Blooming East
Outdoor Advertising: Following record revenue in 2001, the Affichage Group’s revenue declined last year. Its Eastern European business, however, is thriving.
Outdoor advertising Following record sales in 2001, the Affichage Group's revenues declined last year. Eastern European business, on the other hand, is flourishing. Over several years, the Affichage Group's total sales revenue grew steadily to a record CHF 320.3 million in 2001. The year 2002, however, brought - not surprisingly - a reversal of the trend. Consolidated sales revenue declined by 5.8% to 301.6 million Swiss francs and is now even 6 million Swiss francs below the 2000 level.Operating income, which fell by 20.3% to 29.3 million Swiss francs, roughly reached the 1998 level.Consolidated net income, which declined by 16.9% to 22.8 million Swiss francs, is also lower than at any time since 1998.The decline is attributable to the business trend in the home market (Allgemeine Plakatgesellschaft, APG): In Switzerland, sales revenue fell by 21.5 million Swiss francs or 7.5%. APG's operating result amounts to 26.8 million Swiss francs. Nevertheless, APG was able to renew various expiring concession agreements - for example in Berne, Fribourg, and Lausanne - and even gained a new city with Sierre.
In contrast to Switzerland, the still young Eastern European business of Europlakat (EPI) is behaving in an almost anti-cyclical manner. Affichage holds a stake of 50% in this company. Affichage's share of EPI's sales revenue rose to 36.1 million Swiss francs, which corresponds to an increase of 8.3%. EPI thus contributed 12% to total Affichage sales, compared with 10.4% the year before last and 9% in 2000. The EPI share of Group earnings more than doubled in percentage terms. It rose from 3.4% in 2001 to 8.6% in 2002. There are three reasons for this: In addition to further revenue growth, the EPI exit from the Polish, Czech and Slovakian markets (sales to EPI partner JCDecaux) was the main source of cash. Finally, Affichage was able to increase its stake in EPI from 49 to 50% in 2002.
Despite the growth in Eastern Europe, EPI cannot make the necessary investments to expand its market presence on its own and remains dependent on its parent companies: Last year, Affichage and JCDecaux jointly decided to invest a total of CHF 100 million each in their subsidiary over five years.
Despite the current stock market slump: Affichage share price.
The nation's outdoor advertiser remains in the black in 2002.
Affichage in figures (in CHF million)
2002 2001 Change in %
Sales revenue 301.6 320.3 - 5.8
Switzerland 265.5 287.0 - 7.5
Europlakat (50%) 36.1 33.3 + 8.3
Operating result 29.3 36.7 - 20.3
Net profit 22.8 27.4 - 16.9
Cash flow 49.8 56.4 - 11.8
Source: Affichage
Markus Knöpfli
In contrast to Switzerland, the still young Eastern European business of Europlakat (EPI) is behaving in an almost anti-cyclical manner. Affichage holds a stake of 50% in this company. Affichage's share of EPI's sales revenue rose to 36.1 million Swiss francs, which corresponds to an increase of 8.3%. EPI thus contributed 12% to total Affichage sales, compared with 10.4% the year before last and 9% in 2000. The EPI share of Group earnings more than doubled in percentage terms. It rose from 3.4% in 2001 to 8.6% in 2002. There are three reasons for this: In addition to further revenue growth, the EPI exit from the Polish, Czech and Slovakian markets (sales to EPI partner JCDecaux) was the main source of cash. Finally, Affichage was able to increase its stake in EPI from 49 to 50% in 2002.
Despite the growth in Eastern Europe, EPI cannot make the necessary investments to expand its market presence on its own and remains dependent on its parent companies: Last year, Affichage and JCDecaux jointly decided to invest a total of CHF 100 million each in their subsidiary over five years.
Despite the current stock market slump: Affichage share price.
The nation's outdoor advertiser remains in the black in 2002.
Affichage in figures (in CHF million)
2002 2001 Change in %
Sales revenue 301.6 320.3 - 5.8
Switzerland 265.5 287.0 - 7.5
Europlakat (50%) 36.1 33.3 + 8.3
Operating result 29.3 36.7 - 20.3
Net profit 22.8 27.4 - 16.9
Cash flow 49.8 56.4 - 11.8
Source: Affichage
Markus Knöpfli
