III. FORECAST, RISK AND OPPORTUNITY REPORT
1. Forecast report
For the 2024 financial year, in view of the ongoing loss of circulation and the associated stagnation in revenue in the core market, we expect only a slight increase in revenue from organic growth. The forecast of revenue growth of around 3.2 million euros is largely due to the transfer of dpa-infocom’s Web-Line products to the dpa parent company as part of the planned integration of the digital editorial department into dpa’s central editorial department on July 1, 2024. In addition, further growth is also expected for newer products such as Custom Content and dpa-Video.
With rising expenses due to revenue-driven cost items and upcoming pay scale adjustments and slightly falling earnings contributions from the subsidiaries, as well as a 1.0 million euros lower allocation to the provident fund, we expect to achieve a net profit for the year of between approximately 1.0 million euros and 1.2 million euros. It remains to be seen to what extent the eventual collective wage agreement will ultimately reflect the current demands of the collective bargaining partners and thus impact dpa’s annual net profit.
Looking ahead, we also expect total revenue to increase slightly in 2025 and anticipate the net profit for the year to be similar to 2024. The extent to which we can maintain this will depend on the further development of the economic situation and, not least, the effects of the aforementioned collective wage agreement.
2. Risk and opportunity report
The overall situation at dpa remains stable. In addition to the dominant topic of AI and the opening of the pioneering new newsroom in Berlin, there are other significant areas of opportunity for Germany’s largest news agency. These include various sustainability measures as well as several internal initiatives that contribute to the individual advancement and well-being of employees in the workplace, such as the “Mastering Future Leadership” management development programme and the activities of a diversity working group.
dpa published its first sustainability report in the 2023 reporting year, laying the foundation for the establishment of sustainable management and work. The report focuses on social, ecological and economic areas of activity, summarised under the terms “People, Planet, Prosperity”.
For the first time, key figures can be compared with each other and the improvements compared to the previous year can be presented in concrete terms. dpa believes that the company’s sustainable orientation is improving its chances in public tenders (especially at the EU level) and as an employer brand. Experience has shown that sustainable and diverse brands have better chances of retaining high potential employees in the long term.
The fact that dpa is perceived as an attractive employer is crucial to the company’s success. The promotion and retention of managers is particularly important. At the beginning of 2023, dpa launched the group-wide management development programme “Mastering Future Leadership” with 15 participants. With the diversity working group, dpa wants to raise awareness among employees and promote diversity and tolerance in the workplace. Addressing the issues of women and leadership, social background and ethnic origin are top priorities. In the 2023 reporting year, the event series “ElevateHer↑ – networking women, increasing opportunities!” stands out.
Modern working environments can often be decisive for employee satisfaction and engagement. In addition to the opening of the newsroom in Berlin, dpa has been working intensively on the further development of new working worlds at the company headquarters in Hamburg. As a result, another two newly designed floors have now been handed over to the sales and IT employees. dpa has expanded the tried-and-tested principle of shared desks and a mix of meeting and creative spaces, thereby increasing its attractiveness as a forward-thinking employer.
Possible attacks by hacker groups on dpa’s IT infrastructure continue to pose a risk. Fortunately, no successful attacks were carried out in the reporting year. This is also proof of the success of the security measures taken by the IT security team. dpa is constantly working to ensure the security of its networks and to improve the protection against possible attacks. For example, a full-day workshop for software developers was held during the reporting year, which focused on thinking about IT security from the outset. The workshop was conducted by the consulting firm HACKATTACK. In addition, dpa-IT has introduced new security procedures for passwords.
In the upcoming wage negotiations, there is a risk that the eventual wage agreement will be significantly higher than the planned salary increases and therefore have a considerable impact on dpa’s annual net profit. In order to counteract the salary increases, specific structural and cost-saving measures have already been introduced, which will be reinforced depending on the level of the eventual collective wage agreement.
In order to counter the default and liquidity risk of financial assets and related receivables, dpa operates an active financial risk and receivables management system. Long-term investments are invested in a risk-averse manner. By appointing our own employees to executive positions at affiliated companies and shareholdings and adhering to the dual control principle, we are able to minimise risks and react to current developments at short notice.
Since 2022, dpa has been managed using the Objective & Key Results (OKR) management system. In addition to the group OKRs, 16 units have divisional OKRs, which contribute to the group OKRs and define their own divisional targets. The OKRs are tracked on a quarterly basis. This allows them to respond to influences affecting dpa at very short notice and therefore makes a significant contribution to managing business risks. In 2023, the OKR system enabled the individual dpa units to take action very quickly in relation to the dynamic progress of AI technologies. The group OKRs are made public every quarter in a town hall and thus contribute to transparency and trust within the company.
There are currently no identifiable risks to the company as a going concern that are likely to materialise.
Despite stable figures for the 2023 financial year, dpa is obliged to be extremely vigilant due to the Ukraine conflict and the war in Gaza and their direct impact on Germany and the German economy. Inflation, high energy prices and generally gloomy economic expectations for 2024 underline the need for combining forward-looking action with the necessary caution and, simultaneously, the consistent pursuit of strategic goals.