On February 11, Ekspress Grupp published its January sales figures, which showed a 2.0% growth y/y. As the beginning of the year can be considered weak from and advertising market perspective, the company considers this growth rate as significant. Of the three main segments, online media and periodicals managed to expand by 12% y/y and 4.3% y/y respectively, but printing dropped by 3.5% y/y.
On February 11, Ekspress Grupp published its January sales figures, which showed a 2.0% growth y/y. As the beginning of the year can be considered weak from and advertising market perspective, the company considers this growth rate as significant. Of the three main segments, online media and periodicals managed to expand by 12% y/y and 4.3% y/y respectively, but printing dropped by 3.5% y/y.
The Online segment marked its eighteenth consecutive month of y/y expansion, according to our calculations, and was boosted by Delfi Lithuania, which in turn was supported by various portals launched last year and the purchase of the classifieds portal Alio. In the periodicals segment, advertising revenues decreased in all companies, except for Maaleht, but single copy sales of the newspapers and the sales growth from the Estonian Film Classics DVD series, as well as an additional publication of the weeklies, pushed the periodical segment to the rise 13 y/y. The sales of the printing segment decreased despite the increase of3% y/y in printing services.
The company is trading at a 2013e P/B of 0.7x, a P/E of 8.7x and an EV/EBITDA of 7.2x, while the peer group’s medians are 2.4x, 15.4x and 7.1x respectively. For 2013, we expect total net sales to grow by 5.2% y/y, to EUR 62.8m, EBITDA to improve to EUR 8.1m and net profit to expand to EUR 3.6m. We have not made any fundamental changes to our estimates, and we therefore reiterate our EUR 1.40 target price and Strong Buy recommendation.
Recommendation: Strong Buy
Target Price: €1,40
Risk Rating: High risk
Share Price: €1,04