LZ Medien: Record sales and profit slump
The LZ Group generated record revenue of 157.3 million Swiss francs in fiscal year 2008. By contrast, consolidated net income was very modest, amounting to just 600,000 Swiss francs—96 percent less than in the previous year.
The LZ Group generated record sales of CHF 157.3 million in the 2008 financial year. This represents an increase of 5.5 percent compared to the previous year. By contrast, consolidated profit was very modest, amounting to just CHF 600,000 - 96 percent less than in the previous year (CHF 14.9 million).
The sharp drop in consolidated profit was due to high book losses on strategic securities investments, said Erwin Bachmann, CEO of LZ Medien. The financial result closed with a minus of CHF 8.9 million, which corresponds to a decline of CHF 10.7 million compared to the previous year.
In a four-year comparison, however, investment income was still slightly positive, said Bachmann. The CEO also emphasized that at least the 2008 operating profit (EBITDA) of CHF 21.8 million was quite respectable, despite the slump in advertising in the second half of the year and the launch of "Zentralschweiz am Sonntag".
The Lucerne media company's sales growth is also primarily due to this new title, as well as the print sector and specialist publishers. However, advertising revenue in the newspaper division fell by 2.4 percent overall to a total of CHF 48.6 million. In contrast, subscription and newsstand revenues increased slightly by 1.1 percent to a total of CHF 39.7 million. Thanks to acquisitions and new customers, income from the Print and Calendar business segments increased significantly to CHF 52.5 million, an increase of 17.5 percent.
Income from electronic media and other income amounted to CHF 16.5 million, 7.5% more than in the previous year. Operating expenses increased significantly by CHF 11.3 million to CHF 144 million (+8.5 percent). The main reasons for this are the launch of the seventh edition and the operating expenses for new acquisitions. The balance sheet total at the end of 2008 amounted to CHF 151.7 million, of which the share of equity was CHF 100.3 million or a very solid 66.1 percent.
When asked whether he now regrets launching the seventh edition of the Neue LZ last year, Bachmann waves it off: "The decision was absolutely right," he says, "because Sunday is definitely an advertising and readership market. Zentralschweiz am Sonntag (ZaS) has also been well received by the public and the advertising industry. The timing of the launch is debatable. "A year earlier would certainly have been better," he said. But as a Sunday edition is always a long-term project, you have to reckon with economic downturns anyway.
Bachmann is pleased that there have been no significant shifts in advertising from the weekday to the Sunday edition. "On the contrary, the ZaS brought us back customers that we hadn't had during the week for some time," he says. These include ads for cars and other campaigns that are typically placed in the Sunday press.
The question remains as to whether Bachmann would still encourage his colleague in St. Gallen - Hans-Peter Klauser, CEO of Tagblatt Medien - to have his own Sunday edition. Bachmann laughs: "Hans-Peter Klauser knows my opinion, but he hardly needs my advice." But it certainly takes more courage to launch a new edition today than it did last year. "In any case, you shouldn't wait too long to start planning, so that you can press the button as soon as the economy improves," says Bachmann.
Markus Knöpfli
The sharp drop in consolidated profit was due to high book losses on strategic securities investments, said Erwin Bachmann, CEO of LZ Medien. The financial result closed with a minus of CHF 8.9 million, which corresponds to a decline of CHF 10.7 million compared to the previous year.
In a four-year comparison, however, investment income was still slightly positive, said Bachmann. The CEO also emphasized that at least the 2008 operating profit (EBITDA) of CHF 21.8 million was quite respectable, despite the slump in advertising in the second half of the year and the launch of "Zentralschweiz am Sonntag".
The Lucerne media company's sales growth is also primarily due to this new title, as well as the print sector and specialist publishers. However, advertising revenue in the newspaper division fell by 2.4 percent overall to a total of CHF 48.6 million. In contrast, subscription and newsstand revenues increased slightly by 1.1 percent to a total of CHF 39.7 million. Thanks to acquisitions and new customers, income from the Print and Calendar business segments increased significantly to CHF 52.5 million, an increase of 17.5 percent.
Income from electronic media and other income amounted to CHF 16.5 million, 7.5% more than in the previous year. Operating expenses increased significantly by CHF 11.3 million to CHF 144 million (+8.5 percent). The main reasons for this are the launch of the seventh edition and the operating expenses for new acquisitions. The balance sheet total at the end of 2008 amounted to CHF 151.7 million, of which the share of equity was CHF 100.3 million or a very solid 66.1 percent.
When asked whether he now regrets launching the seventh edition of the Neue LZ last year, Bachmann waves it off: "The decision was absolutely right," he says, "because Sunday is definitely an advertising and readership market. Zentralschweiz am Sonntag (ZaS) has also been well received by the public and the advertising industry. The timing of the launch is debatable. "A year earlier would certainly have been better," he said. But as a Sunday edition is always a long-term project, you have to reckon with economic downturns anyway.
Bachmann is pleased that there have been no significant shifts in advertising from the weekday to the Sunday edition. "On the contrary, the ZaS brought us back customers that we hadn't had during the week for some time," he says. These include ads for cars and other campaigns that are typically placed in the Sunday press.
The question remains as to whether Bachmann would still encourage his colleague in St. Gallen - Hans-Peter Klauser, CEO of Tagblatt Medien - to have his own Sunday edition. Bachmann laughs: "Hans-Peter Klauser knows my opinion, but he hardly needs my advice." But it certainly takes more courage to launch a new edition today than it did last year. "In any case, you shouldn't wait too long to start planning, so that you can press the button as soon as the economy improves," says Bachmann.
Markus Knöpfli
