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AFP's 2015 budget prioritises innovation and development

CHAIRMAN AND CEO EMMANUEL HOOG OUTLINED TO THE AFP BOARD ON THURSDAY DECEMBER 11 THE STRATEGIC DIRECTIONS AND MEANS THAT WILL ENABLE THE AGENCY TO ACHIEVE THE INNOVATION AND INVESTMENT GOALS NEEDED FOR THE IMPLEMENTATION OF ITS DEVELOPMENT PLAN.

The Chairman reminded the board that AFP’s 2014-2018 development plan calls for annual revenue growth of between 2% and 2.5%. In the context of the economic and structural crisis affecting the print media, achieving this kind of growth will require AFP to reinforce its operating and investment capabilities in key areas of development.

I. The board therefore approved the creation of AFP Blue, an AFP technical subsidiary of means, innovation and development. This subsidiary, initially proposed in parliamentarian Michel Françaix’s report on AFP’s future submitted to the Prime Minister in April 2014, constitutes a major step for the Agency’s development.

It will enable AFP to invest more than 30 M€ in the following four areas:

- reinforcing AFP’s technical video infrastructure;
- developing innovative applications to respond to new ways of gathering, distributing and consulting news;
- improving the security of its systems and responding more effectively to its clients’ needs thanks to better knowledge of their practices ;
- digitising its archives to enable the Agency to expand its catalogue to include old and rare content and to enhance both the heritage value and the commercial value of its documentary archive.

This subsidiary, which will be operational from January 2015, will be wholly owned by AFP. It will mobilise loans from the “Investing in the Future” programme under the Caisse des Dépôts, the Banque Publique d’Investissements (BPI) and another financial services company.

II. The Chairman also presented the outlook for the end of 2014. The year has been marked by an outstanding commercial performance, with a 2.2% increase in revenues, excluding State subscriptions. Counting the additional revenues related to “special events” – the Sochi Winter Olympics and the FIFA World Cup in Brazil – the increase is 3.3%.

This growth confirms the relevance of AFP’s strategic development orientations which give priority to image production and sports news coverage.

- video revenues have risen by more than 28%; 150 television channels subscribe to this service;
- photo sales continue to increase: a new partnership with Getty has resulted in a 12% growth of photo revenues in the United States;
- sales of online, mobile and infographics products are also dynamic: new contracts have been signed with global giants MSN and Yahoo;
- new, innovative sports products made their mark during the World Cup; these included “live commentary”, HTLM applications and 3D videographics;

Geographically, Latin America is the most dynamic region -- posting a 20% revenue increase this year -- followed by the Middle East and then by Asia, where AFP has renewed its partnership with Jiji Press for another three years
In France, revenues increased by 1.5%. AFP retained the loyalty of its historic clients, with Nice Matin returning to the Agency, and acquired new sport and video contracts.
Costs have been controlled, so that AFP’s operating margin is again on its way up – with a positive margin of nearly 12 M€ forecast for 2014 after six years of decline due to the media crisis in France and in Europe.

III. The board voted to approve AFP’s budget for 2015. The Agency’s commercial prospects remain positive, with revenues – not counting those from the government -- expected to rise by 2.2% over 2014. There will also be a strong increase in revenue from the government of more than 3.3%, demonstrating the State’s support of AFP and the strategic character of the missions of general interest devolved upon the Agency.

In 2015, resources from the State will be divided for the first time between a subsidy to compensate AFP for the net cost of the missions of general interest and a commercial contract covering the subscriptions taken out by various government departments. Compensation for the cost of the missions of general interest is implemented under the terms of the settlement of the complaint lodged in Brussels that AFP had been receiving State aid.
It will be reflected in the contract of objectives and means between AFP and the French state. This contract is now in the final phase of negotiation and France is committed to submitting it to the European Commission before 27 March 2015.

< Costs will be strictly contained. The expected savings on the Agency’s running costs will enable AFP to increase editorial resources – for example staff expenditures (+1.3%) and editorial missions (+6.8% over 2014, not counting special events). Based on this budget, the Agency intends to consolidate the means that it has deployed in the major theatres of international news and that set AFP apart from other global news agencies.

Overall, revenue is budgeted at 296.5 million euros and expenditure at 279.7 million, producing an operating margin of 16.8 M€ for a balanced net result.

AFP will have an investment budget of 15.2 M€ for 2015. This budget will make it possible to pursue the investments linked to the Agency’s development plan for 2014-2018. The major share of these investments will be carried by AFP’s new subsidiary.

About AFP
AFP is a global news agency delivering fast, accurate, in-depth coverage of the events shaping our world from conflicts to politics, sports, entertainment and the latest breakthroughs in health, science and technology. With 2,260 staff spread across almost every country, AFP covers the world 24 hours a day in six languages. AFP delivers the news in video, text, photos, multimedia and graphics to a wide range of customers including newspapers and magazines, radio and TV channels, web sites and portals, mobile operators, corporate clients as well as public institutions.

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