Affichage: No more losses

Daniel Hofer, CEO of Affichage since October 2010, was, in his own words, "much more relaxed" at today's annual press conference than he was a year ago. For one reason in particular: he and his management team have been able to keep most of the promises they made to shareholders at last year's Annual General Meeting: "We have achieved the turnaround, strengthened the balance sheet and can now pay out a dividend of CHF 7 per share again," he said. Last year, Affichage waived dividend payments due to the huge losses in 2010 (-52.3 million francs) and 2009 (-59.1 million francs).

Withdrawal to the domestic market

Hofer's task was not an easy one: practically the entire management team had to be replaced and the new corporate strategy had to be implemented quickly. After the loss-making foreign strategy in south-eastern Europe, Affichage was to withdraw from almost all foreign markets. A focus on the Swiss domestic market was the order of the day. According to Hofer, both have been successful: "A year ago, we were still active in eight countries, but today we have three: Serbia, Montenegro and Romania. Affichage will remain in the first two countries, but we want to leave Romania as soon as possible." Affichage has parted company with its commitments in Greece, Bosnia, Bulgaria and South Tyrol, and already in 2010 with the one in Hungary. Almost everything was completed by the end of 2011, with the exception of Greece, where some final work (including debt collection) still needs to be done.

Increased sales thanks to Swiss business

Despite this withdrawal, Affichage was able to increase its consolidated sales by 3.7 percent in operational terms, although currency losses meant that sales were "only" up by 2.5 percent to CHF 311.8 million. The growth is due to the positive business development in Switzerland, where Affichage was able to increase its sales by a total of 8.3 percent - not least because of the parliamentary elections last fall, which alone brought in around CHF 12 million. The share of foreign business fell accordingly from 30 percent to only around 10 percent. And if the out-of-home advertising group succeeds in withdrawing from Romania as hoped, the foreign share of total sales would fall even further. Nevertheless, Affichage is the market leader in Serbia and Romania, and its subsidiary Almaquattro also has a long-term concession in the Serbian capital Belgrade. Sales in Serbia stagnated last year, and around CHF 3.8 million had to be invested in new advertising media there. But Hofer remains confident, not least because Serbia is aiming for EU membership. The situation is different in Romania, where the economic situation is very uncertain. Hofer assumes, however, that Affichage Romania can soon be made self-supporting, so that it no longer incurs financial losses and becomes more attractive to potential buyers. "We are therefore under no pressure with the sale," says Hofer.

Digitization as a growth driver

In Switzerland, where Affichage was able to increase its results in all business areas and companies, Hofer's team is aiming for further growth despite its strong market position - by means of a more efficient sales strategy, restructured offers and the digitalization of poster panels. In 2011, the Group introduced a good 40 e-panels in the train stations of Basel, Bern, Geneva, Lausanne, Lucerne and Zurich, investing around CHF 2.6 million in the process; together with the existing bigboards, they now account for almost 5 percent of Swiss sales. Affichage also won the poster concessions in the cities of Geneva and Schaffhausen.

Will foreign shareholders have the say in future?

Two proposals put forward by the Affichage Board of Directors to the Annual General Meeting have raised eyebrows: Firstly, the Group should abandon the name Affichage, which it had adopted at the time due to its expansion abroad. In future, the APG | SGA brand, which has been in use in Switzerland since January 1, 2012 (see article Werbewoche.ch/the-new-apg-sga) will also apply to the holding company, with the companies in Serbia and Romania retaining their previous names.

The second proposal concerns the abolition of the transfer restriction clause, which stipulates that shareholders can acquire a maximum of five percent of voting rights, even if their stake in the share capital is larger. The abolition of this clause would mean that the major shareholders, the French outdoor advertising company JCDecaux and the Belgian investment company Albert Frère, which currently only hold 10 percent of the voting rights, would in future receive 30 and 25 percent in line with their shareholdings and would therefore have the say. However, it remains to be seen whether the numerous smaller shareholders, including many Swiss, who currently have a disproportionate say in the company, will agree to this proposal. After all, 80 percent of the votes present at the AGM are required to abolish the restriction on transferability.

Markus Knöpfli