Print advertising market of the NZZ Media Group shrinks, user market stable
In a challenging market environment, the NZZ Media Group reported stable results for the first half of the year. Although print advertising revenues declined much more sharply than forecast, the user market remained stable.
Business Media continued to grow. Despite a slight decline in earnings before interest and taxes (EBIT) of 3.1 percent to CHF 14.0 million, the Group result increased by 7.3 percent to CHF 12.8 million.
In the first half of 2017, the NZZ Media Group generated total operating income of CHF 211.6 million. This is 3 percent less than in the previous year. The main reason for the decline is the print advertising market, which shrank by 11 percent. This means that the NZZ Media Group is still performing better than the comparable Swiss market, according to a press release.
Income from the user market remained stable. This income from subscriptions, individual sales, events and other user-based additional business is central to the NZZ Media Group's strategy. The Group recorded significant revenue growth of 10 percent in other income. This is mainly due to higher revenues in the Business Media division. Print revenues declined by 5 percent, which is attributable to the continuing supply overhang in this market.
Constant EBIT margin
Total operating expenses fell by 3% to CHF 197.6 million compared to the same period last year. Lower material costs in the printing sector, lower distribution costs and various measures to increase efficiency contributed to the decrease. Earnings before interest and taxes (EBIT) fell by CHF 0.5 million year-on-year to CHF 14.0 million. However, the EBIT margin remained constant compared to the previous year at 6.6%.
The Group result rose by CHF 0.9 million year-on-year to CHF 12.8 million in the first half of 2017, mainly due to an improved financial result. The return on sales also rose accordingly from 5.5% to 6.1%. Equity including minority interests decreased by CHF 6.0 million to CHF 274.3 million because goodwill offsets from acquisitions and dividend distributions were higher than the Group result. As a result, the equity ratio fell by 0.6 percentage points to 65.1% compared to the beginning of the year.
Outlook: Exploiting growth opportunities and increasing efficiency
In the second half of 2017, the NZZ Media Group will make additional funds available for new and improved offerings in order to be successful in the long term - even if this will have a temporary negative impact on earnings. The Group will make targeted investments where it sees opportunities for growth. This is primarily in the NZZ Medien user market. At the same time, it is important to adjust costs to the tense market environment and increase efficiency.
