Luxembourg, 21st July 2008 - Metro International S.A. ("Metro")
(MTROA, MTROB), today announced its financial results for the second
quarter ended 30th June 2008. The Group's consolidated results have
been prepared according to International Financial Reporting
Standards ("IFRS").
HIGHLIGHTS FOR Q2 2008
* Operational sales decreased by 4.1 percent to EUR 77.3 million
(2007: EUR 80.6 million), excluding closed/divested operations
and Bostad. In real terms adjusting for the effect of the USD
depreciation the sales decrease is 2 percent.
* Total net sales decreased by 8.6 percent to EUR 81.5 million
(2007: EUR 89.2 million).
* The operating profit was EUR 0.6 million (2007: EUR 3.6 million
profit).
* The contribution from subsidiary newspaper operations was an
operating profit of EUR 5.4 million (2007: EUR 7.2 million
profit).
* Metro International recorded a net loss of EUR 1.9 million (2007:
net profit EUR 1.0 million).
* Schibsted will acquire 35 percent of the shares in Metro's
Swedish subsidiary at a purchase price of SEK 350 million. The
transaction is subject to regulatory approval and is currently
being reviewed by the competition authorities. This pending
transaction does not affect performance in Q2 2008.
* JP/Politiken, the Danish newspaper group, acquired 24.5 percent
of metroXpress Denmark in exchange for transferring the 24 Timer
newspaper to the Metro group. 24 Timer's results will be
consolidated from Q3 2008 onwards.
* In June, Metro acquired an additional 14 percent in our Mexican
joint venture operation taking our stake to 49 percent - the
maximum allowed foreign ownership
* Following the decision to report in Euros (EUR), translation
differences are restricted to the non-Euro businesses.
Year-on-year the currency fluctuations increase or decrease the
reported revenues as follows - US and Hong Kong revenues are
reduced by 16 percent.
* The net loss per share for the second quarter 2008 was EUR 0.004
(2007: profit EUR 0.002).
FIRST HALF RESULTS
* Operational sales decreased by 3.7 percent to EUR 146.3 million
excluding closed/divested operations and Bostad (2007: EUR 151.8
million). In real terms adjusting for the effect of the USD
depreciation the sales decrease is 1.7 percent.
* Total net sales decreased by 7.4 percent to EUR 154.9 million
(2007: EUR 167.3 million).
* The operating loss was EUR 4.9 million (2007: EUR 5.2 million
loss).
* The contribution from subsidiary newspaper operations was an
operating profit of EUR 5.0 million (2007: EUR 3.8 million
profit).
* Metro International recorded a net loss of EUR 8.3 million (2007:
net loss EUR 9.8 million).
Per Mikael Jensen, Chief Executive Officer and President of Metro
International, said:"Metro International's second quarter 2008 has seen much activity
with deals in Sweden, Denmark and Mexico which will contribute to
earnings from Q3 2008. The three deals are in line with the strategy
which was approved by the Board in May and unveiled at the Capital
Markets Day on 3rd June in Amsterdam. Consolidating some of our
markets is an ongoing process.
On a like-for-like basis, excluding divested and closed operations,
Metro's operational sales declined by 4.1 percent year-on-year. In
real terms, after adjusting for the depreciation of the US dollar,
sales decreased by 2.0 percent. This is a commendable result in
difficult market conditions. As usual, the underlying performance in
most of our markets is quite good but a few operations drag the Group
results down. Those are Spain and the US most importantly and
secondly Denmark and Portugal. All markets except for US, Spain,
Denmark and Canada showed a profit in Q2 2008.
In markets like Sweden, Netherlands, Hong Kong, Latin America and
others, Metro continues to perform very well with profit margins in
double digits.
The advertising market is responding to gloomy economic news around
the world but Metro is answering by emphasising our unique access to
the metropolitan demographic and our price differential against paid
for newspapers. We are also continuing to drive costs down in all of
our countries and at HQ.
The deal with Schibsted was announced on 21st May and it is expected
to deliver exciting opportunities for new advertisement packages for
customers that will drive additional revenues in Sweden. Completion
of the transaction is subject to regulatory approval. Conclusion of
the review by the competition authority is expected in Q4 2008. The
Schibsted deal has no impact on Q2 2008 results.
The deal with JP/Politiken ("JP/Pol") in Denmark was announced on
23rd May and it is expected to deliver synergies across the two
titles, metroXpress and 24 Timer in the Danish market. JP/Pol
acquired 24.5 percent of metroXpress and 24 Timer became part of
Metro's growing stable of group titles. The deal was finally signed
in late June so the first results will be included in the Q3 2008
results.
On 11th July we announced that we had increased our stake in the
Mexican joint venture operation to 49 percent. The Mexican JV has
been performing well and is delivering monthly profits on a regular
basis and has been profitable in H1 2008.
Group EBIT in the second quarter has declined by EUR 3.0 million to
EUR 0.6 million profit year-on-year. The source of the decline is our
controlled operations (-EUR 2.0 million), Joint Ventures (-EUR 0.2
million), Websites (-EUR 0.3 million) and HQ & Other (-EUR 0.2
million).
In our JV operations Brazil and Mexico have moved into profitability
for the quarter and franchise fees have been maintained at last
year's level.
The launch of the new French website in March has been followed by
the launch of the new Spanish website on 23rd June. Our capital spend
on the global Online project in Q2 2008 was EUR 0.4 million which
brings our capital spend to date to EUR 2.6 million. This development
cost is being recharged to each country as it rolls out the new
website.
HQ costs are at the same level as in 2007 but cost-saving measures
have been implemented in July to reduce headcount by 14 percent which
will deliver lower costs in Q3 2008.
Outlook and Risks
Conditions for advertising in Europe and North America are gloomy,
regardless of the category. Markets for advertising in paid-for
titles have been hit badly in some countries - particularly US, UK
and Southern Europe - and less so in other markets in Northern
Europe.
In South America, Asia and Russia, the outlook is much brighter.
Spending is expected to grow significantly in the market where Metro
is published, in some areas with double digits. This is partly due to
the better general economic situation, but also due to an increase in
media spending.
With this mixed outlook Metro is obviously most vulnerable in the US,
Canada and Europe. Hence, the defined strategy to grow in Asia, South
America and Russia becomes even more relevant.
Per Mikael Jensen
CEO and President
Metro International
For further information, please visit www.metro.lu , email
info@metro.lu or contact:
Per Mikael Jensen, CEO & tel: +44 (0)
President 20 7016 1300
Frank Mooty, CFO tel: +44 (0)
20 7016 1300
Birgitta Henriksson, IR contact tel: +46 (0)
708 12 86 39
ABOUT METRO INTERNATIONAL AND METRO
Metro is the largest international newspaper in the world. Metro is
published in over 150 major cities in 21 countries across Europe,
North & South America and Asia. Metro has a unique global reach -
attracting a young, active, well-educated Metropolitan audience of
over 20 million daily readers. Metro's advertising sales have grown
at a compound annual rate of 38% since the launch of the first
edition in 1995.
Metro International 'A' and 'B' shares are listed on the OMX Nordic
Exchange's Nordic List under the symbols MTRO SBD A and MTRO SBD B.
CONFERENCE CALL
The company will host a conference call today at 10.00 (CET). The
call will also be webcast on Metro's website at www.metro.lu. To
participate in the conference call, please dial in on the following
numbers:
UK / International: +44 (0)20 3043 2436
Sweden: +46 (0)8 505 598 53
US (free phone): +1 866 458 40 87
A replay facility will be available shortly after the conclusion of
the call at www.metro.lu
The full report with tables can be downloaded from the following
link:
FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED 30th JUNE 2008
| Source: Metro International S.A.
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