III. FORECAST, RISK AND OPPORTUNITY REPORT
1. Forecast report
For the 2023 financial year, in view of continuing circulation losses and the associated revenue stagnation in the core market, we expect only a slight increase in revenues of around 2 million euros, driven mainly by the development of the newer activities such as Custom Content, dpa-Select, and dpa-Audio.
As a result of slightly higher expenses due to revenue-driven cost items and increased technical costs to accelerate key innovation projects, coupled with a renewed significant reduction in the allocation to the provident fund totalling 1.7 million euros and the absence of special expenses for major sporting events, we expect to generate earnings of around 1.0 million to 1.3 million euros. It remains to be seen to what extent the Ukraine war, the energy price crisis, and the inflation trend will continue to have an impact in the 2023 financial year and may require renewed countermeasures as in previous years in connection with the COVID-19 pandemic.
Looking ahead, we expect total revenues to increase again slightly in 2024 and anticipate a net profit for the year similar to that in 2023. The extent to which we can maintain this will depend on the duration and intensity of the crisis situation and its impact on the 2023 fiscal year.
2. Risk and opportunity report
To consolidate and further develop its currently strong economic situation, dpa has launched a detailed sustainability strategy. In the past fiscal year, the foundations for this were laid and a corresponding interdisciplinary team was formed. Against the background of a reporting obligation starting in 2025, the agency will publish its first sustainability report, based on the international standard GRI (Global Reporting Initiative), for the parent company dpa GmbH in the course of 2023.
With regard to the topic of sustainability, dpa sees its work as a social obligation. This ethical value orientation forms the foundation for the business conduct of the German Press Agency. With its sustainable business practices, dpa is ensuring a long-term balance that will enable the agency to fulfil its role as a non-partisan joint venture of the German media in the long run.
The interplay of social, ecological, and economic factors (“People, Planet, Prosperity”) forms the strategic framework to which dpa is aligning its sustainability process. With the help of a survey of the group’s employees, a so-called materiality analysis, nine key fields of action were identified. In addition to the carbon footprint and mobility, these include topics such as new work, continuing education, governance, and responsible business conduct.
In addition to contributing to a climate-friendly society, the executive board and the editorial board also see many opportunities for the company. These lie in two areas in particular. On the one hand, business partners and purchasing departments increasingly view the existence of climate certifications as a basic prerequisite for a successful cooperation with dpa. In the negative case, potential customers may refrain from placing an order if dpa was not able to provide the required certificates. With its sustainability strategy, dpa is in a position to respond constructively to this development.
On the other hand, it is increasingly important for dpa’s employees, as well as for people applying for jobs at the agency, to have found an employer who is credibly committed to sustainable business practices. Expectations here are not limited solely to reducing the carbon footprint or climate neutrality, but also to social aspects, diversity, and a socially relevant corporate purpose.
dpa has recognised that its employees are an essential factor for the company’s long-term economic and journalistic success. Retaining the best employees and attracting promising jobseekers to dpa is one of the major challenges in a changing labour market. In order to optimise the opportunities for the company in the HR area and to learn as much as possible about the sentiments and assessments in the workforce, dpa launched an employee survey. The result: In addition to strong approval in the areas of commitment, identification, and mobile working, several development potentials became clear. For example, dpa needs to take a close look at the aspects of stress and workload, development opportunities, and change processes.
Within the group, several beacon projects have been launched that place additional demands on the HR department, such as the diversity and sustainability projects. Likewise, measures essential to personnel strategy were initiated in the area of organisational and personnel development. The new dpa management development programme “Mastering Future Leadership” was launched. 15 potential candidates (m/f/d) for key positions in the group at the top management level as well as the C-level started their training in Q4 2022. Furthermore, the development of internal needs-oriented training offerings for employees and managers has begun in order to meet the requirements for (collaborative) work in the new hybrid working world and thus simultaneously increase employee retention and satisfaction. To this end, initial pilot workshops have been held with managers and employees from the various companies within the group and organisational departments.
Finally, the response to the offerings created in the area of occupational health management (OHM) has shown that as an employer we offer important support here for keeping our employees healthy. In collaboration with our cooperation partner, we offer psychological support as an acute intervention, which is particularly important in times of crisis, for example due to war or natural disasters, as well as individual or group psychological coaching.
In addition to the areas of optimisation mentioned here, the working environment itself is also decisive for the degree of identification and satisfaction with the employer. For this reason, dpa has continued to drive the establishment of the new working worlds. At the dpa headquarters on Hamburg’s Mittelweg, another floor was completely gutted and adapted to the requirements of a contemporary working environment. As in other areas, shared desks, focus boxes, and additional rooms for meetings and collaborative work have been created here. Other areas of the building will follow suit in the foreseeable future. The desks and co-working zones in the new newsroom of the central editorial office in Berlin were also designed according to similar principles. The Frankfurt site and the largest subsidiary news aktuell have also been looking at new space and equipment concepts.
We are countering the risks associated with the continuing decline in print media circulation by successively converting customers to the new pricing model, which takes particular account of online reach in addition to print reach. The new pricing model is already taking effect for the majority of daily newspaper customers and private radio stations. In addition, new innovative offers are being developed.
Attacks by hacker groups with the aim of capturing sensitive data or paralysing entire systems have become one of the central risk issues. In the course of a partially successful attack on an IT service provider in the HR area, dpa and its employees became the focus of cybercriminals. Fortunately, after in-depth analyses with the help of external specialists, it was determined that the attackers were unable to capture any sensitive employee data and that dpa’s IT systems were not at risk at any time. dpa has taken this attack as an opportunity to once again thoroughly review its cooperation with service providers from an IT security perspective and to identify any potential for optimisation.
Overall, dpa has further strengthened its IT security measures and sensitised employees to the dangers with regular online training programmes. The IT security specialists at dpa have networked with teams at other media groups and hosted a CISO (Chief Information Security Officer) conference themselves. In summary, the dpa group and its employees are well equipped to defend against cyberattacks. dpa is aware that this topic will continue to be high on the list of potential risks in the coming years.
Within the context of the war in Ukraine and potential disruptions to infrastructure in Germany, dpa has developed a crisis plan for itself and its customers in order to be prepared for possible supply bottlenecks and power outages. For example, dpa made timely efforts to stock up on IT equipment and supplies, as well as to proactively equip emergency generators with fuel. In addition, the agency has looked at alternative supply routes in the event of system outages, as well as additional services for customers in the event of a crisis (“#dpa_BE_PREPARED”).
In order to address the default and liquidity risk of financial assets and related receivables, dpa actively engages in financial risk management. Long-term investments are made in a risk-averse manner. By filling executive positions at affiliated companies and shareholdings with our own employees and adhering to the dual control principle, we are able to minimise risks and respond to current developments at short notice at all times. Trade accounts receivable (including those due from shareholders) are monitored in a timely manner and reduced through systematic receivables management.
There are currently no identifiable risks that are likely to jeopardise the company’s continued existence.
Despite stable figures for 2022 and a cautiously optimistic outlook for 2023, dpa remains committed to the highest level of vigilance in connection with the effects of the Ukraine conflict and its immediate impact on Germany and the German economy. The aim is to identify the associated risks at an early stage and, if necessary, to take appropriate countermeasures immediately.