Half-year figures: Tamedia increases sales thanks to acquisitions
Tamedia grew in the first half of the year, primarily thanks to acquisitions. In its traditional core publishing business, however, growth remains sluggish. And even its successful marketplaces are facing increasing competition, which necessitates greater investment.
Sales at Switzerland's largest private media group increased by 9.8 per cent to CHF 524.1 million in the first six months of 2019. The main drivers of this growth were the acquired companies Goldbach and Zattoo, as Tamedia announced on Tuesday.
By contrast, operating profit fell by a good 22% to CHF 41.0 million. The decline is mainly due to increased depreciation and amortization as a result of the acquisitions as well as investments in digital platforms and paid media. The margin amounted to 7.8 percent after 11.0 percent in the previous year.
The bottom line was a consolidated profit of 53.6 million francs. This represents an increase of a good 34 percent compared to the previous year. However, this includes an extraordinary gain of around CHF 18.7 million from the sale of Tamedia's stake in Localsearch to Swisscom.
The reported figures are above the ZKB's estimates in terms of turnover, but clearly below the EBIT. The Zurich cantonal bank expected sales of 495.5 million and EBIT of 46.4 million.
Print remains under pressure
A look at the segments shows the already familiar Munster in publishing. The business with printed journalistic newspapers and magazines remains under pressure. "Compared to the previous year, we lost around CHF 18 million in the print advertising market, which could not be compensated for digitally", CEO Christoph Tonini is quoted as saying in the press release. The decline in sales also had a significant impact on profitability, particularly in the Paid Media segment. At EBIT level, the margin here was a meagre 0.8 percent.
The situation is clearly better in the commuter media and marketing segment. The pressure on the printed editions of commuter newspapers, which was also noticeable here, was more than offset in the first half of the year by the strong growth in digital advertising income and the strengthening of the advertising marketing business through acquisitions.
Marketplaces are challenged
And unlike in previous periods, business in the marketplaces and investments segment is no longer going quite as well. According to CEO Tonini, the digital marketplaces are feeling the effects of competition from international providers. In order to prevent potential disruption, Tamedia is therefore investing in the expansion of personnel and IT, which is putting significant pressure on margins. The management is convinced that these investments will be profitable in the long term.
Imprint calls for a change of course
The journalists' association Impressum is critical of Tamedia in a statement issued on Tuesday. The demand: "Massive" investments in the editorial offices instead of cutting titles. In view of the half-year figures, Tamedia should accept the demands of the editorial offices in French-speaking Switzerland and refrain from making redundancies for at least two years. Furthermore, the Group should reinvest the profits generated by internet platforms in journalism. These investments in the editorial offices are necessary to ensure that titles such as the Tribune de Genève in Geneva and The Covenant and the Bernese Newspaper could retain their respective identities in Bern. (SDA/pd/hae)
| Key figures | 2019-6 | 2018-6 | Change |
|---|---|---|---|
| in CHF million | in CHF million | in percent | |
| Tamedia Group | |||
| Operating income | 524.1 | 477.5 | 9.8 |
| Operating result before depreciation and amortization (EBITDA) | 91.5 | 85.4 | 7.2 |
| Margin (in percent) | 17.5 | 17.9 | -2.4 |
| Operating profit before effects of business combinations | 71.1 | 72.7 | -2.3 |
| Operating result (EBIT) | 41 | 52.7 | -22.3 |
| Margin (in percent) | 7.8 | 11 | -29.2 |
| Result | 53.6 | 39.9 | 34.3 |
| of which attributable to Tamedia shareholders | 39.6 | 26.3 | 50.6 |
| Cash flow from operating activities | 64.9 | 98.8 | -34.3 |
| Balance sheet total | 2 841.6 | 2 948.41 | -3.6 |
| Self-financing ratio (in percent)² | 72.8 | 71.31 | 2.2 |
| Paid media | |||
| Operating income | 276.1 | 290.1 | -4.8 |
| thereof intersegment | 17.7 | 21.7 | -18.7 |
| EBITDA | 17.6 | 22.5 | -21.5 |
| EBITDA margin (in percent)³ | 6.4 | 7.7 | -17.6 |
| Commuter media and marketing | |||
| Operating income | 141.8 | 93.6 | 51.4 |
| thereof intersegment | 7.2 | 4.1 | 73.7 |
| EBITDA | 32.5 | 13.8 | 135.3 |
| EBITDA margin (in percent)³ | 22.9 | 14.8 | 55.4 |
| Marketplaces and shareholdings | |||
| Operating income | 137 | 124.9 | 9.7 |
| thereof intersegment | 6 | 5.3 | 12.4 |
| EBITDA | 42.1 | 53.2 | -20.9 |
| EBITDA margin (in percent)³ | 30.7 | 42.6 | -27.9 |
| Average number of employees⁴ | 3 642 | 3 224 | 13 |
¹ as at 31.12.2018
² Equity to total assets
The margin refers to the operating income
⁴ The average number of employees does not include employees of associated companies / joint ventures.
Alternative performance indicators
Tamedia uses the following alternative performance indicators:
- Operating result before depreciation and amortization (EBITDA)
- Operating result before effects of business combinations
- Consolidated normalized income statement
