Investing in the Future

"For Bonnier, 2011 was a year of big investments in restructuring and adapting to a digital environment, as well as investments in positioning and content within the Broadcasting business area," says CEO Jonas Bonnier. "Together with a decline in the global advertising market during the fall, these were major contributing factors to lower profitability compared to 2010.

"The global change in the media market continues at a rapid pace and during 2011, Bonnier took on significant restructuring costs within a range of its businesses. The major part of the decrease in income before taxes for 2011, which amounted to SEK 664 million (SEK 1 billion), can be attributed to these investments in the future. Restructuring costs are expected to remain high before normalizing in 2013. The goal, naturally, is that the costs we're taking on now will create the best conditions for long-term growth and profitability."

Books sales in 2011 remained nearly unchanged. The EBITA of SEK 648 million (SEK 720 million) reflects a decrease, but was at the same time the second best result ever for books. During the year, Bonnier strengthened its position as Scandinavia's leading publisher of general literature with the acquisition of WSOY from Sanoma, while Bonnier Utbildning was sold.

Magazines is the business area where a clear decline in sales during 2011 is apparent. The EBITA was SEK 128 million (SEK 155 million) and the year was marked by restructuring that will continue during 2012. Not least at Bonnier Corporation in the U.S., where the advertising market is still significantly below levels before the financial crisis. While digital sales volumes increased dramatically, they require continued investments but also represent a big opportunity.

Broadcasting and Evening Paper sales increased in 2011 slightly over last year's record level. The EBITA decreased to SEK 917 million (SEK 1.26 billion) following extensive investments in broadcasting rights and positioning in the various Nordic markets. For example, the repositioning of the Swedish channel Sjuan (previously TV4+), the launch of TV11 and the investments in Nyhetsbolaget and TV4 News. The loss of the Premier League broadcast rights had a negative effect on C More's annual revenues. However, the trend turned positive in the final months of the year.

In December, Finnish MTV Media received a national broadcasting license for the TV channel AVA. Expressen's circulation fell during 2011 but through cost savings and an increase in the price of single copies from SEK 11 to SEK 12, the paper continues to be profitable.

Entertainment EBITA was SEK 273 million (SEK 280 million), with sales decreasing slightly as well. SF Bio's market share in Sweden declined some in the growing Swedish cinema market, while continued expansion in Norway was made possible through a contract to build the new Festningen Kino cinema in Oslo, which will be the country's biggest movie theater.

Business Press succeeded in improving its EBITA to SEK 248 million (SEK 210 million) with positive developments for Dagens industri in Sweden, Børsen in Denmark and in Eastern Europe, where the fall of the advertising market finally reached bottom and the results of consolidations made the previous year began to bear fruit. The Bulgarian business daily Pari was sold during the year.

Morning Paper sales were unchanged and EBITA amounted to SEK 84 million (SEK 115 million). Dagens Nyheter strengthened its performance through cost savings and increased ad sales, primarily for DN.se. Sydsvenskan's ad sales revenues fell compared with the previous year, which resulted in negative returns and an extensive restructuring program conducted during the second half of the year. In the fall, Bonnier sold its shares in the three newspapers that were part of Skånemedia.

Other consists of group-wide activities and functions. This includes the work of the business area Digital, which is under development, including costs to establish Bonnier Solutions, a shared service center for Bonnier's Nordic operations. The effect on the group's EBITA for these activities during 2011 was SEK -403 (-310) million.

Gearing Ratio (net debt in relation to shareholders' equity) was at 0.98, which is in line with internal targets and the previous year. 

* Operating 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 and before restructuring costs and other items affecting comparability.

Net Sales by business area

Operating profits (EBITA) by business area**

Earnings

** before restructuring costs