Quality offensive in Southeast Europe
The crisis and, in some cases, unrest are currently slowing down Affichage's business in South East Europe. But because some of its competitors there are in trouble, the Swiss out-of-home advertiser has some opportunities. In any case, its war chest is well stocked.
Werbewoche reported it earlier: Swiss out-of-home advertiser Affichage increased its sales revenue by 17 percent to 451 million Swiss francs last year, with just under a third (32.3 percent) of this coming from abroad, more precisely from the various countries of south-eastern Europe. In the previous year, foreign sales accounted for less than 25 percent of total sales. However, unlike in 2007, this time the rapid growth abroad is not primarily due to acquisitions, but is largely organic. Acquisitions were only made in Romania and Greece.
One reason for the strong growth is that the market share of the poster medium in the overall advertising pie is very high in some of these countries. In Serbia, for example, it is 15 percent, in Bosnia-Herzegovina even 18 percent. These are more comfortable conditions than out-of-home advertisers are used to in their home market (15 percent).
Even though the out-of-home advertiser was able to achieve and in some cases even exceed its sales targets in most countries in 2008, the margin in some countries is lower than in this country for various reasons. In addition, Affichage had to contend with some adversity in south-eastern Europe last year: the precarious economic situation in Hungary, Serbia, Bulgaria and Romania - and the associated sharp devaluation of the national currencies - should be mentioned. And let's not forget the unrest in Greece, to which some of Affichage's facilities and bus shelters fell victim. A decline in the tourism business is also expected this summer.
Nevertheless, Affichage is well positioned for the future. According to Felix Mende, Regional Director and Head of Market Development at Affichage International, the company is now the clear market leader in Serbia, Bosnia-Herzegovina and Greece, in Romania it is in a neck-and-neck race with Austria's Epamedia, the previous number one, and in Montenegro and Hungary Affichage is still number two. Only in Bulgaria has Affichage played a subordinate role for years. They are waiting for the capital Sofia to submit its bid, says Mende. This city contract should have been put out to tender a long time ago, but it was repeatedly extended under unclear circumstances. "As long as this is not settled, it is not worthwhile for us to continue investing in this country," says Mende. In northern Italy, Affichage has won a contract for bus shelters in South Tyrol, while the outdoor advertiser from Ticino and Como is moving ever closer to the city of Milan and has already reached the suburbs of the metropolis with its products.
In all its activities abroad, Affichage is never just concerned with geographical expansion, emphasizes Mende. The out-of-home advertiser primarily wants to convince customers with a qualitative offensive - firstly according to the principle "less is more", secondly with high-quality carrier material, thirdly with reliable services and fourthly by literally showing customers the poster locations via the online visualization tool InterMediaMap - just like in Switzerland.
Something else will benefit Affichage in the future: The Group still has a well-stocked war chest. This sets it apart from most other international players. The Swiss group is therefore focusing on country representations of three outdoor advertising companies operating in Eastern Europe: Ströer, Germany's heavily indebted number one, the Austrian Epamedia, which recently had to be taken over by Raiffeisenbank, and the American conglomerate Clear Channel Outdoor (CCO), the world's number one. The latter is probably about to be split up.
Markus Knöpfli
One reason for the strong growth is that the market share of the poster medium in the overall advertising pie is very high in some of these countries. In Serbia, for example, it is 15 percent, in Bosnia-Herzegovina even 18 percent. These are more comfortable conditions than out-of-home advertisers are used to in their home market (15 percent).
Even though the out-of-home advertiser was able to achieve and in some cases even exceed its sales targets in most countries in 2008, the margin in some countries is lower than in this country for various reasons. In addition, Affichage had to contend with some adversity in south-eastern Europe last year: the precarious economic situation in Hungary, Serbia, Bulgaria and Romania - and the associated sharp devaluation of the national currencies - should be mentioned. And let's not forget the unrest in Greece, to which some of Affichage's facilities and bus shelters fell victim. A decline in the tourism business is also expected this summer.
Nevertheless, Affichage is well positioned for the future. According to Felix Mende, Regional Director and Head of Market Development at Affichage International, the company is now the clear market leader in Serbia, Bosnia-Herzegovina and Greece, in Romania it is in a neck-and-neck race with Austria's Epamedia, the previous number one, and in Montenegro and Hungary Affichage is still number two. Only in Bulgaria has Affichage played a subordinate role for years. They are waiting for the capital Sofia to submit its bid, says Mende. This city contract should have been put out to tender a long time ago, but it was repeatedly extended under unclear circumstances. "As long as this is not settled, it is not worthwhile for us to continue investing in this country," says Mende. In northern Italy, Affichage has won a contract for bus shelters in South Tyrol, while the outdoor advertiser from Ticino and Como is moving ever closer to the city of Milan and has already reached the suburbs of the metropolis with its products.
In all its activities abroad, Affichage is never just concerned with geographical expansion, emphasizes Mende. The out-of-home advertiser primarily wants to convince customers with a qualitative offensive - firstly according to the principle "less is more", secondly with high-quality carrier material, thirdly with reliable services and fourthly by literally showing customers the poster locations via the online visualization tool InterMediaMap - just like in Switzerland.
Something else will benefit Affichage in the future: The Group still has a well-stocked war chest. This sets it apart from most other international players. The Swiss group is therefore focusing on country representations of three outdoor advertising companies operating in Eastern Europe: Ströer, Germany's heavily indebted number one, the Austrian Epamedia, which recently had to be taken over by Raiffeisenbank, and the American conglomerate Clear Channel Outdoor (CCO), the world's number one. The latter is probably about to be split up.
Markus Knöpfli
