Publigroupe increased sales and earnings
Publigroupe increased its revenue by 3.6 percent to 2.16 billion francs in 2007. Operating income (EBIT) rose slightly by 0.4 percent to 68.9 million francs, thanks to the sale of investments and the positive performance of Publipresse. Net income rose significantly, increasing by 35.6 percent to 73.1 million Swiss francs, primarily due to the sale of a stake in the American company 24/7 Real Media.
Publigroupe increased its sales by 3.6 percent to CHF 2.16 billion in 2007. According to the company, all areas contributed to this positive development, with particularly dynamic growth of 12.7 percent in the international business. Activities in digital and interactive media were the fastest-growing areas. The operating result (EBIT) grew
According to the press release, the company's turnover increased slightly by 0.4 percent to CHF 68.9 million. This was due to profits of 10.3 million francs from the sale of investments and the positive development of Publipresse, the press release continues. According to the company, the result would have been higher had it not been for the costs and provisions in connection with the company's realignment and a 40 percent increase in R&D expenses totaling CHF 10 million. In addition, Cinecom's cinema business experienced a real slump in sales in the 4th quarter. Net profit, on the other hand, rose by 35.6 percent to 73.1 million francs. The increase was strongly influenced by the sale of the 4.5 percent stake in the American company 24/7 Real Media. Earnings per share rose to 30.50 francs, with the strongest growth at PPN The international activities supported by Publicitas Promotion Network (PPN) grew the most, with an increase of 12.7 percent to 423.5 million francs. However, EBIT fell by 44.8 percent to 5.3 million francs. According to the press release, this is due to the expansion of online sales structures and one-off costs resulting from the restructuring of the US business.
The advertising business in Switzerland (Publipresse) increased by 1.1 percent to CHF 1,512.1 million, mainly thanks to job advertisements. Thanks to cost reductions and structural optimization, EBIT in this area increased by 17.4 percent to CHF 22.3 million. This was despite one-off costs of CHF 5 million for the expansion of the new "Media Sales" segment.
Sales of directories (Publidirect) rose by 2.6% to CHF 132.8 million. While sales of print products leveled off, online products grew and thus benefited from the intensified cooperation with Swisscom Directories in the online sector. EBIT decreased to CHF 47.7 million (2006: CHF 51.0 million).
Slump in cinema advertising weighs on result Sales in the "Business under construction" segment developed above average with growth of 15 percent to CHF 124.5 million. However, the weak development of cinema advertising in the 4th quarter led to heavy losses at Cinecom and pushed the result in the "Business under development" division into the red with a loss of CHF 8.3 million. Cinecom's loss is a burden on the result of the entire Group. It is responsible for the 7.6 percent decline in EBIT in the pro forma financial statements (excluding one-off special effects). However, Publigroupe announced that corrective measures had been taken to make this division profitable again.
TV and radio sales, on the other hand, increased significantly by 44.8% in the TV segment and 58% in the radio segment. The online marketing company Web2com (up 9.4%) and Namics, which offers e-business consulting services (up 37.6%), also performed very well. The online marketing company Zanox, which Publigroupe acquired together with the German Axel Springer AG in 2007 and which grew by 55.0 percent in 2007, performed well above expectations. However, it did not yet have any impact on Publigroupe's EBIT in 2007, as the investment was initially consolidated as an associated company.
New strategy to be implemented quickly Publigroupe says it has made a rapid start on implementing the strategy adopted in March 2007 to position itself internationally as a multimedia service provider with a focus on the digital sector. As announced, the Group's organization has now been restructured and since the beginning of this year has been based on the four pillars of "Media Sales" (media marketing), "Search & Find" (directories), "Digital & Marketing Services" (consulting and services) and "Custom Publishing". The new management organization under CEO Hans-Peter Rohner has also been in place since the beginning of the current year.
Eight acquisitions have been made in the last twelve months. These include the German company Zanox, the largest acquisition ever made by Publigroupe. Other strategically significant acquisitions include the Dutch marketing and media services company Schreiner & Van Bokkel Group B.V., India's Mediascope Publicitas and Canada's APR Media. In China, Publigroupe entered into new alliances with Huashang Interactive Media and the advertising sales company City Media at the beginning of this year. With the acquisition of the French company Bégécom, which publishes telephone directories, Publigroupe became the second-largest provider in the French directories market. Finally, the acquisition of the Swiss Denon Group provided the custom publishing segment, which had previously only been active in Asia, with a platform for its planned European expansion.
Outlook for the current financial year With the acquisitions made, Publigroupe is becoming an increasingly international group. The newly acquired companies are expected to generate sales of around CHF 350 million, 97 percent of which will be generated outside Switzerland. Publigroupe remains very solidly financed overall with equity of CHF 596 million and an equity ratio of 44.7 percent, the press release continues. Subject to "unforeseen developments", the Group also intends to significantly increase its operating income in 2008. For 2008, Publigroupe expects double-digit growth in sales and earnings without any further acquisitions.
According to the press release, the company's turnover increased slightly by 0.4 percent to CHF 68.9 million. This was due to profits of 10.3 million francs from the sale of investments and the positive development of Publipresse, the press release continues. According to the company, the result would have been higher had it not been for the costs and provisions in connection with the company's realignment and a 40 percent increase in R&D expenses totaling CHF 10 million. In addition, Cinecom's cinema business experienced a real slump in sales in the 4th quarter. Net profit, on the other hand, rose by 35.6 percent to 73.1 million francs. The increase was strongly influenced by the sale of the 4.5 percent stake in the American company 24/7 Real Media. Earnings per share rose to 30.50 francs, with the strongest growth at PPN The international activities supported by Publicitas Promotion Network (PPN) grew the most, with an increase of 12.7 percent to 423.5 million francs. However, EBIT fell by 44.8 percent to 5.3 million francs. According to the press release, this is due to the expansion of online sales structures and one-off costs resulting from the restructuring of the US business.
The advertising business in Switzerland (Publipresse) increased by 1.1 percent to CHF 1,512.1 million, mainly thanks to job advertisements. Thanks to cost reductions and structural optimization, EBIT in this area increased by 17.4 percent to CHF 22.3 million. This was despite one-off costs of CHF 5 million for the expansion of the new "Media Sales" segment.
Sales of directories (Publidirect) rose by 2.6% to CHF 132.8 million. While sales of print products leveled off, online products grew and thus benefited from the intensified cooperation with Swisscom Directories in the online sector. EBIT decreased to CHF 47.7 million (2006: CHF 51.0 million).
Slump in cinema advertising weighs on result Sales in the "Business under construction" segment developed above average with growth of 15 percent to CHF 124.5 million. However, the weak development of cinema advertising in the 4th quarter led to heavy losses at Cinecom and pushed the result in the "Business under development" division into the red with a loss of CHF 8.3 million. Cinecom's loss is a burden on the result of the entire Group. It is responsible for the 7.6 percent decline in EBIT in the pro forma financial statements (excluding one-off special effects). However, Publigroupe announced that corrective measures had been taken to make this division profitable again.
TV and radio sales, on the other hand, increased significantly by 44.8% in the TV segment and 58% in the radio segment. The online marketing company Web2com (up 9.4%) and Namics, which offers e-business consulting services (up 37.6%), also performed very well. The online marketing company Zanox, which Publigroupe acquired together with the German Axel Springer AG in 2007 and which grew by 55.0 percent in 2007, performed well above expectations. However, it did not yet have any impact on Publigroupe's EBIT in 2007, as the investment was initially consolidated as an associated company.
New strategy to be implemented quickly Publigroupe says it has made a rapid start on implementing the strategy adopted in March 2007 to position itself internationally as a multimedia service provider with a focus on the digital sector. As announced, the Group's organization has now been restructured and since the beginning of this year has been based on the four pillars of "Media Sales" (media marketing), "Search & Find" (directories), "Digital & Marketing Services" (consulting and services) and "Custom Publishing". The new management organization under CEO Hans-Peter Rohner has also been in place since the beginning of the current year.
Eight acquisitions have been made in the last twelve months. These include the German company Zanox, the largest acquisition ever made by Publigroupe. Other strategically significant acquisitions include the Dutch marketing and media services company Schreiner & Van Bokkel Group B.V., India's Mediascope Publicitas and Canada's APR Media. In China, Publigroupe entered into new alliances with Huashang Interactive Media and the advertising sales company City Media at the beginning of this year. With the acquisition of the French company Bégécom, which publishes telephone directories, Publigroupe became the second-largest provider in the French directories market. Finally, the acquisition of the Swiss Denon Group provided the custom publishing segment, which had previously only been active in Asia, with a platform for its planned European expansion.
Outlook for the current financial year With the acquisitions made, Publigroupe is becoming an increasingly international group. The newly acquired companies are expected to generate sales of around CHF 350 million, 97 percent of which will be generated outside Switzerland. Publigroupe remains very solidly financed overall with equity of CHF 596 million and an equity ratio of 44.7 percent, the press release continues. Subject to "unforeseen developments", the Group also intends to significantly increase its operating income in 2008. For 2008, Publigroupe expects double-digit growth in sales and earnings without any further acquisitions.
