Overall, sales grew by 0.6 percent to CHF 313 million, as APG (Allgemeine Plakatgesellschaft) announced in a press release on Thursday. While business in the home market of Switzerland increased, the company suffered a severe setback in its only foreign market, Serbia, due to the strength of the Swiss franc. Operating profit (EBIT) climbed by 2.8 percent to CHF 68.1 million. Below the line, APG earned a net profit of 53.3 million francs. This is 3 percent more than in the previous year.
"We can be proud and report a great annual result," said APG CEO Markus Ehrle at the annual media conference in Zurich. In Switzerland in particular, sales grew by 1.3 percent to 302.3 million Swiss francs. Competition had an impact here. This is because the contract for poster advertising at Geneva Airport was lost to a local competitor on July 1. "If we had had these sales in the second half of the year, we would have had growth of just over 3 percent," said Ehrle. Even the federal elections in the fall could not make up for the shortfall caused by the lost contract, as the previous semester had been very good.
Further orders lost
Elsewhere, main competitor Clear Channel outbid APG with higher offers. This is the case, for example, with the Zurich public transport company (VBZ), where Clear Channel will be allowed to market most of the 1,200 poster spaces at bus and streetcar stops as well as at depots and garages in the city of Zurich from January 1. APG previously held the contract. The concession contract in Lucerne will also be lost on July 1. Nevertheless, APG remains the market leader in both cities, said Ehrle. This is because APG has won other contracts. For example, the company continues to organize the advertising for the buses of the Zurich Transport Association (ZVV) and was also able to conclude a new contract for advertising in Zurich's ShopVille. APG also prevailed over its competitors in the battle for the billboard advertising concession in Lausanne. In addition, APG has supplemented the SBB display screens in 17 Swiss railroad stations with digital displays. Overall, APG is likely to have fared better than the Swiss advertising market as a whole if the discounts are taken into account, said Ehrle.
Slump due to Serbian currency
In Serbia, the weakness of the local currency, the dinar, had a negative impact on APG's result, as Chief Financial Officer Beat Hermann explained. Sales fell by 15.6 percent to 10.8 million Swiss francs. In local currency terms, sales only fell by 1.4 percent. The reason for the decline was the elections in the previous year, for which many posters were put up. In view of the difficult economic situation in Serbia, the figures are excellent, said Ehrle. There are no plans to sell the business. APG responded to the pressure on the business with cost-cutting measures. Among other things, ten full-time positions were cut. The company still has 570 full-time positions, shared by 628 employees. APG also announced the takeover of Alpenplakat with 6 employees. Ehrle did not disclose the purchase price. As usual, APG was very vague when looking to the future. Ehrle refrained from making a concrete forecast on business development in the coming months. (SDA)