Tamedia: Sales and profit increased despite stagnating advertising revenues

Sales rose slightly by 2.4 percent year-on-year to 386.4 million francs, as the Zurich-based media company announced on Wednesday. This growth was due in particular to newly acquired media such as Search.ch, Zürcher Unterländer and Zürichsee-Zeitung. In contrast, the Berner Zeitung and Tages-Anzeiger once again recorded a decline in sales. The development of the Berner Tageszeitng Bund, which broke even for the first time in more than a decade, was pleasing for Tamedia.
The operating result before depreciation and amortization (EBITDA) climbed by 154.4 percent to CHF 66.1 million thanks to the cost-cutting measures taken in the previous year, according to the press release. Operating profit at EBIT level (before interest and taxes) rose from CHF 9.1 million to CHF 48.8 million.
The result from continuing operations amounted to CHF 49.9 million, compared to CHF 5.7 million in the previous year. The newly acquired 49.9% stake in Presse Publications SR, which comprises the main Swiss media activities of the French-speaking Swiss media group Edipresse, contributed CHF 10.8 million to the result. In particular, the activities of Thurgauer Zeitung, which was sold to the NZZ media group in mid-April 2010, are not included in the continuing operations. The overall result including discontinued operations amounted to CHF 52.5 million, compared to CHF 0.8 million in the previous year.
Advertising investments, which had fallen continuously since June 2008, stabilized at a significantly lower level in the first half of 2010. Some months in the first half of the year saw a year-on-year increase in advertising investment. Job advertisements, which react with a delay to an upturn in the labor market, recorded a further decline of -8.8%. The total advertising revenues of the Swiss press in the first half of the year were just above the previous year's figure at plus 0.4 per cent, but at -18.5 per cent still significantly below the first half of 2008. Tamedia expects advertising investments to remain largely stable in the coming months.

Increased sales in the Newspapers, Magazines and Electronic Media divisions
Sales in the Newspapers division rose by 0.4 percent to CHF 255.0 million. This growth is attributable in particular to the titles Zürcher Unterländer and Zürichsee-Zeitung, which were included for two months for the first time, as well as 20 Minuten and Sonntagszeitung.
Sales in the Magazines division increased by 0.6 percent to CHF 48.7 million. In addition to Schweizer Familie and the specialist media Mobil, the people magazine 20 Minuten Friday, which was launched at the end of 2008, also made a positive contribution to sales. Annabelle and TVtäglich, on the other hand, reported a decline in sales.
Sales in the electronic media business division rose by 25.7 percent to CHF 52.8 million. This growth is exclusively attributable to online media. In addition to the online platforms Search.ch, Jobup.ch and Swissfriends.ch, which were included for the first time, 20 Minuten online and the Newsnetz also contributed to growth, while the real estate platform Homegate continued to develop positively. Radio and TV activities fell short of expectations and made no contribution to earnings.
Services with less turnover
At CHF 99.4 million, sales in the Services business division in the first six months of the year were 18.4 percent below the previous year's figure of CHF 119.3 million. For the first time, sales from the DZO Druck Oetwil printing center, where the Zurich regional newspapers are printed, were also included in the Services division. However, the once again lower volumes in newspaper printing led to a significant decline in sales both in the printing centers and in prepress.
Presse Publications SR S.A., which comprises the main Swiss media activities of Edipresse, met the high expectations in the first half of 2010. With sales of CHF 176.7 million, PPsr generated an operating result after depreciation and amortization of CHF 24.8 million. The EBIT margin was thus 14.0 percent. The jointly operated commuter newspaper 20 minutes and the online marketplaces, which have also already been merged, performed particularly well. As Tamedia only held a minority stake of 49.9 per cent in PPSR S.A. until the beginning of 2010, its revenues are not included in Tamedia's half-year financial statements. However, in line with the 49.9 percent stake, around half of the net profit of CHF 21.6 million (CHF 10.8 million) was included in Tamedia's result.
Focus on the future of Zurich's regional newspapers
In addition to the merger with the Swiss media activities of Edipresse, the future of the Zurich regional newspapers will be the focus of attention for Tamedia in the coming months. Together with the partners Ziegler Druck und Verlags AG (Der Landbote) and Zürcher Oberland Medien AG (Zürcher Oberländer), possible cooperations are currently being examined. The partners have decided to run their advertising business jointly from 2010. Further projects are to be completed by the end of 2010.