Wegener in 1st half of 2010: Solidly improved operating result

Corporate Communications
P.O. Box 26
NL - 7300 HB Apeldoorn
Laan van Westenenk 4
NL - 7336 AZ Apeldoorn
PRESS RELEASE
T: +31 (55) 538 86 52
F: +31 (55) 538 86 66
www.wegener.nl
Wegener in 1st half of 2010:
Significantly improved operating profit
Continuing advertising weakness
The operating profit (before exceptional items) of Royal Wegener, the Dutch multi-media group, was
EUR 30.3m in the first half of 2010. This figure was up by EUR 4.2m, a rise of 16.0% compared to the
first half of 2009. The most important reason for this increase was a lower cost level.
Revenues were lower due to the mixed effects of a number of factors:
 Revenue declined due to the sale of AD NieuwsMedia and the printing plant in The Hague.
 Revenue from subscriptions, sale of products and services to readers, internet activities, and
advertisements in the free door-to-door newspapers were up. The latter segment rose following the
acquisition of PLM as of mid-July 2009 and the development of new activities in Limburg and the
Amsterdam region.
 Advertising sales in the daily newspapers and revenues from external printing orders were below
those for the 2009 period.
Thanks to the higher operating profit and lower financing costs and higher taxes, the net profit before
exceptional items for the first half year of 2010 came, on balance, to EUR 18.7m (2009 EUR 13.6m),
an increase of 37.4%. The lower financing costs result from a lower average bank debt and a lower
interest mark-up.
Primarily because of the reservation made for a disputed fine imposed by NMa, the Dutch competition
authority, relating to the newspapers in the southwest region, Zeeuws-Vlaanderen, the first half of
2010 showed a net loss (after exceptional items) of EUR 4.5m compared with 2009’s net profit of
EUR 13.2m. The fine imposed on Wegener of EUR 19.1m is reported under “Other operating
expense”.
Market conditions remained unfavourable during the first half of 2010 despite reports of a modest
economic upturn. This cautious economic recovery is primarily related to exports. Domestic
consumption remained very low, so that advertisers kept their purse strings tightly drawn. Advertising
of national brands and services exhibited a clear decrease compared with the same period in 2009.
This also applied to the market of recruitment advertisements, where revenues slackened for both
printed products and internet products, as employment opportunity fell.
The pace of the ongoing decline in advertising revenue has lessened considerably. The decrease in
advertising sales in the first half of 2010 compared to the same 2009 period was 3.3%, considerably
less steep than the 22.9% decline in 2009 compared to the same period in 2008.
Because of the sale of the 37% share in AD NieuwsMedia and the printing plant in The Hague to “de
Persgroep Nederland” as of mid-2009, the figures for the first half year of 2010 and those for 2009 are
difficult to compare. If these effects are eliminated, total revenue in the first half of 2010 was down by
1.0% compared to the previous year.
Since 1 January 2010, all of Wegener’s publishing activities have been accommodated in a single
publisher under the name of Wegener Media. All supporting and staff services were merged per
discipline in the back office departments of Wegener Media.
Activities
Wegener Media daily newspapers
Advertising revenue in Wegener’s daily newspapers was EUR 60.3m in the first half of 2010, down
EUR 5.9m (8.9%) compared to the same period in 2009. The decline was primarily due to lower
revenues from national advertisers and recruitment advertisements. Recruitment ads are exhibiting a
further decline in volume, causing revenues to fall proportionately. Regional advertisers showed slight
growth and family announcement ads were at the same level as in the first half year of 2009.
Subscription revenues increased by 2.3% thanks to price rises. The number of paid subscriptions
decreased by 1.9%, compared with 2.4% in 2009. The sale of products and services to readers
showed an increase of 7.6%. Thanks to the increased focus on online activities, the news sites of the
dailies could be developed further, and the interaction between the printed product and the online
news site was intensified. As a result, in June 2010 both the number of page views and the number of
unique visitors were up from the levels in June 2009 by 11% and 27% respectively. Revenue from
internet activities of the dailies showed significant growth in the first half year of 2010.
The reorganisation of the back office departments in 2009 meant that daily newspapers could benefit
from a lower cost level in 2010. In addition, the daily newspaper publishers also implemented
decentralised cost-cutting measures to mitigate effects of the decline in sales.
On 16 June 2010, Wegener, Telegraaf Media Groep and NDC Mediagroep signed a letter of intent in
which they had reached broad agreement on the joint distribution of their respective dailies. Under the
new model, TMG’s distribution activities for De Telegraaf in the regions where Wegener and NDC
distribute their regional morning newspapers will be integrated with the distribution activities of
Wegener and NDC respectively. This will yield benefits of synergy and ensure the quality of
distribution. The new organisation will be operational in mid-2011.
Wegener Media free door-to-door newspapers
In the first quarter of 2010 Wegener achieved its goal of nationwide coverage, with the introduction of
free door-to-door newspapers in Limburg and the Amsterdam region. These new products and the
collaboration started in 2009 with a number of external publishers of free door-to-door newspapers
had a positive effect on revenues. Furthermore, the acquisition of PLM in July 2009 increased
revenues for the first half of 2010 compared to the first half of 2009. Revenues from advertising
showed an overall increase of 1.8% to EUR 76.2m.
Thanks to the reorganisation of the back office departments in 2009, the free door-to-door newspapers
could benefit from a lower cost level. In the first half of the current financial year, cost-reducing
measures taken in 2009 were further intensified.
Wegener Media digital
After Wegener had adjusted its organisation to the new market circumstances in 2009 and the
objective of nationwide coverage had been achieved in early 2010, in the first half of this year the next
step could be taken toward becoming a cross-media content publisher. Attention was focused on
expanding and enhancing the reach of the total portfolio, among other things by improving and
developing new digital products and services at both local and national levels. AutoTrack maintained
its number one position in the market for automotive sites. Its newly launched platform will contribute
to maintaining this market position. Revenues of JobTrack were under pressure due to the poor labour
market situation, while site visitors were up compared to the same period in 2009. Overall, revenues
from internet products increased by 14.7% in the first half year of 2010 compared to the same period
in 2009.
Wegener NieuwsDruk
Revenues of the printing plants declined in the first half of 2010 from the level for the same period in
2009, due to a loss of printing orders and shrinking print runs and volumes of orders from external
clients. In addition, some activities were lost -- in particular, the printing order for the AD daily -because of the sale of the printing plant in The Hague in August 2009 to “de Persgroep Nederland”.
2
External revenues showed an autonomous decrease of EUR 2.7m. By adjusting the available printing
capacity to the lower demand -- among other things, by closing the printing plant in Nijmegen at the
end of June 2009 -- and further cost-reducing measures, the operating profit of the printing plants was
about the same for the first half of 2010 as in the first half of 2009.
In June 2010 it was announced that two printing plants, Wegener NieuwsDruk Twente and Wegener
NieuwsDruk Gelderland, were recipients of the Quality Award of the IFRA, which is part of the World
Association of Newspapers and News Publishers. These two printers are among the newest members
of the select company of the International Newspaper Color Quality Club.
Investments/divestments
Investments in the first half of 2010 totalled EUR 4.3m in contrast to the EUR 9.8m for the comparable
2009 period. Of this total EUR 3.3m, compared to EUR 8.4m in 2009, was directed to tangible fixed
assets. The lower 2010 figure is largely due to the fact that investment for the new printing plant in
Best have now been completed.
Investments in intangible fixed assets (EUR 1.0m) primarily related to publishing rights of free door-todoor newspapers. Parts of a number of investments from 2009 were paid in 2010, including the
publishing rights for De Pers.
Financing
Wegener’s net interest-bearing debt at the end of June 2010 was EUR 111.0m, down by 5.1% from
EUR 117.0m at year-end 2009. This decrease is partly the result of the receipt of the repayment of the
Wegener loan to AD NieuwsMedia of EUR 15.4m.
Outlook
Compared to the previous year, the results obtained for the first half of 2010 cannot simply be
projected to the second half. This is primarily because:
 The sale of AD NieuwsMedia and of the printing plant in The Hague and the acquisition of PLM took
place in mid-2009; and,
 Recent reorganisations were completed in the course of 2009. This means that comparable cost
savings have been relatively higher in the first half of 2010.
Completed reorganisations, lower prices for newsprint, and additional measures in 2010 will have a
positive effect on the efficiency of the organisation as well as on the cost level. However,
developments in the advertising market remain uncertain for the time being. This means the operating
profit for the full year is also uncertain at this point.
Apeldoorn, The Netherlands, 28 July 2010
Management Board
Koninklijke Wegener NV
3
Consolidated balance sheet
Before proposed appropriation of profit (in thousands of euros)
30 June
2010
31 December
2009
30 June
2009
519,835
85,971
4,372
5,810
292
616,280
523,105
88,608
4,561
10,837
11,148
638,259
508,323
90,065
4,197
3,929
1,796
608,310
1,685
2,195
46,885
3,555
54,320
2,219
922
54,622
3,500
61,263
2,179
888
55,768
15,535
74,370
-
-
67,990
670,600
699,522
750,670
305,620
305,620
311,704
311,704
316,808
316,808
30,341
25,072
103,694
1,360
160,467
33,010
33,179
112,780
1,255
180,224
14,757
1,080
22,043
128,913
1,662
168,455
6,183
15,621
10,844
1,449
1,367
18,164
48,430
102,455
204,513
6,275
24,444
7,737
1,447
2,816
25,253
52,996
86,626
207,594
3,822
39,568
28,172
1,237
535
26,410
47,566
75,109
222,419
-
-
42,988
670,600
699,522
750,670
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Investments in associates
Deferred tax assets
Other financial assets
Current assets
Inventories
Amounts owed by group companies
Trade and other receivables
Cash and cash equivalents
Assets held for sale
EQUITY AND LIABILITIES
Total equity
Equity attributable to equity holders of
Koninklijke Wegener NV
Minority interests
Non-current liabilities
Pensions
Deferred tax liabilities
Provisions
Interest-bearing loans
Interest rate swaps
Current liabilities
Pensions
Provisions
Interest-bearing loans
Interest rate swaps
Debts to group companies
Trade payables
Prepaid subscriptions
Other current liabilities
Liabilities associated with assets classified as held for sale
Unaudited
4
Consolidated income statement
(in thousands of euros)
first half
2010
first half
2009
full year
2009
Revenue
Other income
Revenue and other income
269,832
269,832
309,405
309,405
586,334
910
587,244
Raw materials and stores
Work subcontracted and other external charges
Staff costs
Amortisation of intangible assets
Depreciation of property, plant and equipment
Other operating expense
Operating expense
19,188
69,412
99,845
4,239
5,916
65,435
264,035
31,138
71,990
116,619
2,756
8,901
51,889
283,293
55,591
140,756
250,868
5,499
15,292
101,006
569,012
5,797
26,112
18,232
433
472
(6,131)
(5,226)
311
251
(7,782)
(7,220)
698
755
(13,907)
(12,454)
571
18,892
5,778
Taxes
(5,035)
(5,723)
2,075
Loss / Profit
(4,464)
13,169
7,853
(4,464)
(4,464)
13,169
13,169
7,853
7,853
(0.12)
0.28
0.14
Operating profit
Share of profit of associates
Finance income
Finance expense
Financial income and expense
Profit before tax
Attributable to:
- equity holders of Koninklijke Wegener NV
- minority interests
Earnings per share (in euros)
- basic, for profit for the period attributable to
holders of ordinary shares Koninklijke Wegener NV
Unaudited
5
Consolidated comprehensive income statement
(in thousands of euros)
Profit for the period
Value changes in effective hedging interest rate swaps
Tax
Comprehensive income
Attributable to:
- equity holders of Koninklijke Wegener NV
- minority interests
Unaudited
first half
2010
first half
2009
full year
2009
(4,464)
13,169
7,853
(71)
18
(53)
(1,297)
330
(967)
(1,013)
258
(755)
(4,517)
12,202
7,098
(4,517)
(4,517)
12,202
12,202
7,098
7,098
6
Consolidated statement of changes in equity
before proposed appropriation of profit (in thousands of euros)
2010
At 1 January 2010
Equity attributable to equity holders of Koninklijke Wegener NV
Gains and
losses
arising
Issued
from
share
Share cash flow Retained
Profit for
capital premium
hedges earnings the period
Total
14,763
167,458
Comprehensive income
(2,089)
123,719
(53)
Appropriation of profit for
previous year
Dividend paid on cumulative
financing preference shares
for 2009
7,853
Total
Equity
7,853
311,704
311,704
(4,464)
(4,517)
(4,517)
(7.853)
-
-
(1,567)
(1,567)
(1,567)
14,763
167,458
(2,142)
130,005
(4,464)
305,620
- ordinary shares
- cumulative financing
preference shares
13,503
139,317
(2,142)
130,005
(5,247)
275,436
1,260
28,141
783
30,184
At 30 June 2010
14,763
167,458
(4,464)
305,620
At 30 June 2010
Minority
interests
-
305,620
This relates to:
Unaudited
(2,142)
130,005
7
2009
At 1 January 2009
Comprehensive income
Equity attributable to equity holders of Koninklijke Wegener NV
Gains and
losses
arising
Issued
from
share
Share cash flow Retained
Profit for
capital premium
hedges earnings the period
Total
Total
Equity
14,763
167,458
(1,334)
113,938
11,348
306,173
5
306,178
-
-
(967)
-
13,169
12,202
-
12,202
11,348
(11,348)
-
-
(1,567)
(1,567)
Appropriation of profit for
previous year
Dividend paid on cumulative
financing preference shares
for 2008
(1,567)
In connection with divestment
of group companies
-
(5)
(5)
-
316,808
14,763
167,458
(2,301)
123,719
13,169
316,808
- ordinary shares
- cumulative financing
preference shares
13,503
139,317
(2,301)
123,719
12,386
286,624
1,260
28,141
783
30,184
At 30 June 2009
14,763
167,458
13,169
316,808
At 30 June 2009
Minority
interests
This relates to:
Unaudited
(2,301)
123,719
8
Consolidated cash flow statement
(in thousands of euros)
Cash flows from operating activities
Revenue and other income
Total expense
Operating profit
Adjustments for:
- value changes / book results of non-current assets
- amortisation of intangible assets
- depreciation of property, plant and equipment
- changes in working capital
- accrual NMa fine regarding Zeeuws-Vlaanderen
- taken to the income statement regarding provisions
Withdrawals from provisions
Cash flows from operations
Dividend received from associates
Finance revenue received
Finance costs paid
Tax received
Cash flows from operating activities
Cash flows from investing activities
Acquisition of group companies
Sale of group companies
Proceeds received from sale of AD NieuwsMedia BV and
assets/liabilities of Wegener NieuwsDruk West
Received redemption loan AD NieuwsMedia
Capital contribution to associates
Purchase of intangible assets
Purchase of property, plant and equipment
Sale of property, plant and equipment
Cash flows used in investing activities
Cash flows from financing activities
Lower use of credit facility interest-bearing loans
Dividends paid to holders of cumulative financing
preference shares of Koninklijke Wegener NV
Cash flows from/(used in) financing activities
Net cash flows
At 1 January
Classified as held for sale
At 30 June, 31 December respectively
Unaudited
first half
2010
first half
2009
full year
2009
269,832
264,035
5,797
309,405
283,293
26,112
587,244
569,012
18,232
4,239
5,916
(5,475)
19,100
3,094
(24,290)
8,381
(300)
2,756
8,901
(4,609)
(13,951)
18,909
(910)
5,499
15,292
4,622
38,092
(39,671)
41,156
914
472
(2,647)
7,120
994
251
(4,826)
15,328
994
328
(9,960)
32,518
-
3,973
862
3,973
15,374
(292)
(10,190)
(4,463)
52
481
(415)
(1,462)
(14,869)
346
(12,427)
14,543
(392)
(9,819)
(16,767)
208
(7,392)
(5,979)
(14,324)
(51,176)
(1,567)
(7,546)
(1,567)
(15,891)
(1,567)
(52,743)
55
(12,990)
(27,617)
3,500
31,117
31,117
-
(2,592)
-
3,555
15,535
3,500
9
Explanatory notes
General
The consolidated half-year accounts for 2010 of Koninklijke Wegener NV were discussed by
the Supervisory Board in its meeting of 26 July 2010. A press release concerning the halfyear figures was issued before the opening of the stock exchange on 28 July.
Koninklijke Wegener NV is located in Apeldoorn, the Netherlands; the depository receipts for
ordinary shares are listed on the Euronext exchange in Amsterdam. The activities of Wegener
and its group companies consist of publishing regional daily newspapers and free door-todoor newspapers, developing and exploiting internet products, and supplying graphic
products and services. These activities are conducted in the Netherlands.
Mecom Group plc of London has held the majority of Wegener’s shares via its subsidiary
Mecom Media Holland Holding BV since the end of October 2007. Mecom holds 86.44% of
the (depository receipts for) ordinary shares. Mecom also holds 100% of the (depository
receipts for) cumulative financing preference shares (to the extent they are not held by
Wegener).
2009 Annual report
The 2009 annual accounts and the 2009 annual report were approved unaltered by the
General Meeting of Shareholders on 18 May 2010. The allocation of profit proposed in the
2009 annual report was also approved unaltered by that General Meeting. The 2009 dividend
on cumulative financing preference shares was distributed on 3 June 2010.
Accounting principles
The half-year report has been drawn up in accordance with International Financial Reporting
Standards (IFRS) as approved by the European Union, including IAS 34. The accounting
principles used are the same as those used for the 2009 annual accounts. This consolidated
half-year report has not been audited.
The new standards applying since 1 January 2010 -- including IFRS 2 Share-based payment
– Group Cash-settled Share-based Payment Transactions, IAS 39 Financial Instruments:
Recognition and Measurement – Eligible Hedged Items, and IFRIC 17 Distribution of Noncash Assets to Owners -- have no influence on Wegener’s financial position.
Risks
The market circumstances during the first half of 2010 continued to be unfavourable, despite
a slight economic upturn. Because of this, the most important risk for the remaining months of
the 2010 financial year continues to be economic recovery and a related recovery in the
advertising market. The effect of the declining advertising market on Wegener’s operating
result has been mitigated by reorganisations carried out in 2009 and by new cost reduction
measures.
Wegener’s strategic policy is aimed at a transition to a successful cross-media organization,
able to cope with the risk of a drop in revenues and result. There is a risk that Wegener is not
able to make this switch in time. Now that the reorganization of the back office departments
has largely been completed, in the second half of 2010 further work will be done in the
transition from a print-oriented to a cross-media content publishing company.
Decrease in the number of printing locations has meant that the capacity utilization level of
the remaining printing presses has increased, and capacity costs decreased. However, the
potential damage that could result from a disaster at a printing location or an interruption in
the printing process has therefore increased. The impact this would have on the result
and/or on equity depends on the nature of the disruption and is therefore difficult to quantify.
A number of measures have been taken to reduce the chance that such a disruption could
occur.
10
Large parts of Wegener’s operating processes are based on automated systems and an
infrastructure to allow for communication between the various systems. These systems and
networks play a key role in almost every aspect of business operations. Disruptions to these
systems and networks can infringe upon the operating processes, and therefore on the
result of the company. Disaster plans, a variety of security measures, and the use of twin
data centers for the networks limit the risks.
More information on the risks cited here and discussions of other risks may be found in the
risk section in the 2009 annual report. Further detail on the fine imposed by the NMa in
relation to the group’s activities in the Zeeuws-Vlaanderen region may be found in the
subsequent section of this report, ‘Events after balance-sheet date’.
Seasonal effects
Revenues from advertising exhibit some seasonal fluctuations. Revenues are higher in the
second and fourth quarters than in the first and third. This seasonal effect occurs throughout
the industry and is caused by a similar effect in consumer spending patterns. Advertisers
respond to this by placing more advertisements for their products and services in periods of
higher consumer spending.
For the printed daily newspapers, a role is also played by the number of due days as well as
the number of Saturdays, although for the period of a half-year this effect is slight. The
number of due days can differ per half-year period depending on the calendar (the days of the
month on which weekends fall) and on what days various national holidays are celebrated.
The number of Saturdays is important because in the printed version, the Saturday paper
contains more advertising, including recruitment ads, than other days of the week. The great
majority of the free door-to-door newspapers are published on Wednesday, so that the
number of Wednesdays in a reporting period can also have some effect. The situation for the
first half of 2010 was nearly identical to that for the first half of 2009:
Days of publication
Number of Saturdays
Number of Wednesdays
2010 first half
150
26
25
2009 first half
151
26
25
Influence of consolidation and deconsolidation
The group companies in which Koninklijke Wegener NV has a direct or indirect interest and
control are included in the consolidation. The assets and liabilities and the income and
expense are included in full. Minority interests in equity and profit are shown separately. The
annual accounts of the group companies are prepared for the same financial year and based
on the same accounting principles as those of Koninklijke Wegener NV. Joint ventures are
consolidated proportionately using the same accounting principles as used by Koninklijke
Wegener NV. A joint venture is deemed to exist if the participants in a collaboration
agreement have joint control over the resulting activities.
All intra-group balances, transactions, income and expenses and profits and losses resulting
from intra-group transactions are eliminated in full.
The most important changes in the consolidation circle were the deconsolidation of AD
NieuwsMedia BV as of 31 July 2009 and the consolidation of Wegener PLM BV as of 15 July
2009. The consolidated figures were also affected by the sale of the printing plant in The
Hague, which was realised in conjunction with the sale of AD NieuwsMedia BV. In the
comparative figures for 2009, the results of AD NieuwsMedia were proportionately (37%)
consolidated for the entire period. On the balance sheet, the assets and liabilities of AD
NieuwsMedia and the printing unit Wegener NieuwsDruk West were presented as ‘classified
as held for sale’ as of 30 June 2009.
Information on segments
The application of IFRS 8 does not result in information on separate segments, given that the
various activities within Wegener all have similar risk profiles and are interrelated to such an
11
extent that operational and strategic decisions on resources to be allocated are made
exclusively at the aggregate level.
Specification of revenue
(in thousands of euros)
first half
first half
change
full year
2010
2009
in %
2009
60,340
66,256
-8.9
126,557
76,222
102,878
10,054
74,895
100,608
12,801
1.8
2.3
-21.5
151,371
203,224
25,807
11,121
9,699
14.7
18,251
9,217
8,241
11.8
18,568
269,832
272,500
-1.0
543,778
- Advertisements AD NieuwsMedia
- Subscriptions AD NieuwsMedia
- graphic products Wegener
NieuwsDruk West
-
9,600
19,470
-100.0
-100.0
10,705
22,870
-
7,835
-100.0
8,981
Total revenue for Wegener group
269,832
309,405
-12.8
586,334
Publishing activities
- advertisements daily newspapers
- advertisements free door-to-door
newspapers
- subscriptions Wegener dailies
- graphic products (exclusive of
Wegener NieuwsDruk West)
- internet products
- other revenues from newspaper
activities
Wegener revenue on a comparable
basis
Tax
The tax amount before exceptional items for the first half of 2010 was 26.2% compared to
32.1% for the same period in 2009. The deviation of tax level from the nominal tax rate
(25.5%) arises from the results of associated companies that fall outside the scope of the
fiscal unity of Wegener.
The (reserved) fine of the NMa in relation to Zeeuws-Vlaanderen is not deductible from
corporate income tax.
12
Exceptional items
Exceptional items in the consolidated profit and loss account
(in thousands of euros)
reported
1st half
2010
excl. exceptional
items
1st half
1st half
2010
2009
reported
1st half
2009
Staff costs
Other operating costs
Operating profit
Financing income/expense
Tax
99,845
65,435
5,797
-5,659
-5,035
96,645
44,135
30,297
-5,659
-6,396
116,619
51,889
26,112
-7,215
-5,867
116,619
51,889
26,112
-7,782
-5,723
Profit
-4,464
18,675
13,592
13,169
17,892
12,809
45,009
45,009
0.40
0.28
Cash earnings
Average number of issued shares
(in thousands)
Cash earnings per share to be allocated to
holders of ordinary shares in Koninklijke
Wegener NV (in euros)
The exceptional items in the first half of 2010 relate to adding the disputed fine imposed by
the NMa in relation to Zeeuws-Vlaanderen, an allocation to the provision for reorganisations
and the provision for vacated office space as a result of new measures, and a release of the
reorganisation provision and the pension provision after recalculation of the premises.
In the 2009 first half, the exceptional items related to write-offs of financing costs recorded as
assets in connection with the reduction of the total credit facility under the new financing
agreements.
Balance sheet
The decrease in receivables is accounted for by the (accelerated) repayment of the loan for
AD NieuwsMedia (a total of EUR 15.4m reported under non-current and current assets). In
part as a result of this accelerated repayment, the net interest-bearing debt was lower as of
30 June 2010.
The lower debt to suppliers is mainly explained by lower investment creditors. The other
short-term debts have increased, especially as a result of the accrual made for the claim
imposed by the NMa in relation to Zeeuws-Vlaanderen. The decrease in the provisions is
accounted for in part by completion of reorganisation programmes.
For its financing, Wegener makes use of an arrangement concluded by Mecom with a
syndicate of banks. This arrangement is unchanged compared to the situation at the end of
2009, which was explained in the 2009 annual report.
Related parties
As the holder of 86.44% of the (depository receipts for) ordinary shares in Koninklijke
Wegener NV, Mecom Group plc has a significant influence on Wegener and for that reason
qualifies as a related party. A number of transactions with Mecom took place in 2010, namely
recharging of holding costs by Mecom and recharging of costs connected to activities
performed by Wegener for the group. Furthermore, Limburg Media Groep (LMG), which is
also a member of the Mecom group, uses some Wegener services, mainly relating to ICT.
Wegener makes use of printing services of LMG. The volume of these transactions is limited
and is comparable to 2009. The receivables and debts related to group companies as of the
balance sheet date are also limited.
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In addition to its shareholdings, Wegener also has a business relationship with some of its
associates. The volume and the number of these transactions are very limited.
Events after balance-sheet date
On 14 July 2010 the Dutch Competition Authority NMa gave its decision on the investigation it
had conducted of alleged violations by Wegener of the conditions imposed by NMa when it
gave its permission for Wegener to purchase VNU Dagbladen in 2000. NMa imposed a fine of
EUR 19.1m on the company, and a penalty totaling EUR 1.3m to five former and present
executive and/or supervisory directors. Pursuant to IFRS rules, the fine was reported in full as
a debt on the balance sheet as of 30 June 2010. Wegener finds it important to stress the fact
that this does not mean that Wegener admits it has committed the alleged violation. As stated
in the related news release, Wegener is of the opinion that the fine is unwarranted and
disproportionate. Wegener will appeal the ruling of NMa and has full confidence in the legal
proceedings. The fine does not need to be paid as long as the procedures for review and
appeal are taking place. However, when and if a fine is finally determined, the amount is
interest-bearing for the period of appeal. Such a fine is not deductible in determining the
corporate income tax due.
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Management statement
The Management Board declares that, to the best of its knowledge:
1. the half-year report for 2010 presents a true and fair picture of the assets, the liabilities, the
financial position, and the profits of the company and the companies jointly included in the
consolidation; and,
2. the half-year report gives a true and fair picture of the situation on the balance sheet date,
the course of business during the first half of the company’s financial year, and of the
companies affiliated with it, the financial details of which are included in its half-year report,
and that the half-year report describes the fundamental risks with which the company is
confronted.
Apeldoorn, The Netherlands, 28 July 2010
J.V. Munsterman
Chairman, Management Board (CEO)
C.G. Boot
Member, Management Board (CFO)
W. Cornelisse
Member, Management Board (COO)
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