APG is solid again and has full war chests
APG generated a profit of CHF 52 million in 2012 and increased its Group turnover by 2 percent to CHF 318 million. It is also debt-free again. It has also just sold its business in Montenegro.
Lots of good news for APG shareholders. The most recent: a few days ago, the company's management, led by CEO Daniel Hofer, succeeded in exiting another foreign market. Specifically, APG was able to sell its company in Montenegro. This means that it is now only active in two Eastern European countries - Romania and Serbia. And that is where it will remain for the time being, even though Hofer actually wanted to leave Romania as a priority a year ago. The Romanian company, which is number 2 in the market, was on the verge of being sold several times, but in the end the (financial) conditions were not right, said Hofer. But the company was trimmed to the point where it is now operating in the black. "We are therefore relaxed, a sale is not pressing," said the CEO.
Write-offs in Serbia
The situation is similar in Serbia, where APG is the market leader, but took an impairment of 20.1 million francs on all goodwill and part of the contracts and completely revalued the company. Management is doing a good job and Mobiliar is "of Swiss quality," Hofer said. One consequence of these measures: APG's foreign business fell by a third to 20.5 million Swiss francs (still including Montenegro), contributing 6.5 percent to total sales (previous year: 10 percent). An addendum to Greece: The three remaining companies are in liquidation as planned, but according to Hofer, a definitive exit is likely to take up to three years.
Switzerland: Election advertising overcompensated in 2011
The second piece of good news is that despite the decline in sales abroad, APG was able to increase its total sales by 1.9 percent to 317.6 million Swiss francs - because it was even able to grow by 5.9 percent to 297 million Swiss francs in its home market of Switzerland. This is also remarkable because APG succeeded in increasing the additional sales of around 10 million Swiss francs generated in the 2011 election year with sales increases in all APG business segments. Swiss business thus now accounts for 93.5 percent of total sales (previous year: 90 percent).
The net result amounted to 52.1 million Swiss francs (+22.1 percent). The conversion of APG's own pension fund from defined benefit to defined contribution plans had a strong influence on this increase.
Digitization at a snail's pace
And the third piece of good news is that the company is now "very solid again". And according to Hofer, it is also completely debt-free. In 2012, the last 15 million francs of debt were repaid. APG also has a well-filled war chest. According to the current strategy of the board of directors, however, this money is not earmarked for new purchases abroad, but for investments in the digitization of Swiss billboard sites, Hofer said. Last year, APG invested 5.4 million Swiss francs, including in 43 e-panels in train stations. Such digitized panels currently account for a good 5 percent of APG's sales.
However, Hofer was unable to name any concrete investment projects on a large scale for the current year. Nevertheless, APG has pilot projects underway in various municipalities, including Zurich, where it won 90 percent of all billboards on public land in a tender last year. "But the digitization of billboards outside buildings is progressing more slowly than we thought," Hofer admitted to Werbewoche. There are still too many prejudices on the part of the authorities. APG is not pursuing flashing and garish digitization à la Time Square, but a quiet, softly backlit form at selected and well-frequented locations. Moving images as in the train stations are also not envisaged, but rather rigid poster subjects that can, however, be changed. In the distant future, this would enable APG advertising customers to pursue not only a broad-based but also a targeting strategy with posters. Digital posters could also be used to address different target groups at different times of day.
Population growth and mobility benefit APG
Incidentally, the CEO is "buoyed" by two developments in Switzerland: The increase in population and growing mobility. "We are benefiting from this, because it brings our areas more contact opportunities." In addition, APG is not only present on the roads, but also on buses, streetcars, and trains, as well as at POS, train stations, airports, and mountain railroads. It thus covers many areas of life (commuting to work, leisure time, vacations) - and does so around the clock. "As soon as you leave your house, you belong to our target groups," Hofer triumphed.
Markus Knöpfli
