Ordinary
shares
On issue as at 1 January
Shares withdrawn in 2007
On issue at 31 December – fully paid
52,499,200
2,499,200
50,000,000
Number of repurchased shares as at 31 December
Number of outstanding shares as at 31 December
259,800
49,740,200
2007
Priority
shares
Ordinary
shares
2006
Priority
shares
960
52,499,200
960
960
52,499,200
960
960
2,499,200
50,000,000
960
All shares have been paid up and have a nominal value of € 0.25. No preference shares have been issued. In 2007, ordinary shares were repurchased
for an amount of 6,164 (2006: 54,415). These shares are stated as treasury shares.
The holders of ordinary shares and priority shares receive a maximum primary dividend of five percent of the nominal amount of the shares,
if the profit is sufficient. If the profit does not allow this, any deficit is charged to the payable amount of the shareholders’ equity. The remaining
profit is at the disposal of the meeting of shareholders. The holders of ordinary shares and priority shares are entitled to cast one vote per share
during the meeting. Each TMG shareholder has access to the meeting of shareholders and the right to cast a vote. A summary of the legal and
statutory provisions relating to the appropriation of the profit and the other statutory rights associated with the ordinary shares, priority shares
and preference shares is included under ‘Other Information’ on page 125.
The right to issue TMG preferential shares is granted by Stichting Beheer van Prioriteitsaandelen Telegraaf Media Groep N.V. to Stichting Preferente
aandelen Telegraaf Media Groep N.V. TMG has an option to issue preferential shares, which will then be managed by Stichting Preferente aandelen
Telegraaf Media Groep. At present, no preferential shares have been issued. The provisions in the articles of association governing remuneration
of preferential shares are in line with the market. The option to issue preferential shares is valued at nil.
Translation reserve
The translation reserve comprises all the foreign exchange differences arising from the translation of the financial statements of foreign operations
in Sweden and the Ukraine.
Other legal reserves
The reserve capitalised development costs concerns capitalised software which has been developed internally. An impairment was applied to
the relevant software in 2007, as result of which the legal reserve was eliminated.
Repurchased shares
On the balance sheet date, the Company had disposal of 259,800 (2006: 2,499,200) repurchased ordinary shares (nominal value € 0.25, 0.5%
(2006: 4.8%) of the issued capital). The cost of the repurchased ordinary shares was 6,164 (2006: 54,415). The repurchased own shares 2006
are withdrawn in 2007.
3-4-2008 15:46:05
102
23. dividend
In the year under review TMG paid out the dividend determined by the meeting of shareholders:
€ 0.50 per (depositary receipt for an) ordinary share (2006: € 0.44)
2007
2006
25,000
23,100
As regards the 960 priority shares, 5% of the nominal amount was paid out in dividend.
After 31 December 2007, the Executive Board made the following dividend proposal for 2007:
€ 1.00 per (depositary receipt for an) ordinary share (2006: € 0.50)
2007
50,000
The dividends have not been provided for and there are no income tax consequences.
24. earnings per share
Basic earnings per share
The calculation of the basic earnings per share as at 31 December 2007 is based on profit attributable to ordinary shareholders of 400,097
(2006: 49,599) and a weighted average number of ordinary shares which has been outstanding during 2007 of 49,992,892 (2006: 51,010,958),
as shown below:
Earnings per share
Result attributable to equity holders of ordinary shares
in Telegraaf Media Groep N.V.
Weighted average number of ordinary shares
Basic earnings per share (EUR)
2007
2006
400,097
49,992,892
8.00
49,599
51,010,958
0.97
Diluted earnings per share
The calculation of the diluted earnings per share at 31 December 2007 is based on profit attributable to ordinary shareholders of 400,097
(2006: 49,599) and a weighted average number of ordinary shares, after adjustment in line with all potential diluted effects on the ordinary shares,
has been outstanding during 2007, of 49,992,892 (2006: 51,010,958). No shares were diluted in 2007.
103
25. interest-bearing loans and borrowings
This note provides information on the contractual terms of TMG’s interest-bearing loans and borrowings. For more information about TMG’s
exposure to interest rate and foreign currency risk, see note 31.
2007
Interest bearing loans
Acquisition payables
Other financing
Total
2006
Other Financing
Total
Total
Current
Non-current
12,689
15,189
31,956
59,834
1,743
8,814
11,203
21,760
10,946
6,375
20,753
38,074
Total
Current
Non-current
150,705
3,482
78,056
232,243
12,556
–
11,203
23,759
138,149
3,482
66,853
208,484
Non-current liabilities, all denominated in euros, were incurred by a combination led by TMG to facilitate acquisition of the Keesing Media Group
and the Sky Radio Group. As a result of the Netherlands Temporary Media Concentrations Act of 13 June 2007 (Tijdelijke Wet Mediaconcentraties),
TMG repaid the bank loan from Sienna Holding B.V. raised for the acquisition of Sky Radio Group in July 2007.
Non-current interest bearing loans and borrowings (2007: 21,760; 2006: 23,759) are classified as current liabilities.
Interest-bearing loans
Syndicated bank loan
Syndicated bank loan Sienna Holding B.V.
Shareholders loan Veronica Holding B.V.
to Sienna Holding B.V.
Keesing bank loan
Other loans
Total
Shares Sienna Holding B.V.
Shares Keesing Media Group B.V.
Shares Relatieplanet Nederland B.V.
and IWD Nederland B.V.
Pilarczyk Media Groep B.V.
Total
Other financing
Non-current liabilities:
Sky Radio Group licences
Shares in Sienna Holding B.V. (Banks)
Other non-current liabilities
Total
1)
Currency
Nominal
interest rate
Nominal
value
Year of
maturity
Carrying
amount 2007
Carrying
amount 2006
EUR
EUR
Euribor
Euribor
92,981
50,000
–
–
–
–
92,981
43,386
EUR
EUR
EUR
5.50%
3-mnd Euribor
Euribor
8,400
10,000
–
2010
2008 - 2012
–
9,227
2,543
919
12,689
8,740
4,829
769
150,705
EUR
EUR
–
–
–
–
2010 - 2011
2010
4,662
1,713
1,352
2,130
EUR
EUR
–
–
–
–
2008
2008
7,800
1,014
15,189
1)
–
3,482
EUR
EUR
EUR
Euribor
Euribor
Euribor
–
–
–
2008 - 2011
–
–
31,390
–
566
31,956
40,873
37,037
146
78,056
In 2006 the acquisition payable of Relatieplanet and Iwannadate (7,464) was stated as accounts payable and other current liabilities.
104
Terms and debt repayment schedule
For the terms and repayment schedule of long-term loans involved in the takeover of Sky Radio Group (Sienna Holding), please refer to the 2006
TMG Financial statements. The loans were repaid in June and July 2007.
The Keesing Media Group bank loan, totalling 800, has a linear repayment requirement and must ultimately be fully repaid in 2012. The interest
rate is linked to the 3-month Euribor. The short-term portion amounts to 2,286 and is recognised under current liabilities. The interest rate is
linked to the Euribor and is set on the balance sheet date. TMG is jointly and severally liable for Keesing Media Group.
In the case of all loans, the effective interest is equal to the nominal interest.
The management is entitled to offer shares to TMG as of the date of maturity. TMG has the obligation to buy these shares from that date.
For an explanation of the valuation of Sky radio management shares, please refer to note 26. The management shares of Keesing Media Group
do not involve any share-based remunerations given that the purchase price is the same as the strike price. In 2007 TMG bought the management
shares of a manager of Keesing Media Group with bad leaver conditions.
Telegraaf Classified Media B.V. has a purchase option on the remaining 30% interest in Relatieplanet Nederland B.V. and IWD Nederland B.V.
The option has to be exercised before September 2008. The shares are in possession of the management. The purchase price on the date of
exercising is fixed. The obligation to purchase the remaining 30% is included in the other debts. Taking the management share purchase option
into account, TMG bears the entire 100% of the economic risk and control of Relatieplanet Nederland B.V. and IWD Nederland B.V. The companies
are included as a group subsidiary in the consolidated financial statements of TMG.
Other financing
Non-current liabilities relating to the licences of Sky Radio Group involve annual payments to the Telecom agency until 1 September 2011.
Besides the payment of a one-time fee to acquire the licensing rights, Sky Radio Group also has an obligation to make annual payments to the
Telecom agency. The annual payments to Telecom are listed under intangible assets as 36,144 (2006: 46,001). The intangible assets are amortised
over the contractual period. The interest payments associated with financial liabilities are recorded as financial charges, while the annual payment
is deducted from the non-current liability.
The shares in Sienna Holding held by banks were purchased for 37,037. In this way, TMG obtained 85% of the shares in Sky Radio Group.
The remaining 15% is in the possession of management at Sky Radio Group and Veronica Holding.
105
26. share-based remunerations
The management of Sky Radio Group has share-based remunerations:
Bid price
Fair value per
per share on share on balance
Number acquisition date
sheet date
In euros
Sienna Holding B.V.
Sienna Holding B.V.
211
1,474
490
490
2,475
2,475
Due date
1-3-2010
1-3-2011
The fair value share price has been determined in accordance with a pre-determined formula. The fair value per share on the balance sheet
date is estimated and is based on future cash flows from the associates. The expense in income statement of these share based remunerations
amounted 329 (2006: 320).
Good leaver, bad leaver conditions have been agreed with the management relating to the period up until the date of maturity.
27. post-employment benefit liabilities
2007
2006
2005
2004
2003
Present value of unfunded obligations
Present value of funded obligations
Present value of obligations
9,814
38,481
48,295
23,055
23,975
47,030
18,892
167,420
186,312
36,643
682,601
719,244
37,371
602,573
639,944
Fair value of plan assets
Present value of net obligations
-17,337
30,958
-20,498
26,532
-148,226
38,086
-628,647
90,597
-576,413
63,531
Unrecognised actuarial gains and losses
Recognised liability for defined benefit obligations
-1,274
29,684
-1,552
24,980
-20,057
18,029
-37,495
53,102
–
63,531
Experience adjustments
Experience adjustments arising on plan liabilities
Experience adjustments arising on plan assets
Adjusted assumptions plan liabilities
3,600
-3,500
1,600
Gross commitment for defined benefit pension rights
TMG contributes to three defined benefit pension schemes on the basis of which employees of TMG in the Netherlands are paid pension benefits
after retirement. This concerns pension schemes of Sky Radio Group and Keesing Media Group and a part of the Amsterdam and Alkmaar
companies of TMG. In determining the provision, account is taken of other employee schemes including allowances for the healthcare costs
of retired employees, early retirement and anniversary schemes. In 2005, the Stichting Telegraafpensioenfonds 1959 plan was changed from a
defined benefit scheme to a defined contribution scheme, giving rise to a release in the employee benefits category.
106
The principle actuarial assumptions at the balance sheet date
In weighted averages
2007
2006
2005
Discount rate at 31 December
Expected return on plan assets at 31 December
Future salary increases
Adjustment for inflation
Increase in social security benefits
5.1%
6.1%
2.5%
2.0%
2.0%
4.5%
6.1%
2.5%
2.0%
2.0%
4.0%
6.1%
2.5%
2.0%
2.0%
The forecast yield is the weighted average expected return, based on the expected investment mix of shares (40%), fixed-interest securities
(60%). The forecast returns on these investments of 8.5% and 4.5% respectively correspond to the points of departure prescribed to date by
De Nederlandsche Bank N.V.
Movements in commitment for defined benefit pension schemes
2007
2006
As at 1 January
47,030
186,312
Business Combinations
Service costs
Past service costs
Interest expenses
IFRS adjustment to opening balance sheet (anniversary payments)
From restructuring provision
Employee contribution
Actuarial losses (gains)
Release of provisions due to scheme reduction
Release of provisions due to discontinued activities
Payments
As at 31 December
–
1,692
1,205
2,198
–
6,516
–
-3,914
–
–
-6,432
48,295
13,462
3,477
–
4,839
6,331
–
359
-6,751
-14,421
-139,357
-7,221
47,030
2007
2006
As at 1 January
20,498
148,226
Business Combinations
Contributions
Expected yield
Employee contribution
Actuarial gains (losses)
Release of investments due to scheme reduction
Release of investments due to discontinued activities
Payments
As at 31 December
–
6,824
1,000
–
-4,553
–
–
-6,432
17,337
11,084
1,475
5,282
359
12,800
-6,582
-150,097
-2,049
20,498
Movement of fair value of plan assets
The release of provisions (or investments) through the termination of activities in 2006 came about due to the sale of the Limburg activities.
In 2006, the scheme restriction concerned HDC Media. The costs of defined contribution schemes also include the costs related to the early
retirement scheme for the printed industry sector.
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107
The following funds, which also qualify as defined benefit schemes, have informed TMG that they are not able to provide us with any details
for the calculation of (our share in) surpluses or deficits:
•Pensioenfonds Grafische Bedrijven (pension scheme for employees in the printing and allied trades).
•Stichting bedrijfstakpensioenfonds voor het beroepsvervoer over de weg (pension scheme for the goods haulage sector).
•Stichting vrijwillig vervroegde uittreding voor het beroepsgoederenvervoer over de weg en de verhuur van mobiele kranen (early retirement
scheme for employees in the goods haulage sector and the rental of mobile cranes).
•Stichting Prepensioenfonds voor het beroepsgoederenvervoer over de weg en de verhuur van mobiele kranen (pre-pension scheme for
employees in the goods haulage sector and the rental of mobile cranes).
These plans qualify as a defined pension scheme and are processed as a defined contribution plan. TMG is not responsible for any shortfall in an
early retirement / pension plan, nor is it required to make up any shortfall. The same applies to the departmental plan concerning the pre-pension
of newspaper journalists.
TMG estimates the contributions to be paid to the defined benefit schemes during 2008 1,087 (2007: 1,018).
In income statement stated expenses:
2007
2006
Pension costs allocated to the year of service
Past service cost
Interest over the liability
Expected return on plan assets
Depreciation of non-recognised gains/ (losses)
Total contribution to defined benefit schemes
1,692
1,205
2,198
-1,000
–
4,095
3,477
–
4,839
-5,282
128
3,162
Result on account of curtailment/termination
Contribution to defined contribution schemes
Total
–
17,844
21,939
-4,609
18,139
16,692
2007
2006
21,595
15,272
–
11,970
-6,516
-16,848
10,201
3,590
44,370
–
-41,637
21,595
Note
7
28. restructuring provision
Balance as at 1 January
Discontinued activities
Provisions made during the financial year
To post-employment benefit liabilities
Provisions used during the financial year
Balance as at 31 December
The restructuring provision concerns the obligations relating to finding alternative employment, redundancy, relocation and retraining and
additional training at Telegraaf Tijdschriften Groep B.V., Holland Combinatie B.V., Uitgeversmaatschappij de Telegraaf B.V., HDC Media B.V.,
Telegraaf Drukkerij Groep B.V., DistriQ B.V. and at holding level. Of these, 13,205 (2006: 17,623) is stated as current obligation. The non-current
part is expected to be spent in 2014 at the latest.
3-4-2008 15:46:05
108
29. deferred tax assets and liabilities
The tax assets and liabilities recognised can be allocated as follows at the end of the financial year:
2007
Assets
Liabilities
Balance
–
419
958
–
206
29
1,612
-33,539
–
–
-1,965
–
–
-35,504
-33,539
419
958
-1,965
206
29
-33,892
2006
Assets
Liabilities
Balance
Intangible assets
Post-employment liabilities schemes
Provisions
Carry-forward loss compensation
Deferred tax liability abroad
Other items
Net tax credit/liability (-)
–
–
1,264
–
180
–
–
1,444
-38,716
-417
–
-2,477
–
-2,559
-106
-44,275
-38,716
-417
1,264
-2,477
180
-2,559
-106
-42,831
Intangible assets
Provisions
Other items
In some countries in which TMG operates, local tax laws provide that the gains are taxed at the moment it is paid out. As of the balance sheet
date, the total gain was nil (2006: 11,516) which results in a tax liability of nil (2006: 2,559).
Unrecognised deferred tax assets
With regard to start-up losses at a few subsidiaries, no deferred tax assets were recognised on the balance sheet. At the end of 2007, unrecognised
deferred tax assets amounted to 7,744 (2006: 8,140). Of this amount, 4,668 (2006: 5,567) concerns foreign losses that can be carried forward
indefinitely. The unused losses in the Netherlands remain within the limit of 9 years.
Movement in temporary differences during the year
Balance
1-1-2007
Recognised
in income
(De-)
Consolidated
Balance
31-12-2007
Intangible assets
Provisions
Other items
-38,716
-417
1,264
-2,477
180
-2,559
-106
-42,831
5,702
836
-306
512
26
–
17
6,787
-525
–
–
–
–
2,559
118
2,152
-33,539
419
958
-1,965
206
–
29
-33,892
Balance
1-1-2006
Recognised
in income
(De-)
Consolidated
Balance
31-12-2006
–
-1,811
-2,514
-6,888
–
–
–
-11,213
9,592
256
3,003
5,218
-26
-2,559
-50
15,434
-48,308
1,138
775
-807
206
–
-56
-47,052
-38,716
-417
1,264
-2,477
180
-2,559
-106
-42,831
Intangible assets
Provisions
Other items
3-4-2008 15:46:05
109
30. accounts payable and other current liabilities
Subscriptions paid in advance
Amounts paid in advance
Trade payables to suppliers
Employee benefits payable (holidays/-allowance and profit share)
Current tax expense
Other taxes and social security premiums
Restructuring provision (short-term)
Other debts and accruals and deferred income
Total
Note
2007
2006
12
52,717
10,211
38,121
44,556
7,247
12,627
13,205
47,946
226,630
49,373
25,443
32,401
31,626
6,839
13,365
17,623
36,440
213,110
Other debts and accruals consist of (estimate for) editorial and distribution, other general expenses, provisions, returned products and commissions
to be paid.
The fair value of the liabilities does not differ from the nominal value recognised here.
110
31. financial risk management
TMG recognises the market, credit, currency-rate and interest risk involved in regular business operations. The trends in the price of paper can
also have a substantial effect on the business result.
The Executive Board has overall responsibility for the establishment and oversight of TMG’s Risk control framework. The Executive Board
makes an annual assessment of the strategic risks at both the central and decentralised level and evaluates the developments and monitoring
of the strategic risks quarterly.
TMG’s risk management policies are established to identify and analyse the risks faced by TMG, to set appropriate risk limits and controls, and
to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions
and TMG’s activities. TMG, through its training and management standards and procedures, aims to developed a disciplined and constructive
control environment in which all employees understand their roles and obligations.
Group Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported
to the Executive Board and Supervisory Board.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect TMG’s income or
the value of its holdings of financial instruments in a negative way. The objective of market risk management is to manage and control market
risk exposures with acceptable parameters, while optimising the return.
TMG has a policy of not using any forward, swap and/or future contracts. Only in the case of interest-rate risk has TMG made use of interest-rate
swaps in 2006 when contracting long-term loans. No use is made of hedge accounting. At the end of 2007 no interest-rate swap contracts
were arranged. TMG also has the policy of restricted use of external financing, with the exception of Sky Radio Group and Keesing Media Group
where external financing is temporary used. Major criteria is that TMG is not dependent on external finance companies. External borrowings
will not exceed 2.5 times EBITDA. For further information, see the note on interest-rate risk.
Credit risks
Credit risk arises principally from TMG’s receivables if a customer to a financial instrument fails to meet its contractual obligation. The (industry-wide)
terms of payment applied, the relatively limited dependency on individual customers and the historical payment behaviour of our customers make
it unnecessary to use financial instruments to limit this risk. The credit risk is principally concentrated in The Netherlands.
Impairment losses
Customers are required to pay within pre-set time limits. Exceeding the deadline results in service deliveries being halted. Customers are primarily
media outlets, companies and subscribers. The aging of trade receivables at balance sheet date was:
Total
Not past due
Past due
30 - 60 days
Past due
60 - 90 days
92,120
98,025
63,216
67,963
18,043
16,344
5,885
3,712
Past due
Past due
90 - 180 days 180 - 360 days
3,932
1,543
-1,121
1,376
More than
360 days
2,165
7,087
TMG has established an impairment risk provision for estimated losses on trade receivables. The loss provision is based on payment arrears and
the stipulated deadlines. Changes in the impairment provision for trade receivables during the year were as follows:
2007
2006
Balance, 1 January
9,396
11,554
Added
Impairment losses recognised
Balance, 31 December
1,189
-5,175
5,410
1,650
-3,808
9,396
Currency risk
TMG incurs currency risks to a very limited extent due to activities outside the euro zone, specifically in Sweden, Denmark and the Ukraine.
The net cash in and outflows of entities and their timing is such that no significant currency positions are created as a result. Sensitivity of TMG
to foreign exchange rates is therefore extremely small. At the end of 2007 TMG had no forward contracts.
TMG has the policy of responding to significant currency exposures by concluding forward contracts to cover the risks over a period of one year.
For an individual entity within TMG, a currency exposure is deemed to be significant if the size of the exposure as a percentage of revenue in
any calendar month exceeds the limit of 500, and the cash flow has a probability of more than 50%.
Interest-rate risk
The most relevant interest-rate risk for TMG involves a mismatch between interest payments and the cash flows from financed assets.
However, TMG is on balance a recipient of interest since the net debt position (recognised loans minus cash resources) is more than compensated
by the interest-bearing cash resources and immediately accessible deposits.
Given the limited size of the debt position, TMG is hardly affected by interest-rate fluctuations, nor do they have any significant influence on
TMG’s financial position and result. For this reason, TMG does not use any interest-rate hedging.
Other market-price risk
Of the commodities traded on the global market, TMG only purchases paper, but to the extent that fluctuations in its price can have a substantial
impact on the business result. TMG has decided not to hedge the risk of increasing paper prices because (a) TMG already has long-term contracts
with paper suppliers and (b) large manufacturers of paper have taken up positions on the futures market making it insufficiently liquid to hedge
significant volumes in a manner that would be attractive to TMG.
Liquidity risk
TMG has hardly any liquidity risk given the limited financial liabilities and the large liquidity position. Liquidity risk is the risk that TMG will not
be able to meet its financial obligations as they fall due. The aim of liquidity risk management is to maintain sufficient liquidity in order, as far
as possible, to cover existing and future financial liabilities under normal and difficult circumstances and without incurring unacceptable losses
or damaging the reputation of TMG.
The following lines of credit are available at balance sheet date:
• € 45 million overdraft facility that is unsecured, unrestricted and without expiry date. Interest would be payable at the EURIBOR one-month
rate plus 50 basis points, 1,877 of this credit line was being used on the balance-sheet date.
• 5 million overdraft facility that is unsecured, unrestricted and without expiry date. Interest would be payable at the EURIBOR one-months
rate plus 50 basis points. No use was being made of this available credit on the balance sheet date.
The fair value of the financial instruments equals the carrying value in 2007 and 2006.
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development
of business. The Executive Board monitors the return of capital, which TMG defines as the net operating income divided by total shareholders’
equity, excluding minority interests. The Executive Board also monitors the level of dividends to ordinary shareholders.
From time to time TMG purchases its own shares on the market. Buy and sell decisions are made on a specific transaction basis by the Executive
Board within limits set by the Supervisory Board and the annual meeting of shareholders; TMG does not have a defined share-buy-back plan.
There have been no changes in TMG’s approach to capital management during the year.
Neither TMG nor any of its subsidiaries are subject to externally imposed capital requirements.
111
112
32. off balance sheet liabilities
Non-cancellable off balance sheet operational leases expire as follows:
< 1 year
1-5 years
> 5 years
Total
2007
2006
4,065
11,320
881
16,266
3,623
15,428
8,638
27,689
The liabilities have terms up to 2020 and consist primarily of rental and lease liabilities. In the financial year 2007, an expense of 6,944 (2006: 5,286)
was included in the income statement of operational leasing.
Within the framework of the termination of non-core activities, Telegraaf Media Groep B.V. entered into an agreement with Atos Origin
concerning the subcontracting of the generic ICT services of Telegraaf Media ICT B.V. as of 1 January 2007. The total value of the contract is
expected to be 43,300 for a period of 5 years.
Litigation
At the Nederlands Drukkerij Bedrijf (NDB), a subsidiary of the Biegelaar Groep, a litigation is started in which former employees of the Biegelaar
Groep sue TMG for supplementary payment. TMG disputes the supplementary payment. At this moment no opinion could be given in case of
the result of the litigation.
A number of TMG group companies face legal proceedings. These cases primarily concern employment relations, disputes and rectifications of
publications. We have every faith in a positive outcome in the case of all these proceedings and do not expect them to have a significant effect
on TMG’s consolidated financial position.
33. investment commitments
In the financial year 2007, TMG entered into agreements for development of software for 4,132 (2006: nil). These investments concern development
of IT systems of DistriQ B.V. and Keesing Media Group.
34. contingent liabilities
As regards partnerships entered into with third parties in the form of general partnerships, the participating group company is jointly and
severally liable for all the partnership’s debts. For associated companies TMG is jointly and severally liable its share in participation.
The Company also provided security for the continuity of Telegraaf Media Ukraïne (Ukraine), TTG Sverige A.B., Telegraaf Media Cyprus Ltd (Cyprus)
and Barragold Ltd (Cyprus).
At the end of 2007 bank guarantees of 2,149 (2006: 1,645) were issued to cover rental agreements.
113
35. related parties
Identity of related parties
TMG has a related party relationship with its subsidiaries, associates (see section 16 of the notes), joint ventures (see section 36 of the notes),
Stichting Telegraafpensioenfonds 1959 their management and key management of TMG. A list of Telegraaf Media Groep N.V. participations has
been published at the Chamber of Commerce in Amsterdam.
The following shareholders have an interest more than 20% in TMG’s capital.
Stichting Administratiekantoor Telegraaf Media Groep N.V.
N.V. Exploitatiemaatschappij Van Puijenbroek
2007
2006
63.4%
32.5%
62.7%
31.0%
Transactions with key management personnel
For a specification of the remunerations per director please refer to the company Income statement (Note 9). The note on related parties
generally refers to TMG senior management, namely the Executive and Supervisory Boards. The total remuneration is included in Personnel
costs (see section 27 of the Notes to the consolidated financial statements).
Other related party transactions
Transactions with related parties relate to associated companies (revenue 3,084; revenue 2006: 17,402) and joint ventures (revenue 834;
revenue 2006: 611). Receivables with related parties were 1,772 as at December 31, for which an provision is made of 1,697. This provision has
not effected the result 2007.
All outstanding balances with these related parties are priced on an arm’s length basis and are settled in cash within six months of the reporting date.
None of the balances is secured.
114
36. interests in joint ventures
The group has an interest in the following joint ventures:
Fitclub B.V.
Telegraaf Expomedia Events vof
TTG Hearst AB
TTG Hearst B.V.
TTG Sulake B.V.
TTG Volgas v.o.f.
Plus Magazine AB
Info Pinnacle B.V.
Ludique Events B.V.
R & R Expo vof
SmartEvents B.V.
Adventure Holding B.V.
Location
Interest 2007
Interest 2006
Groningen
Amsterdam
Stockholm
Amsterdam
Amsterdam
Amsterdam
Stockholm
Amsterdam
Liempde
Amsterdam
Rotterdam
Zeist
75.0%
0.0%
50.0%
75.0%
49.0%
50.0%
50.0%
50.0%
50.0%
0.0%
50.0%
33.3%
75.0%
50.0%
50.0%
75.0%
50.0%
50.0%
0.0%
50.0%
25.0%
32.5%
50.0%
33.3%
The consolidated financial statements include the following items which correspond to TMG’s interest in the joint venture’s assets and liabilities,
revenues and costs:
Non-current assets
Current assets
Current liabilities
Balance of assets and liabilities
Total revenues
Total expenses
Income tax expense
Result
2007
2006
282
3,704
-2,773
-3,370
-2,157
2,122
3,049
-5,341
-3,688
-3,858
2007
2006
9,456
-11,473
911
-474
-1,580
9,211
-10,656
-78
-307
-1,830
115
income statement of telegraaf media groep n.v.
2007
2006
Share in result of subsidiaries, joint ventures and associates
405,544
33,062
Other income and expense after tax
Result for the year
-5,447
400,097
16,537
49,599
116
balance sheet of telegraaf media groep n.v.
as at December 31, before approportionment of result
Note
2007
2006
2
17,445
3,891
3
603,769
23,107
18,804
–
140
645,820
180,554
67,791
25,486
314
390
274,535
663,265
278,426
15,457
437,552
317
18,662
398,791
4,575
–
453,326
–
422,028
1,116,591
700,454
12,500
-123
454,341
400,097
866,815
13,125
1,470
433,847
49,599
498,041
5
26,399
2,904
177
29,480
21,459
4,772
118
26,349
6
6,375
133,500
Subsidiaries
Borrowings and other financing
Total current liabilities
192,638
1,483
19,800
213,921
23,365
16,705
2,494
42,564
Total liabilities
220,296
202,413
1,116,591
700,454
non-current assets
Intangible assets
Goodwill
Financial assets
Subsidiaries
Receivables from subsidiaries
Other associated companies
Receivables from associated companies
Other receivables
Total non-current financial assets
Total non-current assets
current assets
Receivables
Taxes and social security premiums
Subsidiaries
Other receivables and accrued income
Cash
Total current assets
4
Total assets
shareholders’ equity
Issued capital
Statutory reserves
Other reserves
Retained earnings
Total shareholders’ equity
provisions
Pension provision
Total provisions
non current liabilities
current liabilities
Total shareholders’ equity and liabilities
notes to the financial statements telegraaf media groep n.v.
contents
page
Note
118
118
119
119
120
120
120
121
1.
2.
3.
4.
5.
6.
7.
8.
Significant accounting policies
Intangible assets
Financial assets
Receivables
Provisions
Off- balance sheet liabilities
Remuneration of Executive Board
and Supervisory Board members
117
118
notes to the company financial statements
1. significant accounting policies
General
The company financial statements have been prepared in accordance with the provisions in Part 9, Book 2 of the Netherlands Civil Code.
As regards determining the principles for the valuation of assets and liabilities and the result of its company financial statements, Telegraaf
Media Groep N.V. uses the option provided for in Article 2:362, paragraph 8 of the Netherlands Civil Code. This means that the principles
for the valuation of assets and liabilities and the determination of the result (hereinafter to be referred to as the ‘accounting principles’) of
the company financial statements of Telegraaf Media Groep N.V. are the same as those used for the consolidated IFRS financial statements.
Investments in subsidiaries, in which TMG has significant influence, are accounted for in accordance with the equity method. These consolidated IFRS financial statements have been prepared in accordance with the standards of the International Accounting Standards Board and
approved by the European Union. Please refer to pages 78 to 85 for a description of these principles.
Share in result of subsidiaries, joint ventures and associates includes the share of Telegraaf Media Groep N.V. in the results of these participations.
Results on transactions which have involved the transfer of assets and liabilities between Telegraaf Media Groep N.V. and its participations and
between participations themselves have not been processed in so far as these cannot be regarded as having been realised. A reference is made
to the Notes to the consolidated financial statements, unless otherwise stated.
In conformity with article 402, Book 2 of the Netherlands Civil Code, a condensed Income statement is included in the separate financial statements
of Telegraaf Media Groep N.V.
2. intangible assets
The Company’s intangible assets of 17,445 (2006: 3,891) consist of the goodwill and acquisition costs paid during the purchase of the Gooi- en
Eemlander and Media Librium.
119
3. financial assets
Group Companies
Equity
Receivables
Other participations
Media Menu Holding
Media Menu CV
Expomedia Plc
Media Librium B.V.
ANP Holding B.V.
Receivables from associates
Other receivables
Total non-current financial assets
2007
2006
603,769
23,107
626,876
180,554
67,791
248,345
4
112
18,688
–
–
18,804
4
112
18,412
6,180
778
25,486
–
140
140
314
390
704
645,820
274,535
Movements in non-current financial assets can be shown as follows:
Movements in carrying amount
Investments
Divestments during
current financial year
Share in result of investments
Dividend received
Foreign exchange rate differences
(De)consolidation
Loans provided
Withdrawal of loans
Carrying amount
at 31 December 2007
Subsidiaries
Receivables from
subsidiaries
Other
associates
Receivables
from minority
Other
receivables
Total
180,554
67,791
25,486
314
390
274,535
33,447
–
–
799
29
34,275
–
405,544
-15,617
-159
–
–
–
–
–
–
–
1,885
21,222
-67,791
-778
-514
–
–
-5,390
–
–
–
–
–
–
-1,113
–
–
-279
–
–
–
–
–
–
-1,057
405,030
-15,617
-159
-4,618
21,222
-67,791
603,769
23,107
18,804
–
140
645,820
2007
2006
15,457
437,552
–
317
453,326
18,662
398,791
238
4,337
422,028
4. receivables
Income tax
Subsidiaries
Trade receivables
Other receivables and accrued income
Total
120
5. provisions
Provisions for post-employment liabilities
Deferred tax expense
Total provisions
2007
2006
26,399
2,904
177
29,480
21,459
4,772
118
26,349
6. non-current liabilities
The non-current debts related to the loan taken out in relation to the purchase of Sky Radio Group and non-current liabilities relating to the
purchase of the shares in Sienna Holding (Sky Radio Group) and Keesing Media Groep from banks. The loans are redeemed in 2007. The loans
amounting to 6,375 at the end of 2007 involves management shares with regard to Sky Radio Group and Keesing Media Group. Further details
are included in the notes to the consolidated balance sheet (Note 25).
7. off-balance sheet liabilities
Joint and several liability and guarantees
On the basis of Article 403, paragraph 1, under f of Book 2 of the Netherlands Civil Code, the company is liable for the debts resulting from
legal acts of the consolidated subsidiaries as published at the Chamber of Commerce in Amsterdam and is available from TMG upon request.
As regards partnerships entered into with third parties in the form of general partnerships, the participating group company is jointly and
severally liable for all the partnership’s debts. For associated companies TMG is jointly and severally liable for its share in participation.
Fiscal unity
Telegraaf Media Groep, along with almost all of its wholly-owned subsidiaries in the Netherlands, is a single fiscal entity for both income tax and VAT.
Within the fiscal entity, TMG companies are jointly and severally liable for tax liabilities to the Tax Authorities.
121
8. remuneration of Executive Board and Supervisory Board members
The Supervisory Board, in consultation with Stichting Beheer van prioriteitsaandelen TMG N.V., decided on the following remuneration of the
Executive Board based on the remuneration policy established by the General Meeting of Shareholders on 20 April 2005.
The fixed annual salaries of A. J. Swartjes and F. Th. J. Arp will be increased by 2.25% as of 1 January 2007 and Messieurs Swartjes and Arp will
each receive a bonus for 2006 amounting to 1.3 months’ salary.
At the General Meeting of Shareholders of 19 April 2007, the remuneration policy proposed by the Executive Board was ratified for implementation
as of 1 January 2007. The remuneration structure comprises fixed and variable elements. The fixed element is the yearly salary and vacation pay.
The variable element is comprised of (a) the existing profit-share scheme for all employees of Telegraaf Media Groep N.V. and (b) an individual
bonus. The latter varies between 0 and 2 months’ salary, 60% of which is determined by the degree to which the collective Executive Board
targets are accomplished and 40% by the degree to which the individual targets of Executive Board members are accomplished. In addition,
the Supervisory Board can decide to award an extra bonus, for which it will be held accountable at the General Meeting of Shareholders.
In such case, the extra bonus concerns a one-time payment, taking the pension rights of Executive Board members into account.
At this General Meeting, the shareholders agreed to an individual scheme as a facility to bridge the period between 62 and 65 years old for
sitting Executive Board members, this amounting to 70% of the last salary earned, along with maintenance of pension contributions until the
age of 65. At the Extraordinary General Meeting of Shareholders of 26 September 2007, the shareholders agreed to a similar scheme for
Mr P Morley MSc, COO to commence 1 December 2007.
Remuneration of present and former directors of the Executive Board
In euros
A.J. Swartjes
F. Th. J. Arp
P. Morley MSc. (as of 1 December 2007)
Former member of the Executive Board
J. Olde Kalter (till 30 April 2006)
Periodical
remuneration
2007
Deferred
remuneration
Periodical
remuneration
2006
Deferred
remuneration
559,755
533,995
36,755
857,993
461,714
11,784
528,794
498,312
–
64,000
59,000
–
–
–
238,121
19,000
Included in the periodical remuneration is a variable component amounted for Mr. Swartjes 48,928 (2006: 35,554) and Mr. Arp 44,703 (2006: 33,554).
The remuneration of the Supervisory Board is based on indexation of retail price all families (2000 = 100) within January 1, 2007.
Remuneration of present and former members of the Supervisory Board
In euros
A.J. van Puijenbroek
Dr. W. van Voorden
H.L. Weenen
M. Tiemstra
L.G. van Aken
J.G. Drechsel (as of 1 October 2007)
Periodical
remuneration
2007
Deferred
remuneration
Periodical
remuneration
2006
Deferred
remuneration
30,000
24,945
24,945
24,945
24,945
6,236
–
–
–
–
–
–
28,103
23,502
23,502
23,502
23,502
–
–
–
–
–
–
–
122
Share ownership at 31 December 2007:
A.J. Swartjes
F. Th. J. Arp
P. Morley MSc.
A.J. van Puijenbroek
Dr. W. van Voorden
H.L. Weenen
M. Tiemstra
L.G. van Aken
J.G. Drechsel
Shares
Depositary
receipts for
shares
–
–
–
–
597
–
64
–
–
–
11
–
–
–
5,200
–
–
–
Executive Board
A.J. Swartjes, chairman
F. Th. J. Arp
P. Morley MSc.
Supervisory Board
A.J. van Puijenbroek, chairman
Dr. W. van Voorden
H.L. Weenen
M. Tiemstra
L.G. van Aken
Drs. J.G. Drechsel
Other information
126
Other information
SUBSEQUENT EVENTS
100% of Nobiles Media B.V. was acquired on 16 February
2008. At the same time, the 50% holding in Smart Event
B.V. and Info pinnacle B.V. was expanded to 100%. The
acquisitions in question strengthened the position of TMG
in the employment communications market aimed at starters
and young professionals.
January 2008 a 70% holding was taken in WebRegio.
After the balance sheet date, TMG acquired the free local
newspapers from Argo Press, including the Amsterdams
Stadsblad. The acquisitions have a fractional effect on TMG’s
financial position.
From January 1, 2006 till March 13, 2008 TMG repurchase
1,903,753 (depositary receipt of) ordinary shares for
€ 45,263,000
Other information
Auditor’s Report
whether due to fraud or error. In making those risk assess-
To: the Annual General Meeting of Shareholders of
ments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures
Report on the financial statements
that are appropriate in the circumstances, but not for the
We have audited the accompanying financial statements
purpose of expressing an opinion on the effectiveness of
of Telegraaf Media Groep N.V. from page 73 to page 123,
the entity’s internal control. An audit also includes evalu-
Amsterdam. The financial statements consist of the
ating the appropriateness of accounting policies used
consolidated financial statements and the company
and the reasonableness of accounting estimates made by
financial statements. The consolidated financial statements
the company’s Executive Board, as well as evaluating the
comprise the consolidated balance sheet as at December
overall presentation of the financial statements.
31, 2007, income statement, statement of changes in
equity, and cash flow statement for the year then ended,
We believe that the audit evidence we have obtained is
and a summary of significant accounting policies and other
sufficient and appropriate to provide a basis for our audit
explanatory notes. The company financial statements
opinion.
comprise the company balance sheet as at December 31,
2007, the company income statement for the year then
Opinion with respect to the consolidated
ended and the notes.
financial statements
In our opinion, the consolidated financial statements give
Responsibility of the Executive Board
a true and fair view of the financial position of Telegraaf
The company’s Executive Board is responsible for the
Media Groep N.V. as at December 31, 2007, and of
preparation and fair presentation of the financial statements
its result and its cash flow for the year then ended in
in accordance with International Financial Reporting
accordance with International Financial Reporting
Standards as adopted by the European Union and with
Standards as adopted by the European Union and with
Part 9 of Book 2 of the Netherlands Civil Code, and for the
Part 9 of Book 2 of the Netherlands Civil Code.
preparation of the Report of the Executive Board in accordance with Part 9 of Book 2 of the Netherlands Civil Code.
This responsibility includes: designing, implementing, and
Opinion with respect to the company
maintaining internal control relevant to the preparation and
financial statements
fair presentation of the financial statements that are free
In our opinion, the company financial statements give a
from material misstatement, whether due to fraud or error;
true and fair view of the financial position of Telegraaf
selecting and applying appropriate accounting policies;
Media Groep N.V. as at December 31, 2007, and of its
and making accounting estimates that are reasonable in
result for the year then ended in accordance with Part 9
the circumstances.
of Book 2 of the Netherlands Civil Code.
Auditor’s responsibility
Report on other legal and regulatory requirements
Our responsibility is to express an opinion on the financial
Pursuant to the legal requirement under 2:393 sub 5 part e
statements based on our audit. We conducted our audit
of the Netherlands Civil Code, we report, to the extent of
in accordance with Dutch law. This law requires that we
our competence, that the Report of the Executive Board
comply with ethical requirements and plan and perform the
is consistent with the financial statements as required by
audit to obtain reasonable assurance whether the financial
2:391 sub 4 of the Netherlands Civil Code.
statements are free from material misstatement.
An audit involves performing procedures to obtain audit
Amsterdam, March 13, 2008
evidence about the amounts and disclosures in the finan-
KPMG Accountants N.V.
cial statements. The procedures selected depend on the
L.N.J. Epskamp
auditor’s judgment, including the assessment of the risks
of material misstatement of the financial statements,
127
128
Other information
provisions in the articles of
association concerning the
appropriation of profit
•
If a loss is incurred in any one year, no dividend is then
paid in that year. In addition, in subsequent years a dividend
may only be paid after sufficient profit has been made to
In relation to the appropriation of profit, Article 33 of the
cover the loss. Based on a proposal submitted by the priority
articles of association of Telegraaf Media Groep N.V.
shareholders, the general meeting of shareholders may
stipulates that:
however decide to extinguish such a loss against the
•
attributable portion of equity or also make a dividend payable
Each year the Executive Board, subject to the approval
of the Supervisory Board and the Stichting Beheer van
from the distributable portion of equity.
Prioriteitsaandelen Telegraaf Media Groep N.V. [TMG
•
Preference Shares Trust], determines the portion of the profit
that the distribution is permissible, have been adopted.
– the positive balance on the income statement – that will
•
be transferred to the reserves.
not count in determining the distribution of profit.
•
A dividend is made payable on the paid-up preference
Profit is distributed after the financial statements, showing
The shares held by the company in its own capital do
of ordinary shares and priority shares in the amount of five
stichting preferente aandelen
telegraaf Media groep n.v. (tMg
preference shares trust) and
stichting Beheer van prioriteitsaandelen telegraaf Media groep n.v.
(tMg priority share ManageMent
trust)
percent of the nominal value of their shares or – if profit is
In accordance with Best Practice Provision IV 3.9 of the
shares from the profit remaining after the transfer to reserves
in accordance with the previous paragraph, at a percentage
equal to the average yield on Dutch government mediumterm borrowings at the start of the financial year to which
the dividend pertains, plus one percent. This average yield is
determined by the Executive Board subject to the approval
of the Supervisory Board.
•
A statutory dividend is subsequently paid to the holders
insufficient for this purpose – at a percentage that is as high
Corporate Governance Code, the following is an overview
as possible. In relation to priority shares, the percentage of
of all outstanding and potentially available defensive
the dividend as provided for in the previous paragraph may
measures to guard against a possible takeover of control of
not be higher than the statutory interest rate on the last
TMG N.V. This summary identifies the circumstances under
day of the relevant financial year.
which these defensive measures would likely be invoked.
•
If in any financial year the dividend on preference shares
as provided for in paragraph 2 above, cannot or can only
1. Stichting Preferente Aandelen Telegraaf Media Groep
partially be paid, due to a lack of sufficient income, the
N.V. (TMG Preference Shares Trust)
shortfall is paid from the distributable portion of equity.
The purpose of the Stichting Preferente Aandelen TMG N.V.
The dividend is calculated on the paid-up portion of the
(TMG Preference Shares Trust) is as follows:
nominal amount.
•
•
hereinafter referred to as the company, with its affiliated
The profit then remaining is at the disposal of the general
To protect the interests of TMG, vested in Amsterdam,
meeting of shareholders. No additional dividend may however
companies and all involved parties, whereby such measures
be paid from this amount on the priority shares or the
are taken as required to protect to the maximum possible
preference shares.
extent against influences that could threaten continuity,
•
independence or identity, in conflict with these interests.
Distribution of profit is limited to the distributable
portion of equity.
•
To protect against the influence of third parties that could
Other information
affect the editorial independence, as well as the principles that
define by Article 5:71 paragraph 1 sub c of the Wft [Financial
serve as the basis on which the opinion-forming publications
Oversight Act].
of the companies within the Groep are formulated. The trust
The management board consists of one chairman and four
attempts to achieve this goal by 1) acquiring preference
members. At 31 December 2007, the composition of the
shares in the company and by exercising the rights
board was as follows: Dr. S.E. de Jong (Chairman), A. den
associated with these shares and 2) by exercising other
Bandt, A.H.M. van Roosmalen, E.F.M. Kok and A.J. van
rights that are assigned to the Trust pursuant to laws, the
Puijenbroek. No preference shares were outstanding on the
articles of association or on the basis of an agreement.
balance sheet date.
The Trust thereby takes the purpose, as identified under 1)
above, for which the preference shares may be issued into
2. Stichting Beheer van Prioriteitsaandelen Telegraaf
consideration, in accordance with the notes to the proposed
Media Groep N.V. (TMG Priority Share Management Trust)
amendment to the articles of association adopted by the
The objective of the management trust is to acquire and
Annual General Meeting of Shareholders of the company
manage the priority shares of the company and, on this basis,
on December twenty third, nineteen hundred eighty-three.
to ensure the continuity of the company’s management, ward
The disposal, encumbrance or in any other way disposing
off any influences on the company’s management that could
of shares falls outside such purpose, except:
affect the independence of the company in conflict with its
•
interests and to promote sound policy in the interests of the
Disposal to the company itself or to an affiliated group
company to be designated by the company.
•
Collaboration in the repayment and withdrawal of shares.
company.
The authorities associated with the priority shares include the
decision to issue shares, set the number of directors and the
The right to issue preference shares in Telegraaf Media
right to propose an amendment to the articles of association
Groep N.V. is granted by the Stichting Beheer van Prioriteits-
or dissolution of the company before the General Meeting of
aandelen TMG N.V. (TMG Priority Share Management Trust).
Shareholders can decide on such matters.
The Stichting Preferente aandelen Telegraaf Media Groep
N.V. has the right to acquire preference shares in TMG’s
The priority shares are held by the Stichting Beheer van
capital that correspond to 50% of the total number of ordinary
Prioriteitsaandelen Telegraaf Media Groep N.V., whose
shares issued, for the exercise of these rights.
management board at 31 December 2007 consisted of
Messrs. A.J. van Puijenbroek, Chairman, L.G. van Aken,
The Stichting Preferente Aandelen Telegraaf Media Groep N.V.
(TMG Preference Shares Trust) is an independent trust as
E.F.M. Kok, and E.H. van Puijenbroek.
129
130
Other Information
2007 ANNUAL REPORT OF THE STICHTING
ADMINISTRATIEKANTOOR VAN AANDELEN
TELEGRAAF MEDIA GROEP N.V. (TMG
SHARE ADMINISTRATION TRUST)
Telegraaf Media Groep N.V. is a listed company. The
receipts for depositary shares in Telegraaf Media
Groep N.V. (TMG) are traded on the NYSE Euronext in
Amsterdam.
The issue of depositary receipts for shares is a measure
designed to prevent the absence of shareholders at the
general meeting of shareholders from resulting in a minority
of shareholders, by happenstance or otherwise, that is
subsequently able to take over control of the meeting. As
already mentioned in the introduction, the issue of depositary
receipts for shares is not used as an anti-takeover measure
in case of TMG: TMG’s depositary receipts for shares can
be converted without limitation.
Shareholders are entitled to attend the general meeting of
shareholders, and to speak and vote at this meeting.
The meeting of holders of TMG depositary receipts for shares
Holders of depositary receipts are entitled to attend and
took place on 8 February 2007 in Amsterdam. Agenda items
speak at this meeting. Holders of depositary receipts may
included a discussion of the minutes of the meeting of
obtain a proxy for the duration of the meeting from the
holders of depositary receipts for shares held on 2 February
management board of the Stichting Administratiekantoor van
2006, a review of the TMG N.V. general meeting of share-
aandelen Telegraaf Media Groep N.V. [TMG Share
holders held on 19 April 2006, the activities of the manage-
Administration Trust] that entitles them to vote. TMG’s
ment board during the year and consultation of the meeting
depositary receipts for shares can be converted without
in relation to a vacancy on the management board. Only two
limitation. The issue of depositary receipts for shares there-
holders of depositary receipts for shares were present at
fore does not constitute an anti-takeover measure for TMG
this meeting (0.01%). At that point the Trust was in the
possession of 63% of the outstanding shares. The minutes
One of the purposes of the Stichting Administratiekantoor
of this meeting are available on the Trust’s website (http://
van aandelen Telegraaf Media Groep N.V. [TMG Share
administratiekantoor.tmg.nl).
Administration Trust] is to issue convertible bearer depositary
receipts for shares in exchange for which the trust acquires
The items discussed during the management board’s meeting
and holds ordinary shares in its own name, for administration.
of 10 April 2007 (minutes available on the Trust’s website
The trust administers the acquired ordinary shares and
http://administratiekantoor.tmg.nl) include the financial
exercises the rights associated with these shares, including
statements and report for the 2006 financial year, and the
the voting rights. In exercising the rights associated with
Trust’s finances.
the shares, the trust will primarily focus on the interests of
the holders of depositary receipts with due consideration
of the interests of TMG and its affiliated companies.
TMG’s financial statements and the proposed dividend for
2006 were extensively discussed with Mr. F.Th.J. Arp, CFO
of TMG In addition, the management board reviewed the
The notes explaining the variance from Principle IV.2 Issue of
meeting of holders of depositary receipts for shares held
Depositary Receipts for Shares of the Corporate Governance
on 8 February 2007 and Mr. Moleveld was reappointed as
Code may be found on page 67 of this annual report.
member A of the management board. In preparation for
TMG’s general meeting of shareholders, the management
During 2007, the number of convertible depositary receipts
board discussed a number of subjects that the manage-
for shares in TMG issued by the Stichting Administratiekantoor
ment board intends to submit for inclusion on the agenda.
van aandelen Telegraaf Media Groep N.V. [TMG Share
Administration Trust] (hereinafter: the Trust) declined by
TMG’s annual general meeting of shareholders was held on
1,265,155 depositary receipts and amounted to 31,676,029
19 April 2007 in Amsterdam (www.TMG.nl). The management
(at a nominal value of € 0.25) at 31 December 2007, corres-
board issued proxies with full voting rights for the duration of
ponding to a nominal amount of € 7,919,007. An equal number
the meeting to the holders of depositary receipts for shares
of shares were administered by the Trust against these
present during the meeting. The management board repre-
depositary receipts. The decline is due to the share buy
sented 57.8% of the votes present during this meeting, while
back and subsequent withdrawal of the company’s own
the holders of depositary receipts for shares represented
shares by TMG
4.4%. The chairman of the Trust’s management board
131
Other Information
26 October 2007
NMa stops investigation about
possible price-fixing in Dutch
as the Groep ’s auditor. The proposal
advertising market
of the Priority Share Management
Trust to withdraw the bought back
Today the Nederlandse
shares, the authority to buy back
Mededingingsautoriteit (NMa
shares and the extension of the
- Netherlands Competition
authority of the Stichting Beheer
Authority) announced to end the
van Prioriteitsaandelen Telegraaf
investigation which was aimed at
Media Groep N.V. [Priority Share
ascertaining whether price-fixing
Management Trust] to issue ordinary
or discounting agreements have
shares and the granting of rights to
been made in the Dutch print
issued a number of comments further to the 2006 Annual
acquire ordinary shares and the
media advertising market.
Report, such as: a word of thanks for including the Trust’s
extension of the authority of this trust
The investigation started in
annual report in TMG’s Annual Report, the structure of the
to restrict or rule out preferential right
September 2006 at the Raad
Annual Report and questioned the Executive Board as to
of subscription to ordinary shares
van Orde en Toezicht voor het
how it intended to achieve its ambitious goals.
(including the granting of rights to
Advertentiewezen (Board
acquire ordinary shares), was also
for the Advertising market),
supported by the Trust.
at the Nederlands Uitgevers-
In addition, the chairman clearly articulated and explained
verbond (Dutch Publishers
the stance of the Trust related to the proposed remuneration
On 6 September 2007, the manage-
Association) and at a number
ment board held its regular autumn
of publishers under which
The management board voted for the adoption of the 2006
meeting at which it discussed a
Uitgeversmaatschappij De
financial statements, the proposed profit appropriation, and
number of items, including TMG’s
Telegraaf B.V. company (UMT),
the discharge of the Executive Board of responsibility for
semi-annual figures, the Trust’s
whose publications include ‘De
the policies pursued and the discharge of the Supervisory
finances, the preparations for the TMG
Telegraaf’ newspaper. UMT is
Board of responsibility for the supervision exercised during
special meeting of shareholders held
a part of TMG (Telegraaf Media
the year under review. The Trust voted for the appointment
on 26 September 2007, the draft profile
Groep).
of Ms. M. Tiemstra and Mr. A.J. van Puijenbroek as members
of the management board and the
of TMG’s Supervisory Board and the appointment of KPMG
2008 board member vacancies A and B.
policy for the Executive Board during the meeting.
132
Other information
During the special meeting of shareholders held on 26
Article 2:113 paragraph 3 of the Dutch Civil Code and is
September 2007, the management board voted for the
comprised of the following members, including mention of
appointment of Mr. J.G. Drechsel as a member of TMG’s
the former and/or current functions occupied:
Supervisory Board. The Central Works Council’s strengthened
right of recommendation applied to this vacancy.
W.M. Lammerts van Bueren
During this meeting, the Supervisory Board announced the
Chairman: Emeritus Professor in International University
intended appointment of Mr. P. Morley as a member of the
Collaboration/Economics EUR.
Executive Board, in the capacity of COO. The management
board agreed to the proposal that the individual financial
Mrs. J.A. Brewer-de Koster
arrangements for bridging the period between the ages of
Secretary: former member of Telegraaf Media Groep N.V.’s
62 and 65 shall also apply to Mr. Morley in accordance with
Supervisory Board and former member of the Stichting
the arrangements approved for Mr. F.Th.J. Arp, member of
Beheer van Prioriteitsaandelen Telegraaf Media Groep N.V.
the Executive Board in the capacity of CFO.
J.S. Dienske
The remuneration of the board members of the Trust consists
Former Secretary of the Koninklijk Verbond van Grafische
of € 8,000/year for the Chairman and € 6,000/year for the
Ondernemingen.
other board members, paid on an after-the-fact basis and
per calendar year. The annual costs of the activities of the
W.P. Moleveld
Trust primarily consist of expenses related to stock exchange
Professor of accountancy at the Nyenrode Business University.
listings and processing costs, for a total of € 21,052; costs
for the meeting of holders of depositary receipts for shares,
E.H. van Puijenbroek
including advertising expenses, for a total of € 3,646; and
Former director of B.V. Textielfabrieken H. van Puiijenbroek,
costs for maintaining the Trust’s website, for a total of € 7,884
board member of Stichting Beheer van Prioriteitsaandelen
and administration costs in the amount of € 4,908.
The total costs incurred by the Trust during 2007 amounted
to € 69,490 (2006: € 73,833).
The management board of the Stichting Administratiekantoor
Stichting Administratiekantoor van Aandelen
van aandelen Telegraaf Media Groep N.V. (TMG Share
Administration Trust) is independent as provided for in
c/o Basisweg 30 1043 AP AMSTERDAM
133
Other information
23 November 2007
Patrick Morley appointed COO
of TMG effective 1 December
2007
As a follow up to its 29 August
2007 announcement, TMG
(Telegraaf Media Groep) is
pleased to announce that Patrick
Morley has been appointed COO
and will become a member of
the Executive Board as per 1
December 2007. Effective on that
date the members of TMG’s
Executive Board will consist of
A.J. Swartjes (CEO), F. Th. J. Arp
(CFO) and P. Morley, MSc (COO).
Mr Morley will initially be closely
involved in the continued
development of Telegraaf Media
Nederland which incorporates
TMG’s printing and digital
activities in the Netherlands.
134
Other information
products and
activities of
telegraaf Media groep
The Netherlands
Free local publications and news
Nieuwsblad IJmuiden
journals
www.nieuwsbladijmuiden.nl
De Echo (11 edities)
www.echo.nl
Nieuwsblad Santpoort & Velserbroek
www.nieuwsbladsantpoort.nl
Zondagochtendblad (10 edities)
Newspapers
www.zondagochtendblad.nl
Dagblad De Telegraaf)
www.telegraaf.nl
Witte Weekblad (22 edities)
www.dft.nl
www.witteweekblad.nl
www.telesport.nl
Zondag IJmuiden
www.zondagijmuiden.nl
www.overgeld.nl
Amstelveens Nieuwsblad
www.teleweer.nl
www.amstelveensnieuwsblad.nl
www.vaarkrant.nl
www.autotelegraaf.nl
Zondag Haarlem
www.zondaghaarlem.nl
Nieuwsblad De Kennemer
www.nieuwsbladdekennemer.nl
Het weekend (2 edities)
www.woonkrant.nl
Nieuwsblad voor Castricum
www.reiskrant.nl
Zondag Haarlemmermeer
www.wuz.nl
www.zondaghaarlemmermeer.nl
Sp!ts
De Gooi- en Eembode (2 edities)
www.spitsnet.nl
www.gooieneembode.nl
Noordhollands Dagblad
Laarder Courant De Bel/
waarin begrepen:
Nieuwsblad voor Huizen
De Zaankanter
- Alkmaarsche Courant
www.laardercourant.nl
www.zaankanter.nl
- Enkhuizer Courant
Vecht-Journaal
De Krommenieër
- Dagblad voor West-Friesland
www.vechtjournaal.nl
Het op Zondag
www.hetopzondag.nl
Alphen.cc
www.alphen.cc
- Schager Courant
- Helderse Courant
Het Gezinsblad
- Dagblad Kennemerland
Baarns Weekblad
- Dagblad Zaanstreek
www.baarnsweekblad.nl
- Dagblad Waterland
www.nhd.nl
www.gezinsblad.nl
Westfries Weekblad (2 edities)
De Almare (3 edities)
www.westfriesweekblad.nl
www.dealmare.nl
Haarlems Dagblad
www.haarlemsdagblad.nl
Alkmaars Weekblad
De Woonbode
www.alkmaarsweekblad.nl
www.woonbode.nl
IJmuider Courant
www.ijmuidercourant.nl
De Koerier
Haarlems Weekblad
www.haarlemsweekblad.nl
Leidsch Dagblad
www.leidschdagblad.nl
www.deduinstreek.nl
De Digitale Wijkkrant
www.wijkkrant-haarlem-oost.nl
De Gooi- en Eemlander
www.gooieneemlander.nl
www.almerevandaag.nl
Helders Weekblad
www.heldersweek.nl
Heemsteedse Courant
www.heemsteedsecourant.nl
Almere Vandaag
De Duinstreek
Schager Weekblad
www.schagerweekblad.nl
135
Other information
CTR/De Polderbode
Wieringer Courant/
Wieringermeerbode
www.wieringercourant
Magazines
Privé
www.prive.nl
CosmoGIRL!
www.cosmogirl.nl
FHM (For Him Magazine)
www.fhm.nl
Elegance
www.elegance.nl
Residence
28 November 2007
www.residence.nl
Share buy-back programme
Hitkrant
TMG
www.hitkrant.nl
TMG (Telegraaf Media Groep
Autovisie
N.V.) announces today the start
www.autovisie.nl
of a share buy-back programme
-among others- because of the
JAN
recent development of the stock
www.jan-magazine.nl
price of TMG. TMG’s Executive
Board was authorized to take
MotoPlus
such steps during TMG’s
www.motoplus.nl
Annual General Meeting of
Shareholders on 19 April 2007.
Boten
www.botentekoop.nl
www.nieuwebotentekoop.nl
Campers en Caravans
www.camperscaravans.nl
www.nieuwecampers.nl
Automaxx
www.automaxx.nl
VROUW
vrouw.telegraaf.nl
136
Other information
Stijl ontmoet Stijl
www.stijlontmoetstijl.nl
Carp
www.carp.nl
www.careerscope.nl
Trips en Travels
Puzzle magazines
Denksport
www.denksport.nl
Puzzelsport
www.puzzelsport.nl
Tazuku
www.tazuku.nl
10 voor Taal
www.10voortaal.com
Jan Meulendijks
Bingo!
www.bingo.nl
Digital activities
(not print related)
Internet
www.autocircuit.nl
www.woneninholland.nl
www.fitclub.nl
www.iwannadate.nl
www.mijnvoordeelpagina.nl
www.news.nl
www.yourfuture.tv (50%)
www.scholieren.tv (50%)
www.bestetraineeships.nl (50%)
www.vakantierecreatie.nl
www.marinestore.nl
www.cruijff.com
www.mobisphere.nl
www.mobillion.nl
www.mobelle.nl
www.speurders.nl
www.vacaturekrant.nl
www.onderweg.nl
www.relatieplanet.nl
www.habbo.nl
www.sugababes.nl
www.superdudes.nl
Other information
www.geenstijl.nl (40%)
Radio Veronica (85%)
France
www.geenredactie.nl (40%)
www.radioveronica.nl
Sport Cérébral
Tazuku
www.dumpert.nl (40%)
www.gamert.nl (40%)
Classic FM (60%)
www.sudokujeux.fr
www.nieuwnieuws.nl (40%)
www.classicfm.nl
www.sportcerebral.fr
TMF Radio (42,5%)
Poland
www.tmfradio.nl
Tazuku
www.dumpert.nl (40%)
www.telegraaftickets.nl
Sport Umyslowy
Video Productionhouses
6Pack TV
Events
Librium Productions
AutoMaxx Summer Editions
Ukraine
Infopinnacle
Viva Italia
What’s On
Telegraaf Produktiehuis
Mega Trucks Festival
www.whatson-kiev.com
Carmichael & Pilarczyk
Fleet Management Expo 2007
Obzor
Pilarczyk Media Groep
Taxi Management Expo 2007
www.obzor-online.com
Modefabriek (50%)
Panorama
Out of Home TV
Fleurig (50%)
Domus Design
Librium TV
Sp!tsCareerevent(50%)
Maister
Agency TV
Sp!tsMasterbeurs (50%)
Gourmet Guide
Crossmedia-formats
Production companies
www.kyivcity.com
Voetballer van het Jaar
Telefonische informatiediensten
Glance
Bureau van den Heuvel
Digitaal distributieplatform
www.Emarket.ua
Schaatser van het Jaar
SMS/MMS gateway services
Wilma Nanninga Privé
0900 call TV services
Sweden
RTL Autowereld
Web TV productieactiviteiten
Vi Båtägare
RTL Transportwereld
Drukwerk
www.vibatagare.se
Gek op Wielen
Distributie/transport
Båtnytt
Lubimaya
Tarzan Red Carpet
www.batnytt.se
Duels & Cijfers
International
GeenStijl TV op het Web
Belgium
www.golfdigest.se
6 Pack
Denksport
Residence
Sport Report
www.denksport.com
Cosmopolitan
Het Zwarte Gat
Sport Cérébral
www.cosmopolitan.se
Rage Garage
Puzzelsport
Allt om Kök och Bad
De Proefprofs
Tazuku
Segling
Zienema
www.tazuku.be
www.segling.biz
Fashion
www.habbo.be
Plus Sverige
Golf Digest
www.plussverige.se
Kidz in Biz
Super Cars
Denmark
www.marinan.com
Stapel op Auto’s
SoPus
www.maringuiden.se
Jolink goes Mexico
Tazuku
www.batvarlden.se
RTL Wintersport
Tankesport
Seasons
Broadcast
Germany
Sky Radio 101 FM (85%)
Sky Radio Hessen (43,4%)
www.skyradio.nl
www.skyradio.de
137
138
Key Figures
KEY FIGURES1)
20072)
20062)
20052)
20042)
2003
2002
2001
2000
1999
1998
866,815
498,041
530,468
480,595
428,333
454,079
464,761
500,057
471,529
430,079
70.3%
2.64:1
2.37:1
738,795
62,130
400,097
47.8%
1.04:1
0.91:1
678,144
60,195
49,599
68.8%
1.01:1
2.20:1
736,686
46,833
65,428
65.2%
1.35:1
1.87:1
694,320
66,306
67,709
64.5%
1.06:1
1.81:1
683,556
62,172
-25,765
62.5%
0.98:1
1.67:1
704,462
33,059
-4,913
60.6%
0.72:1
1.54:1
822,220
74,992
-29,510
61.6%
0.70:1
1.60:1
811,147
141,486
48,452
63.2%
1.44:1
1.72:1
721,335
102,357
64,794
65.3%
1.55:1
1.88:1
689,916
119,618
65,877
54.2%
7.3%
8.8%
9.8%
-3.8%
-0.7%
-3.6%
6.0%
9.0%
9.5%
-3.8%
201,590
3,594
46.2%
p.m.
-3.2%
177,246
3,782
9.9%
50.0%
7.2%
170,632
4,362
12.3%
35.3%
3.8%
159,463
4,316
14.1%
23.6%
3.5%
153,298
4,357
-6.0%
p.m.
3.1%
150,205
4,553
-1.1%
p.m
1.2%
151,561
5,393
-6.4%
p.m.
9.9%
156,690
5,457
9.7%
41.3%
12.3%
153,922
4,756
13.7%
36.0%
12.8%
151,018
4,619
15.3%
35.4%
Per TMG share with a nominal value of € 0.25 (rounded off to whole euro cents)
17.43
9.96
10.10
Cash flow from operating activities
1.24
1.18
0.89
Result
8.00
0.97
1.25
Dividend
1.00
0.50
0.44
Lowest rate
19.69
19.00
17.06
Highest rate
26.87
23.00
20.64
Closing rate as at 31 December
25.00
19.85
18.25
9.15
1.26
1.29
0.30
16.05
18.90
18.25
8.16
1.18
-0.49
0.11
13.00
19.00
17.99
8.65
0.63
-0.09
0.11
13.00
24.47
15.44
8.85
1.43
-0.56
0.11
14.00
22.90
17.09
9.52
2.70
0.92
0.38
20.80
37.00
21.60
8.98
1.95
1.23
0.44
16.88
24.69
22.00
8.19
2.28
1.26
0.44
17.47
23.82
22.91
Shareholders’ equity x € 1,000
TMG equity in percentages
of the total equity and liabilities
Current ratio
Current gearing
Revenue TMG x € 1,000
Cash flow from operating activities x € 1,000
Result x € 1,000
Result TMG in percentages
of the total revenue
Operating result in percentages
of the total revenue
Average total revenue per employee (fte)
Personnel end of year (fte)
Equity profitability
Payments percentage
1)
2)
Attributable to Telegraaf Media Groep N.V.
Based on IFRS principles.
140
BasisMedia
drs. J.H.R. Eijkelenkamp
M.C.A. Roos
F. Volmer
B. Brouwers
M. Zwagerman
Telegraaf Media Ukraine LLG
J. Zijlstra
International
M.M.P. van Lent
Executive Board
Keesing Media Group
CEO | drs. A.J. Swartjes
P.P. Tordoir
TTG Sverige AB
K.Neld
CFO | drs. F.Th.J. Arp RA
COO | P. Morley MSc
Sky Radio Group
A. Trik
T. Lathouwers
Corporate Staff Departments
Finance & Control:
W. R. de la Motte
Tax Planning:
mr. H. de Groot
Human Resources Management:
mr. G.E.M. Hermens
Procurement:
J. Forrester
Legal Affairs:
Production Units
DistriQ:
H. de Wit
mr. H.M.A. van Meurs-Bergsma
Development & Communication:
drs. B.J. Hilberts
Telegraaf Media ICT:
D. H. Pouw MBA
Investor Relations:
J. Elekan
Telegraaf Drukkerij Groep:
H.J.M.M. Eijkenboom
Group Internal Audit:
drs. P. de Bie
J. Talsma
141
Holland Combinatie
R.D. Keller
G. Brouwer
E.W.C. Wilmink
Video Production
M. Albert
S.A. Kroon
E. Bos
K. de Vroede
J.J.M. Paradijs
Telegraaf Tijdschriften Groep
C.B.M.J. d’Haans
HDC Media
mr. T.E. Klein
drs. M. Moos
H.G.M. ten Dam
J.G.C. Majoor
Digital A
BASIC STRUCTURE TELEGRAAf MEDIA GRoEP, 31 DECEMBER 2007
Uitgeversmaatschappij De Telegraaf
drs. Th.J.C. Trimbach
CREDITS
a publication of Telegraaf Media Groep N.V., Amsterdam
editorial Corporate Communication - Telegraaf Media Groep N.V., Amsterdam
editorial financial information Concernfinanciën en Administratie - Telegraaf Media Groep N.V., Amsterdam
textual advice Smink, van der Ploeg & Jongsma, Amstelveen
english translation Vertaalbureau Bothof, Nijmegen
concept, design, illustrations and art-direction Veldsvorm, Amsterdam
cover and annual report Veldsvorm, Amsterdam
layout of the financial statements Reclameafdeling De Telegraaf, Amsterdam
photography Corbis | Stockxpert | Victor Nieuwenhuijs | Own photography
printing and binding Gravo Groep B.V., Purmerend
paper cover: Arctic, 300 grams | inside: Arctic, 130 grams
typefaces Helvetica Neue, Garamond, Syntax
000-047 annual report

TELEGRAAF MEDIA GROEP (TMG)

Transcription

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