Agora Group:
mid-term growth directions-1-

AgendaKey challenges

3-7

Growth directions of the Agora Group8TASK 1: Transformation of print media

9-11

TASK 2: Building a position in the TV market

12-13

TASK 3: Improving contribution of main businesses– INTERNET

14-15– CINEMA & FILM

16-17

– RADIO & MUSIC

18-19– OUTDOOR

20-21

PRINTING SERVICES – effective utilization of production capacity

22

TASK 4: Cost optimization of shared support functions

23

Summary: Development within the frame of mission

-2-

24

Key challenges
DETERIORATING REVENUE AND PROFITABILITY

REVENUE (PLN million)

EBIT (PLN million)

1500

300

1250

250

1000

200

750

150

500

100

250

50

0

0

-250

-50

2008

2009

2010

2011

2012

2013

2011

2012

2013

COST (PLN million)
1500
PURCHASE
OF HELIOSCINEMA
NETWORK

1250
1000
750
500
250
0

2008

2009



-3-

259 FTEs (AVERAGE)

Source: consolidated financial statements according to IFRS, 2008-2013

2010



304 FTEs (AVERAGE)

Key challenges
EVOLUTION OF THE GROUP’S EBIT STRUCTURE

EBIT (PLN million)

200

160

120

80

40

0

-40
2008

2009
dailies-4-

magazines

Source: consolidated financial statements according to IFRS, 2008-2013

2010
internet

2011
outdoor

2012
radio

cinema2013
Group

Key challenges
ADVERTISING MARKET: STRUCTURAL CHANGES AND RECESSION

11.6%

15%
10%

4.7%
1.5%

5%

In the past 5 years ad spend in

0%
-5%
-10%

(3.8%)(5.0%)

2012

2013

Poland shrank by PLN 1 billion(10.3%)

-15%
-20%

2008

2009

2010

2011

9 000

internet

8 000

magazines

7 000
dailies

6 000

outdoor

5 000

Stable share of TV(50%)

Shrinking shareof print media

4 000

cinema(ad spend down by PLN 1.1 billion)

radio

Growth of digital media

3 000
2 000

despite recession

televis ion

1 000
0
2008

-5-

2009

2010

2011

2012

2013

Source: ad spend estimates by: Agora (press based on Kantar Media and Agora’s monitoring, radio based on Kantar Media), IGRZ (outdoor)
Starlink (TV, cinema, Internet – comprise revenues from e-mail marketing, display, search engine marketing and since 1Q2012 revenues from video advertising.

(ad spend up by PLN 700 million)

Key challenges
CHANGES IN THE STRUCTURE OF THE GROUP’S REVENUES
15%

10.6%

10%
5%

0.4%

Revenues decreased

0.6%

0%

by PLN 204 million

-5%
-10%

(7.8%)-15%2008(13.1%)
2009

2010

2011

2012

(5.7%)

in the past 5 years

2013

1 400

cine m a

1 200

ra dio1 000

outdoorDeap erosion of print media revenues– down by PLN 394 million

inte rne t

800

m a ga zine s

600
da ilie s

Positive impact of
the Helios acquisition

400
Recession inhibits growth of other

200
0
2008

-6-

businesses (down by PLN 6.3 million)

2009

2010

Source: consolidated financial statements according to IFRS, 2008-2013

2011

2012

2013

Key challenges
CHANGES IN THE STRUCTURE OF THE GROUP’S REVENUES% share
100%
90%
27.9%

80%

33.9%

35.9%
42.8%

44.1%

57.2%

55.9%

2011

2012

2013

49.3%

70%
60%
50%
40%
72.1%

30%

66.1%

64.1%

50.7%

20%
10%
0%
2008

% share
100%

2009

2010

Adve rtis ing re ve nue s

Non-a dve rtis ing re ve nue s

6.3%

7.9%

9.8%

10.3%

11.4%

12.5%

93.7%

92.1%

90.2%

89.7%

88.6%

87.5%

2008

2009

2010

2011

2012

2013

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Tra ditiona l re ve nue s-7-

Source: consolidated financial statements according to IFRS, 2008-2013

Digita l re ve nue sGrowth directions of the Agora Group
MID-TERM PRIORITIES OF THE AGORA GROUPREVENUE GROWTHPROFITABILITY IMPROVEMENTSTRATEGIC TASKS FOR THE COMING YEARS

1. Digital transformation of print media
2. Building a position in the TV market
3. Improve contribution from core businesses
4. Cost optimization of shared support functions

8

TASK 1: Transformation of print media
No. 1 quality newspaper in Poland
Pioneer of digital transformation

Owner of online bookstore Publio
Respected publishing house

SUCCESSES

CHALLENGESCOPY SALES (thou. copies)

REVENUE (PLN million)

Copy price increases
slow down the drop
Agora’s publishing house- 600 thousand sold books
Publio.pl – over 430 thousand
digital publications
distributed in different models

in revenue from copy sales

Investment in the quality of content

Launch of metered paywall
Total revenue: PLN 18.6 million in 2013

-9-

600
500
400
300
200
100
0

600
500
400
300
200
100
0
2008

2009

advertising revenues (PLN mln)

2010

2011

2012

copy sales revenues (PLN mln)

Source: consolidated financial statements according to IFRS, 2008-2013; data regarding copy sales and revenues of Publio.pl have not been published in the Group’s financial statements.

2013
no of copies sold (thou.)TASK 1: Transformation of print media
Quality journalism

PRIORITIES
slowing down the pace ofbuilding a significant baseprint revenue declineof paying digital subscribers

PLN 17.9
monthly

PACKAGE: WYBORCZA

START
04.02.2014

PLN 29.90
monthly

PACKAGE: WYBORCZA PLUS

PROMOTIONALPRICE
PLN 0.99
per first month

PLN 39.9
monthly

PACKAGE: WYBORCZA PREMIUM

47 000 digital subscriptions

BENCHMARKS

227 248 paper copy sales

REVENUE (USD million)

REVENUE (USD million)

600

600

500

500

400

400

300

300

200

200

100

100

0

0
3Q06

3Q07

Digital ads

-10-

3Q08

3Q09

Print ads

3Q10

3Q11

3Q12

Copy sales

3Q13

3Q06

Other

Digital ads

Source: Agora’s own estimates based on „The NYT paywall plugs the hole”, 06.11.2013, Columbia Journalism Review published by Ryana Chittuma.;
Die Welt: June 2013, after 6 months of paywall

3Q07

3Q08

3Q09

Digital subscriptions

3Q10

3Q11

Print ads

3Q12

3Q13

Copy sales

Other

TASK 1: Transformation of print media
NEW
BUSINESS MODELREVENUE STREAMSREVENUE STREAMS

2008

2016

PRINT
COPY SALESDIGITAL
SUBSCRIPTIONSDIGITAL ADVERTISINGPRINT
COPY SALESPRINTADVERTISINGPRINT
ADVERTISINGOBJECTIVES

paid subscriptions:

40 thou. thru 2014
75 thou. thru 2016

-11-

CAPEX

negligible; project phase entails growth of operating cost

ASPIRATIONS

Stabilization of the segment’s profitability by 2016TASK 2: Building a position in the TV market
Agora’s entry into TV businessSpecialised movie channel
Resolution
granting concession
09.09.2013

PRIORITIES

START
15.03.2014

Joint project with Kino Polska TV S.A. (41% share)
An opportunity to combine the potential of TV and the new technologies
Adding the TV segment to the portfolio of businesses
Growth of scale
Gaining the share of revenues from the largest segment of ad market
TV AD MARKET TRENDS
The largest ad market segmentwith stable share

Magazines
9.0%

Radio
7.5%

Growing strengthof thematic channels

Cinema
1.5%

19%
2013

Internet
21.0%

10%
2013

PLN 7.2 billion

PLN
3,53 billion
Television
49.5%

Outdoor
6.5%

-12-

Main
stations
73%

Thematicchannels
27%

Dailies
5.0%

Source: ad spend estimates by: Agora (press based on Kantar Media and Agora’s monitoring, radio based on Kantar Media), IGRZ (outdoor)
Starlink (TV, cinema, Internet – comprise revenues from e-mail marketing, display, search engine marketing and since 1Q2012 revenues from video advertising.

TASK 2: Building a position in the TV market
STRONG START
Technical reach 90%

START15.03.2014

MUX - 1CABLE NETWORKSSATELLITE PLATFORMSOBJECTIVES

audience share:

1% thru 2014
2% thru 2016

profitability:

-13-

CAPEX

PLN 10 million thru 2016

ASPIRATIONS

broadening TV presence

2015

TASK 3: Improving contribution of main businesses - INTERNET
Among 3 TOP portals in Poland
12.4 million real users
Innovative mobile apps

REVENUE 2001

GROWTH

PLN 3.8 MILLIONREVENUE 2013
PLN 111.4 MILLION

E-COMMERCE

PAID CONTENTVIDEO & MOBILE ADVERTISINGB2B

PERFORMANCE MARKETINGVORTALS

VORTALS

DISPLAY ADVERTISINGDISPLAY ADVERTISINGBROADENING THE SCALE OF OPERATIONS-14-

STRONG MARKET POSITION

Source: financials: consolidated financial statements according to IFRS, 4Q2013. Internet division, Agora Ukraine, AdTaily, Trader.com (Polska) including print revenues, Sport4People;
Megapanel PBI/Gemius, reach, real users, December 2012, December 2013; selected online publishers.

TASK 3: Improving contribution of main businesses - INTERNET
Maintaining reach and increasing engagement of users
PRIORITIESDEVELOPEMENT OF ATTRACTIVE CONTENTDEVELOPMENT OF MOBILE APPS
AND VIDEO CONTENT

Strengthening advertising offer
DEVELOPMENT OF ADVERTISING OFFER
MOBILE ADVERTISINGVIDEO ADVERTISINGCONTENT MARKETING

IMPLEMENTATION OF NEW SOLUTIONSREAL TIME BIDDING

NEW REVENUE STREAMSLEAD GENERATIONOBJECTIVESEBIT MARGIN:

CAPEX

PLN 20 million by 2018ASPIRATION

15.5% in 2013

20% in 2018

Expand portfolio of attractive offerings by means of organic growthand via selective acquisitions-15-

SELECTION OF
E-COMMERCE PROJECTSTASK 3: Improving contribution of main businesses - CINEMA & FILM

One of the largest cinema operators in Poland
Film co-producer and distributor„Traffic department” the most popular Polish movie in 2013

PRIORITIES

Growth of Helios network

Growth of cinema distribution operations

Openings in 2014:

Plans for 2014:

Siedlce, Kalisz

1H2014
Powstanie Warszawskie

1H2014

Karuzela

1H2014

Bogowie

2H2014Serce, serduszko i wyprawa na koniec swiata

2H2014

Starachowice, Bialystok, Jelenia Gora 2H2014

OBJECTIVES-16-

EBIT MARGIN:

3% in 2013

9-10% in 2018TASK 3: Improving contribution of main businesses - CINEMA & FILM
CAPEX

ASPIRATIONSPLN 80 million thru 2018

Multiscreen cinemas
in all voividship cities

Agora as the lead producer in 201531.12.2013

Achievements to date:

28 CITIES / 31 CINEMAS

CO-PRODUCER OF 5 MOVIES

11 VOIVODSHIP CITIES/ 14 CINEMASPLAN ROZWOJU SIECI 2014-2018

SWIADECTWOPOSTE RESTANTEBABY SA JAKIES INNE
DROGOWKA
AMBASSADAOPENING OF DOZEN OR SO
MULTISCREEN CINEMASPLANS
KATOWICE
LODZ
POZNANWROCLAWWARSZAWA ?
KRAKOW ?

-17-

CO-PRODUCTION OF 2 MOVIES IN 2014
FIRST FILM PRODUCTION IN 2015
(LEAD PRODUCER)TASK 3: Improving contribution of main businesses - RADIO & MUSIC
Network of local radio stations with stable position
Organizer of music events
Publisher and distributor of CDs

PRIORITIESRevenue growth
Effective use of licenses
and music formats
7 NEW LICENSES IN 2012
REACH: 16 urban areas

BROADENING THE REACH
AND NEW LICENSE IN LEGNICA IN 2013

Participation in bids for new licenses

2 WON BIDS FOR BROADENING
REACH OF ZLOTE PRZEBOJEPARTICIPATION IN BID FOR BROADENING
THE LICENSE:
4 FOR ZLOTE PRZEBOJE
1 FOR TOKFMREACH: 21 local radio stations

PARTICIPATION IN THE BIDS
FOR NEW LICENSES:CHANGE OF FROMAT IN 2014
REACH: 7 local stations

OBJECTIVES-18-

EBIT MARGIN:

6% in 2013

5 FOR ZLOTE PRZEBOJE
1 FOR BLUE FM

9% in 2017TASK 3: Improving contribution of main businesses - RADIO & MUSICCAPEX

PLN 17 million by 2018ASPIRATIONS

Search for ways to monetize audio content in the digital sphere

1 000 000
900 000

TUBA FM

800 000
700 000
600 000

TubaFM recipients

500 000

in all channels of distribution

400 000
300 000
200 000
100 000

0,91 million users

WWW

P a rtne rs hip s e rvice s

TOK FM MOBILE APP
FOR LISTENING TO THE RADIO
LIVE ONLINE AND AT ANY TIME
START
04.02.2014-19-

Source: :WWW - Gemius Traffic; mobile applications: Flurry (iOS, Android, WindowsPhone, Blackberry) + Nokia (Symbian) + Samsung (Bada) + Microsoft (Windows 8); Tv
TV sets and decoders: Gemius Stream + NC+

Tota l

ry
ua
ja
n

ce

m
be

r

r

S ma rt TV

de

er

no

to
b

ve
m
be

r

Mobile a pplica tions

oc

st
gu
au

se

pt
em
be

ju
ly

ju
ne

m
ay

ril
ap

y

ch
m
ar

ru
ar

ua
ja
n

fe
b

ry

-

TASK 3: Improving contribution of main businesses - OUTDOOR
The largest outdoor advertising company in Poland
Leader in the premium segment (citylights & backlights)
Bus shelter – new experience in the public space

PRIORITIESStrengthening the position in premium segment - citylights
1999

CITYLIGHTSCITYLIGHT
15%

TRADITIONAL85%

AMS SHARE
2013
OTHER
5%

2013
CITYLIGHT
35%

AMS
61%

TRADITIONAL
60%

Smart OOH

-20-

Source:; ad expenditure in outdoor: IGRZ.

OTHER
39%

TASK 3: Improving contribution of main businesses - OUTDOORPRIORITIES

Implementation of the Warsaw contract (duration – 9 years)

construction of 1580 bus sheltersin 2014-20162014 - 180 bus shelters
2015 - 720 bus shelters
2016 - 680 bus shelters

CAPEX – PLN 80 million-21-

OBJECTIVE

EBIT MARGIN:

2.5% in 2013

8-10% in 2017CAPEX

PLN 90 million by 2016

ASPIRATIONSCitylight in a bus shelter as a multimedia communication channelPRINTING SERVICES - effective utilization of production capacity
The share of revenues from printing
services in total sales of the Group

3 printing plants
20%

Offset and heatset printing technology

16%
12%

Dailies, periodicals, catalogues
and promotional materials
Polish and foreign clients

PRIORITIES

8%
4%
0%
2008

effective utilization of production capacity
ensuring low production cost for our publications
supporting the development of our custom publishing activity

OBJECTIVES

Profitability on the EBIT level

CAPEX

maintenance capex - PLN 15 million thru 2016

-22-

2009

2010

2011

2012

2013

TASK 4: Cost optimization of shared support functions
PRIORITIESCost management is an integral part of management processes in Agora
Cost savings from restructuring processes
1200

1116
976

1000

898

911

859

800

COST SAVINGS: PLN 316 MILLION

800

INCLUDING GROUP LAY-OFFS

600
400

Group lay -offs in 2008 result in cost savings of PLN 11 million in 2009

200
Group lay -offs in 2012 – result in cost savings of PLN 18 million.

0
2008

2009

2010

2011

2012

2013

AGORA GROUP OPERATING COST WITHOUT THE COST OF HELIOS NETWORK,D&A COST AND ONE OFFS.

OBJECTIVE

Decreasing the cost of shared functions in the GroupTHE SHARE OF COST GENERATED BY SHARED SUPPORT FUNCTIONS IN THE AGORA GROUPREVENUES WITHOUT CINEMA (PRO FORMA)

7.5 %
6.8 %
TRANSFER OF LOCALADMINISTRATIONFUNCTIONS FROM
THE PRESS SEGMENT
TO CENTRAL ADMIN.

Management and D&A1

-23-

Cos t of s hared s upport functions 1

Source: consolidated financial statements according to IFRS, 2008-2013
1 cost of shared functions shown in reconciling position in the Group’s financial statements present data not included in business segments, inter alia other revenues and cost of
supporting divisions (centralized technological, administration, financial, human resources functions) as well as the cost of Agora’s Management Board and Agora TC Sp. z o.o.

Local aminis tration functions

Summary: Development within the frame of mission
MID-TERM PRIORITIES OF THE AGORA GROUP

Growth of digital revenues
TRANSFORMATION OF PRINT MEDIA

INTERNET

Building the position in TV segment
Growth of scale and contribution of leading media
CINEMAOUTDOOR

RADIO

Optimization of shared services and infrastructure cost

DEVELOPMENT WITHIN THE FRAME OF MISSION

Provide quality information and entertainment to consumers
and effective tools for linking business to their target audiences-24-

THANK YOU

www.agora.pl

Contact:
investor@agora.plpress@agora.pl-25-