TX Group posts half-year loss and launches savings program

Sales of Switzerland's largest private media company fell by 17.7 percent to CHF 431.2 million in the first six months of 2020, TX Group announced on Tuesday. The minus was thus roughly in line with the expectation of around one fifth published in advance in mid-July.

Operationally, the Group slipped into the red, as also forewarned. The operating loss at EBIT level was 107.5 million, following a profit of 41 million in the previous year. In addition to the decline in sales, goodwill impairments of 85 million at the Tamedia division had a negative impact on the result. EBIT adjusted for the effects of business combinations was 12.3 million compared to 71.1 million. The bottom line was a loss of 109.4 million after a profit of 53.6 million.

"After a good start of the newly positioned TX Group in 2020, the months from March onwards were particularly overshadowed by the Corona crisis," Chairman of the Board of Directors and publisher Pietro Supino is quoted as saying.

70 million savings in the area of paid newspapers

Tamedia", which continues to be the strongest segment in terms of sales and which includes the paid media, lost 18.6 percent of its sales in the first half of the year and already slipped into the red at the EBITDA level. The Corona crisis is accelerating the fundamental structural change of the media, which is why lower cash flows are to be expected looking ahead. As a result, the TX Group additionally recorded an impairment on goodwill in the amount of CHF 85 million at the pay media.

In order to create a sustainable business basis for the future, Tamedia's management now wants to save 70 million in costs over the next three years. The measures required for this are to be developed in the coming months with the affected divisions and with the involvement of the social partners, according to the statement.

Commuter media and advertising sales most affected by Corona

Meanwhile, the Corona-related lockdown hit the commuter medium hardest 20 minutes and advertising marketing. In the corporate division 20 minutes sales slumped 43.5 percent in the first half, and the traditionally high-margin segment posted an operating loss. At Goldbach, sales fell by just under 22 percent and here, too, there was an operating loss. Since June, however, the market has calmed down and a significant recovery is expected for the second half of the year.

But it was not only the publishing and advertising-oriented businesses that suffered losses. TX Markets, with its large classifieds platforms and marketplaces such as Jobcloud, Homegate and Ricardo, also lost almost 7 percent in sales and reported significantly lower profitability than usual.

"Catastrophic austerity measures"

The unions were alarmed by the latest news from the Zurich media house. In a statement, the journalists' association Imprint described the cost-cutting measures as "catastrophic. It called on management to refrain from layoffs and to bridge the temporary shortfall on the earnings side with the extensive reserves.

Together with the media union Syndicom, Imprint demanded a socially responsible implementation of the drastic savings program. Both organizations welcomed the company's willingness to involve the social partners and staff in shaping the strategy. (SDA)