Bonnier AB 2010 – Strong rebound in all business areas

Despite a weak start, 2010 was a successful year for Bonnier AB. Profits before tax increased by SEK 1.23 billion and amounted to SEK 1 billion. Excluding goodwill amortization, earnings amounted to SEK 1.79 billion (SEK 658 million). The EBITA* increased by SEK 926 million to SEK 2.1 billion (SEK 1.19 billion). The EBITA margin increased to 6.9 percent (3.8 percent). Sales fell slightly, primarily because of lower exchange rates due to the strong Swedish krona, amounting to SEK 30.58 billion. Advertising revenues increased by 7.7 percent.

All business areas increased their profits. Morning Paper improved its EBITA by SEK 414 million, Broadcasting and Evening Paper by SEK 269 million, Magazines by SEK 168 million and Business Press by SEK 148 million. The profits for Entertainment increased by SEK 25 million and the cinema division had its best year ever. This was true for Books as well, which hit an all-time high despite a lack of "megasellers."

As of the end of December 2010, shareholders' equity and minority interests amounted to SEK 7.58 billion, an increase of SEK 442 million. Net debt amounted to SEK 7.21 billion, an improvement of SEK 1.29 billion. Relation of net debt to shareholders' equity and minority interests (gearing ratio) was 0.95 (1.19).

Books had an EBITA of SEK 720 million (SEK 710 million), the business area's best result so far. Sales fell slightly due to unfavorable exchange rates. In contrast to 2009, sales in 2010 were not driven by individual bestsellers but by a broad and attractive assortment. Publishing houses within Books increased sales even in shrinking markets. The strong profits were the result of long-term work at improving gross profit margins, primarily within Bonnierförlagen and Bonnier Media Deutschland. Bonnierförlagen had its best year ever, as did online bookstore Adlibris.

Magazines had nearly the same sales as the year before. The EBITA was SEK 155 million (SEK -13 million). Bonnier Publications, with operations in the Nordic countries and Russia, improved profits primarily due to lower costs - while the Swedish Bonnier Tidskrifter's improved results were primarily from higher ad revenues. The U.S. operations, Bonnier Corporation, showed strong improvement as a result of increased ad sales revenues during the second half of the year. Bonnier's own Mag+ platform for the iPad was launched and was very well received.

Broadcasting & Evening Paper had a 5 percent increase in net sales. The EBITA was SEK 1.26 billion (SEK 991 million). The main reason for the improvement was better ad sales for TV4 and Expressen, with TV4's ad space completely sold out during the latter part of the year. The Finnish MTV didn't see the same growth in ad sales as Sweden but showed better results than the previous year.

Entertainment revenues decreased by 9 percent as a result of lower sales for Svensk Filmindustri and Homeenter. SF Bio continued with strong growth, however. The EBITA for the business area was SEK 280 million (SEK 255 million). The main reason for the improvement was SF Bio, with record results, primarily due to a strong start to the year. The most popular films were Avatar, Harry Potter and the Deadly Hallows, Part 1 and Inception. On the downside, Homeenter had a tough year and reported lowered profits from the previous year because of weak growth in the mail-order clubs. Svensk Filmindustri reported profits at the same level as the previous year.

Business Press revenues shrunk by 6 percent, but when excluding divested operations showed an increase of 2 percent. The EBITA was SEK 210 million (SEK 62 million). Ad sales revenues increased throughout the year, primarily for Dagens Industri but even for Dagbladet Børsen, while the ad sales in the Baltic countries continued to be problematic in 2010. Circulation remained stable during the year and the companies continued to have good control over costs. In December, Dagens industri launched Di+, an iPad application on Bonnier's News+ platform.

Morning Paper increased revenues by 7 percent. The EBITA was SEK 39 million (SEK -375 million). Both circulation and ad sales revenues increased during the year, and the ad sales market's rebound grew stronger during the second half of 2010. Cost-reduction measures improved the results for the newspapers, and investments were made in converting the print operations within Bold. Along with the business newspapers, morning papers also launched iPad applications on the News+ platform. So far, News+ has had as many downloads as there are iPads in Sweden.

Other includes group-wide activities and functions. This includes investments in the new business area Digital, which is under development, as well as the costs for establishing a shared service center for Bonnier's Nordic operations. The effects of these group-wide activities on the group's EBITA was SEK -553 million (SEK -445 million).

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

Net Sales by business area

Operating profits (EBITA) by business area

Earnings