Main consolidated data (in million of euros)
|
Q1 2007 |
Q2 2008 |
Variation |
| Sales : |
Advertising (1) |
11,4 |
14,0 |
22% |
Micro-payments |
11,0 |
14,2 |
30% |
Total |
22,4 |
28,2 |
26% |
| Gross Margin (2) : |
Advertising |
49% |
56% |
|
Micro-payments |
27% |
23% |
|
Total |
38% |
39% |
|
Commenting on the figures for the first quarter of 2008, Cyril Zimmermann, Hi-Media's founder and President-CEO, said that "After having exceeded our financial objectives for the year 2007 with revenue of 104 million euros and an operating profit of more than 15 million euros , we maintained a sustainable growth for this quarter and are in line with ourforecast of 140 million euros in sales for the whole 2008 financial year. This good performance, in spite of a less favourable economic environment, shows that the strategy followed for more than two years now is bearing fruit, both in diversification of revenue sources and as regards improvement of the margins. Under uncertain economic conditions, Internet is continuing to gain market share from the other media, as Hi-Media is doing the same towards its competitors."
Narrative quarterly report
In application of article IV L 451-1-2 of the Monetary and Financial Code and of article 221-1 of the general rules and regulations of the AMF (Financial Markets Authority), the Board of Directors disclosed the present "narrative" report concerning the first quarter of 2008.
Significant events:
During the first quarter, along with the acquisition of a minority stake in the website Sport.fr, Hi-Media launched a editorial offering for news and sports, thanks to the development of two new sites: monsondage.com and contre-feux.com.
This third vertical supplements the other two already edited by the Group entertainment (jeuxvideo.com, toutlecine.com, fotolog.com, programme-tv.com, blogorama.fr) and the women's sites (actustar.com, psychonet.fr).
The group currently represents a proprietary audience of 28 million unique users (source: Comscore, March 2008), of which 15 million are in Europe.
The e-wallet solution, Hi-Pay, is now technically operational, and the Belgian banking authorities recently authorised the filing of the articles of association of the company that will handle this activity.
Revenue split by segment: a marked increase of the Publishing activities, to 2.5 million euros
Sales for the first quarter are up to 28.2 million euros, broken down into 14.0 million for advertising (up 22%) and 14.2 million euros for micro-payments (up 30%). Taking into account the seasonal effects and of the on-going increase level of operation anticipated for the proprietary sites throughout the 2008 financial year, the revenue growth rate for the first quarter of the year is in line with the annual objective of posting 140 million euros in sales. As a matter of fact, the first quarter accounts for 20% of the current year end target, in line with the proportion of the first quarter in 2007, which represented 21% of the year's sales.
The revenue from the group's own websites increased by 144% by comparison with the first quarter of 2007. This growth, exceeding the consolidated growth of the Group, is explained by (i) the implemented synergies, (ii) the strong audience growth, and (iii) the launch of new sites.
The contribution made by Fotolog, following its acquisition at the end of November 2007, also explains the increase of the publishing activities, since it has increased its revenue by more than 5 times in one year, with a membership base multiplied by 2.2. The integration and monetisation process of Fotolog continue to increase, while experiencing the unfavourable advertising seasonal trends noted in January and February. For the first quarter, Fotolog posted 1.1 million dollars (0.7 million euros) in revenue, with a speed-up at the end of the period and a very favourable trend noted since March 31.
Altogether, the Hi-Media Publishing posted total revenue of 2.5 million euros (9% of the Group consolidated revenue), versus 1 million (5% of the Group consolidated revenue) one year before.
General description of the financial situation of the issuer and its subsidiaries
The gross margin figures look as follows:
|
Q1 2007 |
Q1 2008 |
Advertising |
49% |
56% |
Micro-payment |
27% |
23% |
Total |
38% |
39% |
Thanks to the growth of the Publishing activity, the consolidated gross margin increased, and this despite of a one-time decline of the micro-payment gross margin (which should increase during the rest of the financial year). This means that the group has been able, again, to combine strong business growth while maintaining its margins at a very high level.
The headcount stood at 369 on March 31, 105 of them being in the Publishing activity. The Group confirms the possibility of strengthening its development by means of acquisitions, if they comply with its financial criteria in terms of profitability and are financed without any capital increase.
In light of these elements management confirms its objective of 140 millions euros in sales, of which 10% of that will be from the proprietary sites, with a current operating profit (4) in an amount of 17 to 18 million euros for the financial year 2008.
(1) The advertising network activities and Direct Marketing were merged in 2007 within an Advertising Sector.
(2) Including the 100% margin recorded on the proprietary sites (Hi-Media Publishing)
(3) Before stock based compensation
(4) Before stock based compensation
