Country Focus: Denmark
Recession affects Egmont profits
by Annika Pham
- Scandinavian media giant Egmont announced in its 2008 annual report that its revenue increased by 5%, from €1.49bn in 2007 to €1.56bn last year. However, net profit fell from €65m to €15m year on year, due to “falling exchange rates, impairment of goodwill and restructuring costs”, according to CEO Steffen Kragh.
To counter the economic trend and sustain the group’s future investments, Egmont launched a cost-saving plan of around €60m in 2008, but even with these precautionary steps, 2009 will be an “exceptionally challenging year,” he admitted.
Egmont’s film group Nordisk Film had a rise in revenue (€472m in 2008, from €449m in 2007) thanks to its PlayStation business. However, operating profits dropped from €18m in 2007 to €5m last year.
Nordisk’s Executive Vice President Allan Hansen, who took over from Michael Ritto last December, said his new job was one of the most demanding and challenging he has ever had. “We will emerge from 2008 with record revenues but unsatisfactory earnings,” he stressed. “These two facts are forcing us to change our priorities. We have to reduce our cost base by more than DKK100m (€13.4m) over the next two years, a strategy that will naturally impact day-to¬day operations.”
The distribution, TV production and cinema chain (which controls 40% of the Danish market) performed positively, unlike Nordisk Film’s post-production business and some production companies, which experienced “a turbulent year”. Egmont’s 50% acquisition of Zentropa was one of the highlights of 2008 and bolstered the group’s position in the film market.