Publigroupe only just in the profit zone

The Group's operating profit amounted to CHF 1.6 million last year, as Publigroupe announced on Friday. In 2011, the advertising marketer had reported an operating profit of CHF 21.9 million. Contrary to an announcement in December, the company was at least able to avoid falling into the red at an operating level.

In contrast, the net profit of CHF 50.2 million was significantly higher than the previous year's result, when the bottom line was a profit of CHF 27.2 million. However, the good result was only possible thanks to the sale of a significant portion of the real estate portfolio. Publigroupe's turnover fell by 13 percent to CHF 1.13 billion.

Problem child of the advertising business

The advertising marketer continues to be concerned about the development of the advertising business (media sales), which is affected by the decline in the print market. As in 2011, revenue from advertising sales fell by 13 percent to CHF 895.4 million. Despite drastic cost-cutting measures, the operating loss in the advertising business was significantly higher than in the previous year at CHF 16.1 million. In 2011, the advertising division, which includes the subsidiary Publicitas, posted an operating loss of CHF 5.1 million.

Publigroupe has been struggling with dwindling sales for some time now. In 2009, the company still had a turnover of 1.6 billion Swiss francs. Group CEO Arndt Groth, who has been at the helm of the Group since September, expects the print market to continue to decline sharply. The cost-cutting measures already introduced, which include job cuts, and a stronger focus on the digital sector should enable the advertising business to break even again. "Digital and mobile media are becoming increasingly important," Groth is quoted as saying in the press release. (SDA)