Despite a jump in sales and consolidated profit, the Espace Media Groupe once again has more problem childrenBy Markus Knöpfli A drop in earnings despite a jump in circulation at the Berner Zeitung, Radio Extra in the black: even if the Espace Media Groupe's 2001 balance sheet is in the best light, the Group has a few problems. It is now focusing more on local business.
At Espace Media Groupe (EM Groupe), the attacking, sometimes blustering tones of last year have faded. At any rate, moderate and thoughtful words were spoken at the annual press conference, which were even reflected in the Group's annual report.
Charles von Graffenried, Chairman of the Board of Directors, raises several fundamental questions, including the following: "Will Espace Media Groupe, wedged between the ever stronger and more comprehensive media metropolis of Greater Zurich and French-speaking Switzerland, still be able to assert itself in the medium and long term and continue to develop with the current momentum on a self-financed basis?"
The questions are rhetorical in nature, but a few paragraphs later the beginnings of an answer can be found: "We still believe that our future as a multimedia media company lies profitably and heavily in the Espace Mittelland region."
The doubt that resonates here may seem surprising at first glance in view of the 2001 annual report. After all, EM Groupe was able to increase sales by 25 percent to 259.9 million Swiss francs. Group CEO Albert P. Stäheli attributes this "huge boost" to the takeover of the Automobil-Revue Group and the inclusion of Druckerei Schaer Thun AG and Berner Oberland Medien AG. The acquisitions are associated with one-off integration costs, which - in addition to the unfavorable economic climate - are reflected in the result. Conversely, EM Groupe sold 60 percent of the shares in the art book publisher Benteli to NZZ.
The Group reported a consolidated profit of CHF 18.2 million, which is CHF 5.9 million below the previous year's figure, but still represents "a top result compared to the rest of the industry", as CEO Stäheli noted.
EM Groupe anticipates deficit at Radio ExtraBern for the first time
The fact that the figures are not just "pleasing" and therefore give pause for thought can be seen in individual business areas. For example, the revenue of the flagship Berner Zeitung (BZ) fell by CHF 5.5 million to CHF 128.4 million. This is all the more alarming given that the BZ is the only major newspaper to have increased its circulation significantly by 18.7% (to 16,2200 copies) thanks to new splits in the Bernese Oberland, although this has (still) brought it hardly any benefit.
On the contrary: in terms of advertising pages, the BZ is one of the four main losers among the twelve major daily newspapers with a loss of 12.3% (Tages-Anzeiger: minus 17.9%, Bund: minus 12.8%, NZZ: minus 12.5%). In addition, the seventh BZ split, Solothurner Tagblatt (ST), launched in October, is hardly making any headway (see interview). Incidentally, Tamedia, which holds a 49% stake in BZ, received around CHF 5.5 million (previous year: around CHF 10 million).
Tele Bärn's accounts are still in the red, with a loss of CHF 1.7 million. At CHF 2.9 million, net income was around CHF 200,000 lower than in the previous year. This year, however, Stäheli expects a slight reduction in the deficit to CHF 1.5 million because local businesses are also increasingly using the medium of TV for their advertising. The cumulative expenditure for Tele Bärn since its launch in 1995 amounts to CHF 15 million.
Stäheli described Radio ExtraBern as a "problem child", with net income of CHF 3.2 million (previous year: CHF 3.6 million) and only just breaking even. For the current year, the CEO is even expecting a deficit of CHF 100,000 to 200,000 for the first time after ten years in the black. In order not to lose even more ground in national advertising campaigns due to falling listener numbers, Stäheli would like Radio 24 to join the existing city pool (ExtraBern, Basilisk, Pilatus). The CEO also expressed the opinion that there was "only room for 1.5 radios" in the Bern region.
In the printing sector, EM Groupe will have to invest CHF 120 million in a new printing center, spread over the years 2002 to 2005. Whether "Der Bund" will also be involved is still the subject of negotiations.
Conscious acceptance of possible cannibalization
EM Groupe has already chosen an initial strategy in response to the questions raised by its Chairman: Because, according to Stäheli, the local advertising business is "doing amazingly well" in contrast to the national one, the local market, which is more stable than the national one, will be cultivated even more in future. "Until now, we were relatively indifferent to advertising revenue in the BZ splits. But now we still see potential there," says Stäheli. The first measure: the ST will become even more local, and other splits will follow suit. Stäheli consciously accepts that local EM media (including Berner Bär and Burgdorfer Tagblatt) could be cannibalized.
Espace Media Groupe in figures
in CHF million 2000 2001 Change in %
Group sales 208.3 259.9 24.8
Consolidated profit 24.1 18.2 - 24.5
Cash flow 20.5 14.6 - 28.8
Net revenue Berner Zeitung 133.9 128.4 - 4.1
Corrigendum
In the article "Pool of millions of conflicts" in the 20/02 issue of WerbeWoche, Markus Knöpfli wrote of an alleged "boycott" by the agent Radiotele of the station Hitradio Z. This could give the impression that the Radiotele sales manager Felix Kilchsperger mentioned in the article had spoken of or admitted to a "boycott". This could give the impression that the Radiotele sales manager Felix Kilchsperger mentioned in the article had spoken of a "boycott" or had admitted to such a boycott. This impression would be wrong. The word "boycott" was never used in the conversation with Kilchsperger, but was chosen by the author himself - and clearly incorrect in this context. This is because Radiotele continues to pass on customer orders to Hitradio Zweiter.