Adjusted net profit increased by 77 percent to 3.1 million Swiss francs (previous year 1.8 million.). At the end of June 2013, the equity ratio was 32 percent (end of June 2012: 31.5 percent). The operating cash flow generated in the first half of the year was minus 10.2 million Swiss francs due to the sharp reduction in current liabilities. Adjusted for special effects (investments in digital TV, termination of software license agreement), Ebit increased by 18.6 percent to CHF 14 million. The adjusted Ebit margin increased to 6.3 percent (previous year 5.6 percent). Goldbach Group wrote this in a communiqué on Wednesday.
The leading advertising logistics company in the DACH region (Germany, Austria, and Switzerland), in Eastern Europe, and in the Adriatic region with the marketing of private electronic, mobile, and interactive media, as well as in online marketing, had grown in all three business lines despite the continuing difficult environment. For the current financial year, further sales growth in the single-digit range and a sustained increase in profitability are expected.
TV growing, radio business declining
Sales in the Media business line, in which the Goldbach Group combines the marketing of private TV, radio and digital out-of-home advertising, primarily in Switzerland as well as in Austria and Romania, recorded a renewed increase of 3.2 percent to CHF 170.9 million in the first half of the year (previous year CHF 165.6 million). In this context, the lack of publication of TV data in Switzerland did not have a negative impact on the development of sales, according to the statement. On the contrary, Goldbach Media was able to further expand its market share for TV advertising in the first half of the year and increase sales by 5.4 percent.
For the first time after a long period of growth, the radio business declined by -10.4 percent, in particular due to lower advertising budgets from major customers as a result of the economic situation, the advertising marketer added in its statement. This trend is likely to continue in the second half of the year, as demand for radio advertising was exceptionally strong in the previous year. In order to tap new customers and exploit the growth potential of radio, the board of directors of Goldbach Media decided to establish an independent radio marketing company as of July 1, 2013, it said. Swiss Radioworld, which emerged from Goldbach Media's radio unit, is based in Zurich-Wollishofen.
The Media business line contributed 78 percent (previous year: 80 percent) to the Goldbach Group's total sales in the first half of 2013. EBIT increased by 1.9 percent in the process and amounted to CHF 17 million (previous year 16.7 million). The Media segment contributed 93 percent to adjusted Group EBIT (previous year 96 percent).
Growth with online advertising
The Audience business line, which bundles Goldbach's online advertising offerings, returned to growth of 2.4 percent to CHF 28.3 million (previous year 27.7 million) in the first half of 2013. All product lines contributed to the Goldbach Group's online growth of 12 percent: The display business, including performance marketing, increased by 6 percent, while the video product line grew by 36 percent. The Goldbach Video Network launched at the beginning of 2012, which aggregates the highest-reach premium advertising platforms across all screens into a single offering and is continuously being expanded to include new platforms, end devices and technologies, is proving to be a strong growth driver.
Adjusted EBIT of Goldbach Audience, which operates in Switzerland, Austria, the Adriatic region and Eastern Europe, amounted to CHF 1.1 million, doubling the previous year's result (0.5 million) adjusted for special effects. Growth in the Adriatic region and the strengthening of the operating result in Eastern Europe contributed to the improvement. The Audience business line contributed 12 percent (previous year 110 percent) to total sales and 6 percent (previous year 3 percent) to the Group's adjusted EBIT in the first half of 2013.
Goldbach Interactive
The Interactive with Mobile business line, which provides conceptual, design and technological services for interactive communication and marketing solutions for the Internet and for all mobile devices, has recovered steadily in recent months from changes in mandates and high investments, and was able to post a positive result in the first half of the year.
In the first half of 2013, the business line again recorded growth despite increasing competitive pressure. Sales of the business line, which operates in the German-speaking region as well as in Poland and Russia, amounted to CHF 23.1 million in the first half of 2013 (previous year: CHF 18.5 million), representing an increase of 25.2 percent. Around 60 percent of the increase was achieved with organic growth in the DACH region, while the acquisition and successful integration of the market-leading Slovenian digital agency Renderspace contributed around 40 percent. Internationally, intensive efforts are being made to expand the Performance Marketing unit, which has been newly integrated into the business line; the country focus is on Germany and Poland. However, restructuring measures in Poland are having a negative impact on the result. The Interactive business line contributed 10 percent to the Goldbach Group's total revenues (previous year: 9 percent) and 1 percent to Group EBIT (previous year: 1 percent). At 0.2 million, the EBIT of the Interactive business line was on a par with the previous year.
Reorganization by regions
The Board of Directors has decided to align the structure of Goldbach Group according to regions as of July 1, 2013, the statement continues. With this reorganization, the Group, which is active in the DACH region, in Eastern Europe (Poland, Czech Republic, Romania, Russia) as well as in the Adriatic region (Slovenia, Croatia, Serbia), wants to strengthen the individual regions and facilitate further expansion steps as part of the long-term corporate strategy.
For 2013 as a whole, Goldbach Group continues to expect sales growth in the single-digit range and, in line with earlier forecasts, also in the TV area. "We also expect higher revenues in the second half of the year, although the TV ratings published since August show lower TV usage overall due to the survey method," says Klaus Kappeler, CEO Goldbach Group. "Despite the challenging situation due to the new TV panel, we expect a further increase in revenues, especially in the TV sector, due to the ongoing shift of advertising budgets to moving images/video."