Q3 2008
CEO Jesper Kärrbrink's comments on the Interim report January - September 2008
All in all, a quarter in line with our expectations and we reiterate our earlier market outlook for 2008, where we expect Group revenues to grow organically with a strong growth in online revenues more than offsetting the decline in print revenues and operational EBITDA expected in the range of SEK 2,050 – 2,100 M.
That said, it can not be dismissed that the global financial market is in one of the worst financial crises ever. While being in the budget process for 2009 a very common question has been how resilient we are to a slower financial climate. This is a fundamentally difficult question to answer. Historically the directory industry has been more resilient than other media and the directory industry has been late into the economical cycles. Our Danish operation is a good example of this. Denmark has been in a recession for the last three quarters and overall advertising in Denmark is reported flat or negative. In contrast to this our Danish operations report an organic top line growth of 3 percent in the third quarter. Looking at the current situation, where the overall advertising market is slowing down, we manage to keep more or less the same overall growth levels as last year, when the economy was peaking. One reason for us being more resilient than many other media companies is the importance for our customers to be visible in all our search channels as our products deliver proven high return of investment.
But, and this is important to say, yes resilient, but we are not immune to slower economical growth or recession.
Looking at the Group online revenues in the third quarter, the organic growth was 14 percent with Sweden and Norway being the drivers. In Norway online revenues now contribute with more than 50 percent of the total revenues with continued high margins.
Denmark, as expected, is still behind plan on online revenues and grew organically by 7 percent in the third quarter. This is not satisfactory but on the other hand order intake has started to pick up significantly in the third quarter, and by that I consider the Krak integration as complete.
Our Swedish operations continued to show strong growth figures in online and managed to keep the decline in print and voice on targeted levels. The Polish operation is also on track but has its most important quarter ahead of them.
Finland is struggling with fierce competition and lower sales than expected; we are looking closely into our Finnish operations.
Following the regular impairment test we have taken the decision to adjust the book value of our Norwegian holdings, leading to a write down of intangible assets on a Group level of SEK 1.2 bn.
The strategy process is continuing and we decided to launch the new online organization earlier than planned in order to be able to take action on the opportunities already this year to get effect as early as possible 2009 and 2010. The rest of the strategy plan - on how Eniro will transform from print dependency to online opportunities - will be presented at the CMD in Copenhagen the 6:th of November.
I hope to see you there.
Jesper Kärrbrink
President and CEO
Last updated:2009-01-13