The Egmont Foundation: Annual report 2012

THE EGMONT FOUNDATION

Annual Report 2012CVR No.: 11456111

The Egmont FoundationVognmagergade 111148 Copenhagen KTelephone: +45 3330 5550 Fax: +45 3332 4508 www.egmont.com [email protected] office: Copenhagen

ContentsManagement’s Review .......................................................................................................................... 4

Consolidated Financial Highlights ....................................................................................................... 4

Record Profit ...................................................................................................................................... 5

TV 2, Norway ..................................................................................................................................... 7

Nordisk Film ....................................................................................................................................... 9

Egmont Magazines ............................................................................................................................. 11

Egmont Kids Media ............................................................................................................................ 13

Egmont Books .................................................................................................................................... 15

The Charitable Activities ..................................................................................................................... 17

Profit for the Egmont Foundation ........................................................................................................ 19

Corporate Governance ....................................................................................................................... 19

Corporate Social Responsibility ........................................................................................................... 19

Special Risks ....................................................................................................................................... 20

Outlook for 2013 ............................................................................................................................... 20

Statement by the Board of Trustees and Management Board ..................................................................... 21

Independent Auditor’s Report ................................................................................................................... 22

Consolidated Financial Statements

Income Statement of the Group .......................................................................................................... 24

Statement of Comprehensive Income of the Group ............................................................................. 25

Balance Sheet of the Group ................................................................................................................ 26

Cash Flow Statement of the Group ..................................................................................................... 28

Statement of Changes in Equity of the Group ...................................................................................... 29

List of Notes to the Consolidated Financial Statements ........................................................................ 31

Notes to the Consolidated Financial Statements .................................................................................. 32

Financial Statements of the Egmont Foundation

Income Statement of the Egmont Foundation ..................................................................................... 69

Balance Sheet of the Egmont Foundation ............................................................................................ 70

Notes of the Egmont Foundation ........................................................................................................ 71

Board of Trustees and Management Board of the Egmont Foundation ................................................ 74

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Management’s review


ConSolidaTEd FinanCial highlighTS 2012 2011 2010 2009 2008 (FSa)

Key figures (EUR million)

Revenue 1,616.9 1,386.3 1,423.1 1,443.1 1,564.8

Profit before net financials, depreciation, amortisation and impairment

186.9 150.4 166.2 152.5 100.4

Operating profit 106.1 * 87.5 82.4 65.6 20.6

Special items 67.3 0.0 0.0 0.0 0.0

Profit/(loss) on net financials (4.6) 6.2 (7.0) (1.6) (5.6)

- of which profit/(loss) from investments in associates

2.1 8.3 (3.7) (8.8) (5.6)

- of which financial income and expenses, net

(6.7) (2.1) (3.3) 7.2 0.0

Profit before tax (EBT) 168.7 93.7 75.3 64.0 15.1

Net profit for the year 151.2 73.6 49.6 66.2 2.6

Balance sheet total 1,604.4 1,294.8 1,267.0 1,192.4 1,111.9

Investments in intangible assets 45.1 43.6 41.6 40.6 57.7

Investments in property, plant and equipment 37.0 18.8 23.3 19.6 27.5

Net interest-bearing debt/(net balance) 119.0 (104.7) (76.7) 31.2 145.2

Equity 676.4 505.9 461.1 421.5 382.1

Cash generated from operations 163.4 107.4 196.9 178.3 84.6

Financial ratios (%)

Operating margin 6.6 * 6.3 5.8 4.5 1.3

Equity ratio 42.0 38.4 35.8 34.8 32.8

Return on equity 25.4 15.2 11.0 16.2 0.2

Average number of employees 4,615 4,161 4,312 4,754 5,134

* Calculated before special items.

The key figures and financial ratios for 2012, 2011, 2010 and 2009 have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU. The key figures and financial ratios for 2008 have not been adapted to IFRS and have been prepared in accordance with the Danish Financial Statements Act (FSA).

The financial ratios have been calculated in accordance with the Danish Society of Financial Analysts’ ‘Recommendations and Financial Ratios 2010’. Please see the definitions and terms used in the accounting policies.

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* Calculated before special items

Egmont is a leading media group in the Nordic region. Our media world spans TV, films, cinemas, magazines, books and interactive games.

Egmont has 6,400 dedicated employees and publishes media in more than 30 countries.

Our vision is to be the most attractive media group for our employees and business partners as well as consum-ers. Creating and telling stories on all platforms is at the heart of all Egmont’s activities. Since its inception in 1878 Egmont has sought to contribute positively to society at large – as a workplace and cultural broker and through donations to charitable causes that will help improve the lives of vulnerable children and young people.

In February 2012 Egmont acquired the remaining 50 % of the shares in TV 2, Norway, for a price of NOK 2.1 billion (EUR 281.0 million), and TV 2 was fully recognised in Egmont’s consolidated financial statements as of 1 February 2012.

RECoRd pRoFiT

RevenueEgmont’s total net revenue for 2012 amounted to EUR 1,616.9 million, a 16.6 % growth compared to 2011. Growth in the film distribution and cinema business in Nordisk Film and organic growth in TV 2 contributed to the advance in revenue. The acquisition of the remaining 50 % shares in TV 2 had an additional impact.

EarningsProfit before net financials, depreciation, amortisation and impairment losses amounted to EUR 186.9 million in 2012, up 24.3 % on the year before.

The operating profit * climbed from EUR 87.5 million in 2011 to EUR 106.1 million in 2012.

Egmont’s business areas have had a strong year and have all contributed to the record performance. Income from screen-based media has developed favourably, income flows from new digital business have increased, and the company’s publications and productions have generally enjoyed success.

In 2012 special items of net EUR 67.3 million were recognised as income, relating to the value adjustment and impairment losses of TV 2 (a net amount of EUR 75.3 million) and the costs of closing printing facilities (EUR 8.0 million) .

Net financials (excl. profit/(loss) from investments in associates) amounted to EUR (6.7) million against EUR (2.1) million in 2011. The increase is due mainly to the financial expenses associated with acquiring the remain-ing 50 % shares in TV 2.

Accordingly, the Group recorded a pre-tax profit of EUR 168.7 million in 2012 against EUR 93.7 million in 2011.

Tax on the profit for the year amounted to an expense of EUR 17.6 million. The Group’s effective tax rate for 2012 was materially affected by the value adjustment of TV 2. When adjusting for this, the effective tax rate is 22.9 %.

The net profit for the year was EUR 151.2 million in 2012 against EUR 73.6 million the year before.

Balance sheetThe balance sheet total increased by EUR 309.6 million to EUR 1,604.4 million, the main reason being the acquisition of the remaining 50 % shares in TV 2.


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The Group’s net interest-bearing debt amounted to EUR 119.0 million compared to net deposits of EUR 104.7 million in 2011. The change from having net deposits to having net interest-bearing debt is attributable mainly to the investment in TV 2.

Egmont’s equity at end-2012 amounted to EUR 676.4 million, an increase of EUR 170.5 million compared with 2011.

Return on equity was 25.4 % compared with 15.2 % the year before. If the equity is adjusted for special items,

the return on equity would be 14.7 % for 2012, on a par with the year before.

The equity ratio at end-2012 came to 42.0 % relative to 38.4 % the year before.

Cash generated from operations amounted to EUR 163.4 million compared to EUR 107.4 million in 2011. This growth is attributable to the positive development of the cash from operating profit.


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TV 2, Norway

Revenue 2012: EUR 445 million (2011: EUR 210 million)operating profit 2012: EUR 36 million (2011: EUR 27 million)Employees 2012: 870 (2011: 415)

TV 2 is Norway’s largest commercial media house in terms of daily use, and the most important marketplace for Norwegian advertisers.

TV 2 is a leading supplier of news, sports and entertain-ment for TV, the internet, mobile phones and tablet computers.

In 2012 TV 2 celebrated its 20th anniversary as a healthy, leading-edge and strong media business. Its overarching vision is to create unforgettable moments for viewers. On this premise, in 2012 TV 2 made its biggest invest-ment yet in Norwegian quality entertainment, and TV 2’s news department began producing from Europe’s most modern news studios. In February 2012 Egmont acquired A-Pressen’s shares in TV 2 for a price of NOK 2.1 billion, making Egmont the sole company owner.

Egmont’s shares of revenue and operating profit in TV 2 are set out in the section at the top of this page. Calculated on a fully consolidated basis (NOK) TV 2 generated its highest revenue to date in 2012, NOK 3,441 million against NOK 3,197 million in 2011. In 2012 TV 2 achieved its second-best operating profit of NOK 338 million compared with NOK 407 million in 2011. The decline is ascribable to increased investment in programme content, which helped maintain the main channel’s market share of 19.3 % in 2012. TV 2’s total viewing share came to 26.1 % against 26.7 % in 2011.

TV 2 (Main ChannEl)Popular programmes such as Farmen, Skal vi danse and Norske talenter made the autumn season on the main channel a success for TV 2.

The most-watched programme in 2012 was the European football cup final between Spain and Italy on 1 July. The match recorded 1,183,000 viewers and a view-ing share of 62.3 %.

Another memorable date for TV 2 was 16 December. First, 1,163,000 viewers watched the team handball final between Norway and Montenegro, generating a view-ing share of no less than 74.4 %. Later in the evening, the final of Farmen attracted 1,153,000 viewers, which translates into a 58.1 % viewing share.

In 2012 TV 2’s news unit bolstered its position among viewers after making a significant investment in state-of-the-art news studios in Bergen and Oslo. The new studios offer exciting opportunities for innovative news presentation. After 20 years, the news also changed its colour scheme from green to red.

TV 2 ZEBRaIn 2012 TV 2 Zebra held a market share of 2.3 %, down 0.4 percentage points on 2011. The figures mask a solid first six months and a considerably weaker second six months. This development occurred because 500,000 households lost TV 2 Zebra in June 2012 when Canal Digital Kabel decided to stop distributing the channel.


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TV 2 BliSSTV 2 Bliss maintained its market share of 1.3 % of view-ers in 2012. The channel broadcasts drama, docusoaps, reality programmes and films.

TV 2 nyhETSKanalEnTV 2 Nyhetskanalen celebrated its fifth anniversary on 15 January 2012. The channel has consistently increased its viewing figures since its launch in 2007, when it com-manded a share of 0.5 %. It ended 2012 with a viewing share of 2.0 % against 2.2 % in 2011. The channel’s coverage of the Utøya terrorist attack on 22 July 2012 accounted for the surge in viewer numbers.

TV 2 FilMKanalEn TV 2 Filmkanalen airs films almost around the clock. The channel’s share of viewers has remained stable since its launch in 2007. In 2012 the channel held a share of 0.6 % compared with 0.7 % in 2011.

TV 2 pREMiER lEagUE TV 2 broadcasts Premier League programmes on three HD TV channels: TV 2 PL HD 1, TV 2 PL HD 2 and TV 2 PL HD 3. The channels broadcast almost all games from the best English league in HD. In May 2012 TV 2 signed a new agreement with the FA Premier League that extends TV 2’s exclusive rights to the Barclays Premier League until the end of the 2015/2016 season.

TV 2 SpoRTOn 6 June 2012 TV 2 relaunched the TV 2 Sport channel as a sports news channel bringing the latest in sport from morning to night. The channel is included in the basic programme packages offered by most Norwegian TV distributors. In August 2012 TV 2 secured the rights

to all English football, with the exception of the Premier League, to which it already held the rights. In addition to the existing Barclays Premier League rights, TV 2 can now offer Norwegian TV viewers FA Cup, League Cup, Championship, League 1, League 2, promotion play-off and Community Shield matches as well as the England senior and U21 internationals.

In the autumn of 2012 the pay channels TV 2 Sport 2-5 were replaced by TV 2 Sport Xtra and TV 2 Sport Xtra 2. These channels broadcast all non-Premier League English football.

TV 2 SUMo TV 2 Sumo is Norway’s largest commercial internet-based TV supplier, reaching the 100,000 paying sub-scriber mark in October 2012. In mid-November TV 2 launched a new version of its web platform. TV 2 Sumo has an extensive programme library and an interactive sports centre.

TV2.no In 2012 TV 2 enjoyed continuing growth in the num-ber of web and mobile users. During the year tv2.no recorded 13 % growth, thus retaining its seventh place on the list of largest Norwegian websites. TV 2 mobile performed well in 2012, and with a growth rate of 95 % remained fourth on the list of largest Norwegian mobile sites.

TV 2’S SUBSidiaRiESTV 2 owns the subsidiaries OB-Team, TV 2 Torget, Vimond, Wolftech and Mosart Medialab, and holds ownership shares in RiksTV (33.33 %) and Norges Televisjon (33.33 %).


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Nordisk FilmRevenue 2012: EUR 339 million (2011: EUR 334 million)operating profit 2012: EUR 18 million (2011: EUR 11 million)Employees 2012: 820 (2011: 798)

Nordisk Film is the leading developer, producer and marketer of creative content in the Nordic region. The division creates and tells stories through the media of film, live entertainment and interactive games.

Revenue increased from EUR 334 million in 2011 to EUR 339 million in 2012. Operating profit amounted to EUR 18 million in 2012 against EUR 11 million in 2011. Strong results in the film and cinema business areas have largely driven this positive development.

FilM Nordisk Film produces, co-produces and markets feature films and TV series, both as in-house productions and in association with Nordic and other international partners. 2012 was an excellent year, bringing an array of success-ful films across the Nordic countries.

The Norwegian epic, Kon-Tiki, produced by Nordisk Film Production, was among Nordisk Film’s most ambitious projects. Attracting 900,000 Norwegians to cinemas, the film became one of the best-selling Norwegian titles in recent years. At the start of 2013 Kon-Tiki was nominated for a Golden Globe as well as for an Oscar in the ‘Best Foreign Language Film’ category. The in-house production A Hijacking was also well received in Denmark and internationally, garnering several inter-national awards and nominations in several ‘Bodil’ and ‘Robert’ award categories.

The associate company Zentropa produced a large num-ber of commercial successes in 2012. At year-end the Oscar- and Golden Globe-nominated A Royal Affair had sold over 500,000 cinema tickets, and All You Need is Love passed the 640,000 ticket mark. The Hunt – which

did not premiere in Denmark until January 2013 – won the award for Best Actor at the Cannes Film Festival and a European Film Award for best script.

Nordisk Film released over 60 cinema titles produced either in-house or by other production companies across the Nordic region. In 2012 Nordisk Film distributed roughly one in every six films shown in the Nordic countries.

The film arm renewed its agreement with the international film studio Summit, which welcomed Lionsgate to its fold following the merger between the two companies in 2012. Lionsgate/Summit owns the two successful global franchises Hunger Games and The Twilight Saga. The last film in the Twilight series, Breaking Dawn Part II, was seen by 1.4 million Nordic cinema guests. The first Hunger Games film in the quadrilogy enjoyed success of a similar calibre, selling 1.2 million cinema tickets across the Nordic region. Further, a four-year agreement, including all new productions, was signed with Steven Spielberg’s film company, Dreamworks.

2012 was the year when consumers truly embraced Video-On-Demand distribution. Market growth was partly driven by Netflix and iTunes, which launched their services in the Nordic markets. Nordisk Film is the Nordic region’s largest supplier of digital films for the Video-On-Demand market.

In 2012 the Nordisk Film Shortcut companies fully digitalised their postproduction activities. The closure of the laboratories in Denmark signalled the end of the analogue era.


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CinEMaSIn 2012 the cinema market generated its highest ticket revenue in Denmark since 1982, with an increase of over 15 % compared with the previous year. Nordisk Film Cinemas sold 6.1 million cinema tickets in Denmark and 400,000 in Norway via Drammen Kino. This corresponds to a 43 % market share in Denmark and approximately 3 % in Norway.

In March Nordisk Film Cinemas opened a new cinema in Næstved, which got off to a good start. The cinema is the most technologically advanced in Denmark. In December Nordisk Film Cinemas announced plans to establish another multiplex in the Fields shopping centre in Ørestaden, Copenhagen, with the opening slated for autumn 2014.

In 2012 Nordisk Film Cinemas introduced Nordisk Film Live, an enterprise aimed at producing live entertainment for a broad audience. In partnership with Momoland and the creative trio of Nikolaj Cederholm and the Hellemann brothers, the new venture launched the thea-tre concert Hey Jude on 28 December. The performance was a box-office hit, selling 60,000 tickets.

During the year Nordisk Film acquired Venuepoint A/S, which handles event ticket sales via Billetlugen in Denmark, Billettportalen in Norway and Biljettforum in Sweden. Venuepoint commands a strong position in Denmark and intends to enhance its standing in Sweden and Norway to the same level.

Kino.dk runs Denmark’s leading film website, handling ticket transactions that represent approximately 70 % of all ticket sales in Denmark. Like the cinema commercials company Dansk Reklame Film, the company did well.

Nordisk Film increased its ownership share of the Norwegian film portal filmweb.no to 64.2 %. Filmweb is the Norwegian counterpart of the Danish film site kino.dk.

Nordisk Film handles a total of 13 million ticket transac-tions annually in the Nordic region.

inTERaCTiVE gaMESNordisk Film Interactive is the official distributor of Sony PlayStation products in the Nordic region and Baltic countries.

Changes in market conditions put growing pressure on PlayStation’s margins and income in 2012. The total game console market dropped from 2011 to 2012, one reason being that the market is awaiting the next gen-eration of consoles.

The PlayStation 3 console continues to be consumers’ preferred game machine. Since its launch in 2006, a total of 1.6 million PS3 machines have been sold in the Nordic region. This means that a PlayStation 3 can be found in 13.4 % of Nordic households. The PlayStation 3 console has solidified its market position in the course of the year, capturing a market share of 50 % against 45 % the previous year.


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* Calculated exclusive of the costs of closing printing facilities of EUR 8 million.

Egmont MagazinesRevenue 2012: EUR 296 million (2011: EUR 296 million)operating profit 2012: EUR 33 million* (2011: EUR 33 million)Employees 2012: 1,045 (2011: 1,044)

With more than 100 titles, Egmont Magazines is among the largest publishers of weeklies and magazines in the Scandinavian market. Catering primarily for the consumer market, the publications provide a vehicle for advertisers to reach a wide range of attractive target groups.

Egmont Magazines’ product portfolio includes family magazines, women’s and men’s magazines, illustrated weeklies, a broad selection of monthly and special inter-est magazines as well as digital services and other activi-ties related to the division’s strong brands.

Financially, 2012 was a good year for Egmont Magazines, even once the costs of closing the printing facilities had been factored in. The decision to close in-house printing facilities and partner with external print-ing houses instead has lowered costs and made a larger proportion of operating costs variable.

Although 2012 was influenced by weak national econo-mies in key markets, declining advertising revenue in all three countries and a distinct drop in newsstand sales, the division managed to maintain its revenue level in its core business on a par with 2011. Revenue amounted to EUR 296 million.

A focus on effective operations enabled Egmont Magazines to successfully lower costs in key areas in 2012. The new agreements with external printing houses made the greatest impact. In addition, all three of the division’s companies have concentrated on lower-ing the day-to-day costs of producing magazines and digital services. Overall this means that the operating

profit – excluding the costs of closing printing facilities – amounted to EUR 33 million in 2012, the same as in 2011. Profit including the costs of closing printing facilities was EUR 27 million.

FaMily MagaZinESIn Scandinavia Egmont’s family magazines – Hjemmet, Hemmets Journal, Norsk Ukeblad, Hendes Verden and Familien – have a total weekly circulation of 677,000, a decrease of 5.7 %.

Despite this decline, family magazines remain a highly attractive part of the magazine portfolio. In Norway Hjemmet was the largest Norwegian weekly in 2012. In Denmark Hendes Verden celebrated its 75th jubilee and continues to command a strong position in the needle-craft magazine niche. In Sweden Hemmets Journal main-tained its ranking among the largest Swedish weeklies.

WoMEn’S MagaZinESWith its attractive advertising potential and the shift towards online media, the women’s magazine market is highly competitive. In Denmark Egmont Magazines leads the field with Alt for damerne, the most powerful advertising medium in the market for magazines and weeklies. Despite falling circulation, the magazine increased its readership in 2012. Eurowoman also fared well, continuing to hold a leading position. In the Norwegian market, Kamille and Det Nye withstood falling circulation figures to remain two of the market’s most-read titles. Elle held its ground well in 2012, with circulation figures finishing the year on a par with 2011. Alt for Damerne, launched in Norway in 2011, enjoyed robust growth in 2012.


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MEn’S MagaZinESEgmont Magazines commands a strong position in the market for men’s magazines. In Denmark Euroman recorded positive development and maintained its stand-ing as Denmark’s leading magazine for men. In Sweden King strengthened its position as the leading men’s fashion magazine. In Norway, men’s magazine circula-tion endured a challenging year, with newsstand sales particularly hard hit. Nonetheless, Vi Menn bolstered its position and is still Norway’s preferred magazine for men.

illUSTRaTEd WEEKliESIn Denmark and Norway Egmont Magazines continues to lead the market in the segment for lower-priced illustrated weeklies, publishing HER&NU and Her&Nå, respectively. The total weekly circulation is 183,000 cop-ies. The market for illustrated weeklies is under consider-able pressure and also represents the segment whose cir-culation has dropped most significantly. However, both publications are strong contenders in the competition.

SpECial inTEREST MagaZinES With more than 80 titles, Egmont Magazines commands a solid position in the Nordic market for special interest magazines and leads several country markets in the house-and-home, motor, boating, parenting, leisure, travel, health and hobby segments. In Denmark monthly magazines have fared better than the market in general, raising both their circulation and readership figures. In 2012 Egmont Magazines acquired the remainder of Oxygen A/S, a company with a strong portfolio of pub-lications targeting mothers-to-be and young families. In Norway the division acquired the country lifestyle magazine Lev Landlig, thus strengthening its position as a leader in the house-and-home segment. The circula-

tion figures for Boligdrøm, Rom 123 and Hytteliv grew in a declining market. Foreldre og Barn remains Norway’s largest magazine in the parenting segment, with an ambition to reinforce this position. In Sweden Nära is enjoying success, with sales continuing to rise in 2012. In addition, Egmont Magazines launched Made By Me in Sweden in close collaboration with Norway, where the magazine was launched in 2011.

inTERaCTiVE MEdiaEgmont Magazines continuously invests in digital media. In 2012 the focus was both on initiatives that support existing print media and on independent digital services. iPad versions of numerous magazines and weeklies are now available in all countries. In Norway, via its co-own-ership of Mediehuset Nettavisen, the division acquired Bootstrap AS, which operates the country’s largest blog portal, blogg.no, and the news site NA24. Another notable acquisition was kvinneguiden.no. The klikk.no portal recorded traffic growth. In Norway traffic via mobile devices has climbed sharply, and in the course of 2012 all brand websites were adapted for use on mobile units. Egmont Magazines has strengthened its position in the motor segment through the acquisition of zatzy.se, which, with over 100,000 weekly unique users, is one of Sweden’s leading communities for car enthusiasts.

oThER aCTiViTiES In 2011 Egmont Magazines acquired Vægt konsulent-erne A/S (formerly De Danske Vægtkonsulenter). The aim is to create Denmark’s best weight loss and health concept, both on- and offline. In Sweden the division invested in Klintberg Niléhn, which in record time has carved a position in the client publishing market. A significant growth rate has been targeted for the years ahead.


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Egmont Kids MediaRevenue 2012: EUR 393 million (2011: EUR 395 million)operating profit 2012: EUR 22 million (2011: EUR 25 million)Employees 2012: 1,245 (2011: 1,237)


Egmont Kids Media is at the global fore of children’s publishing, focusing on reading, playing and learning. The division creates and sells magazines, books, digital media, games and merchandise for children and young people, and its business units operate activities in over 30 countries. The division also exports to 65 markets worldwide.

In 2012 the division generated revenue of EUR 393 mil-lion, on a par with 2011. It realised an operating profit of EUR 22 million, a decline of EUR 3 million on the previous year triggered by smaller magazine circulations and difficult market conditions, especially in Central and Eastern Europe. The profit includes non-recurring costs related to personnel adjustments and office relocations in certain markets.

Egmont Kids Media continues to pursue its strategy of focusing on a healthy, sustainable core business and on its development from print-only publisher to multiplat-form publisher.

noRdiC REgionIn the Nordic region the division further improved the solid results achieved in 2011. To strengthen the Nordic brand, the companies in Denmark, Norway and Sweden have been renamed Egmont Kids Media Nordic. The aim is to further consolidate the Nordic partnership and give all the companies an identical profile. In Norway one of the strongest rights, Pondus, was renewed in 2012. The division successfully launched various products to celebrate the 100th birthday of author and composer Thorbjørn Egner, including sales of 150,000 physical units and over three million streaming sales of his songs. Goal Magazine continued its growth,

and in Norway Goal was effectively launched in partner-ship with TV 2. In Sweden Bamse maintained its huge popularity. In Denmark advertising sales rose by 35 % in a turbulent market.

CEnTRal and EaSTERn EURopEBleak market conditions meant that performance for the region as a whole fell short of expectations. However, all companies improved or maintained their market shares. Partnerships with key licence holders were strengthened after the announcement of programmes based on new franchise agreements such as Monster High by Mattel, Disney School Skills and Play-Doh by Hasbro. Further adjustments to the publication portfolio and production processes have been initiated to achieve economies of scale. Several cost-saving initiatives have already been launched to improve profitability. The region increased its revenue in two growth areas, fiction books and add-on book sales. The region is producing more e-books and audio books and has launched its first local apps for children.

gERMan-SpEaKing CoUnTRiESEgmont Ehapa delivered sound financial results. The core business, comprising the Mickey Mouse and Wendy magazines and the Pocket Book business area, remained solid. The company launched 17 new magazines in 2012, while digital product launches and e-commerce initiatives fuelled healthy growth in the digital entertainment business area. In 2012 Egmont Verlagsgesellschaften experienced an upturn. After establishing Balloon, a new book label for pre-schoolers created in association with Egmont Ehapa, the company now offers a highly attractive portfolio of children’s pub-lications for licensors and authors. Egmont’s romance label LYX developed favourably, ranking as a leading

14 Management’s review

publisher in its field. The business area for e-books con-tinued to record strong results, with an 800 % increase in income over the previous year.

EngliSh-SpEaKing CoUnTRiESThe performance of businesses in English-speaking countries was generally acceptable. In the UK children’s fiction and magazines recorded higher income, but the number of publications under licence fell. After extending its fiction publication programme, Egmont USA recorded a 20 % increase over the year before, and Hardie Grant Egmont, the joint venture company in Australia, returned to its growth track. At the end of 2012, Egmont got a foothold in a new continent when it took over Disney’s activities in South Africa, which include an existing portfolio of five magazine titles.

aSiaAfter the recent record-breaking years, Egmont Kids Media faced challenging market conditions in China. The absence of bestsellers such as Pleasant Goat plus a switch to online distribution made good results impera-tive for all titles. Nonetheless, Children’s Fun Publishing managed to retain its position as a market leader in children’s books and magazines. The Egmont Kids Media joint venture with The Nation Group in Thailand performed satisfactorily in 2012, primarily because

new distribution channels were established, new rights acquired and warehouse and circulation management initiatives implemented.

digiTal MEdia2012 was a year of investment as the division transi-tioned into being a multiplatform publisher. Egmont Kids Media established a new in-house digital organisation as well as a certified network of developers worldwide. More than 200 new app launches in 2012 reflected the strong digital drive throughout the division. New, key digital rights were secured from Disney, Hasbro, Mattel, Warner Brothers and King Features as well as the digital rights to Moviestar Planet, Angry Birds and an array of strong regional brands. The division is developing a wide variety of new products for publication in all major areas in 2013. Several of these products are targeted at offering the comic book experience in apps. E-commerce received extra attention, as reflected in the introduction of a new e-commerce platform in early 2013.

In 2012 Egmont Kids Media acquired a number of early learning apps called Fusentasterne, launched in 15 coun-tries. The division also bought Krea Medie and thus one of Scandinavia’s strongest edutainment-brands, Pixeline/Josefine. The product will be further developed for a variety of media platforms.

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Egmont Books


Revenue 2012: EUR 139 million (2011: EUR 146 million)operating profit 2012: EUR 7 million (2011: EUR 0 million)Employees 2012: 470 (2011: 503)

Egmont Books develops and produces literary fiction, non-fiction, children’s books, audio books, e-books and educational media that entertain readers and give them insight and knowledge.

Egmont Books comprises Norway’s leading publishing house, Cappelen Damm, and the Danish publisher Lindhardt og Ringhof. Egmont’s non-Scandinavian book publishing activities are part of Egmont Kids Media.

CappElEn daMMCappelen Damm is Norway’s largest book publisher with activities spanning general literature, education, book clubs, e-commerce, the bookstore chain Tanum, which has 14 book dealers in the Oslo area, and the distribu-tion business Sentraldistribusjon. The publishing house is co-owned equally by Egmont and Bonnier.

Efficiency-enhancing measures and effective operations made 2012 a good year for Cappelen Damm despite zero growth in the market as a whole.

Cappelen Damm further cemented its market position in 2012. The publishing house is a clear leader in the market for general literature – children’s books, literary fiction, non-fiction and documentaries. Cappelen Damm is also a frontrunner in the market for books for upper secondary schools and commands a strong second posi-tion in books for primary and lower secondary schools.

In 2012 Cappelen Damm acquired the Høyskoleforlaget AS and Akribe AS publishing companies, significantly

reinforcing its position as a publisher of books and electronic products for universities and the professional market. Akribe operates the electronic service Practical Procedures in Nursing (PPN), used by institutions of higher education and hospitals. In addition to being used by over 80,000 nurses in Norway, the service has been introduced by the local authorities of Aarhus and Lolland in Denmark, where its use is expected to become more widespread in 2013.

On balance Cappelen Damm’s digital activities devel-oped positively in 2012, with revenue increasing by 52 % over 2011.

lindhaRdT og RinghoFThe division’s Danish activities are concentrated in Denmark’s second-largest publisher, Lindhardt og Ringhof, which also includes the publishing companies Alinea, Akademisk Forlag and Carlsen. Continuing the extensive organisational adjustments implemented in 2011, the publishing company consoli-dated its organisation in 2012, redirecting its strategic focus towards editorial concerns.

The company is now operating at a profit after a lengthy period in the red.

For the first time in many years, the literary fiction department introduced a number of debut authors, and high-profile authors moved from other publishing houses to Lindhardt og Ringhof.


The non-fiction department maintained its market lead in cookbooks, lifestyle and culture, while several promi-nent publications helped significantly expand its position in the current affairs and history genres.

In 2012 the children’s publisher Carlsen celebrated its 70th anniversary, an event that stimulated extra interest in the company. The company published approximately 600 new titles, including the sixth volume of Knausgårds autobiographi-cally inspired fiction work, My Struggle, Ulrik Wilbek’s Gå Forrest, Michael Katz Krefeld’s Sort sne falder, Claus Meyer’s Bagebog and Anthony Beevor’s The Second World War. The publishing company’s digital activities are booming, audio and e-books in particular. Towards the end of the

year the publisher acquired the audio book activities of Denmark’s second-largest audio book publisher, Audioteket, with a view to expanding this submarket. In 2012 the educational publishers produced a wide range of new digital learning media. Sales took off in earnest towards the end of the year when the Ministry of Children and Education released the first portion of the extensive support funds earmarked for schools to purchase digital learning materials. During the year the company made substantial investments in the new development and consolidation of digital products. Alinea thus remained Denmark’s largest supplier of both analogue and digital learning media in 2012.

17

The Charitable Activities


Since 1920 the Egmont Foundation has donated approximately EUR 349 million in present value to sup-port social initiatives. In 2012 the Foundation’s financial support amounted to EUR 8 million, almost EUR 0.5 million of which was donated to film-related activities via the Nordisk Film Foundation.

The Egmont Foundation is a commercial foundation that re-invests its profit in the media business and charitable activities. The Foundation’s charitable vision is to help give children and young people a good life by supporting their active and committed participation in society.

The Foundation supports projects that help children and young people handle life crises or that foster schoolchildren’s desire to learn. The Foundation also provides financial support to vulnerable children and families. Lastly, the Nordisk Film Foundation, also part of the Egmont Foundation, grants support to film-related projects every year.

long-TERM hElp FoR VUlnERaBlE FaMiliES and ChildREnMaintaining focus on the most socially vulnerable groups in our society is a consistently high priority for the Egmont Foundation, particularly in times of crisis. The Foundation has provided financial support to families in need for almost a century. However, impoverishment means more than lacking money, because children living in families with few financial and social resources can suffer serious consequences. This is why the support framework was changed to offer families not only money but also long-term help such as advice, therapy or social activities. This support empowers families and helps them to tackle some of the more fundamental problems in their lives.

ChildREn in liFE CRiSESIn 2012 the Egmont Foundation continued to focus on life crises that can threaten the development of children and young people. It supported projects for psychologically vulnerable children, children whose lives are affected by illness or death in the family, and children placed outside the home.

In 2012 the Egmont Foundation spotlighted one par-ticular life crisis: divorce. Almost a third of all children in Denmark experience the divorce of their parents. However, society often overlooks the critical impact of divorce on a child’s life. If a child fails to get help coping with this life crisis, its wellbeing may be threatened. In 2012 the Egmont Foundation earmarked EUR 5.4 million for projects that support children, better equip parents and activate the children’s networks.

dESiRE To lEaRn The financial crisis and increasing unemployment leave no doubt about the importance of education. The Egmont Foundation’s schooling initiative focuses on chil-dren’s desire to learn, because children need eagerness, motivation and pleasure to be full involved in school and thus truly benefit from the activities it offers.

The Egmont Foundation’s support in the education area primarily targets vulnerable children and young people, including children placed outside the home. These chil-dren have been neglected in some way and must cope with numerous problems. Many are highly intelligent but do significantly worse at school than other children. For this reason, the Egmont Foundation developed a major, new signature project in 2012. Through summer schools, support workers and the development of new knowledge, the Learning for Life project aims to support


and strengthen children placed outside the home and ultimately enable them to complete a youth education programme.

noRdiSK FilM FoUndaTion As Denmark’s largest private media foundation, the Nordisk Film Foundation has granted support to the media industry since 1992. In 2012 the Foundation donated EUR 466,000. Approximately 73 % of the Foundation’s support funds go to developing creative talent and skills, about 16 % to supporting industry development and internationalisation, and about 11 % to upholding film culture throughout Danish society.

The following are examples of notable donations: • In 2012 the Nordisk Film Foundation awarded a total

of EUR 106,000 to help about 32 young gifted film-makers study at international media schools.

• Collective education programmes received donations totalling EUR 213,000 EUR. Examples include the Super16 and 18Frames, film schools and graduation films and the European cross-media programme from the National Film School of Denmark.

• In 2012 the Nordisk Film Pris talent award went to film director Omar Shargawi, while Ballings Rejselegat travel grant was awarded to the producer duo Tomas Radoor and René Ezra.

• A number of Danish film festivals and conferences with an international slant received EUR 76,000 during the year. Finally, the Foundation donated EUR 44,000 to the Danish Film Institute (DFI) for a project to digitalise old film reels.

19Management’s review

pRoFiT FoR ThE EgMonT FoUndaTion The profit of the Egmont Foundation, the parent entity of the Egmont Group, excluding dividends from equity investments in subsidiaries, was EUR 2.6 million. The Foundation’s Commercial Activities primarily comprise royalty income from the Foundation’s publishing rights and management of the Foundation’s assets.

CoRpoRaTE goVERnanCE Based on the most recent recommendations from the Committee on Corporate Governance, the Board of Trustees and Board of Management have updated the description of the framework for Corporate Governance at Egmont. This framework is described in full on Egmont’s website (www.egmont.com).

Egmont meets the above-mentioned Corporate Governance recommendations, with the exception of recommendations that are irrelevant because the parent entity, the Egmont Foundation, is a commercial founda-tion.

CoRpoRaTE SoCial RESponSiBiliTyEgmont is committed to meeting current international standards for human rights, the environment, working conditions, business ethics and consumer matters.

In 2012 Egmont sustained its focus on ensuring that companies and suppliers comply with Egmont’s Code of Conduct. Formulated in 2005, the Code defines Egmont’s standards concerning human rights, the environment and working conditions. Egmont’s Social Compliance Programme focuses on enforcing these standards, which are verified in practice through inspec-tion visits to suppliers, primarily in Asia. At the end of an inspection visit, the inspector prepares a report and discusses it with the supplier. A plan for rectifying any

Management’s reviewconditions not in compliance with the Code of Conduct is drawn up and then signed by the supplier. On subse-quent visits, the inspectors check that the deficiencies have been rectified.

Egmont’s business ethics rest on the principle that corruption and bribery have no place in a company’s operations. In 2012 Egmont sealed its commitment in an anti-corruption policy that includes, among other things, a supportive whistle-blower policy. This policy will be implemented in Egmont companies in 2013.

Egmont UK has initiated the establishment of an industry club, the Publishing Industry Product Safety Forum – PIPS, to promote work on the use of chemicals in the printing industry. The forum, which currently numbers 10 publishers, intends to work with printing suppliers to prepare a list of the component materials and ingredients of chemical substances (eg, ink, varnishes and adhesives) used in connection with printing. The aim of the forum is to raise awareness of the issues related to safe chemical use. To this end, high standards for the use of chemicals are being set and regular reports sent to the relevant authorities. Launched in 2010 by Egmont UK, the forum and the database were further developed in 2011 and 2012 through the introduction of printing houses that are either ready to supply data by this means or in the process of obtaining data. The work of developing the forum and database will continue in 2013.

Egmont UK launched a similar initiative for paper in 2005, the Publishers Database for Responsible Environmental Paper Sourcing – PREPS. It has since become an industry standard used in many countries. Several Egmont companies are also involved. Read more at www.egmont.com.


At the end of 2012 Egmont joined the UN business network, Global Compact, the world’s largest social responsibility initiative, which sets up 10 principles covering human rights, workers’ rights, the environment and anti-corruption. In preparing for this commitment, Egmont grouped the 10 principles of the UN Global Compact into three categories – People, Planet and Profit – and reviewed policies and processes relating to each category. Initiatives were subsequently launched in areas where improvement was in order.

In 2013 Egmont will focus more sharply on integrating CSR in its commercial and organisational processes. More information on the subject will be available in the course of 2013 at www.egmont.com.

SpECial RiSKS Part of the Group’s business is based on stable, long-standing relations with some of the world’s leading rights holders. Egmont’s strength and geographic breadth underpin its constant efforts to sustain and expand these partnerships.

Furthermore, by virtue of its activities the Group is exposed to various financial risks. Please refer to note 25, Financial risks and financial instruments.

oUTlooK FoR 2013Egmont will carry on developing media platforms, continuously adapting its media products to chang-ing consumer needs, profitability programmes and efficiency-enhancing measures. The greatest uncertainty is associated with advertising revenue, which is sensi-tive to economic fluctuations and accounts for a larger share of revenue since the remaining shares in TV 2 were acquired.

2121Statement by the Board of Trustees and Management Board

The Board of Trustees and Management Board have today discussed and approved the annual report of the Egmont Foundation for the financial year 1 January - 31 December 2012.

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional Danish disclosure requirements according to the Danish Financial Statements Act. The financial statements of the Egmont Foundation have been prepared in accordance with the Danish Financial Statements Act and the financial report-ing requirements of the Foundation’s Charter.

In our opinion, the consolidated financial statements and

BoaRd oF TRUSTEES:

Mikael olufsen Steen Riisgaard Chairman Vice Chairman

Ulrik Bülow peder høgild lars-Johan Jarnheimer

anna von lowzow Jeppe Skadhauge Torben Ballegaard Sørensen

Marianne oehlenschlæger

Statement by the Board of Trustees and Management Board

ManagEMEnT BoaRd:

Steffen Kragh hans J. Carstensen President and CEO

the Foundation’s financial statements give a true and fair view of the Group’s and the Foundation’s assets, liabili-ties, and financial position at 31 December 2012, and of the results of the Group’s and the Foundation’s opera-tions and the consolidated cash flows for the financial year 1 January - 31 December 2012.

Furthermore, in our opinion, the Management’s review gives a fair review of the development in the Group’s and the Foundation’s activities and financial matters, the net profit of the year and the Group’s and the Foundation’s financial position.

Copenhagen, 19 March 2013

22

Independent Auditor’s ReportTo ThE BoaRd oF TRUSTEES oF ThE EgMonT FoUndaTion

aUdiToR’S REpoRT on ThE ConSolidaTEd FinanCial STaTEMEnTS and ThE FoUndaTion’S FinanCial STaTEMEnTS

We have audited the consolidated financial statements and the Foundation’s financial statements for the finan-cial year 1 January – 31 December 2012. The consoli-dated financial statements and the Foundation’s financial statements comprise the income statement, balance sheet and notes, including accounting policies for both the Group and the Foundation, as well as the statement of comprehensive income, statement of changes in equity and cash flow statement for the Group.

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional dis-closure requirements according to the Danish Financial Statements Act. The Foundation’s financial statements are prepared in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter.

ManageMent’s responsibility for the consolidate d financial stateMents and the foundation’s financial stateMentsThe Management is responsible for the preparation of consolidated financial statements and financial state-ments for the Foundation that give a true and fair view

in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional dis-closure requirements according to the Danish Financial Statements Act (the consolidated financial statements), as well as the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter (the Foundation’s financial statements).

Moreover, the Management is responsible for the internal control considered necessary by them to prepare consolidated financial statements and financial state-ments for the Foundation that are free from material misstatement, whether due to fraud or error. auditor’s responsibility Our responsibility is to express an opinion on the consolidated financial statements and the Foundation’s financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish Audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consoli-dated financial statements and the Foundation’s finan-cial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and the Foundation’s financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated

independent auditor’s Report

23

financial statements and the Foundation’s financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Foundation’s preparation of consolidated financial statements and the Foundation’s financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of express-ing an opinion on the effectiveness of the Foundation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as the overall presentation of the consolidated financial statements and the Foundation’s financial statements

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Our audit has not resulted in any qualification.

opinion In our opinion, the consolidated financial statements and the Foundation’s financial statements give a true and fair view of the Group’s and the Foundation’s financial position at 31 December 20112, and of the results of the Group’s and the Foundation’s operations and the consolidated cash flows for the financial year 1 January - 31 December 2012 in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional disclosure requirements according to the

Danish Financial Statements Act in respect of the con-solidated financial statements, and in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter in respect of the Foundation’s financial statements.

STaTEMEnT on ThE ManagEMEnT’S REViEWPursuant to the Danish Financial Statements Act, we have read the Management’s review. We have not performed any other procedures in addition to the audit of the consolidated financial statements and the Foundation’s financial statements. On this basis, it is our opinion that the information provided in the Management’s review is consistent with the consoli-dated financial statements and the Foundation’s finan-cial statements.

Copenhagen, 19 March 2013

KPMGStatsautoriseret Revisionspartnerselskab

Jesper Ridder olsenState-Authorised Public Accountant

independent auditor’s Report

24

Income Statement of the Group (EURk)

income Statement of the group

Note 2012 2011

2 Revenue 1,616,880 1,386,320

Change in inventories of finished goods and work in progress (309) (702)

3 Other operating income 12,645 10,851

Raw materials and consumables (43,786) (60,444)

Other external expenses (1,009,092) (859,641)

4 Personnel costs (385,182) (323,151)

5 Depreciation, amortisation and impairment losses; property plant and equipment and intangible assets (80,759) (62,843)

Other operating expenses (4,270) (2,849)

operating profit before special items and net financials 106,127 87,541

6 Special items 67,267 0

Profit/(loss) after tax from investments in associates 2,081 8,263

7 Financial income 11,733 13,226

8 Financial expenses (18,463) (15,308)

profit before tax 168,745 93,722

9 Tax on profit for the year (17,561) (20,082)

net profit for the year 151,184 73,640

Attributable to:

The Foundation 148,386 71,980

Non-controlling interests 2,798 1,660

Total 151,184 73,640

25

Statement of Comprehensive Income of the Group(EURk)

Statement of Comprehensive income of the group

Note 2012 2011


Foreign exchange adjustments on translation to presentation currency (2,842) 1,207

Foreign exchange adjustments on translation of foreign entities 15,396 (2,826)

Value adjustment of hedging instruments:

Value adjustments for the year (10,953) (14,083)

Value adjustments transferred to financial expenses 5,121 3,877

19 Actuarial gains/(losses) on defined benefit pension plans 38,852 (14,714)

9 Tax on other comprehensive income (10,500) 4,360

other comprehensive income after tax 35,074 (22,179)

Total comprehensive income 186,258 51,461

Attributable to:

The Foundation 183,231 49,647


Total 186,258 51,461

26

Balance Sheet of the Group at 31 december(EURk)

Balance Sheet of the group at 31 december

Note Assets 2012 2011

Film rights, etc. 54,119 38,047

In-house produced film rights 5,686 8,232

Goodwill 264,546 90,426

Trademarks 219,846 44,580

Intangible assets in progress and prepayments for film rights 21,822 24,320

10 intangible assets 566,019 205,605

Land and buildings 172,978 173,797

Plant and machinery 36,555 16,482

Tools and equipment 22,684 17,402

Leasehold improvements 5,877 3,812

Property, plant and equipment under construction 2,876 6,264

11 property, plant and equipment 240,970 217,757

12 investment properties 30,829 30,938

13 Investments in associates 31,397 12,238

Other investments 4,016 3,841

Receivables from associates 22,349 0

20 Deferred tax 6,889 22,156

other non-current assets 64,651 38,235

Total non-current assets 902,469 492,535

14 inventories 163,772 128,855

25 Trade receivables 254,726 206,773

Receivables from associates 3,698 3,648

Other receivables 84,565 60,811

15 Prepayments 105,576 64,432

Receivables 448,565 335,664

16 Securities 48,084 183,439

17 Cash and cash equivalents 41,528 154,259

Total current assets 701,949 802,217

ToTal aSSETS 1,604,418 1,294,752

27Balance Sheet of the group at 31 december

Balance Sheet of the group at 31 december (continued)

Note Equity and liabilities 2012 2011

Capital fund 29,489 29,593

Other reserves (11,659) (20,348)

Transferred comprehensive income 655,370 487,793

Foundation’s share of equity 673,200 497,038


18 Equity 676,405 505,886

19 Pensions 47,307 48,642

20 Deferred tax 52,667 7,945

21 Other provisions 4,604 11,056

25 Mortgage debt 112,216 112,612

25 Other credit institutions 74,025 38,572

Other financial liabilities 26,487 7,891

Deferred income 1,622 5,002

non-current liabilities 318,928 231,720

25 Other credit institutions 11,716 71,627

Prepayments from customers 56,510 56,611

Trade payables 241,979 201,749

Payables to associates 81 0

Corporate income tax 6,058 13,637

Other payables 201,662 132,292

21 Other provisions 66,599 58,149

Deferred income 24,480 23,081

Current liabilities 609,085 557,146

Total liabilities 928,013 788,866

ToTal EqUiTy and liaBiliTiES 1,604,418 1,294,752

28

Note 2012 2011

Operating profit before special items and net financials 106,127 87,541

Adjustment for non-cash operating items, etc.:

5 Depreciation, amortisation and impairment losses 80,759 62,843

Other non-cash operating items, net (14,113) (1,376)

Provisions and deferred income 22,454 (11,152)

Cash generated from operations before change in working capital 195,227 137,856

Change in inventories 26,524 (925)

Change in receivables (60,184) 11,049

Change in trade payables and other payables 1,852 (40,649)

Change in working capital (31,808) (30,525)

Cash generated from operations 163,419 107,331

Interest received 7,031 10,921

Interest paid (17,680) (10,527)

Corporate income tax paid (25,419) (20,331)

Cash flows from operating activities 127,351 87,394

Acquisition of intangible assets (45,131) (43,550)

Acquisition of property, plant and equipment (36,982) (18,798)

Disposal of property, plant and equipment 18,195 2,618

Acquisition of financial assets (229) (1,812)

Disposal of financial assets 269 10,226

Acquisition of securities 0 (73,430)

Disposal of securities 137,746 43,150

29 Acquisition of subsidiaries and jointly controlled entities (288,305) (296)

Disposal of subsidiaries and jointly controlled entities 4,324 805

Cash flows from investing activities (210,113) (81,087)

Borrowing from credit institutions, etc. 0 9,170

Repayments to credit institutions, etc. (24,774) (5,912)

Dividends to non-controlling shareholders (3,185) (447)

Donations (8,454) (7,403)

Cash flows from financing activities (36,413) (4,592)

net cash flows from operating, investing and financing activities (119,175) 1,715

Cash and cash equivalents at 1 January 145,811 140,429

Foreign exchange adjustment of cash and cash equivalents 8,808 3,667

Cash and cash equivalents at 31 december 35,444 145,811

The cash flow statement cannot be derived directly from the balance sheet and income statement.

Cash Flow Statement of the group

Cash Flow Statement of the Group (EURk)

29

Statement of Changes in Equity of the Group(EURk)

Statement of Changes in Equity of the group

Capital fund

Reserve for hedging trans actions

Reserve for foreign

exchange adjustments

Transferred compre-hensive income

non-controlling

interestsTotal

equity

Equity at 1 January 2012 29,593 (19,485) (863) 487,793 8,848 505,886

net profit for the year 0 0 0 148,386 2,798 151,184

Foreign exchange adjustments on translation to presentation currency (104) (997) 3 (1,713) (31) (2,842)

Foreign exchange adjustments on translation of foreign entities 0 0 15,136 0 260 15,396

Value adjustments of hedging instruments:

Value adjustments for the year 0 (10,953) 0 0 0 (10,953)

Value adjustments transferred to financial expenses 0 5,121 0 0 0 5,121

Actuarial gains/(losses) on defined benefit pension plans 0 0 0 38,852 0 38,852

Tax on other comprehensive income 0 379 0 (10,879) 0 (10,500)

other comprehensive income (104) (6,450) 15,139 26,260 229 35,074

Total comprehensive income in 2012 (104) (6,450) 15,139 174,646 3,027 186,258

Used for charitable purposes and associated costs 0 0 0 (8,454) 0 (8,454)

Acquisition/disposal, non-controlling interests 0 0 0 0 (5,485) (5,485)

Dividends, non-controlling interests 0 0 0 0 (3,185) (3,185)

Other capital items 0 0 0 1,385 0 1,385

Equity at 31 december 2012 29,489 (25,935) 14,276 655,370 3,205 676,405

30

Equity at 1 January 2011 29,513 (9,446) 2,089 431,056 7,919 461,131

net profit for the year 0 0 0 71,980 1,660 73,640

Foreign exchange adjustments on translation to presentation currency 80 (73) 6 1,172 22 1,207

Foreign exchange adjustments on translation of foreign entities 0 0 (2,958) 0 132 (2,826)

Value adjustments of hedging instruments:

Value adjustments for the year 0 (14,083) 0 0 0 (14,083)

Value adjustments transferred to financial expenses 0 3,877 0 0 0 3,877

Actuarial gains/(losses) on defined benefit pension plans 0 0 0 (14,714) 0 (14,714)

Tax on other comprehensive income 0 240 0 4,120 0 4,360

other comprehensive income 80 (10,039) (2,952) (9,422) 154 (22,179)

Total comprehensive income in 2011 80 (10,039) (2,952) 62,558 1,814 51,461

Used for charitable purposes and associated costs 0 0 0 (7,403) 0 (7,403)

Acquisition/disposal, non-controlling interests 0 0 0 0 (438) (438)

Dividends, non-controlling interests 0 0 0 0 (447) (447)

Other capital items 0 0 0 1,582 0 1,582

Equity at 31 december 2011 29,593 (19,485) (863) 487,793 8,848 505,886

Statement of Changes in Equity of the group

Statement of Changes in Equity of the group (continued)

Capital fund

Reserve for hedging trans actions

Reserve for foreign

exchange adjustments

Transferred compre-hensive income

non-controlling

interestsTotal

equity

31

NotE

1 Accounting policies 2 Revenue 3 Other operating income 4 Personnel costs 5 Depreciation, amortisation and impairment losses 6 Special items 7 Financial income 8 Financial expenses 9 Taxes 10 Intangible assets 11 Property, plant and equipment 12 Investment properties 13 Financial assets 14 Inventories 15 Prepayments 16 Securities 17 Cash and cash equivalents 18 Equity 19 Pensions 20 Deferred tax 21 Other provisions 22 Fees paid to elected auditor 23 Operating leases 24 Contingent liabilities and collateral 25 Financial risks and financial instruments 26 Related parties 27 Standards and interpretations not yet adopted 28 Subsequent events 29 Acquisition of businesses 30 Group entities

list of notes to the Consolidated Financial Statements

List of Notes to the Consolidated Financial Statements

32

The Egmont Foundation is a commercial foundation

domiciled in Denmark. The annual report of the Egmont

Foundation for 2012 comprises both the consolidated

financial statements of the Egmont Foundation and its

subsidiaries (the Group) and the separate financial state-

ments of the Egmont Foundation.

The consolidated financial statements have been

prepared in accordance with the International Financial

Reporting Standards (IFRS), as adopted by the EU, and

additional Danish disclosure requirements for annual

reports.

The Egmont Foundation’s separate financial statements

have been prepared in accordance with the Danish

Financial Statements Act.

BaSiS oF pREpaRaTion

The Egmont Foundation’s functional currency is Danish

kroner (DKK). For communication and reporting reasons,

the consolidated financial statements are presented in

euro (EUR), rounded to the nearest thousand (EURk).

The consolidated financial statements have been pre-

pared on the historical cost basis except for the following

assets and liabilities, which are measured at fair value:

derivative financial instruments, securities and invest-

ment properties.

The accounting policies set out below have been applied

consistently to the financial year and to the comparative

figures.

Use of estimates and judgements

Judgements, estimates and assumptions have to be

made about future events when determining the

carrying amount of certain assets and liabilities. The

estimates and assumptions made are based on historical

experience and other factors that the Group deems

appropriate in the circumstances, but which are uncer-

tain and unpredictable by nature. Therefore, the actual

results may deviate from such estimates. Consequently,

previous estimates may have to be changed as a result

notes to the Consolidated Financial Statements (EURk)

1 accounting policies

of changes in the circumstances forming the basis of

such estimates, or because of subsequent events or the

emergence of new information.

Information about the most significant accounting

estimates is included in the following notes: note 10

Intangible assets, note 14 Inventories, note 19 Pensions,

note 20 Deferred tax, note 21 Other provisions and note

29 Acquisition of businesses.

Consolidated financial statements

The consolidated financial statements comprise the

Egmont Foundation and subsidiaries in which the

Egmont Foundation has control of financial and operat-

ing policies in order to obtain returns or other benefits

from its activities. Control is obtained when the Group

holds more than 50% of the voting rights, whether

directly or indirectly, or otherwise has a controlling inter-

est in the relevant entity.

Entities in which the Group has significant influence,

but not a controlling interest, are considered associates.

Significant influence is typically obtained when the

Group, directly or indirectly, owns or holds more than

20% of the voting rights, but less than 50%.

When assessing whether the Egmont Foundation exer-

cises control or significant influence, the potential voting

rights that are exercisable at the end of the reporting

period are taken into account.

In the consolidated financial statements jointly

controlled entities are included according to the pro-

rata method. The pro-rata method means that the

proportionate share of the entities’ items in the financial

statements is included in the corresponding items in the

consolidated financial statements.

The consolidated financial statements have been

prepared by consolidating the Egmont Foundation’s and

the individual subsidiaries’ financial statements, pre-

pared in accordance with the Group accounting policies.

On consolidation, intra-group income and expenses,

shareholdings, intra-group balances and dividends,

33notes to the Consolidated Financial Statements (EURk)

1 accounting policies (continued)

and realised and unrealised gains and losses on transac-

tions between the consolidated entities are eliminated.

Unrealised gains on transactions with associates are

eliminated in proportion to the Group’s ownership share

of the associate. Unrealised losses are eliminated in the

same way as unrealised gains to the extent that impair-

ment has not taken place. Transactions with pro-rata

consolidated entities are eliminated proportionally.

In the consolidated financial statements, the items of

subsidiaries are recognised in full. The non-controlling

interests’ shares of the profit for the year, comprehensive

income and of the equity of subsidiaries not wholly

owned are included in the Group’s net profit for the year,

comprehensive income and equity, respectively, but are

disclosed separately.

Business combinations

Businesses acquired or formed during the year are

recognized in the consolidated financial statements

from the date of acquisition or formation. Businesses

disposed of or wound up are recognised in the consoli-

dated financial statements until the date of disposal or

winding-up. The comparative figures are not restated for

newly acquired businesses. Discontinued operations are

disclosed separately; see below.

The acquisition method is used for acquisitions of new

businesses over which the Egmont Foundation obtains

control. The acquired businesses’ identifiable assets,

liabilities and contingent liabilities are measured at fair

value at the acquisition date. Identifiable intangible

assets are recognised if they are separable or arise from

a contractual right. Deferred tax related to the revalua-

tions made is recognised.

The acquisition date is the date when the Egmont

Foundation effectively obtains control of the acquired

business.

When the business combination is effected in stages,

where either control, joint control or significant influ-

ence is obtained, the existing equity interest is remeas-

ured at fair value and the difference between the fair

value and carrying amount is recognised in the income

statement. The additional equity investments acquired

are recognised at fair value in the balance sheet.

Any excess (goodwill) of the consideration transferred,

the value of non-controlling interests in the acquired

entity and the fair value of any existing equity interest

over the fair value of the identifiable assets, liabilities and

contingent liabilities acquired is recognised as goodwill

under intangible assets. Goodwill is not amortised,

but is tested for impairment at least annually. The first

impairment test is performed before the end of the year

of acquisition. Upon acquisition, goodwill is allocated

to the cash-generating units, which subsequently form

the basis for the impairment test. Goodwill and fair

value adjustments in connection with the acquisition of

a foreign entity with another functional currency than

the presentation currency of the Egmont Foundation are

treated as assets and liabilities belonging to the foreign

entity and upon initial recognition translated into the

foreign entity’s functional currency at the exchange rate

at the transaction date. Negative differences (negative

goodwill) are recognised in profit for the year at the

acquisition date.

The consideration transferred for an acquired business

consists of the fair value of the agreed consideration in

the form of assets transferred, liabilities assumed and

equity instruments issued. If part of the consideration is

contingent on future events or compliance with agreed

conditions, this part of the consideration is recognised at

fair value at the date of acquisition. Costs attributable to

business combinations are expensed as incurred.

If uncertainties regarding the identification or meas-

urement of acquired assets, liabilities or contingent

liabilities or determination of the consideration exist at

the acquisition date, initial recognition will take place

on the basis of provisional values. If it subsequently

becomes apparent that the identification or measure-

ment of the transferred consideration, acquired assets,

liabilities or contingent liabilities was incorrect on initial

recognition, the determination is adjusted retrospec-

tively, including goodwill, until 12 months after the

acquisition, and the comparative figures are restated.

34 notes to the Consolidated Financial Statements (EURk)


Subsequently, goodwill is not adjusted. Changes to

estimates of contingent considerations are recognised

in the income statement.

The acquisition of further non-controlling interests after

obtaining control is considered an owner’s transaction,

and the difference between acquisition cost and the

share of such non-controlling interests acquired is recog-

nised directly in equity.

Gains or losses on the disposal or winding-up of sub-

sidiaries, jointly controlled entities and associates are

stated as the difference between the selling price or the

disposal consideration and the carrying amount of net

assets, including goodwill, at the date of disposal, less

the cost of disposal. If the disposal of either control, joint

control or significant influence takes place in stages,

the retained equity investment is measured at fair value,

and the difference between the fair value and carrying

amount is recognised in the income statement.

non-controlling interests

On initial recognition, non-controlling interests are

measured at the fair value of the ownership share or at

the proportionate share of the fair value of the acquired

business’ identifiable assets, liabilities and contingent

liabilities. In the first scenario, goodwill in relation to

the non-controlling interests’ ownership share of the

acquired business is thus recognised, while, in the latter

scenario, goodwill in relation to the non-controlling

interests is not recognised. The measurement of non-

controlling interests is chosen transaction by transaction

and stated in the notes in connection with the descrip-

tion of acquired businesses.

Foreign currency translation

A functional currency is determined for each of the

reporting entities in the Group. The functional currency

is the currency used in the primary economic environ-

ment in which the individual reporting entity operates.

Transactions denominated in currencies other than the

functional currency are considered foreign currency

transactions.

On initial recognition, foreign currency transactions are

translated to the functional currency at the exchange

rates at the transaction date. Foreign exchange differ-

ences arising between the exchange rates at the transac-

tion date and at the date of payment are recognised in

the income statement as financial income or financial

expenses.

Receivables, payables and other monetary items

denominated in foreign currencies are translated to the

functional currency at the exchange rates at the end

of the reporting period. The difference between the

exchange rates at the end of the reporting period and

at the date at which the receivable or payable arose

or was recognised in the latest financial statements is

recognised in the income statement as financial income

or financial expenses.

In the consolidated financial statements, the income

statements of entities with another functional currency

than the presentation currency (EUR) are translated

at the exchange rates at the transaction date, and the

balance sheet items are translated at the exchange

rates at the end of the reporting period. An average

exchange rate for each month is used as the transaction

date exchange rate to the extent that this does not

significantly distort the presentation of the underlying

transactions. Foreign exchange differences arising on

translation of the opening balance of equity of such

foreign entities at the exchange rates at the end of the

reporting period and on translation of the income state-

ments from the exchange rates at the transaction date

to the exchange rates at the end of the reporting period

are recognised directly in other comprehensive income

and presented in equity under a separate translation

reserve. The exchange rate adjustment is allocated

between the equities of the Foundation and the non-

controlling interests.

Foreign exchange adjustments of intra-group balances

which are considered part of the total net investment in

foreign entities with another functional currency than

the presentation currency (EUR) are recognised in other



comprehensive income and presented in equity under a

separate translation reserve.

On recognition in the consolidated financial statements

of associates with another functional currency than the

presentation currency (EUR), the share of profit/loss for

the year is translated at average exchange rates and

the share of equity, including goodwill, is translated at

the exchange rates at the end of the reporting period.

Foreign exchange differences arising on the transla-

tion of the share of the opening balance of equity of

foreign associates at the exchange rates at the end of

the reporting period, and on translation of the share

of profit/loss for the year from average exchange rates

to the exchange rates at the end of the reporting

period, are recognised in other comprehensive income

and presented in equity under a separate translation

reserve.

On disposal of wholly-owned foreign entities with

another functional currency than the presentation cur-

rency (EUR), the exchange rate adjustments that have

been recognised in other comprehensive income and are

attributable to the entity are reclassified from other com-

prehensive income to the income statement together

with any gains or losses from the disposal.

On disposal of partially owned foreign subsidiaries with

another functional currency than the presentation cur-

rency (EUR), the amount of the translation reserve attrib-

utable to non-controlling interests is not transferred to

the income statement.

On partial disposal of foreign subsidiaries with another

functional currency than the presentation currency (EUR)

without a loss of control, a proportionate share of the

translation reserve is transferred from the Group to the

non-controlling interests’ share of equity.

On partial disposal of associates and jointly controlled

entities, the proportionate share of the accumulated

translation reserve recognised in other comprehensive

income is transferred to the income statement for the

year together with any gains or losses from the disposal.

Any repayment of intra-group balances which constitute

part of the net investment in the foreign entity is not

considered a partial disposal of that subsidiary.

derivative financial instruments

Derivative financial instruments are recognised at the

date a derivative contract is entered into and measured

in the balance sheet at fair value. Positive and nega-

tive fair values of derivative financial instruments are

included in other receivables and payables, respectively,

and a set-off of positive and negative values is only

made when the entity has the right and the intention

to settle several financial instruments net. Fair values of

derivative financial instruments are computed on the

basis of current market data and generally accepted

valuation methods.

Changes in the fair value of derivative financial instru-

ments designated as and qualifying for recognition as a

hedge of the fair value of a recognised asset or liability

are recognised in the income statement together with

changes in the value of the hedged asset or liability as

far as the hedged portion is concerned. Hedging of

future cash flows according to agreement (firm commit-

ment), except for foreign currency hedges, is treated as a

fair value hedge. The portion of the value adjustment of

a derivative financial instrument that is not included in a

hedge is recognised under financial items.

Changes in the portion of the fair value of derivative

financial instruments designated as and qualifying as a

cash flow hedge that is an effective hedge of changes in



future cash flows are recognised in other comprehensive

income in equity under a separate hedging reserve until

the hedged cash flows affect the income statement. At

that time, any gains or losses resulting from such hedged

transactions are transferred to other comprehensive

income and recognised under the same item as the

hedged item.

If the hedging instrument no longer qualifies for hedge

accounting, the hedge will cease to be effective. The

accumulated change in value recognised in other

comprehensive income is transferred to the income

statement when the hedged cash flows affect the

income statement. If the hedged cash flows are no

longer expected to be realised, the accumulated change

in value will be transferred to the income statement

immediately. The portion of a derivative financial

instrument not included in a hedge is recognised under

financial items.

For derivative financial instruments that do not qualify

for treatment as hedging instruments, changes in fair

value are recognised on an ongoing basis in the income

statement under financial items.

inCoME STaTEMEnT

Revenue

Revenue from the sale of goods for resale and finished

goods is recognised in the income statement when all

the following conditions have been satisfied:

• the Group has transferred to the buyer the signifi-

cant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial

involvement to the degree usually associated with

ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated

with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the

transaction can be measured reliably.

Magazine subscriptions are accrued and recognised over

the period in which the items are dispatched (issued).

If, based on past experience or otherwise, the Group can

make a reliable estimate of the amount of goods that

will be returned, a provision for the goods estimated to

be returned will be recognised. When there is uncer-

tainty about the possibility of return, revenue is not

recognised until the goods have been delivered and the

time period for return has elapsed.

Advertising income is recognised on the delivery date,

typically when issued or broadcasted.

Revenue from the sale of film broadcasting rights is

recognised at the time when the film becomes accessible

to the customer (availability date).

Royalties received are accrued and recognised as income

in accordance with the concluded agreement.

Rental income is accrued and recognised as income on a

straight-line basis over the lease term in accordance with

the concluded agreement.

Barter agreements where the services exchanged are

dissimilar are recognised at fair value and accrued as

the services are performed or over the period specified

in the concluded agreement. Fair value is measured at

the value of either the delivered or the received services,

depending on which services can be measured reliably.

Revenue is measured at the fair value of the agreed con-

sideration exclusive of VAT and taxes charged on behalf

of third parties. All discounts granted are recognised as a

reduction of revenue.

other operating income and costs

Other operating income and costs comprise items sec-

ondary to the principal activities of the entities, including

gains and losses on the disposal of businesses, which are

not continuing operations, intangible assets and prop-



erty, plant and equipment, as well as continuing value

adjustments of investment properties at fair value. Gains

and losses on the disposal of entities, intangible assets

and property, plant and equipment are determined

as the selling price less disposal costs and the carrying

amount at the date of disposal.

government grants

Government grants comprise film and ticket subsidies

for in-house produced films. Grants are recognised

when there is reasonable assurance that they will be

received. Film subsidies for in-house produced films

recognised in the balance sheet are offset against the

cost of in-house produced films. Ticket subsidies are

recognised in the income statement under other operat-

ing income.

Special items

Special items include significant income and costs that

are not directly attributable to the ordinary operating

activities of the Group, such as restructuring costs

relating to fundamental structural and procedural reor-

ganisations. Special items also includes other significant

non-recurring items, including gains and losses on the

disposal of significant activities, revaluation of the share-

holding in an entity acquired by a step acquisition and

impairment of goodwill.

These items are shown separately in order to give a more

true and fair view of the Group’s primary activities.

Share of result from investments in associates

The proportionate share of the associates’ results after

tax and non-controlling interests and after elimination

of the proportionate share of intra-group gains/losses is

recognised in the consolidated income statement.

Financial income and expenses

Financial income and expenses comprise interest

income and expense, gains and losses on securities,

payables and transactions denominated in foreign cur-

rencies, amortisation of financial assets and liabilities,

including finance lease commitments. Furthermore,

changes in the fair value of derivative financial instru-

ments which are not designated as hedging instruments

as well as the ineffective portion of the hedges are also

included.

Borrowing costs relating to general borrowing or loans

directly relating to the acquisition, construction or devel-

opment of qualifying assets are allocated to the cost of

such assets.

Tax for the year

Tax for the year, which comprises current tax and

changes in deferred tax for the year, is recognised in the

income statement, in other comprehensive income or

directly in equity.

BalanCE ShEET

Film rights, etc.

Film rights comprise film, DVD and TV rights. Film rights

are recognised as an intangible asset at the time when

control over the asset is transferred. Prepayments for

film rights are recognised in the balance sheet as prepaid

intangible assets, and when control is gained over the

assets, the prepayments are reclassified to film rights.

Film rights are measured at cost. For purchases, the cost

is allocated proportionally to the cinema, DVD and TV

media, as well as to markets.

Film rights are amortised according to a revenue-based

method over the period during which they are expected

to generate income on the respective market and in the

respective media.

Other intellectual property rights with a limited useful

life, such as domain names and magazine titles, are

measured at cost on initial recognition and amortised

on a straight-line basis over the useful life (typically 5 to

10 years).

in-house produced film rights

In-house produced film rights are measured at cost,

which includes indirect production costs, less grants



received, accumulated amortisation and impairment, or

at the recoverable amount where this is lower.

In-house produced film rights are amortised according

to a revenue-based method over the period during

which they are expected to generate income.

goodwill

On initial recognition, goodwill is recognised in the

balance sheet at cost as described under ‘Business

combinations’. Subsequently, goodwill is measured at

cost less accumulated impairment losses. Goodwill is not

amortised.

The carrying amount of goodwill is allocated to the

Group’s cash-generating units at the date of acquisition.

The identification of cash-generating units is based

on the management structure and internal financial

control.

Trademarks

Acquired intellectual property rights, including trade-

marks acquired in business combinations, are measured

at cost on initial recognition. Trademarks with an

indefinite useful life are not amortised but are tested for

impairment at least once annually.

property, plant and equipment

Land and buildings, plant and machinery, tools and

equipment and leasehold improvements are measured

at cost less accumulated depreciation and impairment.

Cost comprises the purchase price and any costs directly

attributable to the acquisition until the date when the

asset is available for use.

Subsequent costs, e.g. in connection with replacing

components of property, plant and equipment, are

recognised in the carrying amount of the relevant asset if

it is probable that the costs will result in future economic

benefits for the Group. The replaced components are

derecognised in the balance sheet, and the carrying

amount is transferred to the income statement. All other

costs incurred for ordinary repairs and maintenance are

recognised in the income statement as incurred.

The cost of assets held under finance leases is recognised

at the lower of the fair value of the assets and the

present value of future minimum lease payments. In the

calculation of present value, the interest rate implicit in

the lease or the Group’s incremental borrowing rate is

used as the discount rate.

When individual components of an item of property,

plant and equipment have different useful lives, the cost

of such individual components is accounted for and

depreciated separately. Depreciation is provided on a

straight-line basis over the expected useful lives, based

on the following estimates of the useful lives of the

assets:

Corporate properties (head offices) 25, 50 years

Properties used for operational purposes 25 years

Installations and conversions 10, 15, 25 years(the useful life depends on the nature of conversion)

Plant and machinery 3 - 15 years

Tools and equipment 3 - 5 years

Leasehold improvements 5 - 10 years

Land is not depreciated.

Depreciation is made on the basis of the asset’s residual

value less any impairment losses. The residual value and

useful life of the assets are reassessed every year. If the

residual value exceeds the carrying amount, depreciation

is discontinued.

In case of changes in the useful life or the residual value,

the effect on depreciation is recognised prospectively as

a change in accounting estimates.

Gains and losses on the disposal of property, plant and

equipment are determined as the difference between

the selling price less disposal costs and the carrying

amount at the date of disposal. Gains or losses are rec-

ognised in the income statement under other operating

income or other operating costs, respectively.

investment properties

Properties are classified as investment properties when

they are held for the purpose of obtaining rental income



and/or capital gains. On initial recognition, investment

properties are measured at cost, consisting of the

acquisition cost of the property and any costs directly

attributable to the acquisition. Subsequently, investment

properties are measured at fair value. Changes in the

fair value are recognised in the income statement as a

value adjustment of investment properties under other

operating income/costs in the financial year in which the

change occurs.

Realised gains and losses on the disposal of investment

properties are determined as the difference between

the carrying amount and the selling price and are also

recognised in the item ‘value adjustment of investment

properties’’ under other operating income/costs.

investments in associates

Investments in associates are recognised in the

consolidated financial statements according to the

equity method, which means that the investments are

measured in the balance sheet at the proportionate

share of the associates’ net asset values calculated

in accordance with the Group’s accounting policies

minus or plus the proportionate share of unrealised

intra-group gains and losses and plus any excess values

on acquisition, including goodwill. Investments in

associates are tested for impairment when impairment

indicators are identified.

Investments in associates with negative equity are

measured at EUR 0 (nil). If the Group has a legal or

constructive obligation to cover a deficit in the associate,

such deficit is recognised under liabilities.

Receivables from associates are measured at amortised

cost less any impairment loses.

On the acquisition of investments in associates, the

acquisition method is used; see the description of busi-

ness combinations.

impairment of non-current assets

Goodwill and intangible assets with indefinite useful

lives are subject to annual impairment tests, initially

before the end of the acquisition year. Likewise, devel-

opment projects in process are subject to an annual

impairment test.

The carrying amount of goodwill is tested for impair-

ment together with the other non-current assets of

the cash-generating unit to which goodwill has been

allocated. If the carrying amount exceeds the recover-

able amount, it is written down to the recoverable

amount via the income statement. As a main rule, the

recoverable amount is calculated as the present value of

expected future net cash flows from the entity or activity

(cash-generating unit) to which goodwill has been

allocated.

Deferred tax assets are subject to annual impairment

tests and are recognised only to the extent that it is

probable that the assets will be utilised.

The carrying amount of other non-current assets is

tested annually for impairment indicators. When

there is an indication that assets may be impaired, the

recoverable amount of the asset is determined. The

recoverable amount is the higher of an asset’s fair value

less expected disposal costs and its value in use. Value in

use is the present value of future cash flows expected to

be derived from an asset or the cash-generating unit to

which the asset belongs.

An impairment loss is recognised if the carrying amount

of an asset or a cash-generating unit exceeds the

recoverable amount of the asset or the cash-generating

unit. Impairment losses are recognised in the income

statement.

Impairment of goodwill is not reversed. Impairment of

other assets is reversed only to the extent that changes

in the assumptions and estimates underlying the impair-

ment calculation have occurred. Impairment is only

reversed to the extent that the asset’s increased carrying

amount does not exceed the carrying amount that

would have been determined (net of amortisation or

depreciation) had no impairment loss been recognised

for the asset in prior years.



inventories

Inventories are measured at the lower of cost according

to the FIFO method and the net realisable value.

Goods for resale and raw materials and consumables

are measured at cost, comprising purchase price plus

delivery costs.

The cost of finished goods and work in progress

comprises the cost of raw materials, consumables, direct

wages and salaries and indirect production overheads.

Indirect production overheads comprise indirect

materials, wages and salaries as well as maintenance

and depreciation of production machinery and

equipment as well as administration and management

costs.

The cost of acquired TV programmes are recognised as

inventory at the time when the right to broadcast the

TV programme begins. The cost of a TV programme is

amortised proportionally over the period the TV pro-

gramme is broadcast.

The net realisable value of inventories is calculated as the

selling price less costs of completion and costs neces-

sary to effect the sale and is determined taking into

account marketability, obsolescence and development in

expected selling price.

Receivables

Receivables are measured at fair value on initial recogni-

tion and are subsequently measured at amortised cost

less any impairment. The Group considers evidence of

impairment both on an individual level and on a group

level where considered relevant.

prepayments

Prepayments, such as prepaid royalty, prepaid authors’

fees and prepaid TV programmes and sports broadcast-

ing rights, which are recognised under assets, comprise

costs incurred concerning subsequent financial years.

Prepayments are measured at cost.

Securities

Securities consist mainly of listed bonds that are held

for investment of excess liquidity and managed in

accordance with a documented investment strategy.

Securities are measured initially at the listed price at the

trade date and subsequently at the listed price at the

end of the reporting period using the fair value option.

Value adjustments are recognised directly in the income

statement.

pension obligations and similar

non-current liabilities

The Group has entered into pension plans and similar

arrangements with the majority of the Group’s employ-

ees.

Obligations relating to defined contribution plans where

the Group regularly pays fixed pension contributions

to independent pension funds are recognised in the

income statement in the period during which employees

earn entitlement to them, and any contributions

outstanding are recognised in the balance sheet under

other payables.

For defined benefit plans, an actuarial calculation (the

Projected Unit Credit method) is performed annually of

the present value of future benefits payable under the

defined benefit plan. The present value is determined on

the basis of assumptions about the future development

in variables such as salary levels, interest rates, inflation

and life expectancy. The present value is determined only

for benefits earned by employees from their employ-

ment with the Group. The actuarial present value less

the fair value of any plan assets is recognised in the bal-

ance sheet under pension obligations.

If a pension plan constitutes a net asset, the asset is only

recognised if it represents future refunds from the plan

or will lead to reduced future payments to the plan.

Pension costs for the year are recognised in the income

statement based on actuarial estimates and financial



expectations at the beginning of the year. Any difference

between the expected development in pension plan

assets and liabilities and the realised amounts deter-

mined at year-end is termed an actuarial gain or loss and

is recognised in other comprehensive income.

Non-current employee benefits are recognised at the

best estimate of the expenditure required to settle the

present obligation at the end of the reporting period.

Current tax payable/receivable and deferred taxes

Current tax payable and receivable is recognised in the

balance sheet as tax computed on the taxable income

for the year, adjusted for tax on the taxable income of

prior years and for tax paid on account.

Deferred tax is measured using the balance sheet

liability method on the basis of all temporary differences

between the carrying amount and the tax base of assets

and liabilities. However, deferred tax is not recognised

on temporary differences relating to goodwill that is not

deductible for tax purposes and on office premises and

other items where temporary differences, apart from

business combinations, arise at the date of acquisition

without affecting either result for the year or taxable

income. Where different tax rules can be applied to

determine the tax base, deferred tax is measured based

on Management’s planned use of the asset or settlement

of the liability.

Deferred tax assets, including the tax base of tax loss

carryforwards, are recognised under other non-current

assets at the expected value of their utilisation; either

as a set-off against tax on future earnings or as a set-off

against deferred tax liabilities in the same legal tax entity

and jurisdiction.

Deferred tax assets and liabilities are set off if the entity

has a legally enforceable right to set off current tax

liabilities and tax assets or intends either to settle current

tax liabilities and tax assets on a net basis or to realise the

assets and settle the liabilities at the same time.

Deferred tax is adjusted for eliminations of unrealised

intra-group gains and losses.

Deferred tax is measured according to the tax rules and

at the tax rates applicable in the respective countries

at the end of the reporting period when the deferred

tax is expected to be realised as current tax. Changes in

deferred tax due to changed tax rates are recognised in

the comprehensive income for the year.

other provisions

Other provisions primarily consist of provisions for

goods sold with a right of return, where, based on past

experience or otherwise, the Group can make a reliable

estimate of the amount of goods that will be returned as

well as expected restructuring costs, etc.

Provisions are recognised when the Group incurs a

legal or constructive obligation due to an event occur-

ring before or at the end of the reporting period, and

meeting the obligation is likely to result in an outflow of

economic benefits.

Provisions are measured at the best estimate of the

expenses required to settle the obligation.

When provisions are measured, the costs required

to settle the obligation are discounted provided that

such discounting would have a material effect on the

measurement of the liability. A pre-tax discount rate is



used that reflects the current market interest rate level

plus risks specific to the liability. Changes in the discount

element during the financial year are recognised in the

income statement under financial expenses.

Warranty provisions are recognised as the underlying

goods are sold based on historical warranty costs experi-

ence in previous financial years.

Restructuring costs are recognised under liabilities

when a detailed, formal restructuring plan has been

announced to the employees affected no later than at

the end of the reporting period. On acquisition of busi-

nesses, provisions for restructuring in the acquiree are

only included in goodwill when, at the acquisition date,

the acquiree had an existing liability for restructuring.

A provision for onerous contracts is recognised when the

expected benefits to be obtained by the Group from a

contract are lower than the unavoidable costs of meet-

ing its obligations under the contract.

Financial and non-financial liabilities

Financial liabilities are recognised as at the date of bor-

rowing as the net proceeds received less transaction

costs paid. In subsequent periods, the financial liabilities

are measured at amortised cost, such that the difference

between the proceeds and the nominal value is recog-

nised under financial expenses in the income statement

over the term of the loan.

Financial liabilities also include the capitalised residual

lease commitment under finance leases, which is meas-

ured at amortised cost. Other liabilities are measured at

net realisable value.

deferred income

Deferred income, including the sale of film broadcasting

rights, is measured at amortised cost.

assets held for sale

Assets held for sale consist of non-current assets and

disposal groups held for sale. Disposal groups are

defined as a group of assets to be disposed of in a

single transaction, through sale or otherwise. Liabilities

associated with assets classified as held for sale are

those liabilities directly associated with the assets

that will be transferred in the transaction. Assets are

classified as held for sale if their carrying amount will be

recovered principally through a sale within 12 months

in accordance with a formal plan rather than through

continuing use.

Assets or disposal groups held for sale are measured at

the lower of their carrying amount at the date of clas-

sification as held for sale and their fair value less disposal

costs. Assets are not depreciated or amortised from the

date when they are classified as held for sale.

Impairment losses on initial recognition as held for sale

and gains and losses on subsequent remeasurement at

the lower of carrying amount and fair value less disposal

costs are recognised in the income statement under the

items to which they relate. Gains and losses are disclosed

in the notes.

Assets and associated liabilities are presented as separate

line items in the balance sheet, and the principal items

are specified in the notes. Comparative figures in the

balance sheet are not restated.

presentation of discontinued operations

Discontinued operations represent a separate major line

of business whose activities and cash flows can be clearly

distinguished, operationally and for financial reporting

purposes, from the other business areas, provided that

the unit has been disposed of or that it is held for sale

and the sale is expected to be carried out within twelve

months in accordance with a formal plan. Discontinued

operations also include businesses which are classified as

held for sale in connection with the acquisition.

The profit after tax on discontinued operations and value

adjustments after tax of related assets and liabilities and

gains and losses on disposal are presented as a separate

line item in the income statement with a restatement of



comparative figures. The notes disclose revenue, costs,

value adjustments and tax for the discontinued opera-

tions.

Assets and related liabilities for discontinued operations

are presented in separate line items in the balance sheet

without a restatement of comparative figures; see the

section ‘Assets held for sale’, and the principal items are

specified in the notes.

CaSh FloW STaTEMEnT

The cash flow statement shows the cash flows from

operating, investing and financing activities for the year,

the year’s changes in cash and cash equivalents as well

as the Group’s cash and cash equivalents at the begin-

ning and end of the year.

The cash flow effect of acquisitions and disposals of

businesses is shown separately in cash flows from invest-

ing activities. Cash flows from acquired businesses are

recognised in the cash flow statement from the date of

acquisition, and cash flows from disposals of businesses

are recognised until the date of disposal.

Cash flows from operating activities are calculated

according to the indirect method as the profit for the

year before net financials, adjusted for non-cash operat-

ing items, changes in working capital and corporate

income tax paid.

Cash flows from investing activities comprise payments

in connection with the acquisition and disposal of busi-

nesses and activities and the acquisition and disposal of

intangible assets, property, plant and equipment and

other non-current assets, as well as securities.

Acquisitions of assets by means of finance leases are

treated as non-cash transactions.

Cash flows from financing activities comprise the rais-

ing of loans and repayment of interest-bearing debt,

donations made and transactions with non-controlling

interests.

Cash and cash equivalents comprise cash and market-

able securities with a residual term of less than three

months at the acquisition date which are subject to an

insignificant risk of changes in value.

Cash flows in other currencies than the functional

currency are translated using average exchange rates

unless these deviate significantly from the rates at the

transaction date.

Cash flows from operating, investing and financing

activities for discontinued operations are disclosed in a

note.

SEgMEnT inFoRMaTion

The Egmont Foundation is not officially listed, and in

accordance with IFRS, segment information need there-

fore not be presented.

FinanCial RaTioS

Financial ratios are calculated in accordance with the

Danish Society of Financial Analysts’ ‘Recommendations

and Financial Ratios 2010’.

The financial ratios stated under financial highlights have

been calculated as follows:

operating margin

Operating profit x 100

Revenue

Equity ratio

Equity, excl. non-controlling interests, x 100

Total assets

Return on equity

Net profit for the year, excl. non-controlling interests, x 100

Average equity, excl. non-controlling interests

44

2 Revenue 2012 2011

Sale of goods 1,547,612 1,326,867

Royalty 63,421 50,817

Rental income 5,847 8,636

Total 1,616,880 1,386,320

3 other operating income 2012 2011

Sale of The Student Planner 3,424 0

Sale of TV productions 0 1,148

Government grants 187 665

Miscellaneous 9,034 9,038

Total 12,645 10,851

4 personnel costs 2012 2011

Wages and salaries (307,639) (266,917)

Defined contribution pension plans (17,274) (16,272)

Defined benefit pension plans (8,297) (3,852)

Other social security costs (51,972) (36,110)

Total (385,182) (323,151)

Average number of employees, total 4,615 4,161

Compensation paid to the Management Board amounted to 3,211 (2011: 3,088), of which pension contributions

amounted to 349 (2011: 346). Compensation paid to the Board of Trustees amounted to 454 (2011: 377).

5 depreciation, amortisation and impairment 2012 2011

Amortisation, intangible assets (47,335) (34,920)

Impairment losses, intangible assets (5,167) (1,952)

Depreciation, property, plant and equipment (28,257) (23,746)

Impairment losses, property, plant and equipment 0 (2,225)

Total (80,759) (62,843)

6 Special items 2012 2011

Value adjustment of existing shares in TV 2, Norway 164,977 0

Impairment losses of goodwill TV 2, Norway (89,667) 0

Cost of closing printing facilities (8,043) 0

Total 67,267 0

Please refer to note 29 Acquisition of businesses regarding value adjustment of TV 2, Norway and note 10 Intangible

assets regarding impairment of TV 2, Norway.


45

7 Financial income 2012 2011

Interest income, financial assets, measured at amortised cost 3,559 2,771

Interest income, securities 1,122 5,242

Foreign exchange gains, net 1,189 2,407

Change in fair value, derivative financial instruments 515 800

Other financial income 5,348 2,006

Total 11,733 13,226

8 Financial expenses 2012 2011

Interest expenses, financial liabilities, measured at amortised cost (7,835) (7,113)

Interest expenses, derivative financial instruments (5,121) (3,877)

Change in fair value, securities, net (571) (991)

Other financial expenses (4,936) (3,327)

Total (18,463) (15,308)

9 Taxes 2012 2011

Current tax (9,750) (14,752)

Deferred tax (7,549) (5,667)

Adjustments for prior years (262) 337

Total (17,561) (20,082)

Tax on the profit for the year results as follows:

Calculated tax, 25% on profit before tax (42,186) (23,431)

Adjustment of calculated tax in foreign entities relative to 25% (4,090) (2,083)

Tax effect of:

Non-taxable income 56,796 6,786

Non-deductible expenses (28,339) (3,757)

Share of net profit/(loss) in associates 520 2,066

Adjustments for prior years (262) 337

Total (17,561) (20,082)

Effective tax rate 10.4% 21.4%

The effective tax rate in 2012 is materially affected by a non-taxable value adjustment of TV 2, Norway.

When adjustning for this, the effective tax rate is 22.9 % for 2012.

Tax recognised in other comprehensive income:

Tax on value adjustment of hedging instruments 379 240

Tax on actuarial gains/(losses) on defined benefit pension plans (10,879) 4,120

Total (10,500) 4,360



10 intangible assets

intangible assets under Film in-house development rights, produced Trade- and pre- etc. film rights goodwill marks payments

Cost at 1 January 2012 131,247 73,345 121,262 47,294 24,933

Foreign exchange adjustments 189 479 6,554 2,779 (71)

Acquisitions through business combinations 21,696 0 302,956 191,167 0

Additions 4,733 16,539 0 0 34,096

Goverment grants 0 (10,237) 0 0 0

Transferred 35,276 (291) 0 550 (35,535)

Cost of assets disposed of (3,802) (4,589) (62,797) (21,298) (990)

Cost at 31 december 2012 189,339 75,246 367,975 220,492 22,433

Amortisation and impairment losses at 1 January 2012 (93,200) (65,113) (30,836) (2,714) (613)

Foreign exchange adjustments (992) (404) (3,501) (257) 2

Amortisation and impairment losses of assets disposed of 3,402 2,723 21,739 2,467 0

Impairment losses (4,003) 0 (90,831) 0 0

Amortisation (40,427) (6,766) 0 (142) 0

amortisation and impairment (135,220) (69,560) (103,429) (646) (611) losses at 31 december 2012

Carrying amount 54,119 5,686 264,546 219,846 21,822 at 31 december 2012

Cost at 1 January 2011 103,716 79,698 130,270 46,773 16,420

Foreign exchange adjustments 165 1,229 4,091 1,023 (11)

Additions 6,962 13,644 739 0 31,746

Goverment grants 0 (9,541) 0 0 0

Transferred 23,934 (712) 0 0 (23,222)

Cost of assets disposed of (3,530) (10,973) (13,838) (502) 0

Cost at 31 december 2011 131,247 73,345 121,262 47,294 24,933

Amortisation and impairment losses at 1 January 2011 (68,573) (64,147) (37,233) (2,564) (611)

Foreign exchange adjustments 494 (1,022) (3,621) (652) (2)

Amortisation and impairment losses of assets disposed of 3,374 7,122 11,329 502 0

Transferred (338) 338 0 0 0

Impairment losses (641) 0 (1,311) 0 0

Amortisation (27,516) (7,404) 0 0 0

amortisation and impairment (93,200) (65,113) (30,836) (2,714) (613) losses at 31 december 2011



10 intangible assets (continued)

goodwill

The carrying amount of goodwill is tested annually for impairment. The impairment test is made for the Group’s cash-

generating units, based on their management structure and management control; see below:

2012 2011

TV 2, Norway 196,106 37,520

Nordisk Film, Cinemas 5,712 4,187

Magazines, Norway 34,355 31,137

Books, Norway 13,985 10,592

Other units 14,388 6,990

Carrying amount 264,546 90,426

In the impairment test of the cash-generating units, the recoverable amount, equivalent to the discounted value of

expected future net cash flows, is compared with the carrying amount of the cash-generating units.

The recoverable amount is based on the value in use, determined by using expected net cash flows that are based on

management-approved budgets and business plans for 2012, projections for subsequent years up to and including 2017,

and average growth during the terminal period. For the primary cash-generating units, the following pre-tax discount

rates have been used: TV 2, Norway 8.7 % (2011: 8.3 %), Nordisk Film, Cinemas 8.0 % (2011: 9.6 %), Magazines,

Norway 8.9 % (2011: 10.0 %) and Books, Norway 10.0 % (2011: 10.0 %).

The average expected growth during the terminal period is 2.0 % for TV 2, Norway (2011: 2.6 %), -5.0 % for Magazines,

Norway (2011: -4.1 %) and 2.0 % for Books, Norway (2011: 2.0 %). Expected growth during the terminal period is not

estimated to exceed the long-term average growth rate in the business areas.

In February 2012 Egmont acquired the remaining 50 % of the shares in TV 2, Norway. Please refer to note 29 for further

information.

The TV business is cyclical and therefore affected by a generally large uncertainty regarding the development in revenue

and expenses. Combined with increasing prices for acquiring TV rights for especially sports events and increasing

program cost for Norwegian TV productions, it may result in a challenged EBITDA-margin the coming years. At the end of

2012 assessment and analyses of these uncertainties resulted in an impairment loss of goodwill regarding TV 2, Norway,

for the amount of EUR 89.7 million. The impairment loss is recognized in the profit loss account under special items.

The sensitivity for further impairments losses regarding the TV business is highly related to the development in advertising

revenue, the revenue-category which is most sensitive to cyclical fluctuations. Advertising revenue amounts to more

than 50 % of the total revenue in the TV business and long-term fluctuations is the greatest uncertainty associated to

the future earnings. Additionally it is difficult to adjust program cost because they are disposed for a longer period in the

future.

Inpairment tests for goodwill for 2012 regarding the other cash-generating units of the Group: Nordisk Film, Cinemas,

Magazines, Norway and Books, Norway show that the recoverable amount exceeds the carrying amount.


10 intangible assets (continued)

Trademarks

Trademarks with an indefinite useful life relate to the individual cash-generating units’ primary sales. The Group is

testing the carrying amount of trademarks with an indefinite useful life for impairment annually; see below:

2012 2011

TV 2, Norway 190,791 17,772

Magazines, Norway 18,219 17,242

Books, Norway 10,115 9,566

Carrying amount 219,125 44,580

Trademarks for TV 2, Norway, and Magazines, Norway, are tested by using the Relief from Royalty method to assess

future cash flows from royalty income for the individual trademarks. The royalty rate, determined on the basis of the

cash-generating unit’s products and the reputation of such products, ranged from 5 to 14% for 2012 and 2011.

The trademark of Books, Norway, has been tested together with the goodwill of the cash-generating unit to which it

relates.

The following pre-tax discount rates have been used: 8.7 to 10.0% (2011: 9.9 to 11.0%). The average expected

growth during the terminal period is 2.0 % for TV 2, Norway (2011: 2.5 %), -5.0 % for Magazines, Norway (2011:

-3.5 %) and 2.0 % for Books, Norway (2011: 2.0 %).

The impairment tests for trademarks for 2012 show that the recoverable amount exceeds the carrying amount.

The Group assesses that probable changes in the assumptions underlying the impairment calculations will result in no

need to write down trademarks for impairment in the Group’s primary cash-generating units.

Film rights and in-house produced film rights

The Group makes regular estimates of the useful lives of film rights and in-house produced film rights based on its

expected sales in the cinema, DVD and TV media and in markets, which are naturally subject to uncertainty as actual

sales may differ from estimated sales.

The Group continuously receives sales estimates, and if impairment indicators are identified, film rights and in-house

produced film rights are written down for impairment. The useful lives of film rights and in-house produced film rights

for 2012 were at the expected level.


11 property, plant and equipment

property, plant and leasehold equipment land and plant and Tools and improve- under buildings machinery equipment ments construction

Cost at 1 January 2012 210,948 105,423 82,012 14,468 6,264

Foreign exchange adjustments 100 3,995 2,391 236 (11)

Acquisitions through business combinations 1,269 26,513 529 1,469 0

Additions 234 17,723 7,166 1,897 9,962

Transferred 5,287 325 6,036 832 (12,480)

Cost of assets disposed of (900) (43,864) (4,219) (4,709) (859)

Cost at 31 december 2012 216,938 110,115 93,915 14,193 2,876

Depreciation and impairment losses at 1 January 2012 (37,151) (88,941) (64,610) (10,656) 0

Foreign exchange adjustments (543) (3,009) (1,848) (154) 0

Depreciation and impairment losses of assets disposed of 34 30,491 3,622 3,955 0

Transferred (23) 0 0 23 0

Depreciation (6,277) (12,101) (8,395) (1,484) 0

depreciation and impairment (43,960) (73,560) (71,231) (8,316) 0 losses at 31 december 2012


Hereof assets held under finance leases 0 3,142 0 0 0

Cost at 1 January 2011 210,992 104,552 79,343 15,239 3,319

Foreign exchange adjustments 613 707 290 96 10

Additions 430 7,557 5,390 542 4,879

Transferred 614 142 412 750 (1,918)

Cost of assets disposed of (1,701) (7,535) (3,423) (2,159) (26)

Cost at 31 december 2011 210,948 105,423 82,012 14,468 6,264

Depreciation and impairment losses at 1 January 2011 (32,552) (85,609) (59,599) (10,699) 0

Foreign exchange adjustments 177 (88) 179 5 0

Depreciation and impairment losses of assets disposed of 1,330 6,972 2,889 1,636 (28)

Impairment losses 0 (2,253) 0 0 28

Depreciation (6,106) (7,963) (8,079) (1,598) 0

depreciation and impairment (37,151) (88,941) (64,610) (10,656) 0

losses at 31 december 2011

Carrying amount 173,797 16,482 17,402 3,812 6,264

at 31 december 2011

Hereof assets held under finance leases 0 2,151 336 0 0


12 investment properties 2012 2011

Fair value at 1 January 30,938 30,854

Foreign exchange adjustments (109) 84

Fair value at 31 december 30,829 30,938

Investment properties consist of a rental property in Denmark, let under a long-term lease. The fair value is calculated

according to the net rental method, and thus the value of the property has been calculated on the basis of its expected

operating income (pre-tax return) of about 1,900 and a required rate of return of 6%, determined on the basis of the

general market level and specific circumstances relating to the property.

Rental income amounted to 2,359 (2011: 2,285) and operating costs to 502 (2011: 567).

13 Financial assets

investment in jointly controlled entities

Note 30 includes an outline of the Group’s investments in jointly controlled entities. The Group’s investments in jointly

controlled entities are consolidated on a pro-rata basis. The Group’s shares of jointly controlled entities’ revenue, costs,

assets and liabilities are as follows:

2012 2011

Revenue 151,436 345,716

Costs (145,115) (311,786)

profit/(loss) before tax 6,321 33,930

Non-current assets 38,696 48,743

Current assets 74,427 199,261

Total assets 113,123 248,004

Non-current liabilities 24,875 109,629



The Group’s operating lease commitments, contingent liabilities and collateral provided in jointly controlled entities

appear from notes 23 and 24.


13 Financial assets (continued)

investments in associates 2012 2011

Cost at 1 January 27,439 26,320

Foreign exchange adjustments 916 172

Acquisitions through business combinations 20,689 0

Additions 233 7,214

Disposals (15,345) (6,267)

Cost at 31 december 33,932 27,439

Adjustments at 1 January (15,201) (16,985)

Foreign exchange adjustments (1,132) (336)

Share of profit/(loss) for the year 2,081 8,263

Other capital items (1,037) 128

Dividends (688) (846)

Disposals 22,048 (6,196)

Transferred for set-off against receivables (8,685) 771

Transferred to provisions 79 0

adjustments at 31 december (2,535) (15,201)

Carrying amount at 31 december 31,397 12,238

Note 30 includes an outline of the Group’s investments in associates. The revenue, profit/loss for the year, assets and

liabilities of the primary associates are as follows:

net profit/(loss) Revenue for the year assets liabilities

2012 205,139 14,447 98,532 169,662

2011 194,676 6,613 80,594 161,514

14 inventories 2012 2011

Raw materials and consumables 39 2,487

Work in progress 2,983 3,447

Manufactured goods and goods for resale 99,748 101,530

TV programmes 61,002 21,391

Total 163,772 128,855

At the end of the reporting period, the Group estimates the writedown to realisable value for manufactured goods

and goods for resale, which primarily relates to books and game consoles. The estimate is based on expected sales and

therefore subject to some uncertainty.

The inventories and impairment of inventories expensed for the year amounted to 370,227 (2011: 229,494) and

10,232 (2011: 13,356), respectively. Reversed impairment of inventories in the income statement amounted to 1,331

(2011: 3,760). Inventories included capitalised payroll costs in the amount of 9,306 (2011: 8,437).

15 prepayments

In the amount prepayed sports broadcasting rights are included with 16,747 (2011: 0), which are terminated more

than 12 months from balance sheet day.


16 Securities 2012 2011

Listed bonds 40,532 181,205

Other 7,552 2,234

Total 48,084 183,439

The average duration of the bonds is 6 months.

17 Cash and cash equivalents 2012 2011

Cash and bank account deposits 41,528 154,259

Total 41,528 154,259

Of which deposited in fixed-term deposit 1,265 (2011: 31,405) and cash and equivalents pledged as collateral 6,084

(2011: 8,448).

18 Equity

The Egmont Foundation is a commercial foundation and thus subject to special conditions relating to its capital, as set

out in the Foundation’s Charter. The Foundation’s assets are used for donations in connection with the Foundation’s

Charitable Activities. The balance of the Foundation’s assets is transferred to a reserve to ensure that the Foundation

are provided with the necessary capital for consolidating and expanding in accordance with sound principles. The

Foundation’s equity ratio stood at 42.0 % (2011: 38.4 %).


19 pensions

The Group mainly has defined contribution pension plans, as the Group’s defined benefit pension plans in both

its wholly-owned and its jointly controlled Norwegian entities were closed to new members in 2004 and 2008,

respectively.

In addition, the Group has pension plans in Sweden that have been established together with other enterprises as

part of collective agreements (multi-employer plans). Such plans are defined benefit plans, but are treated as defined

contribution plans because the pension funds are unable to provide the information necessary to calculate the

individual enterprise’s share of the obligation.

For defined benefit pension plans, the obligation is calculated at the actuarial present value at the end of the reporting

period. These pension plans are funded in whole or in part through pension funds for the employees. The present

value of the defined benefit pension obligations depends on the assumptions used as a basis for the actuarial

calculation. The calculation is based on assumptions relating to discount rate, expected return on assets, future wage

or salary increases, life expectancy and future development of the pension obligation.

The primary assumptions lie within the framework determined by the public authorities in Norway and are reviewed as

at the reporting date. Defined benefit pension obligations is affected by a higher discount rate in 2012. In accordance

with updated guidelines the Group have chosen to use a special Norwegian bond interest rate (OMF rate), because

the marked have become sufficient enough to comply with the market demands in IAS 19. This result in a reduction of

the pension obligation as per 31 December 2012 and a corresponding effect in the statement of other comprehensive

income for the year.

pensions 2012 2011

Defined benefit pension obligations (37,003) (39,269)

Other pension obligations (10,304) (9,373)

Total (47,307) (48,642)

Defined benefit pension obligations are specified below:

Present value of defined benefit pension obligations (96,663) (84,576)

Fair value of pension plan assets 64,187 50,142

Payroll tax (4,527) (4,835)

net liability at 31 december (37,003) (39,269)

Movement in the present value of defined benefit pension obligations:

Liability at 1 January (84,576) (68,401)

Adjustments relating to previous year(s) (1,380) 0

Foreign exchange adjustments (5,986) (575)

Acquisitions through business combinations (43,048) 0

Pension costs for the financial year (8,297) (3,287)

Pension costs for the previous financial year (21) (909)

Calculated interest relating to liability (3,338) (2,678)

Actuarial gains/(losses) 32,909 (11,686)

Curtailments and repayments 12,743 0

Pensions paid, etc. 4,331 2,960

liability at 31 december (96,663) (84,576)


19 pensions (continued) 2012 2011

Movement in the fair value of pension assets:

Pension assets at 1 January 50,142 47,842

Adjustments relating to previous year(s) 770 529

Foreign exchange adjustments 2,905 401

Acquisitions through business combinations 16,534 0

Expected return on pension plan assets 2,851 2,668

Actuarial gains/(losses) (948) (1,278)

Payments made to the pension plans 6,114 2,156

Curtailments and repayments (11,780) 28

Pensions paid, etc. (2,401) (2,204)

pension assets at 31 december 64,187 50,142

Return on pension assets:

Actual return on pension plan assets 1,903 1,390

Expected return on pension plan assets (2,851) (2,668)

actuarial losses on pension plan assets (948) (1,278)

Average composition of pension plan assets:

Bonds 56.1 % 48.7 %

Shares 7.1 % 11.9 %

Money market and the like 16.6 % 21.4 %

Property 20.2 % 18.0 %

Average assumptions used for the actuarial calculations at the end of the reporting period in the individual pension plans:

Discount rate 3.9 % 2.6 %

Inflation rate 3.3 % 3.3 %

Adjustment of wages and salaries 3.5 % 3.5 %

Expected return on pension funds 4.0 % 4.1 %

Amount of defined benefit pension obligations for current and previous years:

Defined benefit pension obligations (96,663) (84,576)

Pension assets 64,187 50,142

Payroll tax (4,527) (4,835)

net liability at 31 december (37,003) (39,269)

Pension costs in the income statement:

Pension costs for the year (7,708) (3,342)

Calculated interest relating to liability (3,338) (2,721)

Curtailments and repayments 1,255 0

Expected return on pension plan assets 2,851 2,656

Payroll tax (1,357) (445)

pension costs (8,297) (3,852)

actuarial gains/(losses) recognised in other comprehensive income 38,852 (14,714)


20 deferred tax 2012 2011

Deferred tax at 1 January 14,211 15,523

Adjustments relating to previous year(s) (2,934) 0

Foreign exchange adjustments 2,127 (5)

Acquisitions through business combinations (41,133) 0

Deferred tax for the year recognised in the income statement (7,549) (5,667)

Deferred tax for the year recognised in other comprehensive income (10,500) 4,360

deferred tax at 31 december (45,778) 14,211

Deferred tax has been recognised in the balance sheet as follows:

Deferred tax, asset 6,889 22,156

Deferred tax (liability) (52,667) (7,945)

deferred tax, net (45,778) 14,211

Deferred tax assets are recognised for all unutilised tax losses to the extent it is considered probable that taxable profits

will be realised in the foreseeable future against which the losses can be offset. The amount to be recognised in respect

of deferred tax assets is based on an estimate of the probable time of realising future taxable profits and the amount of

such profits.

The Group has assessed that deferred tax assets totalling 6,889 (2011: 22,156), primarily attributable to Germany can

be realised in the foreseeable future. This is based on the forecast earnings base of the enterprises in which the tax

assets can be utilised.

2012 2011

The deferred tax relates to:

Intangible assets (72,069) (8,534)

Property, plant and equipment 2,430 (3,276)

Receivables 4,921 (46)

Inventories 1,962 3,620

Other current assets 728 836

Provisions 15,777 14,431

Other liabilities (6,851) (1,032)

Tax losses allowed for carryforward, etc. 7,324 8,212

Total (45,778) 14,211

Unrecognised deferred tax assets relate to:

Tax losses 2,260 1,837

Temporary differences 265 977


goods sold with 21 other provisions a right of return other

Other provisions at 1 January 2012 59,507 9,698

Foreign exchange adjustments 1,636 162

Provisions made 49,262 6,978

Provisions used (48,788) (2,111)

Reversed (2,062) (3,079)

other provisions at 31 december 2012 59,555 11,648

Goods sold with a right of return include magazines and books that the shops can return according to agreement. At

the date of sale, the Group estimates how many goods are expected to be returned or exchanged based on historical

experience of selling such goods. This estimate is naturally subject to uncertainty, as the quantity actually returned may

deviate from the estimated quantity. However, the uncertainty concerning the return of magazines is limited due to

the short period allowed for returning them.

Other provisions include warranty provisions, in respect of which expected partial compensation from the supplier is

recognised in other receivables.

22 Fees to elected auditor 2012 2011

Statutory audit (1,748) (1,510)

Tax consultancy (96) (87)

Other assurance statements (105) (71)

Other services (492) (778)

Total fees to KpMg (2,441) (2,446)

Statutory audit (125) (215)

Tax consultancy (30) (50)

Other assurance statements (6) 0

Other services (12) (98)

Total fees to other auditors (173) (363)

Total (2,614) (2,809)

23 operating leases

Operating leases comprise leases for properties of 150,309 (2011: 138,082) and other leases of 10,017 (2011: 8,696).

These figures include leases for properties entered into by jointly controlled entities of 38,250 (2011: 65,258).

2012 2011

Non-cancellable operating lease payments amount to:

Up to 1 year 42,387 32,167

Between 1 to 5 years 100,488 88,132

More than 5 years 17,452 26,480

Total 160,327 146,779

During 2012, 43,815 (2011: 32,273) was recognised as expense in the income statement in respect of operating

leases.


24 Contingent liabilities and collateral

The Group has provided security to mortgage credit institutions of 112,216 (2011: 112,612) over corporate and

investment properties, for which the carrying amount constitutes 162,505 (2011: 166,192 ). The Group’s jointly

controlled entities have provided security of 278 (2011: 2,414) to other credit institutions over miscellaneous assets (a

floating charge). The carrying amount of such assets amounted to 278 (2011: 161,436).

Contractual investment commitments relating to intangible film rights amount to 21,098 (2011: 29,893).

Entities in the Group have furnished miscellaneous guarantees, etc., for 19,104 (2011: 16,526). These figures include

guarantees furnished by jointly controlled entities for 1,904 (2011: 10,429).

25 Financial risks and financial instruments

As a result of its operations, investments and financing, the Egmont Group is exposed to a number of financial risks,

including market risks.

Corporate Treasury is responsible for centralised management of liquidity and financial risks in the Group’s wholly

owned entities. Corporate Treasury operates as a counterparty to the Group’s entities, thus undertaking centralised

management of liquidity and financial risks. Liquidity and financial risks arising at jointly controlled entities are

reported to Corporate Treasury and thus managed on a decentralised basis. Management monitors the Group’s

financial risk concentration and financial resources on an ongoing basis.

The overall framework for financial risk management is laid down in the Group’s Treasury Policy. The Treasury Policy

comprises the Group’s currency and interest rate policy, financing policy and policy regarding credit risks in relation to

financial counterparties and includes a description of approved financial instruments and risk framework. The overall

framework is assessed on an ongoing basis.

The Group’s policy is to refrain from engaging in speculative transactions. Thus, the Group’s financial management

focuses exclusively on managing and reducing financial risks that are a direct consequence of the Group’s operations,

investments and financing.

In 2012 the Group began to hedge currency risk related to purchase of film rights and sports broadcasting rights.

Apart from that there are no major changes in the Group’s risk management policy relative to 2011.

Currency risks

The Group is exposed to exchange rate fluctuations as a result of the individual consolidated enterprises entering

into purchase and sales transactions and having receivables and payables denominated in currencies other than

their functional currency. Forward exchange contracts are used to secure that the actual exposure do not exceed the

currency exposure limit of the Group. Hedge accounting is used regarding currency risk related to purchase of rights.

In 2012 value adjustments after tax on equity amounts to EUR 2.5 million (2011: EUR 0.0 million).

The Group’s major currency risk related to financial instruments is used in hedge accounting. As per 31 December

2012 a 5 % drop in the exchange rates of DKK/NOK, EUR/NOK and DKK/USD will affect the equity with EUR 10.0

million (2011: EUR 0.0 million). The sensitivity analysis is based on financial instruments recognized as per 31

December and an effectiveness of 100 % in the use of hedge accounting.


25 Financial risks and financial instruments (continued)

Translation risks

The Group’s primary currency exposure is denominated in NOK and EUR and relates to the Group’s investments in

wholly owned and jointly controlled entities, including long-term intra-group loans. As a main rule, these currency

risks are not hedged, as ongoing hedging of such long-term investments is not considered to be the best strategy

based on overall risk and cost considerations.

A 5% and 1% drop in the exchange rates of NOK and EUR, respectively, would have impacted the 2012 profits by

EUR -9.0 million (2011: EUR -8.4 million) and EUR 0.5 million (2011: EUR 0.6 million), respectively, and the equity at

31 December 2012 in terms of NOK by EUR -24.1 million (2011: EUR -6.8 million), and in terms of EUR by EUR 5.1

million (2011: EUR 5.0 million). A positive change in foreign exchange rates would have had a reverse impact on profits

and equity based on the financial instruments recognised at end-2012 and end-2011, and unchanged figures for

production/sales and unchanged price and interest rate levels.

interest rate risks

As a result of its investment and financing activities, the Group has an exposure related to fluctuations in interest

levels.

The Group’s policy is to hedge interest rate risks relating to loans when it is assessed that interest payments may be

secured at a satisfactory level. The Group’s interest rate risks are managed by entering into interest swap contracts,

with floating rate loans being converted into fixed interest loans. The principal amount of interest swap contracts

concluded by the Group for hedging purposes was EUR 95 million at 31 December 2012 and EUR 90 million at 31

December 2011. The fair value in the balance sheet amounted to EUR 23.8 million at 31 December 2012 and EUR

20.1 million in 2011, and the value adjustment of the equity for 2012 was negative by EUR 3.0 million after tax

(2011: EUR -10.0 million).

As a result of the Group’s use of derivative instruments to hedge its interest rate exposure relative to instruments of

debt, changes in the fair value of the hedging instruments will impact the Group’s reserve for hedging transactions

under equity. A one percentage point drop in interest rates would reduce equity by about EUR 11 million. In addition,

such an interest rate drop will not affect the income statement in any material way, because the effect by way of loss

of interest income from net deposits and market value changes to derivative financiel instruments equals out and in

addition will be insignificant.

liquidity risks

The Group’s liquidity reserve comprises cash and cash equivalents, securities and unutilised credit facilities. To ensure

optimum utilisation of cash and cash equivalents, the Group operates with cash pools. The Group has a net interest-

bearing debt of EUR 119.0 million (2011: net deposits of EUR 104.7 million).

The Group’s financinually consists primarily of Danish floating rate mortgage loans expiring in 2028 and floating rate

loans denominated in NOK maturing in 2015. In the debt repayment schedule shown below, it is assumed that the

loan facility will be continually extended.

Egmont is governed by a financial covenant in the form of net interest-bearing debt in the ratio to EBITDA in a loan

agreement.



The Group’s liabilities other than provisions fall due as shown below. The debt repayment schedule is based on

undiscounted cash flows incl. estimated interest payments based on current market conditions:

Contrac- Carrying tual cash Within 1 to 5 after amount flows 1 year years 5 years

Mortgage debt 112,216 141,197 4,075 16,192 120,930

Other credit institutions 85,741 107,162 13,074 7,574 86,514

Other financial liabilities 24,505 26,682 1,215 25,467 0

Finance lease liabilities 3,142 3,605 1,305 2,300 0

Trade payables 241,979 241,979 241,979 0 0

non-derivative financial instruments 467,583 520,625 261,648 51,533 207,444

Derivative financial instruments 34,716 50,258 4,963 18,742 26,553

31 december 2012 502,299 570,883 266,611 70,275 233,997

Mortgage debt 112,612 144,356 2,611 15,775 125,970

Other credit institutions 110,199 110,281 71,622 38,659 0

Other financial liabilities 91,724 95,130 87,239 7,891 0

Finance lease liabilities 2,151 2,151 687 1,464 0

Trade payables 201,749 201,749 201,749 0 0

non-derivative financial instruments 518,435 553,667 363,908 63,789 125,970

Derivative financial instruments 23,410 36,815 4,897 12,126 19,792

31 december 2011 541,845 590,482 368,805 75,915 145,762

The Group has in 2013 remortgaged loan with a principal amount of EUR 21.7 million. The new loan is an adjustable-

rate loan and it is instalment-free until 31 December 2022.

Credit risks

The Group’s credit risks relate primarily to trade receivables, securities and cash and cash equivalents. The Group is not

exposed to any significant risks associated with a particular customer or business partner. According to the Group’s

policy for accepting credit risk, all major customers are regularly credit rated.

Trade receivables:

The Group has received collateral relating to sales. This occurs typically in connection with the distribution of

magazines where deposits are received. In addition, some of the Group’s entities take out credit insurance against

losses on trade receivables to the extent deemed relevant. Collateral provided is included in an assessment of the

need to make impairments. Trade receivables backed by collateral, with a consequent reduction in overall credit risk,

amount to 33,686 (2011: 32,322).



Trade receivables, including trade receivables backed by collateral, that have not yet fallen due and have not been

impaired, can be broken down by geographical area as follows:

2012 2011

Denmark 40,319 36,391

Other Nordic countries 101,890 85,834

Other European countries 40,788 38,131

Other countries 7,069 3,430

Total 190,066 163,786

In addition, the aging of trade receivables past due and not impaired is as follows:

2012 2011

Up to 30 days 32,035 24,088

Between 30 and 90 days 8,674 13,650

Over 90 days 24,023 5,249

Total 64,732 42,987

Impairment at 1 January 10,401 12,345

Foreign exchange adjustments 476 (52)

Impairment for the year 3,034 4,010

Realised losses (2,363) (3,193)

Reversed impairment (1,329) (2,709)

impairment at 31 december 10,219 10,401

Securities, cash and cash equivalents:

The Group is exposed to counterparty risk through its cooperation with financial counterparties via funds deposited,

but also via credit commitments. The Group manages this risk by cooperating with banks with a sound credit rating.



Categories of financial instruments

Financial instruments are broken down into categories of financial assets and liabilities below:

2012 2011

Securities (fair value option) 48,084 183,439

Financial assets measured at fair value via the income statement 48,084 183,439

Trade receivables 254,726 206,773

Receivables from associates 3,698 3,648

Other receivables 84,565 60,811

Cash and cash equivalents 41,528 154,259


Derivative financial instruments 8,781 3,925

Financial liabilities measured at fair value via the income statement 8,781 3,925

Derivative financial instruments 25,935 19,485

Financial liabilities used as hedging instruments 25,935 19,485

Mortgage debt 112,216 112,612

Other credit institutions (non-current) 74,025 38,572

Other credit institutions (current) 11,716 71,627

Other financial liabilities 24,505 91,724

Finance lease commitments 3,142 2,151

Trade payables 241,979 201,749

Financial liabilities measured at amortised cost 467,583 518,435

The carrying amount of receivables and other financial liabilities (current) is equal to the fair value.

Mortgage debt and debt to other credit institutions (non-current) are floating rate cash loans, and thus the fair value is

equal to the carrying amount.

Securities are measured at listed prices (level 1). Derivative financial instruments are valued at fair value on the basis of

inputs other than listed prices that are observable for the liability, either directly or indirectly (level 2).

hedge accounting

The Group utilise forward contracts to hedge currency risks related to purchase of film rights and sports broadcasting

rights. Value adjustments on equity amounts to EUR 2.5 million (2011: EUR 0.0 million), which will be recognised in

the income statement during 2013 - 2015.

Interest swaps has been used to hedge the Group’s interest rate risks related to floating interest rate loans. Value

adjustments on equity amounts to EUR 23.4 million (2011: EUR 20.1 million), which will be recognised in the income

statement during 1 - 16 years (2011: 1 - 17 years).


26 Related parties

The Egmont Foundation is a commercial foundation and has no related parties with control.

T he Egmont Group’s related parties with significant influence comprise the Foundation’s Board of Trustees,

Management Board and their close relatives, as well as enterprises in which this group of persons has material

interests. The compensation paid to the Board of Trustees and Management Board appears from note 4.

Related parties with significant influence also comprise associates; see notes 13 and 30. Transactions with associates

consisted of loans to associates of 26,203 (2011: 12,489) and interest income of 1.089 (2011: 907).

27 Standards and interpretations not yet adopted

The IASB has issued a number of new standards and interpretations that have not yet become mandatory for the

Egmont Foundation’s consolidated financial statements for 2012. None of these new standards or interpretations are

expected to have a significant effect on the consolidated financial statements, except for:

IFRS 11, Joint arrangements, will become effective from the 2014 financial year. According to the standard, it will

no longer be possible to consolidate jointly controlled entities on a pro-rata basis. Jointly controlled entities are

subsequently to be recognised according to the equity method, which means that the share of net profit or loss must

be recognised under financial items. This will primarily result in a reduction of the Group’s revenue and operating

profit (EBIT) in respect of the Norwegian part of Egmont Books, while the net profit or loss will remain unchanged.

Comparative figures will have to be restated.

28 Subsequent events

Apart from the events recognised or disclosed in the consolidated financial statements, no events have accurred after

the reporting period.

29 acquisition of businesses

In 2012 the Group has bought 50 % of the shares in AE-TV Holding AS (hereafter: TV 2, Norway) as well as 100 % of

Venue Point Holding ApS and additional 30 % of Filmweb AS, Norway. Please refer to separat sections below for a

further elaboration of the aquisitions. Furthermore the Group has acquired other businesses for a total of EUR 6 million.

Fair value at acquisition date TV 2, norway other Total

Intangible assets 204,010 8,853 212,863

Property, plant and equipment 29,287 493 29,780

Other non-current assets 42,176 10 42,186

Current assets 162,411 8,698 171,109

Non-current financial liabilities (2,961) (965) (3,926)

Other non-current liabilities (240,772) (1,393) (242,165)

Current financial liabilities (1,449) (1,804) (3,253)

Other current liabilities (90,339) (12,310) (102,649)

identifiable net assets 102,363 1,582 103,945

Goodwill 287,414 15,542 302,956

Fair value of 50 % shareholding (108,731) 0 (108,731)

purchase consideration 281,046 17,124 298,170

Cash and cash equivalents, acquired (71) (7,393) (7,464)

Contingent consideration 0 (2,401) (2,401)

Total cash consideration paid 280,975 7,330 288,305


29 acquisition of businesses (continued)

Transaction costs attributable to the acquisitions are recognised in Other external expenses when incurred.

aCqUiSiTionS in 2012

TV 2, norway

On 8 January 2012, the Group entered into an agreement regarding the acquisition of the remaining 50 %

shareholding in TV 2, Norway, with effect from 1 February 2012.

The purchase consideration totalled EUR 281.0 million after fair value adjustment of the existing 50 % shareholding.

Goodwill, which is not deductible for tax puposes, represnets the value of personnel, know-how, a platform for future

income from advertising, distribution and user-paid services, as well as full ownership of the shares.

In accordance with the IFRS rules regarding business combinations achieved in stages, an amount of EUR 165.0 million

is recognised as a fair value adjustment of the existing shares in connection with the acquisition of the remaining 50 %

in 2012. The amount is recognised in Special items, see note 6.

Transaction costs regarding advisers fees attributable to the acquisition amount to EUR 0.9 million, and are recognised

in Other external expenses i the income statement.

Venuepoint

On 9 March 2012, the Group acquired all shares in Venuepoint Holding ApS (Billetlugen). The purchase consideration

amount to EUR 8.6 million, of which EUR 2.4 million concerns a contingent consideration. The contingent

consideration is based on expectations for future earnings.

Transaction costs regarding advisers fees attributable to the acquisition amount to EUR 0.4 million, and are recognised

in Other external expenses i the income statement.

Filmweb

On 3 February 2012, the Group has acuired additional shares in Filmweb AS, whereby Egmont’s ownership increases

to 64 %. Filmweb.no is the leading web portal i Norway for movies and cinema. Since 2008 Egmont has owned 34 %

of the shares. The purchase consideration amount to EUR 2.3 million.

others

In 2012 the book publisher Cappelen Damm has acquired the two publishing companies Akribe AS and

Høyskoleforlaget AS in order to reinforcing its position as a publisher for universities and the professional market.

In 2012 the Kids Media division has acquired the activities of Krea Media, who is behind the well known children

characters Pixeline and Magnus og Myggen and thereby strengthening its leading position in the Nordic region in both

physical and digital edutainment for children.


30 group entities

Unless otherwise stated, the entities are wholly owned. Insignificant – including primarily dormant – entities are not included

in the outline.

The entities marked with * are owned directly by the Egmont Foundation.

SUBSidiaRiES

ownership share Country Entity Registered office 2012 2011

Denmark Egmont International Holding A/S * Copenhagen

Egmont Holding A/S Copenhagen

Egmont Magasiner A/S Gentofte

Egmont Specialblade A/S Gentofte

Vægtkonsulenterne A/S Gentofte

Egmont Magazine Services A/S Gentofte

Oxygen Magasiner A/S Copenhagen 96 % 40 %

Egmont Kids Media Nordic A/S Copenhagen

Egmont Creative Center A/S Copenhagen

Egmont Kids Media, Digital A/S Copenhagen

Lindhardt og Ringhof Forlag A/S Copenhagen

Nordisk Film A/S Copenhagen

Nordisk Film Distribution A/S Copenhagen

Nordisk Film Shortcut A/S Copenhagen

Nordisk Film Production A/S Copenhagen

Nordisk Film Biografer A/S Copenhagen

Scala Bio Center Aalborg ApS Aalborg 80 % 80 %

NF Live A/S Copenhagen

Kino.dk A/S Copenhagen 74 % 74 %

Billetlugen A/S Copenhagen -

Next2Live A/S Copenhagen -

Nordisk Film Bridge Finance A/S Copenhagen

Dansk Reklame Film A/S Copenhagen

Nordisk Trading Company A/S Kolding - (Merged with Nordisk Film Distribution A/S)

Egmont Administration A/S Copenhagen

Egmont Finansiering A/S Copenhagen -

Ejendomsselskabet Vognmagergade 11 ApS * Copenhagen

Ejendomsselskabet Gothersgade 55 ApS* Copenhagen

Ejendomsaktieselskabet Lygten 47-49 Copenhagen

Norway Egmont AS Oslo

Egmont Holding AS Oslo

Egmont Kids Media Nordic AS Oslo

Nordisk Film AS Oslo

Nordisk Film Post Production AS Oslo - (Merged with Nordisk Film Production AS)

Nordisk Film Distribusjon AS Oslo

Nordisk Film Production AS Oslo

Nordisk Film ShortCut AS Oslo 66 % 66 %

65

30 group entities (continued)


SUBSidiaRiES


Norway Drammen Kino AS Drammen 66.7 % 66.7 %

Venuepoint AS Oslo -

Neofilm AS Oslo 66.7 % 66,7 %

Filmweb AS Oslo 64.3 % 34 %

Sportskort AS Oslo 96.82 %

Egmont Hjemmet Mortensen AS Oslo

Hjemmet Mortensen Trykkeri AS Oslo

Hjemmet Mortensen Fagmedia AS Oslo

Frysjaveien 42 AS Oslo -

AE-TV Holding AS Bergen - 50 % (Merged with Egmont Holding AS)

TV 2 Gruppen AS Bergen 50 %

TV 2 AS Bergen 50 %

Nydalen Studios AS Oslo 50 %

OB-Team AS Oslo 50 %

Broom.no AS Oslo -

Outside Broadcast Team AS Bergen 50 %

Eventyrkanalen AS Bergen 50 %

TV 2 Torget AS Bergen 50 %

Vimond Media Solutions AS Bergen 50 %

Kanal 24 Norge AS Fredrikstad 50 %

TV 2 Zebra AS Bergen - 27.5 % (Merged with TV 2 AS)

Mosart Medialab AS Bergen 84.5 % 42.25 %

Sweden Egmont Holding AB Malmø

Egmont Tidskrifter AB Malmø

Auto, Motor och Sport Sverige AB Stockholm - (Merged with Egmont Tidskrifter AB)

Egmont Tidskrifter BM AB Stockholm

Egmont Kids Media Nordic AB Malmø

Egmont Editions AB Malmø

Sudd AB Stockholm 60 %

Sören och Anders Interessenter AB Malmø

Änglatroll AB Malmø

Skandinaviske Skoledagböcker AB Stockholm

Nordisk Film Sverige AB Stockholm

Nordisk Film Produktion Sverige AB Stockholm

Nordisk Film Post Produktion AB Stockholm - (Merged with Egmont Holding AB )

Nordisk Film Distribution AB Stockholm

Spiderbox Entertainment AB Stockholm

Nordisk Film ShortCut AB Stockholm 66 %

Venuepoint AB Gøteborg -


SUBSidiaRiES


Finland Egmont Holding Oy/Egmont Holding Ab Helsinki

Oy Nordisk Film Ab Helsinki

Dominova Oy/AB Helsinki

BK Pro Fitness Oy Vasa

Germany Egmont Holding GmbH Berlin

Egmont Ehapa Verlag GmbH Berlin

Egmont Verlagsgesellschaften mbH Cologne

Mitte-Editionen GmbH Berlin

Egmont Ehapa Rights Management GmbH Berlin

Egmont Ehapa Comic Collection GmbH Berlin

United Kingdom Egmont Holding Ltd. London

Egmont UK Ltd. London

Poland Egmont Polska sp. z o.o. Warsaw

Czech Republic Egmont CR s.r.o. Prague

Hungary Egmont Hungary Kft. Budapest

Russia ZAO Egmont Russia Ltd. Moscow

Estonia Egmont Estonia AS Tallinn

Latvia Egmont Latvija SIA Riga

Lithuania UAB Egmont Lietuva Vilnius

Ukraine Egmont Ukraine LLC Kiev

Romania Egmont Romania S.R.L. Bukarest

Bulgaria Egmont Bulgaria EAD Sofia

Croatia Egmont d.o.o. Zagreb

USA Egmont US Inc. New York

Sverre LLC Denver 50.5 % 50.5 %

China Egmont Hong Kong Ltd. Hong Kong

Egmont Sourcing (HK) Ltd. Hong Kong

South Africa Egmont Africa Pty, LTD Cape Town -



JoinTly ConTRollEd EnTiTiES

ownership share

Country Entity Registered office 2012 2011

Denmark Pumpehuset af 2011 A/S Copenhagen 50 % 50 %

Norway Mediehuset Nettavisen AS Oslo 50 % 50 %

Næringslivsavisen Na24 AS Oslo 50 % -

Bootstrap AS Oslo 50 % -

Nordic World AS Oslo 50 % 25 %

Cappelen Damm Holding AS Oslo 50 % 50 %

Cappelen Damm AS Oslo 50 % 50 %

Cappelen Damm Salg AS Oslo 50 % 50 %

Tanum AS Oslo 50 % 50 %

Sentraldistribusjon ANS Oslo 50 % 50 %

Larsforlaget AS Oslo

Cappelen Damm Holding AS owns 66 % 66 %

Flamme Forlag AS Oslo

Cappelen Damm Holding AS owns 80 % 80 %

Barnemagasinet AS Oslo 50 % 50 %

Maipo Film AS Oslo 55.1 % 55.1 %

Sweden Fladen Film AB Stockholm - 50 %

Finland Solar Films Oy Helsinki 50.1 % 50.1 %

Egmont Kustannus Oy Ab Helsinki 50 % 50 %

Turkey Dogan ve Egmont Yayincilik A.S. Istanbul 50 % 50 %

Australia Hardie Grant Egmont Pty Ltd Melbourne 50 % 50 %

China Children’s Fun Publishing Company Ltd. Beijing 49 % 49 %

Thailand Nation Egmont Edutainment Company Ltd. Bangkok 50 % 50 %



aSSoCiaTES


Denmark Zentropa Folket ApS Hvidovre 49.69% 49.69%

Ugebladenes Fælles Opkrævningskontor I/S Albertslund 50 % 50 %

Publizon A/S Aarhus 36 % 36 %

ABCiTY A/S Copenhagen 24.42 % 24.42 %

I/S Ugebladsdistributionen * Albertslund 50 % 50 %

Norway Motor ANS Oslo 50 % 50 %

Biip.no AS Oslo

Egmont Serieforlaget AS owns - 45 %

TV 2 AS owns - 45 %

Wolftech Broadcast Solutions AS Bergen 40 % -

Norges Televisjon AS Oslo

TV 2 Gruppen AS owns 33.3 % 33.3 %

RiksTV AS Oslo


Norges Mobil TV AS Oslo


Sweden Golfresan AB Stockholm 35 % 35 %

Klintberg Nihlén Media AB Stockholm 49 % -

Finland Matila Röhr-Nordisk Oy Helsinki 43.54 % 43.54 %

HD-Post Oy Helsinki

Solar Films Oy owns 40 % 40 %

United Kingdom Wendy Promotion Ltd. London 50 % 50 %

* Danish partnerships forming part of associates do not prepare official annual reports.


69

Income Statement of the Egmont Foundation(EURk)

income Statement of the Egmont Foundation

note 2012 2011

Royalty income, etc. 3,950 3,940

2 Personnel costs (197) (161)

Other external expenses (836) (868)

operating profit 2,917 2,911

Dividends from investments in subsidiaries 4,225 4,842

Financial income 119 853

Financial expenses (289) (40)

profit before tax 6,972 8,566

3 Tax on profit for the year (190) (382)


distribution of net profit

Transfer to reserve fund 1,356 1,637

Transfer to charitable fund 4,070 4,910

Transfer to liquid reserve fund 1,356 1,637

Total 6,782 8,184

70

Balance Sheet of the Egmont Foundation at 31 December(EURk)

Balance Sheet of the Egmont Foundation at 31 december

Note Assets 2012 2011

4 Investments in subsidiaries 181,061 181,699

5 Investments in associates 251 252

Financial assets 181,312 181,951

Total non-current assets 181,312 181,951

Receivables from group enterprises 101,369 105,535

Other receivables 3,397 292


Securities 577 565

Cash and cash equivalents 0 469

Total current assets 105,343 106,861

ToTal aSSETS 286,655 288,812

Equity and liabilities 2012 2011

6 Capital fund 29,489 29,593

7 Reserve fund 228,218 230,678

8 Charitable fund 12,431 11,628

9 Liquid reserve fund 3,690 4,588

Total equity 273,828 276,487

Pensions 388 397

non-current liabilities 388 397

Payables to group enterprises 120 170

Donations committed but not yet paid 9,782 8,424

Other payables 2,537 3,334



ToTal EqUiTy and liaBiliTiES 286,655 288,812

71notes of the Egmont Foundation (EURk)

1 accounting policies

The financial statements of the Egmont Foundation have been prepared in accordance with the provisions of the

Danish Financial Statements Act applying to class C enterprises (large) and the financial reporting requirements of the

Foundation’s Charter.

The accounting policies applied in the presentation of the financial statements are consistent with those of the previous

year.

No cash flow statement has been included for the Egmont Foundation, as reference is made to the consolidated cash

flow statement.

Royalty income, etc.

Royalties received are accrued and recognised as income in accordance with the concluded agreement.

investments in subsidiaries and associates

Investments in subsidiaries and associates are measured at cost. Where cost is lower than the recoverable amount,

impairments are made to this lower value.

dividends

Dividends from investments in subsidiaries and associates are recognised in the financial year in which the dividend is

declared, typically at the time when the general meeting approves the distribution of dividend by the relevant company.

To the extent that the dividend distributed exceeds accumulated earnings after the acquisition date, dividend is

recognised as a reduction of the cost of the investment.

Equity

Profit is distributed according to the Foundation’s Charter. The Charitable Activities’ donations and associated expenses

are charged directly to the liquid reserve fund under equity.

The Foundation’s equity consists of a capital fund and a reserve fund intended for the Commercial Activities. The capital

fund is an undistributable reserve, while the reserve fund comprises distributable reserves. The charitable fund serves to

ensure the existence of funds required for the Egmont Foundation’s Charitable Activities. The liquid reserve fund is the

amount which is to be used for charitable purposes under the Foundation’s Charter within the scope of the Charitable

Activities.

In the calculation of tax, due allowance is made for the deductibility of charitable donations made according to the

Egmont Foundation’s Charter. These are charged to equity. Tax provisions for future donations are also taken into

account. Provision for deferred tax is made in case the Egmont Foundation does not expect to use liquid funds for

charitable purposes equal to the tax provisions.

72

2 personnel costs 2012 2011

Wages and salaries (166) (107)

Pensions (40) (37)

Adjustment of pension obligation 9 (17)

Total (197) (161)

Compensation paid to the Board of Trustees amounted to 155 in 2012 (2011: 124), of which 75 (2011: 60) was included in

the costs of the Charitable Activities.

The Management Board of the Foundation is also employed by Egmont International Holding A/S, which pays all salaries to

the Management Board. The Foundation pays an overall fee to Egmont International Holding A/S for this administration.

3 Tax on profit for the year 2012 2011

Calculated royalty tax for the year (190) (382)

Total (190) (382)

Tax on profit for the year consists of royalty tax.

4 investments in subsidiaries 2012 2011

Cost at 1 January 181,699 181,214


Cost at 31 december 181,061 181,699

5 investments in associates 2012 2011

Cost at 1 January 252 252


Cost at 31 december 251 252

Investments in associates consist of 50% of the equity in I/S Ugebladsdistributionen, Albertslund.

6 Capital fund 2012 2011

Balance at 1 January 29,593 29,513


Balance at 31 december 29,489 29,593

7 Reserve fund 2012 2011



Transfer from distribution of net profit 1,356 1,637

Transfer to liquid reserve fund (3,003) (2,287)


notes of the Egmont Foundation (EURk)

73

8 Charitable fund 2012 2011



Transfer from distribution of net profit 4,070 4,910

Transfer to liquid reserve fund (3,217) (3,941)


Use according Use according 9 liquid reserve fund to articles 6-10 to article 11 Total

Balance at 1 January 2011 3,876 238 4,114

Foreign exchange adjustments 11 1 12

Used for charitable purposes (5,939) (466) (6,405)

Costs (998) 0 (998)

Transfer from reserve fund 2,058 229 2,287

Transfer from charitable fund 3,941 0 3,941

Transfer from distribution of net profit 1,473 164 1,637

Balance at 31 december 2011 4,422 166 4,588

Foreign exchange adjustments (19) (1) (20)

Used for charitable purposes (7,024) (466) (7,490)

Costs (964) 0 (964)

Transfer from reserve fund 2,703 300 3,003

Transfer from charitable fund 3,217 0 3,217

Transfer from distribution of net profit 1,220 136 1,356

Balance at 31 december 2012 3,555 135 3,690

The liquid reserve fund is the amount which is to be used for charitable purposes under the Foundation’s Charter within the

scope of the Charitable Activities.

notes of the Egmont Foundation (EURk)

74 Board of Trustees and Management Board of the Egmont Foundation

BoaRd oF TRUSTEES

Mikael olufsen (Chairman)director, born 1943, took office 1993Member of the Boards of TryghedsGruppen smba (CM), Tryg A/S (CM), Tryg Forsikring A/S (CM), Malaplast Ltd., Thailand (CM), Gigtforeningen (CM), WWF Verdensnaturfonden, Danmark-Amerika Fondet

Steen Riisgaard (Vice Chairman)CEo, novozymes a/S, born 1951, took office 2002Member of the Boards of ALK-Abello A/S (CM), WWF Verdensnaturfonden (CM), Rockwool International A/S (VC), CAT Science A/S, Novo A/S, Novo Nordisk Fonden, Villum Fonden, Aarhus University

Ulrik BülowCEo, otto Mønsted a/S; CEo, house of Business partners a/S, born 1954, took office 2003Member of the Boards of Arator A/S (CM), GateHouse A/S (CM), Intersport Danmark A/S (CM), Plougmann & Vingtoft A/S (CM), FDM Travel A/S, Oreco A/S, Plaza Ure & Smykker A/S, Royal Unibrew A/S, Toms Gruppen A/S, Gigtforeningen

Torben Ballegaard Sørensendirector, born 1951, took office 2006Member of the Boards of AS3-Companies A/S (CM), CAT Forsknings- og Teknologipark A/S (CM), PowerBrands A/S (CM), Tajco Group A/S (CM), Realfiction ApS (CM), Systematic A/S (VC), Pandora Holding A/S, AB Electrolux, Sweden

Jeppe Skadhaugeattorney and partner, Bruun & hjejle, born 1954, took office 2009Member of the Boards of Blindes Støttefond (CM), Tømmerhandler Johannes Fogs Fond (VC),Designmuseum Danmark (VC), the Council of the Danish Bar and Law Society, the Danish Institute of Arbitration

Board of Trustees and Management Board of the Egmont Foundation

lars-Johan Jarnheimerdirector, born 1960, took office 2011Member of the Boards of BRIS (Children’s Rights in Society) (CM), Sweden, CDON-Group AB (CM), Sweden, Eniro AB (CM), Sweden, Arvid Nordquist HAB, Sweden, SAS Group, Sweden, INGKA Holding BV, the Netherlands

anna von lowzowJournalist and film director, born 1961, took office 1996

peder høgildoperator supervisor, born 1958, took office 2009

Marianne oehlenschlæger hR consultant, born 1958, took office 2011

ManagEMEnT BoaRd

Steffen Kraghpresident and CEo, born 1964Member of the Boards of Nykredit Realkredit A/S (VC), Nykredit Holding A/S (VC), Foreningen Nykredit, Cappelen Damm Holding AS (CM), Norway

hans J. CarstensenChief Financial officer, born 1965Member of the board of DI ITEK

All information as of 19 March 2013.

CM: ChairmanVC: Vice Chairman

The Egmont Foundation: Annual report 2012

Documents

egmont foundationvognmagergade

egmont magazines

egmont books

statement of changes

egmont foundationannual

egmont kids media

cash flow statement

board of trustees