Press releases | Archive 2008
RBC is well on track for record sales in 2008, with 42% revenue growth generated in the first six monthsRBC is well on track for record sales in 2008, with 42% revenue growth generated in the first six months
- RBC total 1H2008 revenue up 42%, which corresponds to the upper end of the full year revenue guidance
- RBC's Internet business delivers dynamic 56% revenue growth in line with the market1
- RBC's Internet resources, which were acquired and launched in 2007, show 5.9-fold revenue growth year-on-year
- RBC's Internet audience soars 97% year-on-year to an average 35mln unique visitors per month in 1H2008
- RBC TV's Moscow coverage rises to over 70%, which positions the channel well for a stronger revenue growth in 2009
- RBC's print media revenue expands 56%, primarily driven by growth of advertising sales in the RBC magazine and RBC Daily newspaper
- Consolidated EBITDA margin reaches 30-32% in 1H2008
- RBC's cash balance amounts to $232m and total debt is $158m as of the end of the second quarter 2008
- The company reconfirms its forecast for 2008: total revenue is expected to reach app. $265-275m, consolidated EBITDA is estimated at a level of $75-85m
RBC revenue for the 1st half of 2008
|$'000 000||1st half 20082||1st half 20072||Growth (%)|
RBC revenue for the 2nd quarter of 2008
|$'000 000||2nd quarter 20084||2nd quarter 20074||Growth (%)|
Moscow, August 7, 2008 - Today RBC Information Systems (RTS, MICEX: RBCI) reported its financial results for the first half of 2008. "In the first six months, RBC delivered a very strong revenue growth on the back of continuing business development and audience expansion in all segments of operations. Increasing monetization levels of our mass market Internet sites have led to the recovery of the consolidated EBITDA margin back to historic levels. The results achieved show we are successfully heading towards becoming a media company with portfolio heavily focused on the growth areas of the Internet. We keep moving forward and expect to announce several sizeable and value-accretive Internet acquisitions in the second half of the year," RBC Chairman and CEO German Kaplun said.
Revenue and EBITDA. The company's total revenue rose 42% from $76.9m in 2007 to $109.4m in 1H2008, on the back of the sustained growth dynamics of the company's business sites and accelerating performance of RBC's general interest Internet resources. An additional growth factor was a significant increase in the volume of advertising in the company's business titles. Moreover, in the first half of 2008, the company registered strong expansion of the audience of its media products in all segments (Internet, television and print media). Of the total 1H2008 revenue mix, 58% was contributed by Media Services, 20% was generated by RBC TV, and the remaining 22% came from Print Publications. The consolidated EBITDA margin of the company reached 30-32%, having recovered from the effect of expansion costs, which strongly influenced it in 2007.
Media Services. Total revenue from Media Services increased 46% from $43.2m 1H2007 to $63.0m in 1H2008, thanks to a stronger growth secured by RBC's expansion to the consumer-driven Internet segment. In particular, revenue from RBC's Internet projects, which were acquired and launched in 2007, surged 486% year-on-year and reached $12.9m, or 22% of the total Internet revenue of the company. This testifies that the company is well on track to reach at least $30m revenue from non-business Internet resources for the full year 2008. Despite traditionally lower business audience activity in the second quarter, business-related sites of the company also delivered strong sustainable revenue growth (30% compared to the same period last year). Of the Internet revenue mix, 82% came from advertising sales, while the remaining 18% were paid services.
In the second quarter, RBC continued strengthening its position in the consumer-driven Internet segment. For example, RBC acquired a 20% stake in Rupay, a Russian e-payment system, with an option to increase it to 51% within three years. In June, RBC launched its Internet payment platform under the brand of RBK Money, using Rupay technology. The rebranding alone allowed for an increase in the number of registered users of the system by about five times. RBC will continue expanding the range of services offered by RBK Money and expects it to become one of the most popular payment tools on the Russian Internet.
Additionally, in the period under review, RBC entered into an exclusive licensing agreement with the Tweegee company to launch in September 2008 the Russian version of Israel's leading children's social network tipo.co.il. At the moment, more than 80% of Israeli children aged between 8 and 14 are visiting tipo.co.il on a regular basis. The highly perspective niche of children's online social networks is currently vacant in Russia, and RBC will be the first to explore it, using the extensive experience of its partner Tweegee.
In the business Internet segment, RBC started a number of regional sites, for example, in Ukraine, Saint Petersburg and Rostov-on-Don. The company generates strong margins on similar sites in Moscow and expects to achieve significant profitability in its regional projects as well. For example, RBC management is particularly pleased with the performance of the company's websites in Ukraine, which offers attractive growth opportunities. The Ukrainian share of the RBC total audience is increasing and has already reached more than 8% in 1H2008.
The total Internet audience of the company reached an average of 35mln unique visitors6 per month for the first half of 2008, representing a 97% increase year-on-year. In its audience survey for June 2008, the independent online research agency Gemius7 ranked RBC the third largest Internet company in Russia in terms of monthly audience.
RBC TV revenue increased 21% from $17.9m in 1H2007 to $21.7m in 1H2008. This growth rate is in line with revenue dynamics demonstrated by the channel in 1H2007, reflecting the seasonal nature of this business. May and June are traditionally considered a holiday period in Russia, which is characterized with low business activity. However the management is confident of reaching the target growth of 25-30% in television for the full year 2008, on the back of strong demand for advertising from regular clients and continuing audience growth.
For example, according to Comcon Media research produced in April 2008, RBC TV viewership continued to expand rapidly on all fronts: the monthly audience grew 22% to 12.2mln people over the past twelve months, the weekly audience rose 26% to 9.6mln and the daily audience increased 24% to 5.4mln.
The channel registered notable audience growth in large Russian cities such as Moscow, Novosibirsk, Ekaterinburg, Tyumen, Ufa and Omsk. Importantly, the number of viewers in Moscow rose by 83% to 1.3mln people on a monthly basis over the twelve months period since April 2007. At present, RBC TV technical coverage in Moscow exceeds 70% and is conservatively expected to reach over 80% by the end of 2008. Overall, the channel reached a critical mass in terms of viewership and is well positioned to attract much bigger advertising budgets in 2009, driven by both price and volume.
Print Publications. Revenue generated by RBC's print media totaled $24.7m in the first half of 2008, up 56% from $15.8 in the same period in 2007, thanks to significant growth in advertising volumes placed in the RBC magazine and RBC Daily newspaper and healthy revenue dynamics delivered by other key publications.
This growth was supported by a substantial audience increase for the company's flagship titles. According to the latest research by TNS Gallup Media8, the all-Russia AIR9 of the company's key interior design & construction magazines more than doubled in one year, and they continue to retain the leadership positions in respective niches in Russia. For example, the AIR of Idei Vashego Doma in Russia went up from 899,600 to 1,961,900 readers year-on-year, while the all-Russia AIR of Salon Interior grew from 268,300 to 777,400 people in the same period. The RBC magazine remains the second most popular business magazine in Russia in terms of AIR (689,500 people). Notably, the difference in AIR between the RBC magazine and the leading publication is less than 4%.
Outlook for 2008. Based on the strong results achieved to date and signed advertising contracts, RBC reiterates its outlook for 2008. Total revenue is estimated to reach about $265-275m. Revenue from Internet advertising & services is expected to expand by approximately 50-60%. The revenue growth in Print Publications is estimated at about 35%, while RBC TV is forecasted to deliver 25-30% revenue growth. Consolidated EBITDA is expected to reach $75-85m.
1 - According to the MindShare Interaction agency, the Russian market for spot advertising on the Internet grew 57% in 1H2008
2 - Based on management accounts prepared in accordance with IFRS
3 - Mainly consists of marketing communications
4 - Based on management accounts prepared in accordance with IFRS
5 - Mainly consists of marketing communications
6 - According to the company statistics
7 - Gemius SA is the largest online research agency in Central and Eastern Europe (www.gemius.com)
8 - The survey was held by TNS Gallup Media for the period from December 2007 to April 2008 Average Issue Readership
9 - Average Issue Readership
Cautionary note regarding forward-looking statements
Some of the information in this press release may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions, and involve known and unknown risks and uncertainties. It is possible that the company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm's future results, see "Risk Factors" in the company's latest Annual Report on www.rbcinfosystems.com. RBC assumes no obligation to update any forward-looking information contained in this document.