Edipresse: Lower Profits and Revenue in 2008
Edipresse generated a profit of 30.5 million Swiss francs in fiscal year 2008, which is 5.4 percent less than the previous year. Revenue declined by about 10 percent.
The Western Swiss media group Edipresse generated a profit of 30.5 million Swiss francs in 2008. That is 5.4 percent less than in the previous year. Consolidated revenue also fell by 9.4 percent to 738 million Swiss francs. Edipresse attributes the decline to discontinued investment activities and the removal of certain business segments from the consolidated balance sheet. Adjusted for these effects, revenue would have fallen by only one percent.
Operating profit (EBIT) fell by 12.6 percent to 51.5 million Swiss francs in 2008. The group described the 2008 results as «solid» given the difficult economic situation and far-reaching changes in the media market. Edipresse noted that 2009 had gotten off to a difficult start. The group did not issue a forecast, citing the difficulty in predicting trends in the advertising business.
Profit Margins Maintained Through Cost-Cutting Programs
Edipresse generated just under half of its revenue—353.4 million Swiss francs—from daily newspapers and their online portals. This business is conducted almost exclusively in Switzerland. The group generated 332.7 million Swiss francs from magazines, primarily in foreign markets. Edipresse’s top management expressed satisfaction with the results: «The results are satisfactory and solid given the difficult economic situation and the profound changes in the media market,» CEO Tibère Adler told the media in Lausanne.
Edipresse executives are particularly pleased that they were able to maintain their profit margin. The EBIT margin (operating profit as a percentage of revenue) fell only slightly, from 7.2 to 7 percent. This is due to cost-cutting measures: «Last year’s cost-cutting programs allowed us to maintain our margins,» Adler explained. Edipresse had already implemented these measures last spring. By the end of 2008, expenses across all cost categories had fallen, in some cases significantly.
Personnel expenses, for example, decreased by 5 percent to 254.3 million Swiss francs. According to Adler, the cost-cutting program announced last August—involving the elimination of about 50 positions—was completed in March 2009 and is now having its full effect. The stated goal was to reduce costs by 20 million Swiss francs per year. Adler also expressed satisfaction with the development of the online business. Without citing exact figures, he spoke of significant progress. The investments in Homegate.ch and Jobup.ch are said to be highly profitable and to offset the declining revenue in the daily newspapers’ advertising business.
Bleak Outlook for the Next Two Years
Incidentally, according to Adler, the daily newspapers’ websites are expected to break even this year. In concrete terms, however, this still only means that advertising revenue will cover direct costs (technology, operations). The costs of producing the content continue to be borne largely by the newspapers. “2009 got off to a difficult start,” said publisher Pierre Lamunière, commenting on the outlook. He did not venture to make a precise forecast. He expects that the economy—and thus the advertising business—will not recover before 2011/2012. The next two years will therefore bring poorer results.
Edipresse expects the merger with Zurich-based Tamedia to strengthen its position. Tamedia plans to take over Edipresse's Swiss operations by 2013, as was announced in early March.
Operating profit (EBIT) fell by 12.6 percent to 51.5 million Swiss francs in 2008. The group described the 2008 results as «solid» given the difficult economic situation and far-reaching changes in the media market. Edipresse noted that 2009 had gotten off to a difficult start. The group did not issue a forecast, citing the difficulty in predicting trends in the advertising business.
Profit Margins Maintained Through Cost-Cutting Programs
Edipresse generated just under half of its revenue—353.4 million Swiss francs—from daily newspapers and their online portals. This business is conducted almost exclusively in Switzerland. The group generated 332.7 million Swiss francs from magazines, primarily in foreign markets. Edipresse’s top management expressed satisfaction with the results: «The results are satisfactory and solid given the difficult economic situation and the profound changes in the media market,» CEO Tibère Adler told the media in Lausanne.
Edipresse executives are particularly pleased that they were able to maintain their profit margin. The EBIT margin (operating profit as a percentage of revenue) fell only slightly, from 7.2 to 7 percent. This is due to cost-cutting measures: «Last year’s cost-cutting programs allowed us to maintain our margins,» Adler explained. Edipresse had already implemented these measures last spring. By the end of 2008, expenses across all cost categories had fallen, in some cases significantly.
Personnel expenses, for example, decreased by 5 percent to 254.3 million Swiss francs. According to Adler, the cost-cutting program announced last August—involving the elimination of about 50 positions—was completed in March 2009 and is now having its full effect. The stated goal was to reduce costs by 20 million Swiss francs per year. Adler also expressed satisfaction with the development of the online business. Without citing exact figures, he spoke of significant progress. The investments in Homegate.ch and Jobup.ch are said to be highly profitable and to offset the declining revenue in the daily newspapers’ advertising business.
Bleak Outlook for the Next Two Years
Incidentally, according to Adler, the daily newspapers’ websites are expected to break even this year. In concrete terms, however, this still only means that advertising revenue will cover direct costs (technology, operations). The costs of producing the content continue to be borne largely by the newspapers. “2009 got off to a difficult start,” said publisher Pierre Lamunière, commenting on the outlook. He did not venture to make a precise forecast. He expects that the economy—and thus the advertising business—will not recover before 2011/2012. The next two years will therefore bring poorer results.
Edipresse expects the merger with Zurich-based Tamedia to strengthen its position. Tamedia plans to take over Edipresse's Swiss operations by 2013, as was announced in early March.
