Publigroupe in the black for the first time since 2007 - Further job cuts planned
The advertising agency Publigroupe is seeing success with its push into online media and directories. With reduced reliance on the print media, the company reported a profit of 42.6 million Swiss francs for 2010.
In the two previous years, Publigroupe had suffered losses of CHF 20 million and CHF 42 million respectively. Last year, the sale of minority shareholdings in publishing houses and two properties contributed CHF 28.1 million to the return to the black. This was announced by the company headed by Hans-Peter Rohner on Friday.
Sales shrank by 8.4 percent to 1.474 billion Swiss francs. Turnover in the Swiss press business fell by 14.3 percent following the end of the exclusive collaboration with three publishing groups, in particular Edipresse in French-speaking Switzerland. Costs in the media business have been reduced by CHF 116 million since 2007 and 677 jobs have been cut, according to the Publigroupe press release. Group-wide, the number of jobs fell by 269 to 2349 last year alone.
The turnaround of the media division was achieved faster than planned with an operating result (EBIT) of CHF +0.5 million (previous year: CHF -28.6 million). The most important profit contribution came from the search services segment with EBIT of CHF 27.7 million. The downward trend has been halted and the course has been set for profitable growth, according to the statement. Shareholders are to receive a dividend of 6 francs per share for 2010 after having received nothing in the previous year. The company expects double-digit growth in operating profit for 2011. Publigroupe's successful realignment will allow it to benefit from the expected slight upturn in the advertising markets and drive forward the development of its marketing and online services in all areas.
Job cuts continue
However, the job cuts, which cost 750 positions on balance, are not yet complete. As CFO Andreas Schmidt told the media in Zurich on Friday, another 100 jobs will be cut this year. At the end of the year, Publigroupe had 2350 full-time positions.
Growing online
The company, which includes the advertising space seller Publicitas, has also gained momentum thanks to the more positive situation in the Swiss media industry following the recession. Press advertising is on the rise again and the Group has been able to renew its cooperation with all major publishers on the basis of a new business model.
Publigroupe's declared future market, the online business, is now an important driving force. This service sector grew by a third across all divisions.
Publigroupe shares were a big hit on the stock market. At times, the share price shot up by more than 10 percent. In the late afternoon, the share was trading at CHF 115.4, 7.4 percent higher than the previous evening. Meanwhile, the overall SPI market was up almost 1 percent.
