Tamedia with lower sales and lower EBIT due to advertising decline
Dwindling advertising revenues pushed down the revenues of the Tamedia media group in the first half of the year. Even revenues from the digital business, which is gaining strongly in importance, were unable to make up for the losses.
Tamedia was particularly troubled by the fact that, in addition to the decline in advertising revenues caused by structural change, the advertising business was also adversely affected by economic factors. At a conference call, Tamedia CEO Christoph Tonini illustrated this with the particularly high revenue declines that occurred with a slight delay to the Swiss franc shock in April and May.
In total, the media group recorded an increase in sales of CHF 530.7 million.
As sales fell, so did operating profit (EBIT), down 5.2 percent to 72.4 million Swiss francs. At 71.6 million Swiss francs, the bottom line was more than 20 percent higher than a year ago. However, this increase in profit is due in particular to gains from the sale of the stake in the French-speaking Swiss kiosk operator Naville and the Winterthur Stadtanzeiger, according to the media release.
Tamedia was hit hardest by the decline in advertising in the paid newspapers (Regional Publishing division). Sales there fell by 7.3 percent, while the division's profit fell by 12.8 percent, including depreciation and amortization. In the future, the business segment may be given some breathing room by the acquisition of further printing contracts - the Neue Zürcher Zeitung, for example, has recently been printed by Tamedia - as well as growing revenues from online sites thanks to rising advertising volumes and payment barriers.
Tamedia also reported a 5.8 percent decline in revenues from its Publizistik National division, which includes commuter newspapers and their websites as well as magazines and weekly newspapers, due to the declining advertising market. This decline was mainly due to the downturn in the advertising market for magazines and the Sunday press, it said on Thursday. Earnings in this division were also down.
Central advertising marketing
The Zurich media group saw an upswing only in its digital business, i.e. in those offerings that are purely commercial in nature and do not contain any journalistic content. The real estate portal Homegate, the Internet television service Zattoo, the ticket seller Starticket, and a dozen other online offerings generated 8.9 percent more revenue in the first half of the year than in the same period last year. The division's profit even rose by more than a quarter.
Around 20 percent of Tamedia's sales and over 27 percent of its operating profit now come from the digital division. In addition, Tamedia generates a further 6 percent of sales and around 9 percent of profits with its publishing offerings on the Internet. However, as of this year, this will be credited to the two publishing divisions.
In order to better market the advertising opportunities of digital media in the future and also to be able to evaluate the existing user data, Tamedia will reorganize advertising sales, which are currently still located with the individual media, by 2017 at the latest.
For this purpose, the publishing business will now be divided into two divisions: Advertising & Commuter Media and Paid Media. The first division will be headed by Marcel Kohler, who currently heads the 20 Minuten Group, while the second will be headed by Serge Reymond, who is currently responsible for Tamedia's media titles in French-speaking Switzerland, among other things. (SDA)
