report for 3q 2016 - gazeta.plbi.gazeta.pl/im/6/20956/m20956376,raport-iiikw-2016-ang.pdf ·...

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AGORA GROUP

Report for

3q 2016

November 10, 2016

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Management Discussion and Analysis for the third quarter of 2016 translation only

TABLE OF CONTENTS

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) OF THE GROUP’S RESULTS FOR THE third QUARTER OF 2016 ...... 4

I. IMPORTANT EVENTS AND FACTORS WHICH INFLUENCE THE FINANCIALS OF THE GROUP ........................................ 4

II. EXTERNAL AND INTERNAL FACTORS IMPORTANT FOR THE DEVELOPMENT OF THE GROUP .................................... 6 1. EXTERNAL FACTORS ................................................................................................................................................ 6

1.1 Advertising market [3] .................................................................................................................................. 6

1.2 Copy sales of dailies [4] ................................................................................................................................. 7

1.3. Cinema admissions [10] ............................................................................................................................... 7

2. INTERNAL FACTORS ................................................................................................................................................ 8 2.1. Revenue ....................................................................................................................................................... 8

2.2. Operating cost ............................................................................................................................................ 10

3. PROSPECTS ............................................................................................................................................................ 12 3.1. Revenue.. ........................................................................................................................................................... 12

3.1.1 Advertising market [3] ............................................................................................................................. 12 3.1.2 Copy sales ................................................................................................................................................ 12 3.1.3. Ticket sales .............................................................................................................................................. 12

3.2 Operating cost .................................................................................................................................................... 12 3.2.1 Costs of external services......................................................................................................................... 13 3.2.2 Staff cost .................................................................................................................................................. 13 3.2.3 Promotion and marketing cost ................................................................................................................ 13 3.2.4 Cost of raw materials and energy ............................................................................................................ 13

III. FINANCIAL RESULTS ................................................................................................................................................. 14 1. THE AGORA GROUP .............................................................................................................................................. 14 2. PROFIT AND LOSS ACCOUNT OF THE AGORA GROUP .......................................................................................... 14

2.1. Financial results presented according to major segments of the Agora Group for the first three quarters

of 2016 [1] ......................................................................................................................................................... 15

2.2. Finance cost, net ........................................................................................................................................ 16

3. BALANCE SHEET OF THE AGORA GROUP .............................................................................................................. 16 3.1. Non-current assets ..................................................................................................................................... 16

3.2. Current assets ............................................................................................................................................ 16

3.3. Non-current liabilities and provisions ........................................................................................................ 17

3.4. Current liabilities and provisions ............................................................................................................... 17

4. CASH FLOW STATEMENT OF THE AGORA GROUP ................................................................................................ 17 4.1. Operating activities .................................................................................................................................... 18

4.2. Investment activities .................................................................................................................................. 18

4.3. Financing activities ..................................................................................................................................... 18

5. SELECTED FINANCIAL RATIOS [5] .......................................................................................................................... 19

IV. OPERATING REVIEW - MAJOR SEGMENTS OF THE AGORA GROUP ........................................................................ 20 IV.A. PRESS [1]........................................................................................................................................................... 20 1. Revenue ................................................................................................................................................................ 21 1.1. Copy sales .......................................................................................................................................................... 21

1.1.1. Copy sales and readership of Gazeta Wyborcza [4] ................................................................................ 21 1.1.2. Copy sales of Agora’s magazines ............................................................................................................ 21

1.2. Advertising sales [3] ........................................................................................................................................... 21 1.2.1. Advertising sales of Gazeta Wyborcza .................................................................................................... 21 1.2.2. Advertising sales of Metrocafe.pl [3],[4] ................................................................................................ 21 1.2.3. Advertising sales of Agora’s magazines .................................................................................................. 22

2. Cost ....................................................................................................................................................................... 22 3. New initiatives ...................................................................................................................................................... 22

IV.B. MOVIES AND BOOKS [1] ....................................................................................................................................... 23 1. Revenue [3] ........................................................................................................................................................... 23 2. Cost ....................................................................................................................................................................... 24

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3. New initiatives ...................................................................................................................................................... 24

IV.C. OUTDOOR (AMS GROUP) ..................................................................................................................................... 25 1. Revenue [8] ........................................................................................................................................................... 25 2. Cost ....................................................................................................................................................................... 25 3. New initiatives ...................................................................................................................................................... 26

IV.D. INTERNET [1], [6] .................................................................................................................................................. 27 1. Revenue ................................................................................................................................................................ 27 2. Cost ....................................................................................................................................................................... 28 3. Important information on internet activities........................................................................................................ 28

IV.E. RADIO ................................................................................................................................................................... 29 1. Revenue [3] ........................................................................................................................................................... 29 2. Cost ....................................................................................................................................................................... 29 4. New initiatives ...................................................................................................................................................... 30

IV.F. PRINT [1] ............................................................................................................................................................... 31 1. Revenue ................................................................................................................................................................ 31 2. Cost ....................................................................................................................................................................... 31 NOTES ....................................................................................................................................................................... 32

V. ADDITIONAL INFORMATION ..................................................................................................................................... 35 1. Important events .................................................................................................................................................. 35 2. Changes in ownership of shares or other rights to shares (options) by Management Board members in the third

quarter of 2016 and until the date of publication of the report .............................................................................. 38 3. Changes in ownership of shares or other rights to shares (options) by Supervisory Board Members in the third

quarter of 2016 and until the date of publication of the report .............................................................................. 38 4. Shareholders entitled to exercise over 5% of total voting rights at the General Meeting of Agora S.A., either

directly or through affiliates as of the date of publication of the quarterly report .................................................. 39 5. Other information ................................................................................................................................................. 40

Condensed interim consolidated financial statements .................................................................................................... 41

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AGORA GROUP

MANAGEMENT DISCUSSION AND ANALYSIS

(MD&A) OF THE GROUP’S RESULTS

FOR THE THIRD QUARTER OF 2016

REVENUE PLN 858.1 MILLION

NET LOSS PLN 24.9 MILLION

EBITDA PLN 65.8 MILLION

OPERATING CASH FLOW PLN 36.1 MILLION

Unless indicated otherwise, all data presented herein represent the period of January – September 2016, while

comparisons refer to the same period of 2015. All data sources are presented in part IV of this MD&A.

I. IMPORTANT EVENTS AND FACTORS WHICH INFLUENCE THE FINANCIALS OF THE

GROUP

� In the third quarter of 2016, Agora Group’s (the “Group”) revenue amounted to PLN 273.4 million and increased

by 5.2% yoy. This resulted mainly from high attendance in Helios cinemas, which translated into an increase in

revenue from ticket sales of 49.0% to PLN 44.7 million and higher concession sales which amounted to PLN 17.6

million (up by 49.2%). Also the Internet segment, the revenue of which increased by 15.6% to reach the amount

of PLN 38.6 million, contributed positively to the level of the Group’s revenue. Another segment to record a

significant increase in revenue — by 7.3%, to PLN 38.2 million, was Outdoor. Press, Radio and Print were among

the segments that recorded lower revenues. The revenue from the Group’s press operations decreased by 10.3%

and amounted to PLN 63.7 million. This results primarily from the existing market trends. The revenue of the

Radio segment decreased by 6.2% to PLN 21.2 million mainly due to the situation in the radio advertising market.

Lower revenue from the operations of the Print segment (down by 5.0% yoy) amounting to PLN 37.9 million result

from the lower volume of orders placed by external customers, primarily in the heatset technology.

� In the period January–September 2016, the Group’s revenue amounted to PLN 858.1 million and increased by

2.7% yoy. The increase in the Group’s revenue in this period resulted primarily from an increase in the inflows of

the Movies and Books, Internet, Outdoor and Radio segments, which counterbalanced the lower revenues from

the Press and Print segments. In the period January–September 2016, the fastest increase in revenue was

recorded in the Internet segment — by 12.7% yoy, to PLN 118.4 million. Another segment characterised by high

revenue growth dynamics was the Outdoor segment. From the beginning of the year to the end of September

2016, total revenue of the segment amounted to PLN 119.6 million and increased by 9.0% yoy. In the period

January–September 2016, total revenue of the Movies and Books segment amounted to PLN 252.5 million — an

increase by 8.3% yoy. This was mainly thanks to high attendance in Helios cinemas, which translated into an

increase in the revenue from both ticket sales as well as concession sales. The revenue of the segment was also

positively affected by the sale of the game The Witcher 3: Wild Hunt and its extensions, recorded in the nine

months of 2016 in the amount of PLN 9.8 million. The revenue of the Radio segment also grew dynamically — by

6.9% to reach PLN 76.2 million. The revenue of the Press segment decreased by 9.2% to PLN 199.4 million. This

decline resulted primarily from lower advertising revenue in that segment. The revenue of the Print segment

amounted to PLN 118.5 million and decreased by 2.1% mainly due to lower volume of orders placed by external

customers.

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� In the third quarter of 2016, the Group’s operating costs increased by 7.2% and amounted to PLN 283.1 million.

This results mainly from increased operating costs in the Movies and Books and Internet segments. The Outdoor

and Radio segments also recorded a slight increase in operating costs. Operating costs in the Print segment

remained similar to those recorded in the third quarter of 2015. The increase in operating costs up to PLN 78.1

million in the Movies and Books segment was mainly affected by higher costs of both film copy purchase and

rental fees in Helios cinemas due to the network’s growing scale. The increase in operating costs up to PLN 33.5

million in the Internet segment was related mainly to the development of the advertising brokerage offer and

consolidation of GoldenLine. In the Outdoor segment, the increase in operating costs by 1.2% to PLN 34.1 million

results primarily from higher staff costs as well as higher costs of executed advertising campaigns. The increase in

operating costs in the Radio segment up to PLN 23.2 million resulted mainly from the cost of cinema advertising

services in Helios cinemas as well as higher promotion and marketing costs. The Press segment recorded

decreased operating costs as a result of a reduction in the majority of cost items.

� In the period January-September 2016, the Group’s operating costs increased by 3.9% and amounted to PLN

866.1 million. There were increases recorded in most of the Group’s operating segments. The highest dynamics in

the increase in operating costs — up by 16.0% to PLN 103.7 million, was recorded in the Internet segment. This

resulted mainly from higher costs related to brokerage of advertising space of third- party Internet publishers,

higher staff costs as well as consolidation of GoldenLine. The increase in operating costs in the Movies and Books

segment — up by 6.8% to PLN 236.8 million, is mainly related to higher costs of film copy purchase and the

development of the Helios network. The increase in operating costs in the Radio segment by 6.1% to PLN 71.2

resulted maily from higher cost of cinema advertising in Helios cinemas, higher, staff cost as well as higher

promotion and marketing cost. In the Print segment, the increase in operating costs was affected by higher costs

of materials and production services. In the Outdoor segment, the increase in operating costs up to PLN 101.3

million results from higher costs of executed advertising campaigns as well as higher staff costs. The Press

segment recorded decreased operating costs as a result of lower staff costs and a reduction in other operating

costs.

� In the third quarter of 2016, the Group’s EBITDA decreased to PLN 14.9 million. In this period, the Group recorded

an operating loss at the EBIT level of PLN 9.7 million. The net loss amounted to PLN 13.8 million and the net loss

attributable to the equity holders of the parent company amounted to PLN 14.5 million.

� In the period January-September 2016, the Group’s EBITDA amounted to PLN 65.8 million and was lower yoy. In

this period, the EBIT operating loss amounted to PLN 8.0 million. In the first nine months of 2016, the net loss

amounted to PLN 24.9 million and the net loss attributable to the equity holders of the parent company

amounted to PLN 26.8 million.

� The acquisition of 106 shares in the share capital of GoldenLine Sp. z o.o. (“GoldenLine”) with its registered office

in Warsaw from the shareholders of this company for the total price of PLN 8.5 million in the first quarter of 2016

significantly affected the Group’s net result in the period January-September 2016. A detailed description of this

transaction is included in note 12 to the condensed interim consolidated financial statements of Agora Group for

the first half of 2016. The total negative impact of the acquisition of GoldenLine on the consolidated net result of

the Group for the first nine months of 2016 amounted to PLN 3.3 million.

� At the end of September 2016, the Group’s cash and short-term monetary assets amounted to PLN 63.3 million,

which comprised cash and cash equivalents in the amount of PLN 24.6 million and PLN 38.7 million invested in

short-term securities. Additionally, the Group held cash receivables of PLN 21.6 million deposited by AMS S.A. as

cash collateral securing the bank guarantees granted in relation to performance of the concession contract for the

construction and modernisation of bus/tram shelters in Warsaw.

� As at 30 September 2016, the Group’s debt amounted to PLN 112.7 million (including external debt of Helios S.A.

consisting of bank loans and finance lease liabilities in the amount of PLN 84.6 million).

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II. EXTERNAL AND INTERNAL FACTORS IMPORTANT FOR THE DEVELOPMENT

OF THE GROUP

1. EXTERNAL FACTORS

1.1 Advertising market [3]

According to the Agora S.A. estimates (“Company”, “Agora”), based on public data sources, in the third quarter of

2016, total advertising spending in Poland amounted to ca PLN 1.7 billion and increased by over 0.5% yoy.

Tab. 1

3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016

% change

yoy in ad

market

value

5.0% 3.0% 6.5% 6.0% 10.0% 4.5% 3.0% 2.0% 0.5%

In the third quarter of 2016 advertisers increased advertising expenditure in cinema, internet and outdoor. They spent

less in press and in radio. The data relating to the changes in the value of advertising expenditure in particular media

segments are presented in the table below:

Tab. 2

Total

advertising

expenditure

Television Internet Magazines Radio Outdoor Dailies Cinema

0.5% 0.0% 7.0% (9.5%) (6.0%) 4.0% (22.0%) 16.5%

The share of particular media segment in total advertising expenditure, in the third quarter of 2016, is presented in

the table below:

Tab. 3

Advertising

spendings, in

total


100.0% 46.5% 29.5% 6.0% 7.5% 6.5% 2.5% 1.5%

In the first nine months of 2016, total advertising spending in Poland amounted to ca PLN 5.7 billion and increased by

2.0% yoy. At that time, advertisers limited their expenditure only in press. The growth of advertising expenditure was

visible in other advertising market segments. The data relating to the changes in the value of advertising expenditure

in particular media segments are presented in the table below:

Tab. 4

Total

advertising

expenditure


2.0% 1.0% 8.0% (8.0%) 0.5% 4.5% (18.5%) 14.0%

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The share of particular media segment in total advertising expenditure, in the first nine months 2016, is presented in

the table below:

Tab. 5

Advertising

spendings, in

total


100.0% 49.5% 27.0% 6.0% 7.5% 6.0% 2.5% 1.5%

1.2 Copy sales of dailies [4]

In the third quarter of 2016, the total paid circulation of dailies decreased by 8.6% yoy. The largest decrease was

observed in regional dailies.

In the first nine months of 2016, the drop in total paid circulation of dailies in Poland amounted to 8.5%. The largest

decrease was observed in regional dailies.

1.3. Cinema admissions [10]

In the third quarter of 2016, the number of tickets sold in Polish cinemas increased by almost 46.9% yoy and

amounted to almost 12.7 million.

In the period January – September 2016, the number of tickets sold in Polish cinemas increased by almost 20.6% yoy

to nearly 36.4 million tickets.

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2. INTERNAL FACTORS

2.1. Revenue

Tab. 6

in million PLN 3Q 2016 % share 3Q 2015 % share % change yoy

Total sales (1) 273.4 100.0% 259.8 100.0% 5.2%

Advertising revenue 123.2 45.1% 125.3 48.2% (1.7%)

Copy sales 31.1 11.4% 33.9 13.0% (8.3%)

Ticket sales 44.7 16.3% 30.0 11.5% 49.0%

Printing services 36.0 13.2% 37.9 14.6% (5.0%)

Other 38.4 14.0% 32.7 12.7% 17.4%

in million PLN 1-3Q 2016 % share 1-3Q 2015 % share % change yoy

Total sales (1) 858.1 100.0% 835.4 100.0% 2.7%

Advertising revenue 395.4 46.1% 392.3 47.0% 0.8%

Copy sales 100.0 11.7% 107.4 12.9% (6.9%)

Ticket sales 133.8 15.6% 107.0 12.8% 25.0%

Printing services 112.6 13.1% 114.7 13.7% (1.8%)

Other 116.3 13.5% 114.0 13.6% 2.0%

(1) particular sales positions, apart from ticket sales and printing services, include sales of Publishing House and film

activities (co-production and distribution in the Movies and Books segment), described in details in point IV.B in

this report.

In the third quarter of 2016, the Group's total revenue amounted to PLN 273.4 million and increased by 5.2% yoy.

In the reporting period, the Group’s advertising revenue decreased by 1.7% yoy and amounted to PLN 123.2 million.

It was lower in the Press and Radio segments. However, it increased in the Internet, Movies and Books and Outdoor

segments.

In the third quarter of 2016, the Group’s copy sales revenue amounted to PLN 31.1 million and decreased by 8.3%

yoy. This was mainly due to the decline in sales of the Agora Publishing House and decline in copy sales of printed

press.

In the third quarter of 2016, revenue from tickets sold in Helios cinemas increased by 49.0% and amounted to PLN

44.7 million. In the reporting period, the number of tickets sold in Helios cinemas amounted to over 2.4 million, which

meant an increase by over 37.5% yoy. In the same period, the overall number of cinema tickets sold in Poland

amounted to almost 12.7 million and increased by 46.9% [10]. The difference in the dynamics of ticket sales provided

by Boxoffice and by Helios cinema network comes from the different approach to reporting periods. According to the

Boxoffice data the reporting period in September included one weekend more than in the same month of 2015 or in

the calendar in September 2016. The data provided by Helios is reported according to the current calendar. If Helios

used the same reporting period as Boxoffice.pl its growth dynamics of ticket sales would amount to 50.4%.

In the third quarter of 2016, revenue from the sales of printing services in the Group amounted to PLN 36.0 million

and decreased by 5.0% yoy.

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The revenue from other sales amounted to PLN 38.4 million and increased by 17.4%. This resulted mainly from higher

concession sales, which increased by 49.2% to PLN 17.6 million in the third quarter of 2016, and from the sales of

subscriber access in GoldenLine.

In the period January–September 2016, the Group's total revenue amounted to PLN 858.1 million and increased by

2.7% yoy.

In the first three quarters of 2016, the Group’s advertising revenue increased by 0.8% yoy and amounted to PLN

395.4 million. The highest growth in advertising revenue was reported in the Outdoor segment. Advertising revenue in

the Internet, Movies and Books and Radio segments also increased.

In the period January–September 2016, the Group’s copy sales revenue amounted to PLN 100.0 million and

decreased by 6.9% yoy. The factors that influenced the level of the Group’s copy sales revenue were, among others,

the continued downward trend with regard to copy sales of printed press and the high sales results of the movie

Bogowie on DVD in the first nine months of 2015.

In the first three quarters of 2016, revenue from tickets sold in Helios cinemas increased by 25.0% and amounted to

PLN 133.8 million. In the reporting period, the number of tickets sold in Helios cinemas amounted to almost 7.4

million and was higher by 19.5% yoy. In the same period, the overall number of cinema tickets sold in Poland

amounted to nearly 36.4 million and increased by almost 20.6% [10]. The difference in presented dynamics of ticket

sales growth results from different reporting periods used by Boxoffice.pl and Helios. If Helios used the same

reporting periods as Boxoffice.pl, its growth dynamics of ticket sales in the comparable period would amount to

almost 22.6.

In the period January–September 2016, revenue from the sales of printing services in the Group amounted to PLN

112.6 million and was lower by 1.8% yoy.

The revenue from other sales amounted to PLN 116.3 million and increased by 2.0% yoy. This increase was mainly

affected by higher concession sales in cunemas and sales of paid services by GoldenLine.pl. Significantly lowere yoy

were revenues from film distribution.

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2.2. Operating cost

Tab. 7

in million PLN 3Q 2016 % share 3Q 2015 % share % change yoy

Operating cost net, including: (283.1) 100.0% (264.2) 100.0% 7.2%

External services (97.4) 34.4% (87.2) 33.0% 11.7%

Staff cost (76.1) 26.9% (73.5) 27.8% 3.5%

Raw materials, energy and consumables (54.3) 19.2% (53.7) 20.3% 1.1%

D&A (24.6) 8.7% (24.2) 9.2% 1.7%

Promotion and marketing (20.0) 7.1% (20.7) 7.8% (3.4%)

in million PLN 1-3Q 2016 % share 1-3Q 2015 % share % change yoy

Operating cost net, including: (866.1) 100.0% (833.7) 100.0% 3.9%

External services (304.9) 35.2% (277.4) 33.3% 9.9%

Staff cost (236.8) 27.3% (229.8) 27.6% 3.0%

Raw materials, energy and consumables (164.9) 19.0% (163.3) 19.6% 1.0%

D&A (73.8) 8.5% (77.7) 9.3% (5.0%)

Promotion and marketing (58.1) 6.7% (60.2) 7.2% (3.5%)

The Group’s net operating costs increased by 7.2% in the third quarter of 2016 and amounted to PLN 283.1 million. In

the first nine months of 2016, they increased by 3.9%, up to the amount of PLN 866.1 million.

There was an increase in the cost of external services recorded both in the third quarter, as well as in the first nine

months of 2016.

In the third quarter of 2016, this increase was caused mainly by higher costs of film copy purchase, increased costs of

brokerage services in the Internet and Radio segments and an increase in the costs of computer services in the

Internet segment.

In the period January–September 2016, the sharpest increase was recorded in the costs of film copy purchase in the

Movies and Books segment. The costs of advertising brokerage services, computer services as well as rental fees and

transport and distribution were also higher. It is worth noting that in the first three quarters, the level of costs of

external services was significantly affected by the settlement with the producer of the game The Witcher 3: Wild Hunt

related to the sale of the game and its extensions.

The Group’s staff costs increased by 3.5% to PLN 76.1 million in the third quarter of 2016, and by 3.0% to PLN 236.8

million in the first nine months of 2016. This cost item went up in most of the Group’s operating segments. The

segments in which staff costs were lower in both periods were the Press and Print segments.

The increase in this cost item in the both reporting periods in the Internet segment resulted, among other things, from

consolidation of GoldenLine and headcount increase in the AdTaily network and Trader.com (Polska) Sp. z o.o. as well

as services from the Gazeta.pl group dedicated to sports. Higher staff costs in the Movies and Books segment were

connected with the expansion of the Helios network, and in the Outdoor segment with higher yoy execution of sales

budgets. The staff cost in the Radio segment remained flat in the third quarter of 2016, and grew in the first nine

months of 2016 due to strengthening of the sales teams.

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The Group’s headcount at the end of September 2016 amounted to 2,998 full time employees and decreased by 14

FTEs yoy. This reduction results mainly from a lower yoy level of employment in the Press and Print segments.

The Group offers different incentive plans for its employees (for example: cash motivation plans, incentive plans in

sales departments, incentive schemes for Board Members, etc.), the cost of which is charged to the Group’s staff costs

items.

A decrease by 0.6% in the costs of materials and energy recorded in the third quarter of 2016 resulted mainly from

lower cost of production materials related to lower production volumes. In the period January–September 2016, these

cost items remained at a similar level to the corresponding period of 2015.

The Group's cost of promotion and marketing decreased in the third quarter of 2016 by 3.4% to PLN 20.0 million. This

resulted mainly from less intensified promotional activity in the Movies and Books, Outdoor and Press segments. In

the first three quarters of 2016, the promotion and marketing costs were 3.5% lower yoy. A slight increase was

recorded only in the Radio segment.

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3. PROSPECTS

The operating result of the Agora Group may be positively affected by execution of the conditional agreement of the

sales agreement of the right of perpetual usufruct of two, together with the ownership of the buildings erected on

one of them. The Company informed about execution of the above agreement in the current report published on

October 27th, 2016.

The total sale price of the Property will be PLN 9.7 million net and its positive impact on the operating result of the

Agora Group for 4Q2016 will be ca. PLN 6.0 million.

3.1. Revenue

3.1.1 Advertising market [3]

In the third quarter of 2016, the advertising market in Poland increased by over 0.5% yoy. Advertisers spent ca PLN 1.7

billion yoy to promote their products and services. In the first three quarters of 2016, the total amount of expenditure

on advertising increased by 2.0% yoy and amounted to ca PLN 5.7 billion.

The Company observes symptoms showing the slow down of the advertising market performance: lack of growth of

advertising expenditure in the largest segment of advertising market – TV and continued decrease of advertising

expenditure in press in the third quarter of 2016. Additionally radio advertising expenditure suffers from the drop of

advertising expenditure a consecutive quarter in a row.

Due to the specific nature of the third quarter the Company decided not to change its estimates regarding advertising

expenditure growth in Poland in 2016. The Company would like however draw attention to the fact that the dynamics

of advertisers’ expenditure in particular media may differ from the estimates given by Company. According to

Company’s estimates the dynamics of advertising expenditure in radiostations and in TV may be lower than estimated

by the Company and higher in outdoor and cinemas than published by the Company in the Management Board’s

Discussion and Analysis for the first half of 2016.

3.1.2 Copy sales

In the last quarter of 2016, negative trends relating to copy sales of dailies and magazines in their print versions will

continue. The Company is working on the sales of its digital content. At the beginning of 2014, Agora implemented a

new model of access to the digital content of Gazeta Wyborcza and a digital subscription offer. In the Company’s

opinion, such activities, together with other factors, should stabilise the Press segment’s financial results in the long

term.

3.1.3. Ticket sales

The most significant factor affecting attendance in Polish cinemas is the repertoire. Based on the available

information, the number of tickets sold in Polish cinemas in the first nine months of 2016 amounted to nearly 36.4

million, which means an increase by almost 20.6% yoy [10]. Results for the period January–September 2016 and the

repertoire for the rest of the current year allow the Company to estimate that the cinema attendance in the entire

2016 may be higher than the one observed in 2015.

3.2 Operating cost

The level of operating cost in the fourth quarter of 2016 will be affected by the provision related to the group

redundancy procedure executed in the Group. The process will continue until the end of 2016 and involve up to 135

employees. The Company estimates that the level of the provision for this process will amount to PLN ca 5.6 million.

The provision will burden the financial results of the Company and Agora Group in the fourth quarter of 2016.

Additionaly on the December 2, 2016 the Company will launch its television channel - METRO – on MUX - 8, which will

affect the level of the Group’s operating cost.

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In the last quarter of 2016, the Group is planning to continue its development projects in selected business segments,

which, however, should not result in a significant increase in operating costs. Segments with the largest projects to be

executed include: Internet, Radio, Outdoor as well as Movies and Books.

3.2.1 Costs of external services

The cost of external services in the period October–December 2016 will largely depend on the cost of brokerage

services — in particular in the Internet segment, costs of film copy purchase related directly to the level of revenue

from ticket sales, costs related to the launch of the METRO TV station and the EUR/PLN exchange rate. In addition, the

increase in this cost item will be affected by opening of new cinema facilities planned for 2016 and fees for film

producers related to the Group’s film distribution business and execution of other development projects.

3.2.2 Staff cost

The growth of the staff cost in the fourth quarter of 2016 shall be caused, i.a., by the provision related to collective

redundancy process executed in Agora S.A. in the amount of PLN 5,6 million. Additionally the level of staff cost will be

affected by the execution of development projects in the Group. In the Internet segment, the increase in staff costs

will be related to consolidation of GoldenLine and development of selected web portals of the Gazeta.pl group and

mobile applications, as well as to strengthening the sales force team. In the Radio and Outdoor segments, the increase

will be mainly related to strengthening the sales departments and higher yoy execution of sales budgets. The launch

of the METRO TV station will also contribute to the increase in this cost item.

3.2.3 Promotion and marketing cost

In the first three quarters of 2016, the promotion and marketing costs were lower by 3.5% yoy. In the last quarter of

2016, Agora Group plans further development activities, which also include promotional activities. The dynamics of

changes in individual media, the number of launched development projects, including the METRO TV channel and film

co-production and distribution activities, as well as market activities of the Group’s competitors may affect the level of

these expenses. Taking the above factors into consideration, the Company estimates that in the period October–

December 2016 this cost item may be similar to that recorded in 2015.

3.2.4 Cost of raw materials and energy

In the first nine months of 2016, the value of this cost item was at the comparable level yoy. According to the Group's

estimates, the level of this cost item in the last quarter of 2016 will be shaped by similar market trends. The Group’s

Print segment has the largest impact on this cost item, especially the cost of production materials, the volume of

production and the EUR/PLN exchange rate.

[ w w w . a g o r a . p l ]


III. FINANCIAL RESULTS

1. THE AGORA GROUP

The consolidated financial statements of the Agora Group for the third quarter of 2016 include: Agora S.A. and

21 subsidiaries, which operate principally in the internet, print, cinema, radio and outdoor segments. Additionally, the

Group held shares in jointly controlled entities Stopklatka S.A. and Online Technologies HR Sp. z o.o., as well as in

associated companies Instytut Badan Outdooru IBO Sp. z o.o. and Hash.fm Sp. z o.o.

A detailed list of companies of the Agora Group is presented in the note 11 and selected financial data together with

translation into EURO are presented in note 18 to the condensed interim consolidated financial statements.

2. PROFIT AND LOSS ACCOUNT OF THE AGORA GROUP

Tab. 8

in PLN million 3Q 2016 3Q 2015 % change

yoy

1-3Q

2016

1-3Q

2015

% change

yoy

Total sales (1) 273.4 259.8 5.2% 858.1 835.4 2.7%

Advertising revenue 123.2 125.3 (1.7%) 395.4 392.3 0.8%

Copy sales 31.1 33.9 (8.3%) 100.0 107.4 (6.9%)

Ticket sales 44.7 30.0 49.0% 133.8 107.0 25.0%

Printing services 36.0 37.9 (5.0%) 112.6 114.7 (1.8%)

Other 38.4 32.7 17.4% 116.3 114.0 2.0%

Operating cost net, including: (283.1) (264.2) 7.2% (866.1) (833.7) 3.9%

Raw materials, energy and consumables (54.3) (53.7) 1.1% (164.9) (163.3) 1.0%

D&A (24.6) (24.2) 1.7% (73.8) (77.7) (5.0%)

External services (97.4) (87.2) 11.7% (304.9) (277.4) 9.9%

Staff cost (76.1) (73.5) 3.5% (236.8) (229.8) 3.0%

Promotion and marketing (20.0) (20.7) (3.4%) (58.1) (60.2) (3.5%)

Gain on a bargain purchase (2) - - - 2.2 - -

Operating result - EBIT (9.7) (4.4) (120.5%) (8.0) 1.7 -

Finance cost, net, incl.: (0.9) 0.5 - (6.5) (0.4) 1,525.0%

Revenue from short-term investment 0.4 0.4 - 1.3 1.6 (18.8%)

Interest on bank loans, borrowings, finance

lease and similar items (1.0) (0.9) 11.1% (2.8) (2.9) (3.4%)

Remeasurement of equity interest at the

acquisition date (2) - - - (5.5) - -

Share of results of equity accounted

investees - (0.8) - (0.1) (1.0) (90.0%)

Profit/(loss) before income tax (10.6) (5.7) (86.0%) (14.6) 0.3 -

Income tax (3.2) (1.0) 220.0% (10.3) (2.2) 368.2%

Net profit/(loss) for the period (13.8) (6.7) (106.0%) (24.9) (1.9) (1,210.5%)

Attributable to:

Equity holders of the parent (14.5) (6.6) (119.7%) (26.8) (3.0) (793.3%)

Non - controlling interest 0.7 (0.1) - 1.9 1.1 72.7%

EBIT margin (EBIT/Sales) (3.5%) (1.7%) (1.8pp) (0.9%) 0.2% (1.1pp)

EBITDA 14.9 19.8 (24.7%) 65.8 79.4 (17.1%)

EBITDA margin (EBITDA/Sales) 5.4% 7.6% (2.2pp) 7.7% 9.5% (1.8pp)

[ w w w . a g o r a . p l ]


(1) particular sales positions, apart from ticket sales and printing services, include sales of Publishing House division

and film activities (co-production and distribution in the Movies and Books segment), described in details in point IV.B

in this report.

(2) the line items - gain on a bargain purchase and remeasurement of equity interest at the acquisition date – are

related to the acquisition of GoldenLine Sp. z o.o in the first quarter of 2016.

2.1. Financial results presented according to major segments of the Agora Group for the first

three quarters of 2016 [1]

Major products and services, as well as operating revenue and cost of the Agora Group are presented in detail in part

IV of this MD&A (“Operating review – major segments of the Agora Group”).

Tab. 9

in PLN million Press Movies

and Books Outdoor Internet Radio Print

Reconciling

positions (3)

Total

(consoli-

dated)

1-3Q 2016

Total sales (1) 199.4 252.5 119.6 118.4 76.2 118.5 (26.5) 858.1

% share 23.2% 29.4% 13.9% 13.8% 8.9% 13.8% (3.0%) 100.0%

Operating cost net (1) (200.4) (236.8) (101.3) (103.7) (71.2) (123.5) (29.2) (866.1)

EBIT (1.0) 15.7 18.3 14.7 5.0 (5.0) (55.7) (8.0)

Finance cost, net

(6.5)

Share of results of

equity accounted

investees

(0.1)

Income tax

(10.3)

Net loss for the period (24.9)

Attributable to:

Equity holders of the

parent (26.8)

Non-controlling interest

1.9

EBITDA 6.0 38.5 30.0 18.5 7.3 6.8 (41.3) 65.8

CAPEX (2) (1.2) (25.1) (14.1) (4.8) (1.7) (2.6) (5.9) (55.4)

(1) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media if such promotion

is executed without prior reservation between segments of the Agora Group; the direct variable cost of campaigns

carried out on advertising panels is the only cost that is included above; it is allocated from the Outdoor segment to

other segments;

(2) based on invoices booked in the period, the amount in the Movies and Books segment includes also PLN 11.0 million

of non-current assets in lease;

(3) reconciling positions show data not included in particular segments, i.a.: other revenues and costs of Agora’s

supporting divisions (centralized IT, administrative, finance and HR functions, etc.), new TV channel and the

Management Board of Agora S.A., Agora TC Sp. z o.o., intercompany eliminations and other matching adjustments

which reconcile the data presented in the management reports to the consolidated financials of the Agora Group.

[ w w w . a g o r a . p l ]


2.2. Finance cost, net

Net financial activities of the Group for the first three quarters of 2016 were influenced mainly by interest from bank

deposits, cost of commissions and interest on bank loans and lease liabilities, as well as the effect of the

remeasurement of previously held equity interest in the subsidiary GoldenLine sp. z o.o. at the acquisition date in the

first quarter 2016.

3. BALANCE SHEET OF THE AGORA GROUP

Tab. 10

in PLN million 30-09-2016 30-06-2016 % change to

30-06-2016 31-12-2015

% change to

31-12-2015 30-09-2015

Non-current assets 1,152.0 1,154.5 (0.2%) 1,162.3 (0.9%) 1,146.5

share in balance sheet total 76.4% 73.3% 3.1pp 72.2% 4.2 pp 75.0%

Current assets 354.9 420.1 (15.5%) 447.9 (20.8%) 383.1

share in balance sheet total 23.6% 26.7% (3.1pp) 27.8% (4.2 pp) 25.0%

TOTAL ASSETS 1,506.9 1,574.6 (4.3%) 1,610.2 (6.4%) 1,529.6

Equity holders of the parent 1,087.0 1,101.2 (1.3%) 1,153.5 (5.8%) 1,137.9


Non-controlling interest 18.7 18.4 1.6% 16.7 12.0% 15.3

share in balance sheet total 1.2% 1.2% - 1.0% 0.2pp 1.0%

Non-current liabilities and provisions 141.6 139.6 1.4% 118.6 19.4% 120.3


Current liabilities and provisions 259.6 315.4 (17.7%) 321.4 (19.2%) 256.1

share in balance sheet total 17.3% 20.0% (2.7pp) 20.0% (2.7 pp) 16.7%

TOTAL LIABILITIES AND EQUITY 1,506.9 1,574.6 (4.3%) 1,610.2 (6.4%) 1,529.6

3.1. Non-current assets

The decrease in non-current assets, versus 30 June 2016 and 31 December 2015, resulted mainly from depreciation

and amortisation charges as well as reclassification of some property, plant and equipment to current assets due to

their presentation as non-current assets held for sale. The above changes were, to some extent, compensated by new

investments in property, plant and equipment and intangible assets as well as by an increase in long-term receivables,

because part of the cash collateral provided by the subsidiary AMS S.A. was reclassified from short-term to long-term

receivables.

The change in non-current assets versus 31 December 2015 was also affected by the acquisition of assets of

GoldenLine Sp. z o.o. in the first quarter of 2016, compensated, to some extent, by the decrease in investments in

equity accounted investees due to obtaining control over GoldenLine Sp. z o.o.

3.2. Current assets

The decrease in current assets, versus 30 June 2016 and 31 December 2015, results mainly from the decrease in

accounts receivable and short-term securities.

[ w w w . a g o r a . p l ]


3.3. Non-current liabilities and provisions

The increase in non-current liabilities and provisions, versus 30 June 2016, stems mainly from reclassification of put

option granted to a non-controlling shareholder of GoldenLine Sp. z o.o. from short-term to long-term liabilities as

well as minor increase in other non-current liabilities. The above changes were, to some extent, compensated by a

decrease in long-term loans.

The increase in non-current liabilities and provisions, versus 31 December 2015, resulted mainly from an increase in

long-term loans as Agora S.A. used a tranche available within its time credit limit in the second quarter of 2016. The

increase was also affected by the higher deferred tax liabilities resulting from the acquisition of Goldenline Sp. z o.o in

the first quarter of 2016.

3.4. Current liabilities and provisions

The decrease in current liabilities and provisions, versus 30 June 2016, stems mainly from the decrease in accounts

payable and the dividend liability. There has been also a decrease in short-term borrowings and other financial

liabilities.

The decrease in current liabilities and provisions, versus 31 December 2015, stems from the decrease in accounts

payable, tax liabilities and accruals, as well as lower balance of short-term loans and other financial liabilities.

4. CASH FLOW STATEMENT OF THE AGORA GROUP

Tab. 11


yoy

1-3Q

2016

1-3Q

2015

% change

yoy

Net cash from operating activities 25.6 12.7 101.6% 36.1 65.5 (44.9%)

Net cash from investment activities 22.1 (14.3) - 7.6 (79.5) -

Net cash from financing activities (53.1) 5.7 - (50.2) (9.1) 451.6%

Total movement of cash and cash

equivalents (5.4) 4.1 - (6.5) (23.1) (71.9%)

Cash and cash equivalents at the end of

period 24.6 29.3 (16.0%) 24.6 29.3 (16.0%)

As at 30 September 2016, the Agora Group had PLN 63.6 million in cash and short-term monetary assets, which

comprised cash and cash equivalents in the amount of PLN 24.6 million (cash, bank accounts and bank deposits) and

PLN 38.7 million invested in short-term securities. Additionally, as at 30 September 2016 the Group held long-term

cash receivables of PLN 21.6 million deposited by AMS S.A. as cash collateral securing the bank guarantees granted in

relation to performance of the concession contract for the construction and modernisation of bus/tram shelters in

Warsaw.

In the first three quarters of 2016, Agora S.A. has not been engaged in any currency option instruments or other

derivatives (used for hedging or speculative purposes).

On the basis of the Annex no. 2 to the multi - purpose credit line agreement signed on 24 May 2016 with Bank Polska

Kasa Opieki S.A., Agora S.A. was provided with a time credit of up to PLN 100.0 million, which may be used by 31 May

2017 and with a credit facility in the current account of up to PLN 35.0 million, which may be used by 31 May 2017. As

at 30 September 2016, the amount of the time credit is diminished by the non-renewable tranche used in May 2016 in

the amount of PLN 25.0 million, which will be paid up in 13 equal installments from June 30, 2017 till June 30, 2020.

[ w w w . a g o r a . p l ]


As at the date of this MD&A report, considering the cash position, the cash pooling system functioning in the Group

and available credit facility, the Agora Group does not anticipate any liquidity problems with regards to its further

investment plans (including capital investments).

4.1. Operating activities

The decrease in net inflows from operating activities, in the first three quarters of 2016, stems mainly from the lower

result from the main operating activities of the Group, changes in working capital of the Group (mainly increase in

inventory and decrease in accruals, which were to some extent compensated by a decrease in accounts receivable) as

well as higher payments of income tax liabilities.

4.2. Investment activities

Net intflows from investing activities, in the first three quarters of 2016, results mainly from net proceeds from

disposal of short-term securities and other inflows related to the return of cash paid by the Company in connection

with the subscriptions for shares of Stopklatka S.A. and the return of cash deposits provided to the bank by AMS S.A.

as a cash collateral securing the the concession contract for construction and utilization of bus shelters in Warsaw.

Those inflows were to some extent compensated by expenditure on property, plant and equipment and intangibles as

well as acquisition of GoldenLine sp. z o.o.

4.3. Financing activities

Net outflows from financing activities, in the first three quarters of 2016, results mainly from the payment of dividend

to equity holders of the parent (PLN 35.7 million), financial lease payments as well as acquisition of non-controlling

interests in subsidiaries. Those outflows were to some extent compensated by net cash inflows from bank loans

(including the one related to the tranche of the time credit used by Agora S.A. in the amount of PLN 25.0 million in the

second quarter of 2016).

[ w w w . a g o r a . p l ]


5. SELECTED FINANCIAL RATIOS [5]

Tab.12

3Q 2016 3Q 2015

(2)

% change

yoy

1-3Q

2016

1-3Q

2015 (2)

% change

yoy

Profitability ratios Net profit margin (5.3%) (2.6%) (2.7pp) (3.1%) (0.4%) (2.7pp)

Gross profit margin 26.1% 28.3%* (2.2pp) 28.1% 29.1%* (1.0pp)

Return on equity (5.3%) (2.3%) (3.0pp) (3.2%) (0.4%) (2.8pp)

Efficiency ratios

Inventory turnover 15 days 14 days 7.1% 14 days 13 days* 7.7%

Debtors days 65 days 71 days (8.5%) 63 days 66 days (4.5%)

Creditors days 40 days 43 days* (7.0%) 41 days 39 days* 5.1%

Liquidity ratio

Current ratio 1.4 1.5 (6.7%) 1.4 1.5 (6.7%)

Financing ratios

Gearing ratio (1) 3.3% - - 3.3% - -

Interest cover (11.3) (5.8) 94.8% (3.2) 0.7 -

Free cash flow interest cover 3.3 (12.4) - (9.9) (0.7) 1,314.3%

(1) as at 30 September 2015 the Group had net cash position;

(2) ratios marked with “*” symbol were adjusted in connection to the adjustment of comparative amounts as described

in note 2 to the condensed interim consolidated financial statements.

Definitions of financial ratios [5] are presented at the end of part IV of this MD&A ("Operating review – major

segments of the Agora Group").

[ w w w . a g o r a . p l ]


IV. OPERATING REVIEW - MAJOR SEGMENTS OF THE AGORA GROUP

IV.A. PRESS [1]

The Press segment includes the pro-forma consolidated financials of Gazeta Wyborcza, Magazines and Free Press

division.

Tab. 13


yoy 1-3Q 2016 1-3Q 2015

% change

yoy

Total sales, including: 63.7 71.0 (10.3%) 199.4 219.7 (9.2%)

Copy sales 30.4 31.4 (3.2%) 93.0 97.0 (4.1%)

incl. Gazeta Wyborcza (1) 24.8 26.1 (5.0%) 76.5 80.2 (4.6%)

incl. Magazines 3.6 4.0 (10.0%) 11.4 12.6 (9.5%)

Advertising revenue (2) 31.3 37.9 (17.4%) 101.0 119.1 (15.2%)

incl. Gazeta Wyborcza (3) 17.9 23.9 (25.1%) 59.1 76.3 (22.5%)

incl. Magazines (4) 5.7 5.3 7.5% 17.4 16.2 7.4%

incl. Metrocafe.pl (4), (5) 3.4 4.6 (26.1%) 10.9 13.7 (20.4%)

Total operating cost, including (6): (64.7) (65.7) (1.5%) (200.4) (206.9) (3.1%)

Raw materials, energy, consumables

and printing services (15.8) (17.7) (10.7%) (51.2) (54.6) (6.2%)

Staff cost (26.8) (27.7) (3.2%) (83.1) (87.1) (4.6%)

D&A (2.2) (2.4) (8.3%) (7.0) (7.4) (5.4%)

Promotion and marketing (2), (7) (11.5) (11.8) (2.5%) (34.1) (34.6) (1.4%)

EBIT (1.0) 5.3 - (1.0) 12.8 -

EBIT margin (1.6%) 7.5% (9.1pp) (0.5%) 5.8% (6.3pp)

EBITDA 1.2 7.7 (84.4%) 6.0 20.2 (70.3%)

EBITDA margin 1.9% 10.8% (8.9pp) 3.0% 9.2% (6.2pp)

(1) since the first quarter of 2016 the sales from copy sales and advertising revenue of Gazeta Wyborcza include the

revenues from the sales and advertising revenue from digital subscriptions of the daily. The data for previous periods

were adjusted accordingly. In previous reporting periods the revenues from the copy sales and advertising revenue of

digital subscriptions were presented in other revenues;

(2) the amounts do not include revenues and total cost of cross-promotion of different media between the Agora

Group segments (only direct variable cost of campaigns carried out on advertising panels) if such promotion is

executed without prior reservation;

(3) in 2015 the presented amounts refer to only a portion of total revenues from dual media offers (published both in

Gazeta Wyborcza, as well as on GazetaPraca.pl, Domiporta.pl, Komunikaty.pl verticals and Nekrologi.Wyborcza.pl

website), which is allocated to the print edition of Gazeta Wyborcza. Since 2016 total revenues from dual media offers

are presented in the advertising revenues of Gazeta Wyborcza.

(4) in 2016 custom publishing activities, which till the end of 2015 were reported together with the results of

Metrocafe.pl, are offered by the Magazines division. The data for 2015 were not adjusted in this respect.

(5) the amounts refer to total revenues of the Free Press including revenues from Metrocafe.pl’s display advertising

(previously Metro), classifieds and inserts as well as from metroBTL services and Metrocafe.pl’s special activities;

(6) segment operating costs associated with the production of the Group's own titles are settled on the basis of

allocation of direct and indirect cost associated with their production from the Print segment;

(7) the amounts include inter alia the production and promotional cost of gadgets offered with Gazeta Wyborcza and

Agora’s magazines.

[ w w w . a g o r a . p l ]


1. REVENUE

In the third quarter of 2016, total revenue of the Press segment decreased by 10.3% yoy and amounted to PLN 63.7

million. The value of the segment’s revenue was affected the most by lower revenue from advertising sales (down by

17.4%), mainly for Gazeta Wyborcza. Revenue from the advertising sales in magazines was, however, higher than in

the third quarter of 2015.

1.1. Copy sales

1.1.1. Copy sales and readership of Gazeta Wyborcza [4]

In the third quarter of 2016, Gazeta Wyborcza maintained its leading position among the opinion-forming dailies. The

average payable distribution of Gazeta Wyborcza amounted to 162 thousand copies and decreased by 8.8% yoy. In

the analysed period, the revenue from copy sales of Gazeta Wyborcza decreased by 5.0% yoy. In the reporting period,

the weekly readership of Gazeta Wyborcza stood at 7.0% (2.1 million readers; CCS, weekly readership index), which

placed it as the second daily among nationwide dailies.

1.1.2. Copy sales of Agora’s magazines

In the third quarter of 2016, the revenue of the Magazines and Free Press division from copy sales decreased by 10.0%

yoy. The average number of copies sold by Agora’s monthlies amounted to 284.2 thousand copies (up by 3.7% yoy). It

is worth noting that in 2016 the magazine portfolio was expanded to include a new magazine – Pogoda na życie. The

sales results were also significantly affected by the sales promotion of electronic versions of selected magazines.

1.2. Advertising sales [3]

1.2.1. Advertising sales of Gazeta Wyborcza

In the third quarter of 2016, Gazeta Wyborcza’s net advertising revenue from all the advertising activity (including

display advertising, classifieds and inserts) amounted to PLN 17.9 million (down by 25.1% yoy).

It should be noted that since 2016, total revenue from the dual-media offer are included in the revenue from

advertising sales of Gazeta Wyborcza. In 2015, the above figures included only a portion of revenue from dual-media

advertising offers (published both in the print edition of Gazeta Wyborcza and on the GazetaPraca.pl, Domiporta.pl,

Komunikaty.pl vertical portals and the Nekrologi.Wyborcza.pl website), which is allocated to the print edition of

Gazeta Wyborcza.

In the third quarter of 2016, ad spending in Polish dailies decreased by almost 22.0% yoy. In the analysed period,

Gazeta Wyborcza’s spending on display advertising decreased by ca 28.0%, and its estimated share in display ad

spending in dailies decreased by 3.0 pp yoy, amounting to almost 34.0%.

In the third quarter of 2016, Gazeta Wyborcza’s share in the national newspapers ad spend amounted to approx.

44.0% and decreased by 2.0 pp yoy. In this period, Gazeta Wyborcza decreased its share in ad spending in Warsaw-

based dailies by almost 5.0 pp. At the same time, Gazeta Wyborcza’s share in ad spending in local dailies (excluding

Warsaw) decreased by over 3.0 pp yoy.

One should bear in mind that these advertising market estimations may represent some margin of error due to a

significant discounting pressure on the part of advertisers. Once the Company has more reliable market data, it may

adjust the ad spend estimations in the consecutive reporting periods.

In the third quarter of 2016, the share of ad pages in Gazeta Wyborcza’s total pagecount amounted to ca. 21.7%

(down by ca 3.9 pp yoy), while the average number of paid-for ad pages published daily in all local and national Gazeta

Wyborcza’s editions amounted to ca. 62 and was lower by ca. 24.9% yoy.

1.2.2. Advertising sales of Metrocafe.pl [3],[4]

In the third quarter of 2016, Metrocafe.pl’s total ad revenue declined by 26.1%, including the display advertising

revenue drop by approx. 20.0% yoy. At the same time, the total display ad spend in all daily newspapers decreased by

[ w w w . a g o r a . p l ]


almost 22.0% yoy. As a result, Metrocafe.pl preserved its share in advertising spending in all dailies at the level of

almost 6.0%. Metrocafe.pl’s share in advertising spending in national dailies decreased in the analysed period by ca.

1.0pp yoy and its share in advertising spending in local dailies went up by almost 1.5pp yoy. Metrocafe.pl increased its

share in Warsaw-based dailies by almost 5.0pp yoy to approx. 28.5%.

1.2.3. Advertising sales of Agora’s magazines

In the third quarter of 2016, the advertising revenue from Agora’s magazines increased by 7.5% to PLN 5.7 million. At

the same time, advertisers limited their expenditure in magazines by 9.5%. Agora had a 3.5% share in the total

national magazines ad spend (based on rate card data) [7] and a 7.1% share in monthlies ad spend (based on rate card

data) [7].

An increase in advertising revenue from Agora’s magazines in the third quarter results, among other things, from the

dynamics growth of online services and higher advertising revenues of the monthly Ladny Dom. Additionally, issuing a

new monthly — Pogoda na zycie, as of January 2016, had a positive impact on the level of revenues.

2. COST

In the third quarter of 2016, the segment's operating costs declined by 1.5% to PLN 64.7 million. This resulted mainly

from lower costs of materials, energy, goods and printing services due to lower printing volumes of own magazines. A

decrease was also recorded in staff costs, mainly due to a lower headcount and year-on-year lower execution of sales

budgets.

3. NEW INITIATIVES

In the third quarter of 2016, the focus of the Press segment was on continued development of its product portfolio —

both paper-based and digital.

The team of editors at Gazeta Wyborcza has been working hard to develop its video content and prepare a new video

offer of Wyborcza.pl, which, as of September this year, includes more original programmes of the daily’s journalists as

well as new video cycles. Apart from the above, the video division of Gazeta Wyborcza has been developing special

projects executed for or in cooperation with its advertising customers.

In July this year, the editorial team of Ladnydom.pl offered new functionalities to its users, including the possibility to

purchase products which are of interest to them and a product search engine. Thanks to the above, not only can they

read about attractive products but also buy them. The team of editors at the portal also prepared an original tool —

Native Galleries, to present combinations of recommended products in the articles, which can be purchased at the

websites of the portal’s business partners. In September this year, Ladnydom.pl offered a new online video format to

its users — Tudu, with short “DIY” tips.

In July this year, a special edition of Avanti — Fit&Beauty hit the market. The special issue of the monthly focuses on

fitness, healthy lifestyle and dietetics.

[ w w w . a g o r a . p l ]


IV.B. MOVIES AND BOOKS [1]

The Movies and Books segment includes the pro-forma consolidated financials of Helios S.A. and NEXT FILM Sp. z o.o.,

which form the Helios group, and Agora’s Special Projects division comprising, i.a, the Publishing House division and

film production division.

Tab. 14


yoy

1-3Q

2016

1-3Q

2015

% change

yoy

Total sales, including : 83.4 65.6 27.1% 252.5 233.1 8.3%

Tickets sales 44.7 30.0 49.0% 133.9 107.0 25.1%

Concession sales 17.6 11.8 49.2% 50.0 39.6 26.3%

Advertising revenue (1) 7.2 6.5 10.8% 19.6 18.8 4.3%

Revenues from film activities (1), (2) 1.6 3.7 (56.8%) 5.2 13.9 (62.6%)

Revenues from Publishing House 9.5 11.3 (15.9%) 34.7 45.3 (23.4%)

Total operating cost, including: (78.1) (65.0) 20.2% (236.8) (221.7) 6.8%

Raw materials, energy and

consumables (3) (7.9) (6.6) 19.7% (22.5) (19.8) 13.6%

External services (3) (36.2) (28.2) 28.4% (110.0) (95.7) 14.9%

Staff cost (3) (8.9) (7.4) 20.3% (26.4) (22.2) 18.9%

D&A (3) (7.3) (7.6) (3.9%) (22.2) (21.4) 3.7%

Promotion and marketing (1), (3) (5.7) (6.8) (16.2%) (16.5) (19.0) (13.2%)

Costs related to Publishing House (4) (9.9) (8.8) 12.5% (35.0) (40.9) (14.4%)

EBIT 5.3 0.6 783.3% 15.7 11.4 37.7%

EBIT margin 6.4% 0.9% 5.5pp 6.2% 4.9% 1.3pp

EBITDA (4) 12.9 8.4 53.6% 38.5 40.4 (4.7%)

EBITDA margin 15.5% 12.8% 2.7pp 15.2% 17.3% (2.1pp)

(1) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media (only the direct

variable cost of campaigns carried out on advertising panels) if such a promotion was executed without prior

reservation;

(2) the amounts comprise the revenues from film co-production (executed in Special Projects division) and film

distribution in cinemas (executed by NEXT FILM);

(3) the amounts do not include costs related to Publishing House division;

(4) the amounts include D&A cost in Publishing House division, which in the first three quarters of 2016 amounted to

PLN 0.6 million, and in the third quarter of 2016 to PLN 0.3 million (in the comparable periods of 2015 it

amounted respectively to PLN 7.6 million and 0.2 million).

In the third quarter of 2016, the Movies and Books segment significantly improved its operating results. The result at

the EBITDA level amounted to PLN 12.9 million and the operating profit at the EBIT level reached the amount of PLN

5.3 million.[1]

The Publishing House closed the third quarter of 2016 with an operating loss at the EBIT level of PLN 0.4 million [1].

1. REVENUE [3]

In the third quarter of 2016, the revenue of the Movies and Books segment increased by 27.1% to PLN 83.4 million.

[ w w w . a g o r a . p l ]


During this time, the number of visitors to Helios cinemas amounted to over 2.4 million and increased by over 37.5%

yoy. This, combined with higher average ticket price and concession sales, translated into a higher revenue from ticket

sales and concession sales.

In the third quarter of 2016, the segment’s total revenue from film co-production and distribution amounted to PLN

1.6 million, showing a decrease by 56.8% yoy. In the reporting period, NEXT FILM released two films for cinema

distribution: a foreign production — Manhattan Nocturne, and a Polish production — Slugi boze. At the same time,

cinemas screened films introduced to the big screen in earlier periods. In the third quarter of 2016, the Special

Projects division recorded revenue from film co-production of the films introduced to Polish cinemas in earlier

periods, mainly Karbala in connection with the distribution in cinemas, on DVD and VOD.

In the third quarter of 2016, the revenue of Agora’s Publishing House (operating within the Special Projects division)

amounted to PLN 9.5 million and decreased by 15.9% yoy. Their level was positively affected by the revenue from the

rights to sell the game The Witcher 3: Wild Hunt and its extensions.

In the third quarter of 2016, the Agora's Publishing House issued 7 book publications, 2 music albums and 2 film

publications. As a result, during the analysed period, the Publishing House sold approximately 0.1 million books and

books with CDs and DVDs.

2. COST

In the third quarter of 2016, the operating costs of the Movies and Books segment increased by 20.2% yoy and

amounted to PLN 78.1 million.

The increase in the segment’s operating costs in the third quarter of 2016 resulted, among other things, from the

higher cost of external services connected with higher rent costs in Helios cinemas due to the expansion of their

network. The second factor that caused the increase in this cost item were higher payments for film copies due to

higher attendance in Helios cinemas, which translated into the increase in revenues from ticket sales. Due to the

expansion of the Helios cinema network and higher concession sales, an increase was recorded in staff costs, the costs

of raw materials, energy and consumables. The decrease in promotion and marketing costs is related to less

intensified activity in film distribution. However, operating costs of the Publishing House, which amounted to PLN 9.9

million, were higher yoy.

3. NEW INITIATIVES

In the third quarter of 2016, a foreign production — Manhattan Nocturne, distributed by NEXT FILM, a film

distribution company from the Helios group, premiered on the big screen. At the same time, the premiere of Slugi

boze directed by Mariusz Gawrys also took place with Agora as the co-producer of the film.

[ w w w . a g o r a . p l ]


IV.C. OUTDOOR (AMS GROUP)

The Outdoor segment consists of the pro-forma consolidated data of companies constituting the AMS group

(AMS S.A., Adpol Sp. z o.o.).

Tab. 15


yoy

1-3Q

2016

1-3Q

2015

% change

yoy

Total sales, including: 38.2 35.6 7.3% 119.6 109.7 9.0%

Advertising revenue (1) 37.7 35.0 7.7% 117.8 107.7 9.4%

Total operating cost, including: (34.1) (33.7) 1.2% (101.3) (98.4) 2.9%

Execution of campaigns (1) (6.0) (5.5) 9.1% (18.0) (16.8) 7.1%

Maintenance cost (1) (14.1) (15.6) (9.6%) (44.1) (46.3) (4.8%)

Staff cost (5.4) (4.9) 10.2% (16.2) (14.7) 10.2%

Promotion and marketing (1.1) (1.7) (35.3%) (3.3) (3.8) (13.2%)

D&A (3.9) (3.5) 11.4% (11.7) (9.5) 23.2%

EBIT 4.1 1.9 115.8% 18.3 11.3 61.9%

EBIT margin 10.7% 5.3% 5.4pp 15.3% 10.3% 5.0pp

EBITDA 8.0 5.4 48.1% 30.0 20.8 44.2%

EBITDA margin 20.9% 15.2% 5.7pp 25.1% 19.0% 6.1pp

Number of advertising spaces (2) 23,971 24,833 (3.5%) 23,971 24,833 (3.5%)

(1) the amounts do not include revenues, direct and variable cost of cross-promotion of Agora’s other media on AMS

panels if such promotion was executed without prior reservation;

(2) excluding small advertising panels of AMS group installed on bus shelters and in the Warsaw subway, as well

as advertising panels on busses and trams.

Thanks to a significant increase in revenue in the third quarter of 2016, the segment’s operating EBIT result increased

by 115.8% yoy and amounted to PLN 4.1 million. The segment also improved the result at the EBITDA level, and the

EBITDA margin increased to 20.9%.

1. REVENUE [8]

According to the IGRZ (Outdoor Advertising Chamber) report, in the third quarter of 2016, outdoor advertising

spending increased by nearly 4,0% yoy.

The dynamics of the increase in the advertising revenue of the AMS Group in the third quarter of 2016 was higher

than in the whole outdoor advertising spending market and amounted to 7.7%. A sharper increase in advertising

revenue for the segment than that recorded by the market was achieved owing to positive dynamics in advertisers’

spending on citylight and backlight panels.

In the third quarter of 2016, the estimated share of the AMS Group in the outdoor ad spend amounted nearly to

35,5%.

2. COST

In the third quarter of 2016, the segment’s operating costs increased by 1.2% yoy.

The costs of campaign execution increased by 9.1% due to a significant increase in the volume of poster printing

services and higher posting costs related to a larger number of orders.

A decrease in system maintenance costs by 9.6% in the reporting period results from effective optimisation of the

portfolio of advertising panels and a decrease in rental fees in selected types of panels.

[ w w w . a g o r a . p l ]


The increase in staff costs by 10.2% results from better performance in terms of sales targets which, among other

things, caused an increase in variable remuneration components.

In the third quarter of 2016, the segment’s marketing and promotion expenses decreased by 35.3%. This was due to a

social communication campaign of a total value lower than the campaigns executed in the comparable period of 2015.

The increase in the amortisation costs is related to intensive investment activities in connection with the performance

of the concession contracts for the construction and use of bus/tram shelters in Warsaw and Krakow. As at the end of

September 2016, there were already 1,150 new bus/tram shelters on the streets of Warsaw and 97 in Krakow.

3. NEW INITIATIVES

In the third quarter of 2016, AMS executed the project of construction of 51 bus shelters in Sosonowiec. The rental

agreement for 102 advertising panels was executed for 10 years.

[ w w w . a g o r a . p l ]


IV.D. INTERNET [1], [6]

The Internet segment includes the pro-forma consolidated financials of Agora’s Internet Department, Trader.com

(Polska) Sp. z o.o., AdTaily Sp. z o.o., Sport4People Sp. z o.o., Sir Local Sp. z o.o., GoldenLine Sp. z o.o. (since January

2016) and Optimizers Sp. z o.o. (since March 2016).

Tab. 16


yoy 1-3Q 2016 1-3Q 2015

% change

yoy

Total sales , including 38.6 33.4 15.6% 118.4 105.1 12.7%

Display ad sales (1) 30.1 26.6 13.2% 94.0 85.4 10.1%

Ad sales in verticals (2) 3.6 3.5 2.9% 9.8 10.2 (3.9%)

Total operating cost, including (33.5) (28.4) 18.0% (103.7) (89.4) 16.0%


Staff cost (12.5) (11.8) 5.9% (38.6) (36.1) 6.9%

D&A (1.3) (1.3) - (3.8) (4.0) (5.0%)

Promotion and marketing (1) (3.1) (2.2) 40.9% (11.3) (11.5) (1.7%)

EBIT 5.1 5.0 2.0% 14.7 15.7 (6.4%)

EBIT margin 13.2% 15.0% (1.8pp) 12.4% 14.9% (2.5pp)

EBITDA 6.4 6.3 1.6% 18.5 19.7 (6.1%)


(1) the amounts do not include total revenues and cost of cross-promotion of Agora’s different media (only direct

variable cost of campaigns carried out on advertising panels) if such promotion is executed without prior reservation,

as well as inter-company sales between Agora’s Internet Department, Trader.com (Polska) Sp. z o.o., AdTaily Sp. z o.o.,

Sport4People Sp. z o.o., Sir Local Sp. z o.o., GoldenLine Sp. z o.o. and Optimizers Sp. z o.o.;

(2) in 2015 presented amounts include, among others, allocated revenues from the dual media offer (i.e. published

both in Gazeta Wyborcza, as well as on GazetaPraca.pl, Domiporta.pl, Komunikaty.pl verticals and

Nekrologi.Wyborcza.pl website). Since 2016 the revenues from dual media offers, as well as revenues from listings in

verticals Komunikaty.pl and NekrologiWyborcza.pl are not allocated to Internet division.

In the third quarter of 2016, the operating result of the Internet segment at the EBIT level increased by 2.0% to PLN

5.1 million [1]. It should be noted that the comparability of the segment’s results against the corresponding periods in

2015 is impacted by the change in the settlement method for dual-media announcements as well as announcements

at Komunikaty.pl and Nekrologi.Wyborcza.pl and the acquisition of majority ownership of GoldenLine Sp. z o.o. as of

January 2016. Due to taking control of the company in January 2016, its results are consolidated under the full

method, while in 2015 they were recognised in the results of the Agora Group under the equity method.

1. REVENUE

In the third quarter of 2016, total revenue of the Internet segment increased by 15.6% and amounted to PLN 38.6

million. This substantial increase in revenue was affected, among other things, by higher sales of web display

advertising and the sales of other Internet services, such as access to the candidate search engine and employers’

profiles through the GoldenLine.pl website.

In the third quarter of 2016, the inflows from web display advertising sales increased by 13.2%, while the revenue

amounted to PLN 30.1 million. The increase in the segment’s advertising revenue was significantly influenced by

higher sales of web display advertising by the AdTaily network and affiliated networks as well as revenue generated by

the GoldenLine.pl website.

In the third quarter of 2016, the segment’s revenue from ad sales in verticals increased by 2.9%. There was a

significant increase in the sales of announcements in recruitment (such as GoldenLine.pl) and real estates

(Domiporta.pl) verticals. The growth dynamics of the revenue was negatively affected by the change in the method of

settling inflows from dual-media announcements as well as announcements on Komunikaty.pl and

Nekrologi.Wyborcza.pl with the Press segment.

[ w w w . a g o r a . p l ]


2. COST

In the third quarter of 2016, operating costs of the Internet segment increased by 18.0% to PLN 33.5 million. The

increase in operating costs was significantly affected by higher costs of external services, staff costs and costs of

promotion and marketing.

In the third quarter of 2016, the costs of external services increased by 44.8% to PLN 15.2 million. The increase in this

cost item was caused mainly by higher rental costs of advertising space in the AdTaily network and the affiliated

network. The increase in this cost item was accompanied by growing revenues from advertising brokerage services

which contributed to the growth of the segment’s total revenue. Apart from the higher rental costs of advertising

space, the segment also recorded an increase in the costs of computer services and other external services in

GoldenLine (consolidated under the full method as of January 2016), in AdTaily and the Gazeta.pl website.

In the third quarter of 2016, staff costs increased by 5.9%. It is mainly the result of full consolidation of GoldenLine, an

increased headcount in AdTaily, Trader.com (Polska) and sports websites of Gazeta.pl.

In the third quarter of 2016, promotion and marketing expenditure in the Internet segment increased by 40.9% yoy.

The increase in this cost item is mainly related to consolidation of GoldenLine’s results and higher advertising outlays

settled in the form of barter transactions in exchange for the promotion of Gazeta.pl’s websites.

3. IMPORTANT INFORMATION ON INTERNET ACTIVITIES

In September 2016, the reach of Gazeta.pl group websites among Polish Internet users stood at 60.6%, and the

number of users reached 15.4 million. The total number of page views of Gazeta.pl group websites reached 624.6

million, with an average viewing time of 57 minutes per user [6].

In September 2016, 8.8 million Internet users (reach of 34.9%) viewed the websites of Gazeta.pl group on mobile

devices, which made Gazeta.pl group the fifth player according to the market survey of Gemius PBI. The number of

mobile page views amounted to 233.7 million, and the share of mobile page views on the websites of Gazeta.pl group

stood at 37.4% and was the highest among Polish horizontal portals [6].

The websites of Gazeta.pl group are ranked among the top thematic market players. In accordance with the data of

Gemius PBI for September 2016, the websites of Gazeta.pl group are the leader in the Work category (GazetaPraca.pl,

GoldenLine.pl), hold the third place in the Information and Journalism and Sports (among others, Sport.pl) categories,

and the fourth place in the thematic rankings — Communities (Forum.Gazeta.pl, Blox.pl) and Cuisine and Cooking

(Ugotuj.to).

[ w w w . a g o r a . p l ]


IV.E. RADIO

The Radio segment includes the pro-forma consolidated financials of Agora’s Radio Department, all local radio stations

and a super-regional radio TOK FM, which are parts of the Agora Group. These include: 23 Golden Hits (Zlote Przeboje)

local radio stations, 4 local radio stations (since March 1, 2016; in 2015 and in January-February 2016 7 local radio

stations broadcasted under the name Rock Radio), 7 local stations broadcasting under the brand Radio Pogoda (3

stations since June 12, 2015, 4 stations since July 31, 2015, 7 stations since March 1, 2016) and a super-regional news

radio TOK FM broadcasting in 22 metropolitan areas (on July 22, 2016 Radio TOK FM started broadcasting in

Bydgoszcz i Rzeszow).

Tab. 17


yoy

1-3Q

2016

1-3Q

2015

% change

yoy

Total sales, including : 21.2 22.6 (6.2%) 76.2 71.3 6.9%

Radio advertising revenue (1), (2) 18.5 20.1 (8.0%) 65.5 64.7 1.2%

Total operating cost, including: (2) (23.2) (22.8) 1.8% (71.2) (67.1) 6.1%

Staff cost (6.9) (6.9) - (22.9) (21.6) 6.0%


D&A (0.8) (0.7) 14.3% (2.3) (2.1) 9.5%

Promotion and marketing (2) (4.9) (4.7) 4.3% (9.8) (9.0) 8.9%

EBIT (2.0) (0.2) (900.0%) 5.0 4.2 19.0%

EBIT margin (9.4%) (0.9%) (8.5pp) 6.6% 5.9% 0.7pp

EBITDA (1.2) 0.5 - 7.3 6.3 15.9%

EBITDA margin (5.7%) 2.2% (7.9pp) 9.6% 8.8% 0.8pp

(1) advertising revenues include revenues from brokerage services of proprietary and third-party air time;

(2) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media (only the direct

variable cost of campaigns carried out on advertising panels) if such a promotion was executed without prior

reservation.

1. REVENUE [3]

In the third quarter of 2016, the sales revenue of the Radio segment decreased by 6.2% yoy and amounted to PLN

21.2 million. The decrease in revenue resulted mainly from lower ad sales in the radio stations of the Agora Radio

Group as well as lower revenue from brokerage services in third party radio stations. However, revenue from the sales

of advertising services in Helios cinemas and inflows from barter transactions increased in the reporting period. In the

third quarter of 2016, the total radio advertising expenditure in Poland decreased by 5.9% yoy.

2. COST

In the third quarter of 2016, the operating costs of the segment increased by 1.8% to PLN 23.2 million. The increase in

the operating costs resulted mainly from the sales of advertising services in Helios cinemas, reported under external

services. Apart from the advertising brokerage costs and the costs related to the sales of advertising services in Helios

cinemas, the external services item also includes rental fees, production services as well as operator fees.

Higher costs of promotion and marketing are related mainly to the Radio Zlote Przeboje image campaign.

[ w w w . a g o r a . p l ]


3. AUDIENCE SHARES [9]

Tab. 18

% share in listening 3Q 2016 change in pp

yoy 1-3Q 2016

change in pp

yoy

Group's music radio stations (Rock Radio, Zlote

Przeboje and Radio Pogoda)

4.2% 0.4pp 4.0% 0.1pp

News talk radio station TOK FM 1.9% 0.5pp 1.9% 0.5pp

4. NEW INITIATIVES

In July this year, GRA launched the Premium version of its online radio service Tuba.FM. Premium access to Tuba.FM

enables its users to listen to music without audio and video commercials. Additionally, in June this year, completely

new Tuba.FM mobile applications for devices with Android and Windows 10 were launched.

As of July this year, residents of Bygdoszcz and Rzeszow can listen to original programmes of TOK FM and to the latest

world, national and regional news as per the current schedule of the station. Thanks to the launch of transmitters in

Bydgoszcz and Rzeszow, TOK FM Radio is present in 22 urban areas.

In September 2016, a new promotional campaign of Radio Zlote Przeboje was launched. The slogan of the campaign is

Muzyka daje radosc. The station’s commercials were presented i.a. on TV, in cinemas, the press and the Internet.

[ w w w . a g o r a . p l ]


IV.F. PRINT [1]

The Print segment includes the pro-forma financials of Agora’s Print division and Agora Poligrafia Sp. z o.o.

Tab. 19


yoy

1-3Q

2016

1-3Q

2015

% change

yoy

Total sales, including: 37.9 39.9 (5.0%) 118.5 121.0 (2.1%)

Printing services (1) 36.0 37.9 (5.0%) 112.6 114.7 (1.8%)

Total operating cost, including (2): (39.9) (39.9) - (123.5) (119.4) 3.4%

Raw materials, energy and production

services (28.4) (28.4) - (86.9) (84.3) 3.1%

Staff cost (5.0) (5.2) (3.8%) (15.9) (16.3) (2.5%)

D&A (3.9) (4.0) (2.5%) (11.8) (12.1) (2.5%)

EBIT (2.0) 0.0 - (5.0) 1.6 -

EBIT margin (5.3%) 0.0% (5.3pp) (4.2%) 1.3% (5.5pp)

EBITDA 1.9 4.0 (52.5%) 6.8 13.7 (50.4%)


(1) revenues from services rendered for external customers;

(2) segment operating costs associated with the production of the Group's own titles are settled on the basis of

allocation of direct and indirect cost associated with their production to the Press segment.

Both, in the third quarter and in the period of January – September 2016 the Print segment had a positive operating

result of the EBITDA level. It was however, lower yoy and amounted to respectively PLN 1.9 million and PLN 6.8 million

[1].

1. REVENUE

In the third quarter of 2016, revenues from printing services for external customers reached PLN 36.0 million and

decreased by 5.0% yoy. It is mainly the result of lower volume of orders for printing services in heatset technology.

2. COST

In the third quarter of 2016, the Print segment's operating costs remained at the same level yoy.

[ w w w . a g o r a . p l ]


NOTES

[1] The performance measure “EBIT” represents net operating profit/(loss) defined as net profit/(loss) in accordance

with IFRS before finance income and costs, share of results of equity accounted investees and income taxes.

The performance measure “EBITDA” is defined as EBIT increased by depreciation and amortization of property, plant

and equipment and intangible assets.

In the Management Board opinion, EBITDA constitutes a useful supplementary financial indicator in assessing the

performance of the Group and its operating segments. It should be taken into account, that EBIT and EBITDA are not

measures determined by IFRS and have not a uniform standard of calculation. Accordingly, their calculation and

presentation by the Group may differ from that applied by other companies.

EBIT and EBITDA of Press, Internet, Movies and Books as well as Print segments are calculated on the basis of cost

directly attributable to the appropriate operating segment of the Agora Group and excludes allocations of all

Company’s overheads (such as: cost of Agora’s Management Board and a majority of cost of the Company`s

supporting divisions), which are included in reconciling positions.

Moreover, EBIT of particular operating segments does not include depreciation and amortisation recognised on

consolidation as described in note 4 to the condensed interim consolidated financial statements.

[2] the data on ticket sales in the cinemas comprising Helios group come from the accounting data of Helios reported

in accordance with full calendar periods.

[3] The data refer to advertising expenditures in six media (print, radio, TV, outdoor, Internet, cinema). In this MD&A

Agora has corrected the numbers for Internet, TV, dailie and cinema in the third quarter of 2016.

Unless explicitly stated otherwise, press and radio advertising market data referred to herein are based on Agora’s

estimates adjusted for average discount rate and are stated in current prices. Given the discount pressure as well as

advertising time and space sell-offs, these figures may not be fully reliable and will be adjusted in the consecutive

reporting periods. In case of press, the data include only display advertising, excluding classifieds, inserts and

obituaries. The estimates are based on rate card data obtained from the following sources: Kantar Media monitoring,

Agora S.A. monitoring.

Presented TV, Internet and cinema figures are based on initial Starlink media house estimates; TV estimates include

regular ad broadcast and sponsoring with product placement, exclude teleshopping and other advertising forms.

Internet ad spend estimates include display, search engines (Search Engine Marketing), e-mail marketing and video

advertising.

Outdoor advertising figures are based on Izba Gospodarcza Reklamy Zewnetrznej estimates [8].

The Company would like to stress that one should bear in mind that these advertising market estimations may

represent some margin of error due to significant discount pressure on the market and lack of reliable data on the

average market discount rates. Once the Company has a more reliable market data in consecutive quarters, it may

correct the ad spending estimations in particular media.

[4] The data on the number of copies sold (total paid circulation) of daily newspapers is derived from the National

Circulation Audit Office (ZKDP). The term "copy sales" used in this MD&A is consistent with the sales declarations of

publishers to the National Circulation Audit Office.

The data on dailies readership are based on PBC General, research carried out by MillwardBrown on a random,

nationwide sample of Poles over 15 years of age. The CCS index was used (weekly readership index) - percentage of

respondents reading at least one edition of the title within 7 days of the week preceding research. Size of the sample:

nationwide PBC General for July-September 2016: N=5, 017.

[ w w w . a g o r a . p l ]


[5] Definition of ratios:

Net profit margin = Net profit /(loss) attributable to equity holders of the parent

Sales of finished products, merchandise and materials

Gross profit margin = Gross profit / (loss) on sales

Sales of finished products, merchandise and materials

Return on equity =

Net profit / (loss) attributable to equity holders of the parent

(Equity attributable to equity holders of the parent at the beginning of the period

+ Equity attributable to equity holders of the parent at the end of the period)

/ 2 /(1,33 for the three quarters and 4 for quarterly results)

Debtors days =

(Trade receivables gross at the beginning of the period

+ Trade receivables gross at the end of the period) / 2

Sales of finished products, merchandise and materials / no. of days

Creditors days =

(Trade creditors at the beginning of the period

+ Trade creditors at the end of the period) / 2

Cost of sales / no. of days

Inventory turnover = (Inventories at the beginning of the period + Inventories at the end of the period) / 2

Cost of sales / no. of days

Current ratio I = Current Assets

Current liabilities

Gearing ratio =

Current and non-current liabilities from loans – cash and cash equivalents

– highly liquid short-term monetary assets

Total equity and liabilities

Interest cover = Operating profit / (loss)

Interest charge

Free cash flow interest

cover =

Free cash flow *

Interest charge

* Free cash flow = Net cash from operating activities + Purchase of property plant and equipment and intangibles.

[ w w w . a g o r a . p l ]


[6] Real users, page views and spent time on the basis of Megapanel PBI/Gemius, cover Internet users age 7 years and

above, connecting to Internet from the territory of Poland and include only Internet domains registered on Agora S.A.

in Gemius SA’s Registry of Service Providers. Real users data of the Gazeta.pl group services are audited by Gemius SA.

Since May 2016 a new methodology of Gemius PBI research has been introduced and the data for previous audited

periods is not comparable. According to the new methodology the data is presented jointly for PCs and mobile

platforms, and the reach of websites is reported accordingly. The way of weighing data and the definitions of indices

also changed.

The data for mobile platforms present the traffic through www, however it does not include the users of mobile

applications and the pageviews generated through mobile applications (Gazeta.pl LIVE, Sport.PL LIVE, Moje Dziecko,

Moja Ciaza, Tuba.fm).

[7] Average paid circulation of monthlies is based on the Agora’s own data. Rate card data on magazines obtained

from Kantar Media monitoring; commercial brand advertising and sponsored articles, excluding specialized monthlies;

accounted for 118 monthlies and 76 other magazines; in total 194 magazines for the period of July – September 2016.

[8] Source: report prepared by Izba Gospodarcza Reklamy Zewnetrznej (IGRZ) in cooperation with Starlink company.

[9] Audience market data referred herein are based on Radio Track surveys, carried out by MillwardBrown SMG/KRC

(all places, all days and all quarter) in whole population and in the age group of 15+, from July to September (sample

for 2015: 20,938; sample for 2016: 20,751) and from January to September (sample for 2015: 62,893; sample for 2016:

62,728).

[10] The data on cinema ticket sales are estimates of Helios group prepared on the basis of data received from

Boxoffice.pl (based on reports submitted by distributors of film copies). Cinema ticket sales are reported for periods,

which do not cover a calendar month, quarter or year. The number of tickets sold in the given period is calculated from

the first Friday of a given month, quarter or year until the first Thursday of the next reporting month, quarter or year.

[ w w w . a g o r a . p l ]


V. ADDITIONAL INFORMATION

1. IMPORTANT EVENTS

� Important events for Company

In the current report dated on October 4, 2016, the Management Board of Agora S.A. informed that on October 4th,

2016, the resolutions concerning: (i) initiation of the consultation on group layoffs with the trade unions operating at

Agora S.A. and the Company's works council, (ii) requesting the trade unions operating at the Company and the

Company's works council to join in the consultation on collective redundancy process, (iii) providing the relevant Labor

Office with information on the intention to execute group layoffs in the Company; were adopted.

Management Board of Agora S.A., in the process of transformation, made a decision of ceasing the publication of the

free daily newspaper "Metrocafe.pl" on 14 October 2016. The reason for taking the restructuring measures, is ongoing

market recession visible in press advertising expenditure and negative forecasts of its further development. The

Company's Management Board decided to focus on the development of "Gazeta Wyborcza", particularly its further

development in digitization and support of the development of paid subscriptions.

In the current report dated on October 11, 2016, the Management Board of Agora S.A. informed about:

(i) conclusion on October 11th, 2016 of a trilateral agreement ("Agreement") with trade unions operating at

Agora S.A. (the Agreement fulfills the provisions of article 3, Section 1 of the Act of March 13th, 2003 on

Special Rules for Termination of Employment for Reasons Not Attributable to Employees) and with works

council in the Company (which constitutes an agreement in accordance with the Act of April 7th, 2006 on

informing and consulting employees),

(ii) adoption by the Management Board of the Company on October 11th, 2016 of a resolution regarding

execution of the group layoffs in accordance with the provisions of the Agreement.

The group layoffs shall be executed from October 20th, 2016 till December 31st, 2016 and shall affect up to 135

employees of the Company, i.e. ca 6.8% of all employees of the Company.

In accordance with the Agreement, the laid-off employees will be provided by the Company with a wider range of

supportive measures than it is required by the law. The redundancy payment provided for in the law regulations will

be increased by an additional indemnity in the amount equal to one additional monthly salary. The laid-off employees

shall be supported by additional protective measures provided by the Company inter alia, help in searching for new

job or reskilling.

In the current report dated on October 26, 2016, (corrected by the current report published on October 27, 2016),

the Management Board of Agora S.A. informed that on October 26, 2016, has received information about signing on

October 26, 2016 a cooperation agreement between the subsidiary of Agora - Green Content Sp. z o.o. ("Green

Content") and EmiTel Sp. z o.o. ("EmiTel").

The agreement was concluded for a definite period from the 1st of December, 2016 until the 28th of December, 2025,

which is the duration of the license to transmit METRO television program granted to Green Content. The total

estimated value of the agreement within the expected time amounts to approximately PLN 62.0 million.

The contract covers the provision by EmiTel for Green Content the service of placing the television program METRO on

MUX-8 and ensuring uninterrupted digital signal transmission of MUX-8 in the DVB-T standard. The total liability for

damages (contractual and tort) of each of the parties, including contractual penalties, is limited to the amount of

compensation that the company Green Content should pay EmiTel for 36 months of the contract (does not apply to

damage caused willfully).

Green Content will start broadcasting METRO on MUX-8 on the 2nd of December, 2016.

In the current report dated on October 27, 2016, The Management Board of Agora S.A. announced that on October

27th, 2016 the Company has entered into a conditional agreement with the sale of the right of perpetual usufruct of

[ w w w . a g o r a . p l ]


two properties of total area of ca. 4.2 thousand square meters located in Lodz, together with the ownership of the

buildings erected on one of them, including a historic office building with covered area of ca. 1 thousand square

meters (referred to collectively as "the Property"). The agreement was concluded under the condition that the mayor

of the City of Lodz shall not exercise the right of first refusal to the Property vested in the Municipality of the City of

Lodz.

The decision to sell the Property stems from the fact that the Company does not utilize effectively the entire Property

for its operations. The Company believes that the optimal solution shall be to lease office space adapted to the

current scale of operations of the Company in Lodz. Along with the conditional sale agreement, a conditional

agreement was settled to lease office space, under which Agora will lease from the buyer office space located in the

Property for the period of 5 years.

The total sale price of the Property will amount to PLN 9.7 million net and its impact on the operating result of the

Agora Group for 4Q2016 will be ca. PLN 6.0 million.

The value of the Property is not significant from the Company's perspective, however, due to its one-off and non-

operational character and its positive impact on the operating results of the Agora Group for 4Q2016, information

about the transaction should be made public in a current report.

� Changes in subsidiaries

On July 5, 2016, Agora S.A. received, from a former non-controlling shareholder of Helios S.A., a call to pay an

additional price for the shares sold by this non-controlling shareholder to the Company, based on a share sale

agreement of December 11, 2014, concluded between Agora S.A. and the non-controlling shareholder. On August 3,

2016, Agora S.A. paid the additional price in the amount of PLN 4,277 thousand to the bank account of the former

non-controlling shareholder of Helios S.A.

On July 8, 2016, Agora S.A. received, from a non-controlling shareholder of Helios S.A., a call to purchase 0.38% shares

of Helios S.A. The call was submitted pursuant to the provisions of an option agreement dated August 31, 2010; the

price for shares was calculated in accordance with the provisions of this agreement. On August 4, 2016, in

performance of the call for acquisition, Agora S.A. and a non-controlling shareholder of Helios S.A. signed the

Promised Share Purchase Agreement, as a result of which Agora S.A. purchased 0.38% of shares of that company, for

the total price of PLN 791 thousand, calculated in accordance with provisions of the option agreement concluded

between the parties. As a result, shares held by Agora S.A. currently represent 88.88% of the company’s share capital

and 88.88% of the voting rights at the shareholders’ meeting.

On September 7, 2016, the extraordinary general meetings of shareholders of the companies Grupa Radiowa Agory

Sp. z o.o. with its registered office in Warsaw (“GRA”) and Projekt Inwestycyjny Sp. z o.o. with its registered office in

Warsaw (“PI”) adopted resolutions on merger of PI ( as acquired company) with GRA (as acquiring company). As of

the date of publication of this report, the above merger was not entered into the register of entrepreneurs of the

National Court Register.

On September 9, 2016, Agora S.A. acquired 8 shares in the share capital of Adtaily Sp. z o.o. with its registered seat in

Warsaw, from a shareholder of that company for the total price of PLN 203 thousand. As a result of the above

transaction, Agora S.A. currently owns 738 shares with nominal value of PLN 50 per share and total nominal value of

PLN 36,900, which on publication of this report represent 84,25% of the company’s share capital and 84,25% of the

votes at the shareholders’ meeting.

In the current report dated on September 30, 2016, the Management Board of Agora S.A. informed that on

September 30, 2016 an option agreement governing the terms and conditions of sale by a minority shareholder - G.C.

Geek Code Ltd. ("G.C. Geek Code") of its shares in GoldenLine Sp. o.o. ("GoldenLine") to Agora S.A. was signed.

According to the provision of the agreement, the parties have specified the detailed terms and conditions of put and

call options regarding the shares held by G.C. Geek Code and any other shares in GoldenLine which G.C. Geek Code

may purchase in the future. In case the put option or call option is executed, the valuation of shares will be based on

the future financial results of GoldenLine. Currently, Agora S.A. holds 278 shares in GoldenLine, representing 92.67%

of the share capital of the company and 278 votes, representing 92.67% of the votes at the shareholders meeting. G.C.

[ w w w . a g o r a . p l ]


Geek Code, a company controlled by Mariusz Gralewski, who is the main founder of GoldenLine, is the minority

shareholder in GoldenLine. G.C. Geek Code currently holds 22 shares, representing 7.33% of the share capital of

GoldenLine and giving the right to 22 votes, representing 7.33% of the votes at the general meeting of shareholders of

GoldenLine.

On October 4, 2016, the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the

National Court Register entered into the register of entrepreneurs of the National Court Register the increase of the

share capital of Adtaily Sp. z o.o. with its registered office in Warsaw, from the amount of PLN 42,000 to the amount

of PLN 43,800 on the basis of the resolution adopted by the extraordinary general meeting of shareholders of

Adtaily Sp. z o.o. on May 12, 2016 concerning the share capital increase by 36 new shares with the nominal value of

PLN 50 per share. New shares were assigned to two new minority shareholders of Adtaily Sp. z o.o., 18 for each of

them. After the registration of the share capital increase, Agora S.A. owns 738 shares with nominal value of PLN 50

per share and total nominal value PLN 36,900, which represent 84,25% of the company’s share capital and 84,25% of

the votes at shareholders’ meeting.

� Call for the repurchase of shares in a subsidiary

On March 29, 2016, a minority shareholder (“Minority Shareholder”) of Helios S.A., holding 320,400 shares of Helios

S.A., constituting 2.77% of the share capital (“Shares”), submitted a call to Helios S.A., based on Article 418 (1) of the

Commercial Companies Code (“CCC”), for convening the general meeting of shareholders of Helios S.A. and placement

on the agenda of an item regarding adoption of a resolution on Shares compulsory sell-out (“Call”).

As a result of: (i) the Call, (ii) further calls, submitted pursuant to Article 418 (1) of CCC by the Minority Shareholder

and others minority shareholders of Helios S.A., who purchased a portion of the Shares from the Minority Shareholder

and (iii) resolutions adopted by the General Meetings of Shareholders of Helios S.A. held on May 10, 2016 and June

13, 2016, there are currently two ongoing sell-out procedures (pursuant to Article 418 (1) of CCC) and one ongoing

squeeze-out procedure (pursuant to Article 418 of CCC), aiming at the acquisition by the two shareholders of Helios

S.A., including Agora S.A., of the Shares held by the Minority Shareholder and other minority shareholders.

In connection with the ongoing sell-out procedures, as of June 30, 2016 Agora S.A. transferred the amount of PLN

2,938 thousand to Helios S.A., as the sell-out price, calculated based on Article 418 (1) § 6 of CCC. As of September 30,

2016 Agora Group recognised in its balance sheet a liability to acquire the shares from the minority shareholders of

Helios S.A. in the total amount of PLN 3,185 thousand. The above mentioned amount includes amount of PLN 2,938

thousand, which Agora S.A. transferred to Helios S.A. and the total amounts transferred by the second shareholder of

Helios S.A. in connection with the ongoing sell-out procedures.

The shareholders, whose shares are subject of sell-out procedures, haven’t agreed on sell-out price calculated based

on Article 418 (1) § 6 of CCC and based on Article 418 (1) § 7 of CCC, applied to the registry court for appointment of

expert in order to determine the price of sell-out shares by the court.

The final evaluation of Shares, which are subject to the sell-out and squeeze-out procedures, will be calculated by an

expert or experts appointed by the registry court having the jurisdiction over the registered office of Helios S.A.

The squeeze-out procedure, which entered into force on July 14, 2016, concerns 10 shares. The owner/s of the

mentioned shares, didn’t respond to a Company’s call, announced in the Court and Commercial Gazette, directed at

the minority shareholder/s holding the above mentioned shares, to lodge the share certificates with the Company

within two weeks from the date of announcement of the call, under pain of invalidation thereof.

As of the date of publication of this report, the compulsory sell-out and squeeze-out procedures have not been

completed.

[ w w w . a g o r a . p l ]


� Notification pursuant to article 160 item 1 of the Trading in Financial Instruments Act.

In the current report dated on July 1, 2016 the Management Board of Agora S.A. informed that on July 1, 2016 the

Company received a notification from a Supervisory Board member pursuant to Article 160 item 1 of the Trading in

Financial Instruments Act relating to the purchase of Company's shares by a person related with this Supervisory

Board member.

A person related to the Supervisory Board member of the company purchased:

− 1,615 shares of Agora S.A. at PLN 12.22 - 12.30 per one share on June 27th, 2016,

− 4,614 shares of Agora S.A. at PLN 12.25 - 12.50 per one share on June 28th, 2016,

− 207 shares of Agora S.A. at PLN 12.41 - 12.50 per one share on June 29th, 2016,

− 1,002 shares of Agora S.A. at PLN 12.50 per one share on June 30th, 2016.

The above transactions were executed in the course of an ordinary session transactions on the Warsaw Stock

Exchange. The person obliged to provide the information did not agree to disclose their personal data.

2. CHANGES IN OWNERSHIP OF SHARES OR OTHER RIGHTS TO SHARES (OPTIONS) BY

MANAGEMENT BOARD MEMBERS IN THE THIRD QUARTER OF 2016 AND UNTIL THE DATE OF

PUBLICATION OF THE REPORT

Tab. 20

a. shares

As of

November 10,

2016

decrease increase As of September 30,

2016 decrease increase

As of August 12,

2016

Bartosz Hojka 2,900 - - 2,900 - - 2,900

Tomasz Jagiello 0 - - 0 - - 0

Grzegorz

Kossakowski 44,451 - - 44,451 - - 44,451

Robert Musial 1,233 - - 1,233 - - 1,233

In the described periods, the members of the Management Board did not have any other rights to shares (e.g.

options).

The members of the Management Board participated in the incentive plan described in the note 5 to the condensed

interim consolidated financial statements.

3. CHANGES IN OWNERSHIP OF SHARES OR OTHER RIGHTS TO SHARES (OPTIONS) BY

SUPERVISORY BOARD MEMBERS IN THE THIRD QUARTER OF 2016 AND UNTIL THE DATE OF

PUBLICATION OF THE REPORT

Tab. 21

a. shares

As of

November 10,

2016

decrease increase As of September

30, 2016 decrease increase

As of August 12,

2016

Tomasz Sielicki 33 - - 33 - - 33

Andrzej Szlezak 0 - - 0 - - 0

Dariusz Formela 0 - - 0 - - 0

Wanda

Rapaczynski 882,990 - - 882,990 - - 882,990

Anna Krynska –

Godlewska 0

- - 0 - - 0

Andrzej Dobosz 0 - - 0 - - 0

[ w w w . a g o r a . p l ]


In the described periods, the members of the Supervisory Board did not have any other rights to shares (e.g. options).

4. SHAREHOLDERS ENTITLED TO EXERCISE OVER 5% OF TOTAL VOTING RIGHTS AT THE

GENERAL MEETING OF AGORA S.A., EITHER DIRECTLY OR THROUGH AFFILIATES AS OF THE

DATE OF PUBLICATION OF THE QUARTERLY REPORT

The shareholders’ structure is updated on the basis of the official notifications from shareholders entitled to over 5%

of the total voting rights at the General Meeting of the Company.

According to the formal notifications received from the Company’s shareholders, particularly on the basis of art. 69 of

Act on Public Offer and the Conditions of Introducing Financial Instruments to the Organized Trading System and on

Public Companies dated July 29, 2005, the shareholders’ structure actual as of the day of publication of former

quarterly report (i.e. August 12, 2016) and as of the day of publication of this report, has not significantly changed.

According to the abovementioned notifications, the following shareholders were entitled to exercise over 5% of the

total voting rights at the General Meeting of the Company as of the date of publication of this report:

Tab. 22

no. of shares % of share

capital no. of votes

% of voting

rights

Agora-Holding Sp. z o.o.

(in accordance with the last notification obtained

on September 24, 2015 )

5,401,852 11.33 22,528,252 34.77

Powszechne Towarzystwo Emerytalne PZU S.A.

(Otwarty Fundusz Emerytalny PZU Złota Jesień

and Dobrowolny Fundusz Emerytalny PZU)

(in accordance with the last notification obtained

on December 27, 2012 )(1)

7,594,611 15.93 7,594,611 11.72

w tym:

Otwarty Fundusz Emerytalny PZU Złota

Jesień (in accordance with the last

notification obtained on December 27,

2012)(1)

7,585,661 15.91 7,585,661 11.71

Media Development Investment Fund, Inc.

(MDIF Media Holdings I, LLC.) (in accordance

with the last notification obtained on June 6,

2016)

5,350,000 11.22 5,350,000 8,26

Nationale-Nederlanden Powszechne

Towarzystwo Emerytalne S.A. (Nationale –

Nederlanden Otwarty Fundusz Emerytalny and

Nationale – Nederlanden Dobrowolny Fundusz

Emerytalny) (in accordance with the last

notification obtained on June 9, 2016 )

4,493,055 9.43 4,493,055 6.93

Aegon Powszechne Towarzystwo Emerytalne

S.A. (Aegon Otwarty Fundusz Emerytalny) (in

accordance with the last notification obtained on

December 7, 2015)

3,283,154 6.89 3,283,154 5.07

(1) number of shares according to the shareholder’s notification – as of the December 27, 2012; proportion of voting rights and

percentage of share capital were recalculated by the Company after registration of redemption of Company’s share capital.

[ w w w . a g o r a . p l ]


5. OTHER INFORMATION

� The Management Board’s statement of the possible realization of forecasts

The Management Board did not publish any forecasts of financial results and because of that this report does not

present any Management Board’s statement of the possible forecast execution.

� Changes in contingences and court cases

Any changes in contingencies since the date of closing of the last financial year and information about court cases

were described in notes 7 and 8 to the condensed interim consolidated financial statements.

� Related party transactions

Transactions carried out with parties related to the Group are of routine nature and were described in note 10 to the

condensed interim consolidated financial statements.

[ w w w . a g o r a . p l ]

AGORA GROUP Condensed interim consolidated financial statements as at 30 September 2016 and for 3 and 9 month period ended thereon

(all amounts in PLN thousands unless otherwise indicated) translation only

AGORA GROUP

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS as at 30 September 2016 and for 3 and 9month period

ended thereon

[ w w w . a g o r a . p l ]



CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2016

Note

As at 30

September

2016

unaudited

As at 30 June

2016

unaudited

As at 31

December

2015

audited

As at 30

September

2015

unaudited

Assets

Non-current assets:

Intangible assets 468,607 466,025 448,064 427,213

Property, plant and equipment 639,740 656,354 669,689 669,927

Long-term financial assets 83 86 98 104

Investments in equity accounted

investees 8,135

8,230 19,938

15,418

Receivables and prepayments 25,064 14,351 14,179 25,421

Deferred tax assets 10,339 9,473 10,388 8,435

1,151,968 1,154,519 1,162,356 1,146,518

Current assets:

Inventories 36,176 32,433 29,031 28,113

Accounts receivable and prepayments 234,723 277,933 281,716 246,200

Income tax receivable 609 348 121 374

Short-term securities and other

financial assets 44,664

79,301 105,826

79,072

Cash and cash equivalents 24,594 30,083 31,163 29,306

340,766 420,098 447,857 383,065

Non-current assets held for sale 14 14,136 - - -

354,902 420,098 447,857 383,065

Total assets 1,506,870 1,574,617 1,610,213 1,529,583

Accompanying notes are an integral part of these condensed interim consolidated financial statements.

[ w w w . a g o r a . p l ]



CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2016 (CONTINUED)

Note

As at 30

September

2016

unaudited

As at 30 June

2016

unaudited

As at 31

December

2015

audited

As at 30

September

2015

unaudited

Equity and liabilities

Equity attributable to equity holders

of the parent:

Share capital 47,665 47,665 47,665 47,665

Share premium 147,192 147,192 147,192 147,192

Retained earnings and other reserves 892,104 906,353 958,629 943,058

1,086,961 1,101,210 1,153,486 1,137,915

Non-controlling interest 18,664 18,433 16,699 15,297

Total equity 1,105,625 1,119,643 1,170,185 1,153,212

Non-current liabilities:

Deferred tax liabilities 27,533 26,599 22,527 29,284

Long-term borrowings 3 77,356 79,358 60,850 61,588

Other financial liabilities 15 17,613 15,853 16,575 21,287

Retirement severance provision 2,616 2,616 2,451 2,575

Provisions 754 812 927 985

Deferred revenues, accruals and other

liabilities 15,747 14,364 15,259 4,587

141,619 139,602 118,589 120,306

Current liabilities:

Retirement severance provision 66 66 198 30

Trade and other payables 137,971 182,516 165,998 131,915

Income tax liabilities 5,260 3,527 9,463 3,205

Short-term borrowings 3 35,329 39,937 46,794 38,784

Other financial liabilities 15 - 6,828 4,304 3,236

Provisions 1,960 2,005 2,115 2,060

Deferred revenues and accruals 79,040 80,493 92,567 76,835

259,626 315,372 321,439 256,065

Total equity and liabilities 1,506,870 1,574,617 1,610,213 1,529,583


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CONSOLIDATED INCOME STATEMENT FOR THREE AND NINE MONTHS ENDED 30

SEPTEMBER 2016

Three months

ended

Nine months

ended

Three months

ended

Nine months

ended

Note

30 September

2016

unaudited

30 September

2016

unaudited

30 September

2015

unaudited,

adjusted

30 September

2015

unaudited,

adjusted

Sales 4 273,399 858,134 259,811 835,382

Cost of sales (202,184) (616,806) (186,368) (592,602)

Gross profit 71,215 241,328 73,443 242,780

Selling expenses (51,674) (162,142) (58,082) (163,611)

Administrative expenses (27,572) (88,479) (24,473) (83,213)

Other operating income 1,901 8,930 7,832 14,493

Other operating expenses (3,569) (7,660) (3,185) (8,774)

Operating profit/(loss) 4 (9,699) (8,023) (4,465) 1,675

Finance income 556 2,888 458 3,064

Finance costs (1,421) (9,332) (958) (3,502)


investees (95) (146) (768) (986)

Profit/(loss) before income taxes (10,659) (14,613) (5,733) 251

Income tax (3,103) (10,266) (1,045) (2,219)

Loss for the period (13,762) (24,879) (6,778) (1,968)

Attributable to:

Equity holders of the parent (14,533) (26,801) (6,656) (3,043)

Non-controlling interest 771 1,922 (122) 1,075

(13,762) (24,879) (6,778) (1,968)

Basic/diluted earnings per share (in

PLN) (0.30) (0.56) (0.14) (0.06)


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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THREE AND NINE

MONTHS ENDED 30 SEPTEMBER 2016

Three

months

ended

Nine

months

ended

Three

months

ended

Nine months

ended

30

September

2016

unaudited

30

September

2016

unaudited

30

September

2015

unaudited

30

September

2015

unaudited


Other comprehensive income:

Items that will not be reclassified to profit or

loss

- - - -

Items that will be reclassified to profit or

loss

- - - -

Other comprehensive income for the period - - - -

Total comprehensive income for the period (13,762) (24,879) (6,778) (1,968)

Attributable to:

Shareholders of the parent (14,533) (26,801) (6,656) (3,043)

Non-controlling interests 771 1,922 (122) 1,075

(13,762) (24,879) (6,778) (1,968)


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR FOR NINE MONTHS ENDED 30 SEPTEMBER 2016

Attributable to equity holders of the parent

Share capital

Treasury

shares

Share

premium

Retained

earnings and

other reserves Total

Non-

controlling

interest Total equity

Nine months ended 30 September 2016

As at 31 December 2015 audited 47,665 - 147,192 958,629 1,153,486 16,699 1,170,185

Total comprehensive income for the period

Net profit/(loss) for the period - - - (26,801) (26,801) 1,922 (24,879)

Total comprehensive income for the period - - - (26,801) (26,801) 1,922 (24,879)

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Dividends declared - - - (35,749) (35,749) - (35,749)

Dividends of subsidiaries - - - - - (852) (852)

Total contributions by and distribtutions to owners - - - (35,749) (35,749) (852) (36,601)

Changes in ownership interests in subsidiaries

Acquisition of non-controlling interests - - - 822 822 (1,240) (418)

Acquistion of a subsidiary - - - - - 2,035 2,035

Recognition of put option granted to non-controlling

interests (note 12) - - - (1,760) (1,760) - (1,760)

Additional contribution of non-controlling shareholders - - - (98) (98) 100 2

Other - - - (2,939) (2,939) - (2,939)

Total changes in ownership interests in subsidiaries - - - (3,975) (3,975) 895 (3,080)

Total transactions with owners - - - (39,724) (39,724) 43 (39,681)

As at 30 September 2016 unaudited 47,665 - 147,192 892,104 1,086,961 18,664 1,105,625


[ w w w . a g o r a . p l ]



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR FOR NINE MONTHS ENDED 30 SEPTEMBER 2016 (CONTINUED)

Attributable to equity holders of the parent

Share capital

Treasury

shares

Share

premium

Retained

earnings and

other

reserves Total

Non-

controlling

interest

Total

equity


As at 31 December 2014 audited 50,937 (30,060) 147,192 981,520 1,149,589 15,490 1,165,079


Net profit/(loss) for the period - - - (3,043) (3,043) 1,075 (1,968)

Total comprehensive income for the period - - - (3,043) (3,043) 1,075 (1,968)



Dividends of subsidiaries - - - - - (676) (676)

Repurchase of own shares - (9,288) - - (9,288) - (9,288)

Redemption of own shares (3,272) 39,348 - (36,076) - - -

Total contributions by and distribtutions to owners (3,272) 30,060 - (36,076) (9,288) (676) (9,964)

Changes in ownership interests in subsidiaries

Acquisition of non-controlling interests - - - 444 444 (592) (148)

Expiration of put option liability - - - 213 213 - 213

Total changes in ownership interests in subsidiaries - - - 657 657 (592) 65

Total transactions with owners (3,272) 30,060 - (35,419) (8,631) (1,268) (9,899)

As at 30 September 2015 unaudited 47,665 - 147,192 943,058 1,137,915 15,297 1,153,212


[ w w w . a g o r a . p l ]



CONSOLIDATED CASH FLOW STATEMENT FOR THREE AND NINE MONTHS ENDED 30

SEPTEMBER 2016

Three

months

ended

Nine months

ended

Three

months

ended

Nine months

ended

30

September

2016

unaudited

30

September

2016

unaudited

30

September

2015

unaudited

30

September

2015

unaudited

Cash flows from operating activities

Profit/(loss) before income taxes (10,659) (14,613) (5,733) 251

Adjustments for:

Share of results of equity accounted investees 95 146

768 986

Depreciation of property, plant and equipment 19,393 58,885 19,815 58,908

Amortization of intangible assets 5,191 14,879 4,401 18,785

Foreign exchange (gain) /loss - 33 36 (31)

Interest, net 851 2,426 654 2,062

(Profit) / loss on investing activities 545 (726) (1,984) (3,396)

Purchase of programming assets (202) (202) - -

(Decrease) / increase in provisions (103) (295) (541) (1,624)

(Increase) / decrease in inventories (3,742) (7,144) 1,120 2,069

(Increase) / decrease in receivables and

prepayments 25,532 31,694

15,966 9,147

(Decrease) / increase in payables (9,552) (26,898) (19,041) (26,462)

(Decrease) / increase in deferred revenues and

accruals (487) (14,586)

(1,400) 9,064

(Profit) / loss on acquisition of subsidiary - 3,309 - -

Other adjustments 190 (219) 114 650

Cash generated from operations 27,052 46,689 14,175 70,409

Income taxes paid (1,514) (10,629) (1,450) (4,882)

Net cash from operating activities 25,538 36,060 12,725 65,527

Cash flows from investing activities

Proceeds from sale of property, plant and

equipment and intangibles 1,737 3,598 1,509 3,448

Dividends received - 360 - -

Loan repayment received - 3,600 - -

Interest received 477 1,151 455 1,043

Disposal of short-term securities 57,756 133,490 47,751 88,354

Other inflows (1) 8,000 18,645 8,000 8,000

Purchase of property, plant and equipment and

intangibles (22,695) (60,823)

(22,264) (67,260)

Acquisition of subsidiary (net of cash acquired),

associates and jointly controlled entities - (6,204) (5,728) (8,552)

Acquisition of short-term securities (23,000) (86,000) (44,000) (102,000)

Loans granted (200) (200) - (2,495)

Net cash used in investing activities 22,075 7,617 (14,277) (79,462)

[ w w w . a g o r a . p l ]



Three

months

ended

Nine months

ended

Three

months

ended

Nine months

ended

30

September

2016

unaudited

30

September

2016

unaudited

30

September

2015

unaudited

30

September

2015

unaudited

Cash flows from financing activities

Proceeds from borrowings - 32,943 9,546 25,329

Proceeds from factoring - - 8,429 17,368

Other inflows 14 248 - -

Repurchase of own shares - - - (9,288)

Acquisition of non-controlling interest (5,324) (5,486) (767) (767)

Dividends paid to equity holders of the parent (35,749) (35,749) - -

Dividends paid to non-controlling shareholders - (852) - (676)

Repayment of borrowings (7,182) (24,437) (3,581) (22,105)

Outflows from factoring - - (1,581) (1,581)

Payment of finance lease liabilities (3,862) (13,553) (5,465) (14,187)

Interest paid (872) (2,883) (794) (2,524)

Other (127) (477) (90) (658)

Net cash used in financing activities (53,102) (50,246) 5,697 (9,089)

Net increase / (decrease) in cash and cash

equivalents (5,489) (6,569) 4,145 (23,024)

Cash and cash equivalents

At start of period 30,083 31,163 25,161 52,330

At end of period 24,594 24,594 29,306 29,306

(1) other inflows relate to the return of cash deposits provided to the bank by AMS S.A. as a cash collateral securing the

concession contract for construction and utilization of bus shelters in Warsaw, in 2016 the amount of other inflows

includes additionally cash paid by the Company in connection with the subscriptions for shares of Stopklatka S.A.,

which was returned to the Company on January 21, 2016.


[ w w w . a g o r a . p l ]



NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS AT

30 SEPTEMBER 2016 AND FOR THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2016

1. GENERAL INFORMATION

Agora S.A. with its registered seat in Warsaw, Czerska 8/10 street (“the Company”) principally produces and sells

newspapers (including Gazeta Wyborcza), carries out the Internet activity and is active as a publisher in magazines,

periodicals and books segment. The Company also engages in projects related to production and coproduction of

movies. Additionally, the Agora Group (“the Group”) is also active in the cinema segment through its subsidiaries

Helios S.A. and Next Film Sp. z o.o. (“Helios Group”) and in the outdoor segment through its subsidiary AMS S.A.

(“AMS”). Moreover, the Group controls 5 radio broadcasting companies and offers printing services for external

clients in printing houses belonging to the Company and to its subsidiary Agora Poligrafia Sp.z o.o. The Group is also

present in TV segment by holding shares in Stopklatka S.A. Additionally, in December 2015 the subsidiary Green

Content Sp. z o.o. received the decision of the President of the National Broadcasting Council on granting a license to

broadcast a television programme via digital terrestrial platform in signal of eighth multiplex. The Company plans to

start broadcasting METRO TV on December 2, 2016.

As at 30 September 2016 the Agora Group (“the Group”) comprised: the parent company Agora S.A. and 21

subsidiaries. Additionally, the Group held shares in 2 jointly controlled entities: Stopklatka S.A. and Online

Technologies HR Sp. z o.o. and in 2 associates: Instytut Badan Outdooru IBO Sp. z o.o. and Hash.fm Sp. z o.o.

Financial statements were prepared as at and for three and nine months ended 30 September 2016, with comparative

figures presented as at 30 June 2016, 31 December 2015 and as at and for three and nine months ended 30

September 2015.

The financial statements were authorized for issue by the Management Board of Agora S.A. on November 10, 2016.

2. STATEMENT OF COMPLIANCE

The Consolidated Balance Sheet as at 30 September 2016, the Consolidated Income Statement, the Consolidated

Statement of Comprehensive Income, the Consolidated Cash Flow Statement and the Consolidated Statement of

Changes in Equity for nine months ended 30 September 2016 have not been audited. The Consolidated Financial

Statements as at and for twelve months ended 31 December 2015 have been audited by an independent auditor who

issued an unqualified opinion.

The Condensed Interim Financial Statements have been prepared under International Accounting Standard 34

“Interim Financial Reporting”, according to art. 55 point 5 and art. 45 point 1a-1c of Accounting Act (Official Journal

from 2016, item 1047 with subsequent amendments), regulations issued based on that Act and the Decree of Minister

of Finance dated 19 February 2009 on current and periodic information provided by issuers of securities and the

conditions for recognition as equivalent information required by the law of a non-Member State (Official Journal from

2014, item 133 with subsequent amendments).

In the preparation of these condensed interim consolidated financial statements, the Group has followed the same

accounting policies as used in the Consolidated Financial Statements as at 31 December 2015, except for the changes

described below. The condensed interim consolidated financial statements as at 30 September 2016 should be read

together with the audited consolidated financial statements as at 31 December 2015.

For the Group’s financial statements for the year started with January 1, 2016 the following new intepretations and

amendments to existing standards, which were endorsed by the European Union, are effective:

1) Amendments to IAS 19 Employee Benefits: Defined Benefit Plans - Employee Contributions; 2) Amendments to IFRS - Improvements to IFRS 2010-2012;

3) Amendments to IFRS 11 Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations;

4) Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets - Clarification of Acceptable

Methods of Depreciation and Amortisation;

5) Amendments to IFRS - Improvements to IFRS 2012-2014;

6) Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture - Bearer Plants;

7) Amendments to IAS 27 Separate Financial Statements - Equity Method in Separate Financial Statements;

8) Amendments to IAS 1 Presentation of Financial Statements - Disclosure initiative.

[ w w w . a g o r a . p l ]



The application of the above amendments had no material impact on the consolidated financial statements.

In 2016 the Group changed the name of the line item in the consolidated balance sheet from „Accounts payable” to

„Trade and other payables”. The scope of balances presented in this line item did not change. In Company`s opinion,

the new name reflects more accurately the information scope of this line item. The same change was applied to the

unconsolidated balance sheet of the Company.

Adjustments to comparative information

In 2016, the Group modified the presentation of expenses related to rental cost of advertising space in internet

business. Till the end of 2015 these costs were presented in the consolidated income statement in the line item

“Selling expenses” and starting from the first quarter of 2016 these costs are presented in the line item “Cost of

sales”. In the Company`s opinion, the new presentation more appropriately reflects the nature of these costs from the

perspective of classification of expenses according to their function. The comparative amounts were adequately

adjusted. The above change had no impact on previously reported amounts of operating profit, net profit and equity

of the Group.

The summary of adjustments made to the consolidated comparative amounts of the Group is presented in the table

below:

Nine months

ended

Nine months

ended

30 September

2015

(as reported)

Presentation

adjustments

30 September

2015

(as adjusted)

Cost of sales (577,019) (15,583) (592,602)

Gross profit 258,363 (15,583) 242,780

Selling expenses (179,194) 15,583 (163,611)

Three months

ended

Three months

ended

30 September

2015

(as reported)

Presentation

adjustments

30 September

2015

(as adjusted)

Cost of sales (179,992) (6,376) (186,368)

Gross profit 79,819 (6,376) 73,443


3. LONG-TERM AND SHORT-TERM BORROWINGS

On the basis of the Annex no. 2 to the multi - purpose credit line agreement signed on 24 May 2016 with Bank Polska

Kasa Opieki S.A., Agora S.A. was provided with a time credit of up to PLN 100,000 thousand, which may be used by

31 May 2017 and with a credit facility in the current account of up to PLN 35,000 thousand, which may be used by

31 May 2017. As at 30 September 2016, the amount of the time credit is diminished by the non-renewable tranche

used in May 2016 in the amount of PLN 25,000 thousand, which will be paid up in 13 equal installments from June 30,

2017 till June 30, 2020.

As at 30 September 2016, the Company had outstanding debt related to the time credit used in the amount of PLN

25,000 thousand (including PLN 21,154 thousand presented in non-current liabilities) and PLN 2,486 thousand used

within its current account facility. Moreover, the company AMS S.A. had outstanding debt within its current account

facility in the amount of PLN 490 thousand.

[ w w w . a g o r a . p l ]



As at 30 September 2016, external debt of the Helios S.A. including bank loans and finance lease liabilities amounted

to PLN 84,608 thousand. This amount consisted of:

- bank loans in the amount of PLN 36,940 thousand (including PLN 24,237 thousand presented in non-current part);

- finance lease liabilities in the amount of PLN 47,668 thousand (including PLN 31,675 thousand presented in non-

current part) - connected mainly with finance leasing of the cinema equipment and cars.

4. SALES AND SEGMENT INFORMATION

In these condensed interim consolidated financial statements, in accordance with IFRS 8 Operating segments,

information on operating segments are presented on the basis of components of the Group that management

monitors in making decisions about operating matters. Operating segments are components of the Group, about

which separate financial information is available, that is evaluated regularly by the chief operating decision maker in

the process of decision making regarding allocation of resources and assessing the performance of the Group.

For management purposes, the Group is organized into business units based on their products and services.

The Group activities are divided into six reportable operating segments as follows:

1) the Press segment includes the Group’s following activities: publishing of dailies: Gazeta Wyborcza and

Metrocafe.pl as well as publishing of the magazines within Agora’s Magazine Department and Free Press division,

2) the Movies and Books segment includes the Group’s activities within the cinema management of Helios S.A., film

distribution activities of Next Film Sp. z o.o. as well as activities of Agora`s Special Projects Department (including book

collections and film production),

3) the Outdoor segment includes the activities within the AMS Group, which provides advertising services on different

forms of outdoor advertising panels,

4) the Internet segment includes the following Group’s activities: the Internet and multi-media products and services

within the Agora’s Internet department, Trader.com (Polska) Sp. z o.o., AdTaily Sp. z o.o., Sport4People Sp. z o.o., Sir

Local Sp. z o.o., GoldenLine Sp. z o.o. and Optimizers Sp. z o.o.;

5) the Radio segment includes the Group’s activities within local radio stations, super-regional TOK FM radio and

Agora’s Radio Department,

6) the Print segment includes the Group’s activities related to printing services within the Agora’s Printing Department

and Agora Poligrafia Sp. z o.o.

Accounting policies for operating segments are the same as followed by the Agora Group, besides some issues

described below.

Data within each reportable segment are consolidated pro-forma. The Management Board monitors the operating

results of its business units separately for the purpose of making decisions about resource allocation and performance

assessment. Press segment operating costs associated with the production of the Group's own titles are settled on the

basis of allocation of direct and indirect costs associated with their production from the Print segment. Segment

performance is evaluated based on operating profit or loss.

Operating results of reportable segments do not include:

a) revenues and total cost of cross-promotion of Agora’s different media if such promotion is executed without prior

reservation between segments of the Agora Group; the direct variable cost of campaigns carried out on advertising

panels is the only cost that is included above; it is allocated from the Outdoor segment to other segments,

b) amortisation recognised on consolidation (described below).

Group financing (including finance costs and finance revenue) and income tax are managed on a Group level and are

not allocated to operating segments. Transfer prices between operating segments are set on the market basis in the

manner similar to transactions with third parties.

Reconciling positions show data not included in particular segments, inter alia: other revenues and costs of Agora’s

supporting divisions (centralized IT, finance, administrative, HR functions, etc.), new TV channel and the Management

Board, Agora TC Sp. z o.o., intercompany eliminations and other matching adjustments, which reconcile the data

presented in the management reports to the consolidated financials of the Agora Group.

[ w w w . a g o r a . p l ]



Operating depreciation and amortisation includes amortisation of intangible assets and fixed assets of each segment.

Amortisation recognised on consolidation can be defined as consolidation adjustments, inter alia: the amortisation of

intangible assets and adjustments to property, plant and equipment recognised directly on consolidation.

Impairment losses and reversals of impairment losses show impairment losses and their reversals presented in other

operating expenses and income.

Amount of investment in associates and joint ventures accounted for by the equity method include the amount of

acquired shares adjusted by the Group`s share of net results of those entities accounted for by the equity method. The

financials presented for three and nine months ended 30 September 2016 and 30 September 2015 relate to Online

Technologies HR Sp. z o.o, Instytut Badan Outdooru Sp. z o.o., Stopklatka S.A., GoldenLine Sp. z o.o. (in 2015) and

Hash.fm Sp. z o.o.

Capital expenditure consists of additions based on the invoices booked in the reported period connected to purchases

of intangible and fixed assets. In case of Movies and Books segment capital expenditure do not include outlays related

to the cinema fit-out works to the extent in which those outlays are reimbursed by the owners of the premises, in

which those cinemas are located.

The Agora Group does not present geographical reporting segments, because its business activities are carried out

mainly in Poland.

[ w w w . a g o r a . p l ]



4. SALES AND SEGMENT INFORMATION (CONTINUED)

Three months ended 30 September 2016

Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total

Revenues from external customers 60,684 78,891 37,478 36,930 20,290 37,569 1,557 273,399

Intersegment revenues (2) 3,014 4,570 744 1,640 913 397 (11,278) -

Total revenues 63,698 83,461 38,222 38,570 21,203 37,966 (9,721) 273,399

Total operating cost (1), (2), (3) (64,711) (78,095) (34,191) (33,493) (23,285) (40,023) (9,300) (283,098)

Operating profit (loss) (1) (1,013) 5,366 4,031 5,077 (2,082) (2,057) (19,021) (9,699)

Net finance income and cost (865) (865)


investees (3) - - - 157 - - (252) (95)

Income tax expense (3,103) (3,103)

Net loss (13,762)

(1) segments do not include amortisation recognised on consolidation, which is presented in reconciling positions;

(2) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media if such promotion is executed without prior reservation between segments of the

Agora Group; the direct variable cost of campaigns carried out on advertising panels is the only cost that is included above; it is allocated from the Outdoor segment to other segments;

(3) reconciling positions show data not included in particular segments, inter alia: other cost and the result on other operating activities of Agora’s support divisions (centralized IT,

administrative, HR functions, etc.), new TV channel and the Management Board and Agora TC Sp. z o.o. (PLN 20,919 thousand), intercompany eliminations and other matching

adjustments which reconcile the data presented in the management reports to the consolidated financials of the Agora Group. In case of equity accounted investees, the reconciling

positions include the investment in Stopklatka S.A.

[ w w w . a g o r a . p l ]





Press

Movies and

books (3)

Outdoor

Internet

Radio

Print

Reconciling

positions

Total

Operating depreciation and

amortisation (2,102) (7,539) (3,956) (1,248) (798) (3,977) (4,214) (23,834)

Amortisation recognised on

consolidation (1) - (129) - (684) - - 63 (750)

Impairment losses (255) (278) (972) (399) (66) - (728) (2,698)

Reversals of impairment losses 118 170 - 1 25 138 14 466

Capital expenditure (2) 404 9,582 6,917 1,260 507 1,648 2,686 23,004

(1) is not presented in operating result of the Group’s segments;

(2) based on invoices booked in the period;

(3) capital expenditure include lease property, plant and equipment in the amount of PLN 4,433 thousand.

[ w w w . a g o r a . p l ]





Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


Intersegment revenues (2) 7,919 12,827 1,651 4,140 3,552 1,191 (31,280) -

Total revenues 199,405 252,526 119,631 118,402 76,212 118,518 (26,560) 858,134


Operating profit / (loss) (1) (1,039) 15,743 18,280 14,715 4,968 (5,042) (55,648) (8,023)

Net finance income and cost (6,444) (6,444)


investees (3) - - - 249 - - (395) (146)

Income tax (10,266) (10,266)

Net loss (24,879)








[ w w w . a g o r a . p l ]





Press

Movies and

books (3)

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


amortisation (6,955) (22,765) (11,718) (3,760) (2,336) (11,818) (12,162) (71,514)


consolidation (1) - (388) - (2,052) - - 190 (2,250)

Impairment losses (941) (522) (1,217) (868) (492) (95) (947) (5,082)

Reversals of impairment losses 531 178 96 89 139 147 22 1,202

Capital expenditure (2) 1,170 25,114 14,079 4,809 1,730 2,630 5,935 55,467

As at 30 September 2016

Press

Movies and

books Outdoor Internet Radio Print

Reconciling

positions (4) Total

Property, plant and equipment and

intangible assets 72,413 284,405 269,974 68,370 80,666 161,582 185,073 1,122,483

Investments in associates and joint

ventures accounted for by the equity

method - - - 1,859 - - 6,276 8,135



(3) capital expenditure include lease property, plant and equipment in the amount of PLN 10,960 thousand;

(4) reconciling positions include mainly Company’s headquarter (PLN 110,313 thousand) and other property, plant and equipment and intangible assets of Agora’s support divisions and

Agora TC Sp. z o.o. not included in particular segments and intercompany eliminations. In case of equity accounted investees, the reconciling positions include the investment in

Stopklatka S.A., reconciling positions include also non-current assets, which as at 30 September 2016 were presented in the balance sheet as non-current assets held for sale according to

the description provided in note 14.

[ w w w . a g o r a . p l ]





Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


Intersegment revenues (2) 2,557 3,972 1,026 1,066 912 363 (9,896) -

Total revenues 70,961 65,595 35,642 33,409 22,521 39,888 (8,205) 259,811


Operating profit/ (loss) (1) 5,269 562 1,960 5,044 (232) (34) (17,034) (4,465)



investees (3) - - - 25 - - (793) (768)

Income tax expense (1,045) (1,045)

Net loss (6,778)








[ w w w . a g o r a . p l ]





Press

Movies and

books (3)

Outdoor

Internet Radio

Print

Reconciling

positions

Total


amortisation (2,405) (7,795) (3,420) (1,320) (719) (4,036) (4,182) (23,877)


consolidation (1) - (135) - (267) - - 63 (339)

Impairment losses (821) (187) (501) (462) (128) (74) (5) (2,178)

Reversals of impairment losses 2,307 - 122 114 - 11 - 2,554

Capital expenditure (2) 354 22,503 12,953 898 720 513 1,815 39,756



(3) capital expenditure include lease property, plant and equipment in the amount of PLN 13,594 thousand.

[ w w w . a g o r a . p l ]





Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


Intersegment revenues (2) 6,503 12,145 2,376 3,612 3,498 1,078 (29,212) -

Total revenues 219,698 233,098 109,744 105,063 71,267 121,029 (24,517) 835,382


Operating profit/(loss) (1) 12,796 11,382 11,312 15,658 4,224 1,589 (55,286) 1,675



investees (3) - - (15) 241 (1,212) (986)

Income tax (2,219) (2,219)

Net loss (1,968)








[ w w w . a g o r a . p l ]





Press

Movies and

books (3)

Outdoor

Internet Radio

Print

Reconciling

positions

Total


amortisation (7,364) (28,993) (9,439) (4,037) (2,087) (12,097) (12,661) (76,678)


consolidation (1) - (404) - (801) - - 190 (1,015)

Impairment losses (2,148) (528) (1,393) (900) (378) (216) 133 (5,430)

Reversals of impairment losses 3,368 102 808 264 134 59 - 4,735

Capital expenditure (2) 1,014 33,602 35,016 1,642 2,082 1,490 3,201 78,047

As at 30 September 2015

Press

Movies and

books Outdoor Internet Radio Print

Reconciling

positions (4) Total

Property, plant and equipment and

intangible assets 72,083 276,581 260,396 49,340 80,478 179,459 178,803 1,097,140

Investments in associates and joint

ventures accounted for by the equity

method - - - 13,284 - - 2,133 15,417



(3) capital expenditure include lease property, plant and equipment in the amount of PLN 17,894 thousand;

(4) reconciling positions include mainly Company’s headquarter (PLN 115,058 thousand) and other property, plant and equipment and intangible assets of Agora’s support divisions and

Agora TC Sp. z o.o. not included in particular segments and intercompany eliminations. In case of equity accounted investees, the reconciling positions include the investment in

Stopklatka S.A.

[ w w w . a g o r a . p l ]



5. INCENTIVE PLANS BASED ON FINANCIAL INSTRUMENTS

a) Three-Year-Long Incentive Plan for the period of 2013-2015

Starting from the third quarter 2013, Management Board members of the Company participated in an incentive

program (“Three-Year-Long Incentive Plan” for the period of 2013-2015), which was described in consolidated financial

statements for the year 2015.

The rules, goals, adjustments and conditions for Three-Year-Long Incentive Plan fulfillment for the Management Board

members were specified in the Supervisory Board resolutions.

Till the end of 2014 the Three -Year-Long Incentive Plan was based on two components: the stage of realisation of the

financial result (“the EBITDA target”) and the percent of Company’s share price increase (“the Target of Share Price

Increase”).

In 2014, due to the fulfillment of the condition concerning the achievement of certain EBITDA level of the Agora Group

(being the sum of operating profit/loss and amortization and depreciation), the Three -Year-Long Incentive Plan was

modified so that, starting from the first quarter of 2015, the potential reward resulting from the Three -Year-Long

Incentive Plan was based only on the percent of Company’s share price increase. As a result, the liability relating to the

EBITDA target component of the Plan accumulated so far has been reversed and credited to the Income Statement in

the fourth quarter of 2014.

The value of potential reward resulting from the component based on the percent of Company’s share price increase

was charged to the Income Statement in proportion to the full vesting period of the Three-Year-Long Incentive Plan,

that is from the third quarter of 2013 till the second quarter of 2016.

In accordance with its assumptions, Three -Year-Long Incentive Plan for the period of 2013-2015 was settled in cash in

the second quarter of 2016. The realization of the plan resulted in the total payment of PLN 1,628 thousand.

b) Incentive Plan for years 2016-2017

Starting from the second quarter 2016, Management Board members of the Company participate in a new incentive

program, on the basis of which, they will be eligible to receive an annual bonus based on two components described

below:

(i) the stage of realisation of the target based on the EBITDA of the Agora Group (“the EBITDA target”). The EBITDA

target is specified as the EBITDA result (being the sum of operating profit/loss and amortization and depreciation)

to be reached in the given financial year determined by the Supervisory Board. The amount of potential bonus

depends on the stage of the EBITDA target fulfillment and will be determined on the basis of the audited

consolidated financial statements of the Agora Group for the given financial year;

(ii) the percent of Company’s share price increase (“the Target of Share Price Increase”). The amount of potential

reward in this component of the Incentive Plan will depend on the percent of Company’s share price increase in the

future. The share price increase will be calculated as a difference between the average of the quoted closing

Company’s share prices in the first quarter of the financial year commencing after the financial year for which the

bonus is calculated (“the Average Share Price IQ”) and the average of the quoted closing Company’s share prices in

the fourth quarter of the financial year preceding the financial year for which the bonus is calculated (“the Average

Share Price IVQ”). If the Average Share Price IQ will be lower than the Average Share Price IVQ, the Target of Share

Price Increase is not satisfied and the bonus in this component of the Incentive Plan will not be granted.

The bonus from the Incentive Plan depends also on the fulfillment of a non-market condition, which is the continuation

of holding the post of the Management Board member.

The rules, goals, adjustments and conditions for the Incentive Plan fulfillment for the Management Board members are

specified in the Supervisory Board resolution.

As at 30 September 2016, the fair value of potential reward from the fulfillment of the EBITDA target has been

calculated on the basis of the best estimate of the expected fulfillment value of the EBITDA target for 2016 and was

[ w w w . a g o r a . p l ]



charged to the Income Statement in proportion of the actual accumulated EBITDA level reached till the balance sheet of

the current financial statements in the estimated value of the EBITDA target realization for 2016.

The fair value of the potential reward concerning the realization of the Target of Share Price Increase, was estimated on

the basis of the Binomial Option Price Model (Cox, Ross, Rubinstein model), which takes into account – inter alia –

actual share price of the Company (as at the balance sheet date of the current financial statements) and volatility of the

share price of Company during the last 12 months preceding the balance sheet date. As at 30 September 2016, the

value was charged to the Income Statement in proportion to the vesting period of the Incentive Plan.

The basic parameters of the Binomial Option Price Model used for calculation of the fair value of the potential reward

from the realization of the Target of Share Price Increase and the estimated cost of the Incentive Plan charged to the

Income statement of the Agora Group for the period, are described below:

the share price of Agora S.A. as at the current balance sheet date PLN 9.98

volatility of the share price of Agora S.A. during the last twelve months % 31.93

the Average Share Price IVQ PLN 12.03

risk-free rate % 1.33-1.62

(at the maturity dates)

Total impact of the Incentive Plan on the consolidated financial statements of the Agora Group is presented below:

Nine months

ended 30

September

2016

Income statement – increase/(decrease) of staff costs

641

Income statement - deferred income tax (122)

Liabilities: accruals - as at the end of the period 641

Deferred tax asset - as at the end of the period 122

The cost of the Incentive Plan concerning the Management Board of Agora S.A.:

Nine months

ended 30

September

2016

Bartosz Hojka 221

Tomasz Jagiello 140

Grzegorz Kossakowski 140

Robert Musial 140

641

In the third quarter of 2016 the total value of the Incentive Plan did not change.

[ w w w . a g o r a . p l ]



6. CHANGES IN PROVISIONS AND IMPAIRMENT LOSSES FOR ASSETS

In the period from January 1, 2016 to September 30, 2016 the following changes in impairment losses were accounted

(in brackets the amounts for the third quarter of 2016):

- impairment loss for receivables: decrease by PLN 123 thousand (increase by PLN 420 thousand),

- impairment loss for inventory: increase by PLN 589 thousand (decrease by PLN 305 thousand),

- impairment loss for tangible assets and intangible assets: decrease by PLN 425 thousand (increase by PLN

5 thousand).

Additionally in the period from January 1, 2016 to to September 30, 2016 the following provisions were changed (in

brackets the amounts for the third quarter of 2016):

- provision for onerous contracts: decrease by PLN 174 thousand (decrease by PLN 58 thousand),

- provision for legal claims and similar: decrease by PLN 155 thousand (decrease by PLN 45 thousand),

- retirement severance provision: increase by PLN 34 thousand (no change).

7. CONTINGENCIES, GUARANTEES AND OTHER COLLATERALS

As at 30 September 2016, the Group had contingencies, guarantees and other collaterals arising in the ordinary course

of business from which it is anticipated that no material liabilities will arise, other than those noted below:

Amount

Benefiting party Debtor Valid till As at 30

September

2016

As at 31

December

2015

Provisions

booked

Guarantees provided by Agora S.A.

Bank Pekao S.A. Agora’s employees 28 Jan 2017 -

05 Jul 2020

288 289 -

Bank Pekao S.A. Doradztwo Mediowe

Sp. z o.o.

30 Jun 2017 14,400 14,400 -

Bank Pekao S.A. Trader.com (Polska)

Sp. z o.o.

30 Jun 2017 2,400 2,400 -

Bank Pekao S.A. Optimizers Sp. z o.o. 30 Jun 2017 1,200 - -

Bank Pekao S.A. Optimizers Sp. z o.o. 31 Jul 2020 375 - -

Bank Pekao S.A. Green Content Sp. z

o.o.

31 Jul 2020 375 - -

Guarantees provided by AMS S.A.

Tejbrant Polska Sp. z o.o. Adpol Sp. z o.o. 30 Jun 2017 3,000 3,000 -

Guarantees provided by Adpol Sp. z o.o.

mBank S.A. AMS S.A. 28 Feb 2017 -

30 Apr 2017

32,400 44,400 -

Bills of exchange issued by AMS S.A. and Adpol Sp. z o.o.

Urzad Miejski Wroclawia AMS S.A. 31 May 2016 - 34 -

Gmina Miasto Szczecin AMS S.A. indefinite

period

90 90 -

mBank S.A. AMS S.A. 3 Mar 2017 -

8 Sep 2018

1,944 2,730 -

Zarzad Drog Miejskich

Warszawa

Adpol Sp. z o.o. 1 Jan 2022 200 200 -

[ w w w . a g o r a . p l ]



The total amount of the contingencies, guarantees and other collaterals is smaller than 10% of the Group’s equity.

Additionally, Helios S.A. issued blank promissory notes as collaterals for bank loan agreements and finance lease

agreements and guarantees on rent agreements.

Moreover, AMS S.A. provided to the bank cash deposits as a cash collateral securing the bank guarantees issued in

relation to the concession contract for construction and utilization of bus shelters in Warsaw. In the third quarter of

2016 AMS S.A. fulfilled the conditions giving entitlement to the reduction of the cash deposits and the cash in the

amount of PLN 8.0 million was returned to the company. Consequently, as at 30 September 2016 the deposit receivable

amounts to PLN 21.6 million and is presented within long-term receivables.

Information on contingent liabilities related to legal disputes is described in note 8.

8. COURT CASES

As at September 30, 2016, the Group has not entered into litigation for claims or liabilities that in total exceed 10% of

the Group’s equity. Provision for legal claims as at September 30, 2016, amounted to PLN 207 thousand (as at

December 31, 2015: PLN 362 thousand).

Additionally, as at September 30, 2016, the companies of the Group are a party of legal disputes in the amount of PLN

2,750 thousand (as at December 31, 2015: PLN 2,573 thousand) in cases when the Management Board estimates the

probability of loss for less than 50%. Such disputes are contingent liabilities.

9. SEASONALITY

Advertising revenues are subject to seasonality – revenues earned in the first and third quarter are usually lower than

in the second and fourth quarter.

Cinema revenues are subject to seasonality – revenues earned in the second and third quarter are usually lower than

in the first and fourth quarter.

10. RELATED PARTY TRANSACTIONS

(a) Management Board and Supervisory Board remuneration

The remuneration paid by Agora S.A. to Management Board members during the nine months period ended September

30, 2016 amounted to PLN 8,014 thousand (nine months ended September 30, 2015: PLN 2,446 thousand). This amount

includes also one-off bonus payments, inter alia, the one resulting from realization of Three-Year-Long Incentive Plan

described in note 5.

The remuneration paid by Agora S.A. to Supervisory Board members during the nine months period ended September

30, 2016 amounted to PLN 351 thousand (nine months ended September 30, 2015: PLN 351 thousand).

(b) Other related parties (not consolidated)

There were no material transactions and balances with related entities other that disclosed below:

Three

months

ended 30

September

2016

Nine months

ended 30

September

2016

Three

months

ended 30

September

2015

Nine months

ended 30

September

2015

Jointly controlled entities

Sales 196 629 400 735

Purchases of goods and services (272) (552) (300) (902)

Interest on loans granted 16 63 30 87

Other operating income - - - 1

[ w w w . a g o r a . p l ]



Three

months

ended 30

September

2016

Nine months

ended 30

September

2016

Three

months

ended 30

September

2015

Nine months

ended 30

September

2015

Associates

Sales 27 43 2 20


Interest on loans granted 29 84 24 67

Dividends received - 360 - -

Major shareholder

Sales 15 47 15 46

Other operating income - 86 59 181

As at 30

September

2016

As at 30 June

2016

As at 31

December

2015

As at 30

September

2015


Shares 7,213 7,417 7,511 2,937

Short-term receivables 138 244 135 307

Short-term liabilities 224 236 407 375

Loans granted 2,050 2,033 5,735 3,704

Associates

Shares 922 813 12,427 12,481



Loans granted 3,934 3,705 3,650 3,148

Major shareholder - -

Short-term receivables - 1 - -

Short-term liabilities - 75 75 76

Dividend liability - 4,051 - -

The above transactions carried out with related parties are of routine nature.

[ w w w . a g o r a . p l ]



11. DESCRIPTION OF THE GROUP

The list of companies from the Group:

% of shares held (effectively)

30 September

2016

30 June

2016

Subsidiaries consolidated

1 Agora Poligrafia Sp. z o.o., Tychy 100.0% 100.0%

2 AMS S.A., Warsaw 100.0% 100.0%

3 IM 40 Sp. z o.o., Warsaw (1) 72.0% 72.0%

4 Grupa Radiowa Agory Sp. z o.o. (GRA), Warsaw 100.0% 100.0%

5 Adpol Sp. z o.o., Warsaw (2) 100.0% 100.0%

6 Inforadio Sp. z o.o., Warsaw (1) 66.1% 66.1%

7 Agora TC Sp. z o.o., Warsaw 100.0% 100.0%

8 Doradztwo Mediowe Sp. z o.o, Warsaw (1) 100.0% 100.0%

9 Trader.com (Polska) Sp. z o.o., Warsaw 100.0% 100.0%

10 AdTaily Sp. z o.o., Warsaw (4) 84.3% 83.3%

11 Helios S.A., Lodz (5) 88.9% 88.5%

12 Next Film Sp. z o.o., Lodz (3), (5) 88.9% 88.5%

13 Sport4People Sp. z o.o. in liquidation, Cracow 100.0% 100.0%

14 Projekt Inwestycyjny Sp. z o.o., Warsaw (1) 100.0% 100.0%

15 Sir Local Sp. z o.o., Warsaw 78.4% 78.4%

16 TV Zone Sp. z o.o., Warsaw 100.0% 100.0%

17 Green Content Sp. z o.o., Warsaw 100.0% 100.0%

18 Joy Media Sp. z o.o., Warsaw 100.0% 100.0%

19 PTA Sp. z o.o., Warsaw 100.0% 100.0%

20 GoldenLine Sp. z o.o., Warsaw 92.7% 92.7%

21 Optimizers Sp. z o.o., Warsaw 100.0% 100.0%

Joint ventures and associates accounted for the equity method

22 Online Technologies HR Sp. z o.o., Szczecin 46.2% 46.2%

23 Instytut Badan Outdooru IBO Sp. z o.o., Warsaw (2) 40.0% 40.0%

24 Stopklatka S.A., Warsaw 41.1% 41.1%

25 Hash.fm Sp. z o.o., Warsaw 49.5% 49.5%

Companies excluded from consolidation and equity accounting

26 Polskie Badania Internetu Sp. z o.o., Warsaw 15.8% 15.8%

(1) indirectly through GRA Sp. z o.o.;

(2) indirectly through AMS S.A.;

(3) indirectly through Helios S.A.

(4) acquisition of shares from a non-controlling shareholder;

(5) acquisition of shares from a non-controlling shareholder.

[ w w w . a g o r a . p l ]



12. CHANGES IN THE COMPOSITION OF THE GROUP

On July 5, 2016, Agora S.A. received, from a former non-controlling shareholder of Helios S.A., a call to pay an additional

price for the shares sold by this non-controlling shareholder to the Company, based on a share sale agreement of

December 11, 2014, concluded between Agora S.A. and the non-controlling shareholder. On August 3, 2016, Agora S.A.

paid the additional price in the amount of PLN 4,277 thousand to the bank account of the former non-controlling

shareholder of Helios S.A.

On July 8, 2016, Agora S.A. received, from a non-controlling shareholder of Helios S.A., a call to purchase 0.38% shares

of Helios S.A. The call was submitted pursuant to the provisions of an option agreement dated August 31, 2010; the

price for shares was calculated in accordance with the provisions of this agreement. On August 4, 2016, in performance

of the call for acquisition, Agora S.A. and a non-controlling shareholder of Helios S.A. signed the Promised Share

Purchase Agreement, as a result of which Agora S.A. purchased 0.38% of shares of that company, for the total price of

PLN 791 thousand, calculated in accordance with provisions of the option agreement concluded between the parties. As

a result, shares held by Agora S.A. currently represent 88.88% of the company’s share capital and 88.88% of the voting

rights at the shareholders’ meeting.

On September 7, 2016, the extraordinary general meetings of shareholders of the companies Grupa Radiowa Agory Sp.

z o.o. with its registered office in Warsaw (“GRA”) and Projekt Inwestycyjny Sp. z o.o. with its registered office in

Warsaw (“PI”) adopted resolutions on merger of PI ( as acquired company) with GRA (as acquiring company). As of the

date of publication of this report, the above merger was not entered into the register of entrepreneurs of the National

Court Register.

On September 9, 2016, Agora S.A. acquired 8 shares in the share capital of Adtaily Sp. z o.o. with its registered seat in

Warsaw, from a shareholder of that company for the total price of PLN 203 thousand. As a result of the above

transaction, Agora S.A. currently owns 738 shares with nominal value of PLN 50 per share and total nominal value of

PLN 36,900, which on publication of this report represent 84,25% of the company’s share capital and 84,25% of the

votes at the shareholders’ meeting.

On September 30, 2016, Agora S.A. signed an option agreement governing the terms and conditions of sale by a

minority shareholder - G.C. Geek Code Ltd. ("G.C. Geek Code") of its shares in GoldenLine Sp. o.o. ("GoldenLine") to

Agora S.A. According to the provision of the agreement, the parties have specified the detailed terms and conditions of

put and call options regarding the shares held by G.C. Geek Code and any other shares in GoldenLine which G.C. Geek

Code may purchase in the future. In case the put option or call option is executed, the valuation of shares will be based

on the future financial results of GoldenLine. Currently, Agora S.A. holds 278 shares in GoldenLine, representing 92.67%

of the share capital of the company and 278 votes, representing 92.67% of the votes at the shareholders meeting. G.C.

Geek Code, a company controlled by Mariusz Gralewski, who is the main founder of GoldenLine, is the minority

shareholder in GoldenLine. G.C. Geek Code currently holds 22 shares, representing 7.33% of the share capital of

GoldenLine and giving the right to 22 votes, representing 7.33% of the votes at the general meeting of shareholders of

GoldenLine. As at 30 September 2016 the put option liability recognised in the consolidated balance sheet of the Group

amounted to PLN 1,760 thousand.

The conclusion of the above option agreement was the result of the negotiations between Agora S.A. and G.C. Geek

Code conducted after the sale transaction of 22 shares in GoldenLine held by G.C. Geek Code in the first quarter of 2016

as a result of which Agora obtained control over GoldenLine. The sale agreement provided that after the transaction

principles of cooperation between Agora and G.C. Geek Code in relation to the remaining shares held by G.C. Geek Code

shall be established. The acquisition of GoldenLine by the Agora Group and its impact on the consolidated net result of

the Group in the first quarter of 2016 was described in detail in the semi-annual report of the Agora Group for the six

months ended June 30, 2016.

On October 4, 2016, the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National

Court Register entered into the register of entrepreneurs of the National Court Register the increase of the share capital

of Adtaily Sp. z o.o. with its registered office in Warsaw, from the amount of PLN 42,000 to the amount of PLN 43,800

on the basis of the resolution adopted by the extraordinary general meeting of shareholders of Adtaily Sp. z o.o. on May

12, 2016 concerning the share capital increase by 36 new shares with the nominal value of PLN 50 per share. New

shares were assigned to two new minority shareholders of Adtaily Sp. z o.o., 18 for each of them. After the registration

[ w w w . a g o r a . p l ]



of the share capital increase, Agora S.A. owns 738 shares with nominal value of PLN 50 per share and total nominal

value PLN 36,900, which represent 84,25% of the company’s share capital and 84,25% of the votes at shareholders’

meeting.

� Call for the repurchase of shares in a subsidiary

On March 29, 2016, a minority shareholder (“Minority Shareholder”) of Helios S.A., holding 320,400 shares of Helios

S.A., constituting 2.77% of the share capital (“Shares”), submitted a call to Helios S.A., based on Article 418 (1) of the

Commercial Companies Code (“CCC”), for convening the general meeting of shareholders of Helios S.A. and placement

on the agenda of an item regarding adoption of a resolution on Shares compulsory sell-out (“Call”).

As a result of: (i) the Call, (ii) further calls, submitted pursuant to Article 418 (1) of CCC by the Minority Shareholder and

others minority shareholders of Helios S.A., who purchased a portion of the Shares from the Minority Shareholder and

(iii) resolutions adopted by the General Meetings of Shareholders of Helios S.A. held on May 10, 2016 and June 13,

2016, there are currently two ongoing sell-out procedures (pursuant to Article 418 (1) of CCC) and one ongoing squeeze-

out procedure (pursuant to Article 418 of CCC), aiming at the acquisition by the two shareholders of Helios S.A.,

including Agora S.A., of the Shares held by the Minority Shareholder and other minority shareholders.

In connection with the ongoing sell-out procedures, as of June 30, 2016 Agora S.A. transferred the amount of PLN 2,938

thousand to Helios S.A., as the sell-out price, calculated based on Article 418 (1) § 6 of CCC. As of September 30, 2016

Agora Group recognised in its balance sheet a liability to acquire the shares from the minority shareholders of Helios

S.A. in the total amount of PLN 3,185 thousand. The above mentioned amount includes amount of PLN 2,938 thousand,

which Agora S.A. transferred to Helios S.A. and the total amounts transferred by the second shareholder of Helios S.A. in

connection with the ongoing sell-out procedures.

The shareholders, whose shares are subject of sell-out procedures, haven’t agreed on sell-out price calculated based on

Article 418 (1) § 6 of CCC and based on Article 418 (1) § 7 of CCC, applied to the registry court for appointment of expert

in order to determine the price of sell-out shares by the court. The final evaluation of Shares, which are subject to the

sell-out and squeeze-out procedures, will be calculated by an expert or experts appointed by the registry court having

the jurisdiction over the registered office of Helios S.A.

The squeeze-out procedure, which entered into force on July 14, 2016, concerns 10 shares. The owner/s of the

mentioned shares, didn’t respond to a Company’s call, announced in the Court and Commercial Gazette, directed at the

minority shareholder/s holding the above mentioned shares, to lodge the share certificates with the Company within

two weeks from the date of announcement of the call, under pain of invalidation thereof.

As of the date of publication of this report, the compulsory sell-out and squeeze-out procedures have not been

completed.

13. FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY FOR THE CONDENSED INTERIM

CONSOLIDATED FINANCIAL STATEMENTS AND CONDENSED UNCONSOLIDATED FINANCIAL

STATEMENTS OF AGORA S.A. AND THE TRANSLATION METHOD OF FINANCIAL DATA

The functional and presentation currency for Agora S.A. and other companies as well as for the presented consolidated

financial statements is Polish zloty.

Selected financial data presented in the financial statements has been translated into EURO in the following way:

� income statement and cash flow statement figures for three quarters of 2016 (three quarters of 2015) using the

arithmetic average of exchange rates published by NBP and ruling on the last day of each month of the three

quarters. For the three quarters of 2016 EURO 1 = PLN 4.3688 (EURO 1 = PLN 4.1585).

� balance sheet figures using the average exchange rates published by NBP and ruling as at the balance sheet date.

The exchange rate as at 30 September 2016 – EURO 1 = PLN 4.3120, as at 31 December 2015 – EURO 1 =PLN 4.2615

PLN as at 30 September 2015 – EURO 1 = PLN 4.2386.

[ w w w . a g o r a . p l ]



14. PROPERTY, PLANT AND EQUIPMENT

a) property, plant and equipment held for sale as at the balance sheet date

As at 30 September 2016, non-current assets with the carrying amount of PLN 14,136 thousand were presented as held

for sale and comprised perpetual usufruct of land with the carrying amount of PLN 10,848 thousand and buildings with

the carrying amount of PLN 3,288 thousand. Those assets are related to properties located in Lodz and Warsaw. In the

segment information provided in note 4 those assets are presented within reconciling positions.

As at 30 September 2016, the actions to sell the assets have already been initiated and a sale is expected to be

completed within the period shorter than 12 months from the balance sheet date. The Management Board estimates

that the fair value less costs to sell of those assets is higher than their carrying amounts.

On October 27, 2016 Agora S.A. has entered into a conditional sale agreement for the sale of property in Lodz as


b) property, plant and equipment purchased and contractual commitments as at the balance sheet date

In the period from January 1, 2016 to September 30, 2016, the Group purchased property, plant and equipment in the

amount of PLN 59,343 thousand (in the period of January 1, 2015 to September 30, 2015: PLN 80,130 thousand).

As at September 30, 2016, the commitments for the purchase of property, plant and equipment amounted to PLN PLN

28,150 thousand (as at December 31,2015: PLN 34,785 thousand).

The Management Board of the Company would like to point out that the commitments for the purchase of property,

plant and equipment include also future liabilities resulting from the signed agreements related to the realization of the

concession contract for the construction and utilization of 1,580 bus shelters in Warsaw and 600 shelters in Cracow. The

investment process in Warsaw has commenced in 2014 and shall last 3 years. The estimated total cost of the bus shelter

construction in Warsaw amounts to ca PLN 80 million. The investment process in Cracow has commenced in 2015 and

shall last 10 years.

Moreover, according to the medium term development plans of the Agora Group announced in March 2014, the

subsidiary Helios S.A., plans to open new cinema facilities. Since March 2014 till the end of 2018 the investment outlays

related to this process may amount to ca PLN 80 million. In 2014 the number of new facilities, by which the Helios

network enlarged was 3 and in 2015 it was 4.

15. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

The Group applies the following hierarchy for disclosing information about fair value of financial instruments – by

valuation technique:

Level 1: quoted prices in active markets (unadjusted) for identical assets or liabilities;

Level 2: valuation techniques in which inputs that are significant to fair value measurement are observable, directly or

indirectly, market data;

Level 3: valuation techniques in which inputs that are significant to fair value measurement are not based on observable

market data.

The table below shows financial instruments measured at fair value at the balance sheet date:

As at 30

September

2016

Level 1

Level 2

Level 3

Certificates in investment funds 38,660

-

38,660

-

Financial assets measured at fair value 38,660

-

38,660

-

[ w w w . a g o r a . p l ]



As at 30

September

2016

Level 1

Level 2

Level 3

Put option liabilities 17,613

-

-

17,613

Financial liabilities measured at fair value 17,613

-

-

17,613

As at 31

December

2015

Level 1

Level 2

Level 3

Certificates in investment funds 85,771

-

85,771

-

Financial assets measured at fair value 85,771

-

85,771

-

Put option liabilities 16,575

-

-

16,575

Contingent payment liability 4,304

-

-

4,304

Financial liabilities measured at fair value 20,879

-

-

20,879

The table below shows a reconciliation from the beginning balance to the ending balance for financial instruments in

Level 3 of the fair value hierarchy:

As at 30

September

2016

As at 31

December

2015

Opening balance 20,879

22,218

Additions resulting from initial recognition (note 12) 1,760

-

Expiration of put option recognised in equity -

(213)

Remeasurement recognised in profit or loss 42

(507)

Exercise of the put option (1)

(791)

(619)

Settlement of the contingent payment (2)

(4,277)

-

Closing balance 17,613

20,879

(1) in 2016 relates to a call to purchase 0.38% shares of Helios S.A. exercised by a non-controlling shareholder as

described in note 12;

(2) relates to a call to pay an additional price for the shares sold by a former non-controlling shareholder of Helios S.A. as


Key assumptions that are most significant to the fair value measurement of financial instruments in Level 3 of the fair

value hierarchy include: estimated level of the EBITDA result (being the sum of operating profit/loss and amortization

and depreciation) during the period specified in put option conditions and discount rate.

[ w w w . a g o r a . p l ]



16. PROFIT DISTRIBUTION FOR THE YEAR 2015

In accordance with the resolution adopted by the General Meeting of Shareholders on June 23, 2016, the net profit of

Agora S.A. for the financial year 2015 was distributed in the form of dividend in the total amount of PLN 35,749

thousand (the additional amount was distributed from the reserve capital). The dividend amounted to PLN 0.75 per

share. Shareholders of record on 14 July 2016 were eligible to participate in the dividend payment.

The dividend payment was made on August 2, 2016.

17. POST BALANCE-SHEET EVENTS

� Conclusion of an agreement concerning the group layoffs in Agora S.A.

On October 4, 2016, the Management Board of Agora S.A.: (i) adopted a resolution concerning initiation of the

consultation on group layoffs with the trade unions operating at Agora S.A. and the Company's works council, (ii)

requested the trade unions operating at the Company and the Company's works council to join in the consultation on

collective redundancy process, (iii) provided the relevant Labor Office with information on the intention to execute

group layoffs in the Company.

On October 11, 2016, Agora S.A concluded a trilateral agreement ("Agreement") with trade unions operating at Agora

S.A. (the Agreement fulfills the provisions of article 3, Section 1 of the Act of March 13th, 2003 on Special Rules for

Termination of Employment for Reasons Not Attributable to Employees) and with works council in the Company (which

constitutes an agreement in accordance with the Act of April 7th, 2006 on informing and consulting employees) and the

Management Board of the Company adopted a resolution regarding execution of the group layoffs in accordance with

the provisions of the Agreement.

The group layoffs shall be executed from October 20, 2016 till December 31, 2016 and shall affect up to 135 employees

of the Company, i.e. ca 6.8% of all employees of the Company. The Company estimates that the level of the provision

for this process will amount to PLN ca 5.6 million. The provision will burden the financial results of the Company and

Agora Group in the fourth quarter of 2016.

In accordance with the Agreement, the laid-off employees will be provided by the Company with a wider range of

supportive measures than it is required by the law. The redundancy payment provided for in the law regulations will be

increased by an additional indemnity in the amount equal to one additional monthly salary. The laid-off employees shall

be supported by additional protective measures provided by the Company inter alia, help in searching for new job or

reskilling.

Management Board of Agora S.A., in the process of transformation, made a decision of ceasing the publication of the

free daily newspaper "Metrocafe.pl" on 14 October 2016. The reason for taking the restructuring measures, is ongoing

market recession visible in press advertising expenditure and negative forecasts of its further development. The

Company's Management Board decided to focus on the development of "Gazeta Wyborcza", particularly its further

development in digitization and support of the development of paid subscriptions.

� Conclusion of a cooperation agreement with EmiTel Sp. z o.o.

On October 26, 2016, a cooperation agreement between the subsidiary of Agora - Green Content Sp. z o.o. ("Green

Content") and EmiTel Sp. z o.o. ("EmiTel") was signed. The agreement was concluded for a definite period from

December 1, 2016 until December 28, 2025, which is the duration of the license to transmit METRO television program

granted to Green Content. The total estimated value of the agreement within the expected time of its validity amounts

to approximately PLN 62.0 million.

The contract covers the provision by EmiTel for Green Content the service of placing the television program METRO on

MUX-8 and ensuring uninterrupted digital signal transmission of MUX-8 in the DVB-T standard. The total liability for

damages (contractual and tort) of each of the parties, including contractual penalties, is limited to the amount of

compensation that the company Green Content should pay EmiTel for 36 months of the contract (does not apply to

damage caused willfully).

[ w w w . a g o r a . p l ]



The Company also announces that Green Content will start broadcasting METRO on MUX-8 on December 2, 2016.

� Conclusion of a conditional sale agreement for a property in Lodz

On October 27, 2016 Agora S.A. has entered into a conditional agreement with the sale of the right of perpetual

usufruct of two properties of total area of ca. 4.2 thou. square meters located in Lodz, together with the ownership of

the buildings erected on one of them, including a historic office building with covered area of ca. 1 thou. square meters

(referred to collectively as "the Property"). The agreement was concluded under the condition that the mayor of Lodz

shall not exercise the right of first refusal to the Property vested in the Municipality of the City of Lodz.

The decision to sell the Property stems from the fact that the Company does not utilize effectively the entire Property

for its operations. The Company believes that the optimal solution shall be to lease office space adapted to the current

scale of operations of the Company in Lodz. Along with the conditional sale agreement, a conditional agreement was

settled to lease office space, under which Agora will lease from the buyer office space located in the Property for the

period of 5 years.

The total sale price of the Property will be PLN 9.7 million net and its impact on the operating result of the Agora Group

for 4Q2016 will be ca. PLN 6.0 million.

[ w w w . a g o r a . p l ]



18. SELECTED CONSOLIDATED FINANCIAL DATA TOGETHER WITH TRANSLATION INTO EURO

in PLN thousand

in EUR thousand

Nine months

ended 30

September

2016

unaudited

As at 31

December

2015

audited

Nine months

ended 30

September

2015

unaudited

Nine months

ended 30

September

2016

unaudited

As at 31

December

2015

audited

Nine months

ended 30

September

2015

unaudited

Sales 858,134

835,382

196,423

200,885

Operating profit/(loss) (8,023)

1,675

(1,836)

403

Profit/(loss) before

income taxes (14,613)

251

(3,345)

60

Net loss for the period

attributable to equity

holders of the parent

(26,801)

(3,043)

(6,135)

(732)

Net cash from operating

activities 36,060

65,527

8,254

15,757

Net cash used in investing

activities 7,617

(79,462)

1,743

(19,108)

Net cash used in financing

activities (50,246)

(9,089)

(11,501)

(2,186)

Net increase / (decrease)

in cash and cash

equivalents

(6,569)

(23,024)

(1,504)

(5,537)

Total assets 1,506,870

1,610,213

1,529,583

349,460

377,851

360,870

Non-current liabilities 141,619

118,589

120,306

32,843

27,828

28,383

Current liabilities 259,626

321,439

256,065

60,210

75,429

60,413

Equity attributable to

equity holders of the

parent

1,086,961

1,153,486

1,137,915

252,078

270,676

268,465

Share capital 47,665

47,665

47,665

11,054

11,185

11,245

Weighted average number

of shares 47,665,426

47,906,531

47,987,783

47,665,426

47,906,531

47,987,783

Basic/diluted earnings per

share (in PLN / in EURO) (0.56)

(0.06)

(0.13)

(0.02)

Book value per share (in

PLN / in EURO) 22.80 24.08 23.71

5.29 5.65 5.59

[ w w w . a g o r a . p l ]



19. CONDENSED INTERIM UNCONSOLIDATED FINANCIAL STATEMENTS OF AGORA S.A.

Unconsolidated balance sheet as at 30 September 2016

As at 30

September

2016

unaudited

As at 30 June

2016

unaudited

As at 31

December

2015

audited

As at 30

September

2015

unaudited

Assets

Non-current assets:

Intangible assets 56,705 57,148 59,635 58,697

Property, plant and equipment 252,901 272,640 281,851 286,458

Long term financial assets 592,909 591,791 569,446 572,674

Receivables and prepayments 4,852 9,189 17,912 534

907,367 930,768 928,844 918,363

Current assets:

Inventories 23,266 22,447 19,566 19,338

Accounts receivable and prepayments 142,821 190,673 175,499 185,117

Income tax receivable 6 4 - 89

Short-term securities and other financial

assets 15,571 42,283

83,715

36,602

Cash and cash equivalents 11,401 12,936 11,682 12,439

193,065 268,343 290,462 253,585

Non-current assets held for sale 14,136 - - -

207,201 268,343 290,462 253,585

Total assets 1,114,568 1,199,111 1,219,306 1,171,948

[ w w w . a g o r a . p l ]



Unconsolidated balance sheet as at 30 September 2016 (continued)

As at 30

September

2016

unaudited

As at 30 June

2016

unaudited

As at 31

December

2015

audited

As at 30

September

2015

unaudited

Equity and liabilities

Equity:

Share capital 47,665 47,665 47,665 47,665

Share premium 147,192 147,192 147,192 147,192

Other reserves 119,855 119,855 119,855 119,684

Retained earnings 627,154 649,299 696,049 680,892

941,866 964,011 1,010,761 995,433

Non-current liabilities:

Deferred tax liabilities 12,469 11,475

12,182 15,904

Long-term borrowings 21,244 23,163 - -

Other financial liabilities - - - 4,483

Retirement severance provision 2,043 2,043 1,905 2,003

Deferred revenues and accruals 8 8 15 19

Other 100 100 81 77

35,864 36,789 14,183 22,486

Current liabilities:

Retirement severance provision 47 47 163 20

Trade and other payables 73,192 117,262 108,801 81,288

Short-term borrowings 6,343 8,571 17,878 5,519

Other financial liabilities 20,182 29,869 16,865 22,342

Provisions 207 187 297 257

Deferred revenues and accruals 36,867 42,375 50,358 44,603

136,838 198,311 194,362 154,029

Total equity and liabilities 1,114,568 1,199,111 1,219,306 1,171,948

[ w w w . a g o r a . p l ]



Unconsolidated income statement for three and nine months ended 30 September 2016

Three months

ended

Nine months

ended

Three months

ended

Nine months

ended

30 September

2016

unaudited

30 September

2016

unaudited

30 September

2015

unaudited,

adjusted

30 September

2015

unaudited,

adjusted

Sales 132,626 428,718

149,661 478,581

Cost of sales (96,729) (302,264) (97,395) (319,240)

Gross profit 35,897 126,454 52,266 159,341

Selling expenses (38,989) (129,793) (48,594) (142,964)

Administrative expenses (17,782) (57,142) (16,970) (56,500)

Other operating income 829 2,528 4,871 7,320

Other operating expenses (1,217) (3,267) (1,842) (4,820)

Operating loss (21,262) (61,220) (10,269) (37,623)

Finance income 550 29,367 717 31,688

Finance costs (439) (965) (157) (973)

Loss before income taxes (21,151) (32,818) (9,709) (6,908)

Income tax (993) (328) 114 5,473


Basic/diluted earnings per share (in PLN) (0.46) (0.70) (0.20) (0.03)

Unconsolidated statement of comprehensive income for three and nine months ended 30

September 2016

Three months

ended

Nine months

ended

Three months

ended

Nine months

ended

30 September

2016

unaudited

30 September

2016

unaudited

30 September

2015

unaudited

30

September

2015

unaudited


Other comprehensive income

for the period - -

- -

Total comprehensive income

for the period (22,144) (33,146) (9,595) (1,435)

[ w w w . a g o r a . p l ]



Unconsolidated statement of changes in equity for nine months ended 30 September 2016

Share capital

Treasury

shares

Share premium Other reserves Retained earnings Total equity


As at 31 December 2015 audited 47,665 - 147,192 119,855 696,049 1,010,761


Net loss - - - - (33,146) (33,146)

Total comprehensive income for the period - - - - (33,146) (33,146)



Dividends declared - - - - (35,749) (35,749)

Total transactions with owners - - - - (35,749) (35,749)

As at 30 September 2016 unaudited 47,665 - 147,192 119,855 627,154 941,866


As at 31 December 2014 audited 50,937 (30,060) 147,192 137,289 700,798 1,006,156


Net loss - - - - (1,435) (1,435)

Total comprehensive income for the period - - - - (1,435) (1,435)



Redemption of own shares (3,272) 39,348 - 3,272 (39,348) -

Repurchase of own shares - (9,288) - - - (9,288)

Reserve capital for share buy-back - - - (20,877) 20,877 -

Total transactions with owners (3,272) 30,060 - (17,605) (18,471) (9,288)

As at 30 September 2015 unaudited 47,665 - 147,192 119,684 680,892 995,433

[ w w w . a g o r a . p l ]



Unconsolidated cash flow statement for three and nine months ended 30 September 2016

Three

months

ended

Nine months

ended

Three

months

ended

Nine months

ended

30

September

2016

unaudited

30

September

2016

unaudited

30

September

2015

unaudited

30

September

2015

unaudited

Cash flows from operating activities

Loss before income taxes (21,151) (32,818) (9,709) (6,908)

Adjustments for:

Depreciation of property, plant and

equipment 7,764 23,641 8,019 24,349

Amortization of intangible assets 1,989 6,067 2,725 14,592

Foreign exchange (gain) /loss - - (51) (1,615)

Interest, net 17 (288) (148) (474)

(Profit) / loss on investing activities (552) (1,478) (1,911) (2,585)

Dividend income - (26,677) - (27,429)

(Decrease) / increase in provisions 21 (68) (357) (980)

(Increase) / decrease in inventories (818) (3,700) 981 1,263

(Increase) / decrease in receivables and

prepayments 24,325 35,402 20,153 16,929

(Decrease) / increase in payables (8,681) (30,437) (10,283) (5,714)

(Decrease) / increase in deferred revenues

and accruals (5,507) (12,874) (7,595) 6,587

Other adjustments 81 171 67 522

Cash generated from operations (2,512) (43,059) 1,891 18,537

Income taxes (paid)/received - - - -

Net cash from operating activities (2,512) (43,059) 1,891 18,537

Cash flows from investing activities

Proceeds from sale of property, plant and

equipment, and intangibles 3,684 10,644 1,528 1,652

Dividends received 24,594 25,649 - 9,663

Repayment of loans granted 200 6,200 446 1,589

Interest received 354 1,186 256 689

Disposal of short-term securities 39,564 103,369 19,022 29,029

Repayment of finance lease receivables - - 4,047 11,949

Other inflows (1) - 10,645 - -

Purchase of property, plant and equipment,

and intangibles (3,520) (16,945) (3,703) (12,645)

Acquisition of subsidiaries, associates and

jointly controlled entities (5,324) (27,032) (907) (959)

Acquisition of short-term securities (8,000) (42,000) (19,000) (60,000)

Loans granted - (2,000) - (2,000)

Net cash used in investing activities 51,552 69,716 1,689 (21,033)

[ w w w . a g o r a . p l ]



Three

months

ended

Nine months

ended

Three

months

ended

Nine months

ended

30

September

2016

unaudited

30

September

2016

unaudited

30

September

2015

unaudited

30

September

2015

unaudited

Cash flows from financing activities

Proceeds from borrowings - 25,000 - 6,150

Proceeds from cash pooling - 13,444 - 3,446

Repurchase of own shares - - - (9,288)

Dividends paid (35,749) (35,749) - -

Repayment of borrowings (4,142) (15,392) (631) (9,363)

Outflows from cash pooling (10,347) (13,347) (3,216) (3,216)

Payment of finance lease liabilities (5) (10) - -

Interest paid (279) (571) (123) (419)

Other (53) (313) (50) (450)

Net cash used in financing activities (50,575) (26,938) (4,020) (13,140)

Net increase / (decrease) in cash and cash

equivalents (1,535) (281) (440) (15,636)

Cash and cash equivalents

At start of period 12,936 11,682 12,879 28,075

At end of period 11,401 11,401 12,439 12,439

(1) the amount relates to cash paid by the Company in 2015 in connection with the subscriptions for shares of

Stopklatka S.A. and was returned to the Company on January 21, 2016.

Additional information to unconsolidated financial statements of Agora S.A.

In the period from January 1, 2016 to September 30, 2016 the following impairment losses and provisions were

changed in the unconsolidated financial statements of Agora S.A. (in brackets the amounts for the third quarter of

2016):

- impairment loss for financial assets: decrease by PLN 600 thousand (decrease by PLN 200 thousand),

- impairment loss for receivables: decrease by PLN 399 thousand (increase by PLN 39 thousand),

- impairment loss for inventory: increase by PLN 596 thousand (decrease by PLN 291 thousand),

- impairment loss for tangible assets and intangible assets: increase by PLN 70 thousand (no change),

- provision for legal claims and similar: decrease by PLN 90 thousand (increase by PLN 20 thousand),

- retirement severance provision: increase by PLN 21 thousand (no change).

In the period from January 1, 2016 to September 30, 2016, the Company purchased property, plant and equipment in

the amount of PLN 10,267 thousand (in the period of January 1, 2015 to September 30, 2015: PLN 6,531 thousand).

As at September 30, 2016, the commitments for the purchase of property, plant and equipment amounted to PLN

521 thousand (as at December 31,2015: PLN 2,962 thousand).

As at 30 September 2016, non-current assets of the Company with the carrying amount of PLN 14,136 thousand were

presented as held for sale as described in note 14.

As at September 30, 2016 other short - term financial liabilities include liabilities of Agora S.A. to subsidiaries resulting

from settlements related to the cash pooling system, which functions within Agora Group since December 5, 2014. In

the third quarter of 2016 the Company settled the contingent payment liability to a former non-controlling

shareholder of Helios S.A. as requested by a call to pay the additional price for the shares received on July 5, 2016.

[ w w w . a g o r a . p l ]



Adjustments to comparative information

In 2016, the Company modified the presentation of expenses, which is described in note 2 to the condensed interim

consolidated financial statements. The comparative amounts in the unconsolidated income statement of the

Company were adequately adjusted.

The summary of adjustments made to the unconsolidated comparative amounts of the Company is presented in the

table below:

Nine months

ended

Nine months

ended

30 September

2015

(as reported)

Presentation

adjustments

30 September

2015

(as adjusted)

Cost of sales (303,112) (16,128) (319,240)

Gross profit 175,469 (16,128) 159,341


Three months

ended

Three months

ended

30 September

2015

(as reported)

Presentation

adjustments

30 September

2015

(as adjusted)

Cost of sales (92,453) (4,942) (97,395)

Gross profit 57,208 (4,942) 52,266


Related party transactions

There were no material transactions and balances with related entities other that disclosed below:

Three

months

ended 30

September

2016

Nine months

ended 30

September

2016

Three

months

ended 30

September

2015

Nine months

ended 30

September

2015

Subsidiaries

Sales

11,296 25,084

7,410

25,796

Purchases of goods and services (18,682) (60,826) (21,484) (64,156)

Other operating income 1 1 1 8

Other operating costs - - (7) (193)

Dividends income - 26,677 - 27,429

Other finance income 311 992 334 2,539

Finance costs (112) (309) (95) (341)


Sales 115 344 209 395


Other operating income - - - 1

[ w w w . a g o r a . p l ]



Three

months

ended 30

September

2016

Nine months

ended 30

September

2016

Three

months

ended 30

September

2015

Nine months

ended 30

September

2015

Finance income 16 63 29 86

Associates

Sales 27 43 2 20


Major shareholder

Sales 15 47 15 46

Other operating income - 86 59 181

As at 30

September

2016

As at 30 June

2016

As at 31

December

2015

As at 30

September

2015

Subsidiaries

Shares (1) 572,549 571,502 537,659 537,707

Cash pooling receivables 8,658 3,711 1,131 -

Non-current receivables 4,366 8,705 17,299 -

Short term receivables 20,515 19,701 19,181 15,371

Dividends receivables 1,028 25,622 - 26,041

Cash pooling liabilities 20,182 25,592 12,561 22,342

Short term liabilities 7,919 10,682 9,908 12,034

Loans granted 8,534 8,464 8,326 16,899


Shares 11,593 11,593 11,593 7,186

Short term receivables 97 70 135 185

Short term liabilities 149 234 407 256

Loans granted 2,050 2,033 5,734 3,704

Associates

Shares 949 949 12,584 12,584



Major shareholder

Short-term receivables - 1 - -

Short-term liabilities - 75 75 76

Dividends liability - 4,051 - -

(1) the change versus 31 December 2015 relates mainly to the acquisition of additional shares in GoldenLine Sp. z o.o.

and a share capital increase in Green Content Sp. z o.o. covered with a cash contribution in the first quarter of 2016.

[ w w w . a g o r a . p l ]



Selected unconsolidated financial data together with translation into EURO

in PLN thousand

in EUR thousand

Nine months

ended 30

September

2016

unaudited

As at 31

December

2015

audited

Nine

months

ended 30

September

2015

unaudited

Nine

months

ended 30

September

2016

unaudited

As at 31

December

2015

audited

Nine

months

ended 30

September

2015

unaudited

Sales 428,718

478,581

98,132

115,085

Operating loss (61,220)

(37,623)

(14,013)

(9,047)

Loss before income

taxes (32,818)

(6,908)

(7,512)

(1,661)

Net loss for the period (33,146)

(1,435)

(7,587)

(345)

Net cash from operating

activities (43,059)

18,537

(9,856)

4,458

Net cash used in

investing activities 69,716

(21,033)

15,958

(5,058)

Net cash used in

financing activities (26,938)

(13,140)

(6,166)

(3,160)

Net increase /

(decrease) in cash and

cash equivalents

(281)

(15,636)

(64)

(3,760)

Total assets 1,114,568

1,219,306

1,171,948

258,481

286,121

276,494

Non-current liabilities 35,864

14,183

22,486

8,317

3,328

5,305

Current liabilities 136,838

194,362

154,029

31,734

45,609

36,340

Equity 941,866

1,010,761

995,433

218,429

237,184

234,849

Share capital 47,665

47,665

47,665

11,054

11,185

11,245

Weighted average

number of shares 47,665,426

47,906,531

47,987,783

47,665,426

47,906,531

47,987,783

Basic/diluted earnings

per share (in PLN / in

EURO)

(0.70)

(0.03)

(0.16)

(0.01)

Book value per share (in

PLN / in EURO) 19.76 21.10 20.74

4.58 4.95 4.89

[ w w w . a g o r a . p l ]



Warsaw, November 10, 2016

Bartosz Hojka - President of the Management Board Signed on the Polish original

Grzegorz Kossakowski - Member of the Management Board Signed on the Polish original

Robert Musial - Member of the Management Board Signed on the Polish original

Tomasz Jagiello - Member of the Management Board Signed on the Polish original

report for 3q 2016 - gazeta.plbi.gazeta.pl/im/6/20956/m20956376,raport-iiikw-2016-ang.pdf ·...

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