Egmont delivers solid earnings and digital growth

Egmont continued its digital growth in 2020 and was also behind strong films, TV programmes, books, magazines and computer games. The cinema market was hit hard by the Covid-19 pandemic. Egmont celebrated its 100-years anniversary as a foundation and made charitable donations of more than EUR 12m to help children and young people and support film talents.

The media group Egmont was behind prize-winning blockbuster films, agenda-setting TV programmes, significant book releases, computer games and magazines in 2020. In addition, TV 2 Norway secured a wide range of attractive long-term sports rights. 

Egmont’s digital growth businesses – TV streaming, e-commerce, games, digital agencies and digital book publishing – made further strong progress. Egmont thus continued its strategy of transforming its media business to grow with the modern consumer online, while investing comprehensively in content and journalism.

Egmont delivered solid earnings before tax (EBT) of EUR 85m, up from EUR 80m in 2019. EBITDA came to EUR 225m. Including its share of non-consolidated companies, Egmont generated total revenue of EUR 1,881m. Consolidated revenue was EUR 1,542m, down from EUR 1,682m in 2019. 

The restrictions and temporary closure of Nordisk Film’s cinemas in Denmark, Norway and Sweden due to Covid-19 cut revenue by around EUR 90m and brought heavy losses for the cinemas despite support from public compensation schemes. On the other hand, there was combined revenue growth of more than EUR 90m in many of Egmont’s other businesses.

”I am proud of how we have coped with a challenging year. We stand strong as a media group and are continuing to grow our digital businesses. We have succeeded with our digital transformation and strategy based on that people want to stream more, game more and shop more online. This accelerated further during corona. We anticipate growth and further investments in 2021,” says President and CEO Steffen Kragh and sends his thanks to Egmont’s employees.  

“I am impressed by the level of ambition and innovation shown by our employees when the pandemic struck. They were quick to adapt and continued to be hugely creative and innovative and deliver cutting-edge journalism and relevant content.” 

2020 highlights

• TV 2 is an important part of Norwegian society with its range of key public service programmes, news, entertainment and sports. The 24-hour news channel had record-high viewing figures in 2020, and the streaming service TV 2 Play made good progress and now has more than 500,000 subscribers. TV 2’s eight linear channels had a combined audience share of 29.2%. Advertising revenue was hit by Covid-19 in the second quarter. TV 2 secured a wide range of sports rights during the year, including to Norwegian top-tier soccer Eliteserien for 2023-28.
• Nordisk Film was behind a number of the year’s hit films, including Another Round and Riders of Justice in Denmark and My Father Marianne in Sweden. The portfolio of computer game companies delivered strong earnings and was expanded through further acquisitions, including 40% of Spanish company MercurySteam. Sony PlayStation 5 was launched successfully at the end of the year. Covid-19 hit the film market and not least Nordisk Film’s cinemas hard.
• Story House Egmont is active in media, e-commerce and digital agencies. The portfolio of nine Nordic e-commerce companies saw very strong growth and is now similar in size to the magazine and media business. Agreement was reached on the acquisition of e-commerce company Royal Design Group AB, and the transaction was approved by the competition authorities in early 2021. The media business showed solid performance in 2020 in an increasingly challenging market with key markets like Sweden and Norway realizing strong results. The international children’s book business in the UK and Poland and parts of the German book business were sold to HarperCollins as part of a strategic focus on magazines. The portfolio of eight Nordic agencies that help businesses with digital marketing and performance on platforms such as Google, Facebook and Instagram saw strong growth.
• Denmark’s large international publishing house Lindhardt og Ringhof now has 80,000 digital titles in more than 30 languages via SAGA Egmont. This strong digital position and 10% growth in sales of paper books brought Lindhardt og Ringhof strong revenue growth and record earnings. Cappelen Damm, Norway’s largest publishing house, also had a good publishing year, with solid earnings.

Egmont celebrated its 100-years anniversary in 2020 as a commercial foundation which has a dual purpose: to develop modern media and to help vulnerable children, young people and families. Egmont had charitable activities of EUR 12.2m in Denmark and Norway during the year. The Egmont Foundation continued to support the Learn for Life programme for children in care, which the foundation itself has initiated, with a new four-year partnership to ensure that more vulnerable children and young people receive an education. The foundation also earmarked funding for initiatives to support vulnerable children and young people during the Covid-19 crisis. Two anniversary prizes, each of DKK 1m, were handed out in 2020: the Egmont Foundation’s Employee Prize was awarded to the Young Grief initiative, and the Egmont Foundation’s Anniversary Prize to the Read for Life programme. Since 1920, Egmont has made total donations of EUR 423m in today’s money.

Key figures (EURm)     2020    2019
 
Revenue                       1,542   1,682
 
EBITDA                         225      250
 
EBT                               85        80
 
Equity                          886       886

-------

TV 2
Revenue: EUR 464m (509m). Operating profit after result from associates: EUR 45m (43m)

TV 2 is Norway’s largest private public service media house and delivers news, sports and entertainment through eight TV channels and the streaming service TV 2 Play. As a public service broadcaster, TV 2 delivered strong journalism in a year dominated by Covid-19. The 24-hours news channel saw strong growth with an audience share of 7.1% in 2020. TV 2 Play also grew strongly in terms of both viewing time and subscriptions, and now has more than 500,000 subscribers. Established programme formats such as the reality show Farmen and celebrity dance show Skal vi danse? as well as new concepts such as the reality series Kompani Lauritzen and crime series Witch Hunt attracted high viewing figures. TV 2 added the rights to Norwegian top-tier soccer Eliteserien for 2023-28 to its existing portfolio of attractive sports rights, which include UEFA Champions League, UEFA Nations League and Tour de France. TV 2’s commercial market share was stable, while its overall market share in the target age group of 20-49 slipped 1.1 percentage points to 29.2%, due partly to major sporting events being postponed and to TV 2’s channels being unavailable through Telia throughout the month of June. TV delievered a good result. Revenue decreased partly as a result of Covid-19 hitting advertising income, especially in the second quarter in the wake of the first lockdown in Norway, but the advertising market picked up again in the second half of the year. TV 2-owned Vimond, which supplies streaming technology to media companies worldwide, saw double-digit growth in licensing revenue.

Nordisk Film
Revenue: EUR 366m (541m). Operating profit after result from associates: EUR 15m (34m)

Nordisk Film produces films and TV series in the Nordic region, operates cinemas in Denmark, Norway and Sweden, and has a substantial computer game business. Revenue and operating earnings fell extraordinarily in 2020 as a result of Covid-19, which hit the global movie market and the cinema chain in particular. The cinemas were closed or operated under restrictions for much of the year, with revenue down around EUR 90m and heavy losses even after support from public compensation schemes. Despite an unpredictable film market with restrictions, cinema closures and delayed premieres, the film production and distribution businesses and Nordisk Film’s associated film production companies delivered solid earnings. Nordisk Film had a record-high 28% share of the Nordic cinema market and distributed the three bestselling Danish films of the year: Thomas Vinterberg’s Another Round (more than 800,000 tickets sold) and Anders Thomas Jensen’s Riders of Justice (more than 450,000 tickets sold) – both produced by the associate company Zentropa – and Klovn: The Final (437,000 tickets sold). In Sweden, Nordisk Film produced the year’s biggest box-office success, My Father Marianne, and Amanda Kernell’s prize-winning Charter. In Norway, Nordisk Film was behind Betrayed, produced by Fante Film. Nordisk Film expanded its portfolio of computer game companies during the year with the acquisition of Finland’s Nitro Games (40%) and Spain’s MercurySteam (40%). The portfolio also includes Avalanche Studios Group and the part-owned companies Star Stable Entertainment, Raw Fury, RETO MOTO and Flashbulb Games. Nordisk Film distributes Sony PlayStation in the Nordics and Baltics and saw very strong demand for the new PlayStation 5 launched at the end of the year. GoGift again delivered double-digit revenue growth in digital gift card solutions and launched a digital gift universe together with MobilePay in Denmark.

Story House Egmont
Revenue: EUR 645m (575m). Operating profit after result from associates: EUR 47m (27m)

Story House Egmont (formerly Egmont Publishing) has businesses in three areas: media, e-commerce and agencies. Revenue and operating earnings grew strongly in 2020, driven mainly by e-commerce and agencies. Story House Egmont has a portfolio of nine majority- and minority-owned Nordic e-commerce companies which are experts in the outdoor, parenting, hobby, health & beauty, home & interior and kitchen categories, among others. 2020 was a very good year for e-commerce, with Covid-19 generating very strong demand for online retailers. The companies in the e-commerce portfolio grew by an average of 50%, with the portfolio’s total revenue climbing from EUR 363m in 2019 to EUR 537m. Story House Egmont invested in Norwegian company Skitt Fiske, increased its holding in Sweden’s Jollyroom to 49% and reached agreement at the end of the year on the acquisition of Swedish e-commerce company Royal Design Group AB, which was completed early in 2021. The e-commerce portfolio also includes Outnorth, Fjellsport, Bagaren och Kocken, NiceHair, Med24 and Garnius. In the media area, Story House Egmont is behind popular magazines and digital titles both in the Nordic region and internationally. Despite a structural decline in the market for printed weeklies and magazines, and Covid-19’s negative effect on the advertising market, the media business was able to deliver solid earnings. The children’s book business in the UK and Poland and parts of the German book business were sold during the year to HarperCollins. Story House Egmont has majority or minority stakes in eight Nordic agencies – s360, KAN, Ingager, Markedspartner, Klintberg Niléhn, Core Content, Okto and Belong – which are leaders in areas such as performance marketing and posted substantial revenue growth and strong earnings in 2020.

Egmont Books
Revenue including Egmont’s holding in Cappelen Damm:[i] EUR 125m (126m)
Revenue excluding Cappelen Damm, which is not consolidated under IFRS: EUR 63m (53m)
Operating profit after result from associates:[/i] EUR 9m (0m)

Egmont Books comprises the Danish publisher Lindhardt og Ringhof and the part-owned Norwegian publisher Cappelen Damm. Both publish printed books, audiobooks, e-books and educational materials. Denmark’s large international publishing house Lindhardt og Ringhof saw strong revenue growth and record earnings in 2020, with sales of paper books up 10%. The year’s bestseller was Barack Obama’s A Promised Land, and Lindhardt og Ringhof was also behind many other big sellers from the likes of Leif Davidsen, Michael Katz Krefeld, Steffen Jacobsen, Karl Ove Knausgaard and Claus Meyer. Lindhardt og Ringhof’s global digital publisher SAGA Egmont now offers 80,000 e-books and audiobooks in more than 30 languages and expects to release a further 25,000 digital titles in 2021. Lindhardt og Ringhof’s educational publisher Alinea acquired EduLab and 60% of GoTutor during the year, and founded Praxis Forlag A/S together with the Praxis Foundation. Norway’s largest publishing house, Cappelen Damm, saw growth of 30% in the education market and had an excellent publishing year with great commercial and literary success for authors such as Beate Grimsrud, Vigdis Hjorth, Tore Renberg and Roy Jacobsen.

Charitable activities

Egmont is a commercial foundation. The profit generated by the media business is distributed between charitable activities helping vulnerable children and young people and supporting film talent (through the Nordisk Film Foundation) and in developing the media group. The foundation mainly supports charitable activities in Denmark, but also makes some donations in Norway. Egmont celebrated its 100-years anniversary as a foundation in 2020 and has distributed a total of EUR 423m in today’s money during its history. Egmont had charitable activities of EUR 12.2m during the year, including EUR 0.7m via the Nordisk Film Foundation. Egmont is working towards the fourth UN Sustainable Development Goal of making a quality education available to all children and young people by 2030. The Egmont Report 2020 focused on the consequences of the Covid-19 pandemic for young people’s lives, well-being and learning, and Egmont earmarked funds for initiatives to support vulnerable children and young people during the crisis. Egmont continued to support the Learn for Life programme for children in care, which the foundation itself has initiated, with a new four-year partnership to ensure that more vulnerable children and young people receive an education. The foundation celebrated its anniversary by handing out two special prizes, each of DKK 1m: the Egmont Foundation’s Employee Prize was awarded to the Young Grief initiative, and the Egmont Foundation’s Anniversary Prize to the Read for Life programme. In Norway, Egmont supported projects for children and young people under the Norwegian Women’s Public Health Association, Norwegian Red Cross and the Crown Prince Couple’s Foundation. The Nordisk Film Foundation sent 54 film talents out into the world through its travel grants during the year and supported five initiatives focusing on areas such as the use of new technology in film production.