Management Commentary

Statement of the chairman of the management board

Dear shareholders, colleagues and partners,

The past year again reaffirmed the vital role of independent and financially self-sustaining journalism in our society. At a time of uncertainty prevailing in the world, our commitment to serving democracy through quality journalism is more important than ever.

Recognitions and challenges

The year was characterised by important global events: from the US presidential elections to the growing influence of social media platforms, where in the era of the noise created by artificial intelligence and the increasing merging of politics and business, fact-checking is being increasingly disregarded. These developments confirm the extraordinary importance of reliable, fact-based journalism in preserving an informed society.
The dedication of Ekspress Grupp’s media publications to quality was recognised with numerous prestigious prizes in all Baltic States, from the Journalist of the Year title awarded by the Estonian Association of Media Companies to Vilja Kiisler, to several important recognitions for the journalistic work of our Latvian and Lithuanian colleagues. We are extremely proud of the success of our journalists: a more detailed list of the most important recognitions is provided in the chapter of the annual report “Media Recognitions and Awards in 2024“.

Digital development and market situation

The journey of the digital transformation of Ekspress Grupp continues. In terms of digital subscriptions, we have managed to achieve a position in the global leadership group. Estonia's achievements are especially noteworthy – we can proudly say that we are at the top in the world in terms of digital news subscriptions. In addition to the solid work of our journalists, the high level of digitalisation among the Estonian people and the strong competitive situation in the journalism landscape have also contributed to this.
In 2024, the digital revenue of the Ekspress Group increased by 9%, and as a result, the share of digital revenue in the Group’s total revenue was 86%. It already exceeds the 85% target set for digital revenue by 2026. Our success has led to growing international recognition – we are increasingly invited to share our digital transformation story at conferences around the world and several European media houses have visited us to gain experience.
The advertising market was controversial in 2024. While Lithuania achieved strong results, Latvia and Estonia faced challenges, as we saw in 2024 one of the steepest market declines in recent years. This was primarily due to the general economic slowdown in both countries – the economic recession continued in Estonia and Latvia, and consumer confidence remained low, directly impacting the advertising budgets of companies. However, our diverse revenue base helped us maintain stability, with digital outdoor advertising and ticket sales showing particularly robust growth.

Business diversification and investments

Our technology investments continued to pay off – the complete introduction of Delfi 2.0 platform in all countries will update our back-office architecture and create opportunities for the countries to cooperate and optimise content production costs. An important step was also the creation of a separate innovation and artificial intelligence department, the main focus of which is on making internal processes more efficient, making maximum use of group-wide synergies, and increasing product quality for consumers. This allows us to react even more quickly to the opportunities arising from the development of the artificial intelligence and to ensure the continuous development of our services and products according to the expectations of our users.
The extension of the digital outdoor network has significantly contributed to both revenue and EBITDA growth. While these investments with higher interest costs affected our net profit, they will help us achieve a stronger position in the future.
The success of the ticket business, especially in Latvia, showed the benefits of the diversification strategy. We have built a stable customer base with well-diversified concentration risks, benefiting both from the volume growth of events as well as inflation-related price adjustments.
The Group’s expansion continued with strategic acquisitions in the conference business. UAB Kenton Baltic, acquired in Lithuania, will add two strong and well-known conference brands EBIT and HR Week to our portfolio. In Estonia, we strengthened our positions through Delfi Meedia, which acquired the business of the Estonian Training and Conference Centre, thereby expanding its activities in the training and conference market.

Social responsibility

Our commitment to supporting Ukraine remains solid. We will continue covering the war with the same intensity, regularly sending journalists to the scene, while understanding that it is not just news coverage, but part of our main mission to serve democracy.
In the era of growing cyber threats, we have significantly strengthened our security measures to protect platforms and data, as well as copyright issues. The largest media companies in Estonia, together with Ekspress Grupp, founded the Baltic Press Publishers Association for the collective representation of press publishers. The association will start promoting the interests of Estonian, Latvian and Lithuanian press publishers, related to the economic copyrights and copyright-related rights, including defining a fair market situation and working towards fair taxation of major platforms in target countries.

Strategy and future

Looking forward, we have set clear strategic targets until 2026. We have already surpassed one important goal – the share of digital revenue accounting for 85% of total revenue. The next major goal is to increase the number of digital subscriptions in the Baltic States to 340 000. This is an ambitious yet realistic goal, the achievement of which depends on only on us, but also on the development of the general economic environment.
Trust in our flagship Delfi continues to grow in all Baltic States. Behind the growing trust is our conscious work for high-quality journalism – whether it is investigative articles on corruption, in-depth coverage of war events in Ukraine or analysis of the risks and opportunities related to the development of artificial intelligence.
The media landscape continues to evolve rapidly, but our commitment to quality journalism, technological innovation and serving democracy remains unchanged. I would like to express my gratitude to our dedicated team whose work and commitment have made our achievements possible, and to our shareholders for their continued support.

Yours sincerely,
Mari-Liis Rüütsalu

Despite the economic downturn, which shaped the entire economic environment in the Baltic States, the Group’s revenue increased by 4% in a year and totalled EUR 76.2 million. At the same time, digital revenue increased by 9% and as a result, the share of digital revenue made up 86% of the Group’s total revenue in 2024. This exceeds the 85% target set for the share of digital revenue by the year 2026.

In a year, the Group received nearly 31 000 new digital subscriptions (+15%) in the Baltic States, totalling 238 000 subscriptions at the end of 2024. The Group’s digital revenue is thus increasingly based on digital subscription revenue and it makes up an increasingly larger recurring revenue base without the need for additional sales activity (and costs). We have enhanced the quality and volume of content offered by the Group’s media companies in order to be the leader in the digital subscription field in all Baltic States. The Group is gradually moving towards its financial strategic goals and wishes to offer paid digital content to at least 340 000 subscribers by the year 2026.

The Group was also successful outside traditional media activities. The revenue of ticket sales platforms increased by 21% in a year, growing especially strongly in the Latvian market. The outdoor screen business also demonstrated significant 26% growth supported by the extension of the network to 156 screens. With this, the Group has increased its presence in the Latvian market, where the number of screens increased from 98 to 109 in a year, while there are 47 screens in Estonia. These two areas have shown resilience also in the conditions of slower economic growth.

The advertising revenues for 2024 remained at the previous year's level. The economic environment of the Baltic States was difficult in the first nine months of 2024. It was characterised by low consumer confidence, conservative investment policies of businesses and changing tax policies of countries. This put also pressure on advertising revenue. However, the 9% increase in advertising revenues in Q4 (compared to last year), which was driven by Lithuania (partially due to the elections in Lithuania in Q4), indicated economic recovery.

The earnings before interest, tax, depreciation and amortisation (EBITDA) of Ekspress Grupp totalled EUR 10.7 million, increasing by 4% in a year. The EBITDA growth received a boost from the successful sale of digital subscriptions as well as the increase in the volume of ticket sales platforms and digital outdoor screens. For us as the Group, the ongoing improvement of efficiency continues to be of importance, in order to maintain the EBITDA margin and achieve the minimum 15% level as laid down in our strategy. In the conditions of a difficult economic situation, it was important to pay attention to controlling the cost base – for example, we were able to keep the increase in labour costs at 3% because the annual average number of employees decreased by 1%. The decrease comes mainly from Latvia, where a new manager was also hired at the end of the year in to go strongly against 2025.

Implementation of our growth ambitions and the transition to digital media requires investments in technology. In 2024, we invested EUR 4.6 million in tangible and intangible fixed assets, the largest of which were investments in the development of Delfi platform and Delfi TV.

At the end of 2024, the Group had available cash in the amount of EUR 9.0 million and equity in the amount of EUR 58.4 million (51% of total assets). The Group’s future investment capacity continues to be in focus when shaping the liquidity position, and we consider it important to maintain our liquidity reserves for possible new acquisitions as well as possible cooling of the economy. We have an additional overdraft facility of EUR 3 million, which ensures the necessary liquidity buffer for future operations.

In 2024, Ekspress Grupp significantly expanded its activities in the conference business, making two important acquisitions. In July, Delfi Meedia acquired the business of Eesti Koolitus- ja Konverentsikeskus (the Estonian Training and Conference Centre) and in December, the Lithuanian subsidiary UAB Delfi acquired the conference company Kenton Baltic. These acquisitions support the Group's strategic goal of developing the conference business as a new revenue area that complements existing media activities and enables to find new synergies. By its nature, the conference business is content creation business and thus is a good match for the portfolio of Ekspress Grupp. The content produced at conferences can successfully be enhanced through the Group’s strong media outlets. In addition, this field of activity strengthens the position of Delfi’s brand among business customers and creates opportunities for new business relations and revenue.

When designing our further activities, we will take into consideration that the difficult economic situation can also continue in 2025, especially in Estonia and Latvia. Despite the economic situation, we are still positive at Ekspress Grupp about the growth of our future business volumes, both from the point of view of digital subscription revenue and all other revenue in the digital areas. In 2025, we will focus on developing the long-term business strengths in media, ticket sales platforms and outdoor media. We remain committed to our growth strategy and achieving our long-term financial goals.

Yours sincerely,
Lili Kirikal

The year 2024 has been a year of continued digital growth for Ekspress Group. The number of the Group’s digital subscriptions increased by 15%, reaching 238 182 subscriptions, and the share of digital revenue reached 86% of the Group’s total revenue (2023: 83%).

Digital subscriptions are the foundation of the Group's long-term stability, providing predictable and recurrent revenue flow even in more difficult times. The results of the year 2024 confirm the correctness of this strategy - even in the conditions of economic slowdown, the growth of digital subscriptions and the related revenue have remained stable.

The progress made has varied from country to country, but it has consistently been positive.

- In Estonia, Delfi Meedia continued strong growth, increasing the number of its digital subscriptions by 12% to 114 631 subscriptions. Õhtuleht Kirjastus increased the number of its digital subscriptions by 2% to 25 257 subscriptions and Genius Media by 5% to 7 356 subscriptions.
- In Latvia, Delfi was exceptionally successful, increasing the number of its digital subscriptions by 33% to 35 082 subscriptions.
- In Lithuania, strong progress was also evident - the number of Delfi’s digital subscriptions increased by 11% to 44 170 subscriptions and Lrytas achieved 84% growth, reaching 11 686 subscriptions.

During the year, the global digital media landscape was shaped by three key trends. Firstly, the artificial intelligence revolution, which has brought new opportunities for content creation, automation of workflows, and personalisation of user experience. Secondly, the rise of short-form videos, as shown by the growing popularity of TikTok, Instagram Reels, YouTube Shorts, and others. It has also forced traditional media companies, including the Ekspress Group, to adjust their content strategy. Thirdly, people's media consumption habits are changing, requiring media companies to be flexible in adapting their business models.

The development of business models is also significant. Revenue diversification has become increasingly important - in addition to traditional advertising, the company is looking for new sources of revenue through subscriptions, membership status, events and e -commerce. The importance of first-party data is increasing, allowing for personalised experiences and targeted marketing. The application of artificial intelligence in optimising content recommendations, marketing processes, and pricing strategies has become widespread.

With the growth of digital revenue, cyber threats are increasing, and cybersecurity has become an increasingly critical area for media companies. Ensuring security involves three main challenges facing the sector. Subscriber data protection has become one of the key issues for media companies relying on digital subscriptions. More attention is being paid to security measures which would ensure secure handling of personal data and payment information, and compliance with data protection regulations.

The development of artificial intelligence has brought new challenges in detecting and preventing misinformation. Media companies are increasingly actively looking for solutions to help ensure the integrity of journalistic content and detect fake content. The security of content management systems has become particularly important in connection with the new risks associated with the development of artificial intelligence. Digital revenue protection is also a growing trend. Media companies are increasingly contributing to fighting advertising and click fraud, and ensuring the security of payment solutions. These measures have become critical in ensuring the stability of both advertising and subscription revenue.

The year 2024 brought significant technological advancements. The complete implementation of the Delfi 2.0 platform across all Baltic States has modernised our back-office architecture and created new opportunities for the countries to cooperate. The new innovation and artificial intelligence department will focus on making internal processes more efficient and maximizing cross-group synergies.

The digital development of the Group also extends to other business areas where we are looking for opportunities to increase efficiency through new technologies and services. The expansion of the digital outdoor screen network has significantly contributed to both the revenue and EBITDA growth, and the ticket business has shown particularly strong results in Latvia, where we have built a stable digital customer base. Strategic acquisitions made in the conference business - UAB Kenton Baltic in Lithuania and the business of the Estonian Training and Conference Centre – will create new opportunities for developing digital services and diversifying the revenue base. These steps support our goal of reducing reliance on traditional revenue while growing the digital business sector.

As a result of these developments, we have already surpassed one of our strategic goals - the share of digital revenue in total revenue has grown to over 85%. The next big goal is to increase the number of digital subscriptions in the Baltic States to 340 000 by 2026. This is an ambitious but realistic goal, towards which we are consistently moving across all markets.

Yours sincerely,
Karl Anton