Publicitas bankruptcy and newspaper crisis depress Tamedia profits

Tamedia was able to maintain sales in the first half of the year thanks to its commercial digital offerings, investments and the acquisition of Neo Advertising. However, the bankruptcy of Publicitas, the discontinuation of the print edition of Le Matin and the declining print advertising market put pressure on profits.

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At the largest Swiss media group, the shift away from publishing towards commercial digital services is progressing. Thus, in the first half of the year, Tamedia was only able to maintain sales at about the previous year's level of CHF 477.5 million (PY 477.8 million) thanks to these offerings and the acquisition of the company Neo Advertising. The share of sales accounted for by digital offerings increased to 39.3 per cent from 37.1 per cent in the previous year, as Tamedia announced on Tuesday.

Profit, on the other hand, was markedly lower: Net income fell by 48 percent to 39.9 million Swiss francs. The decline is largely due to special factors. Among other things, the bankruptcy of the advertising broker Publicitas led to a value adjustment of receivables of CHF 5 million. In addition, pension costs rose significantly to 52 million francs. However, even after adjusting for these special factors, Tamedia posted a lower result of CHF 45.4 million compared to the previous year (previous year CHF 54.5 million).

Slump in profits for media stocks

This decline in profit is attributable to the media titles. The operating result (EBITDA) of daily and weekly newspapers and magazines fell sharply by 42 percent to CHF 21.6 million. According to the statement, the operating result was lower in particular due to the bankruptcy of Publicitas, the closure costs of the print edition of Le Matin and the lower result of the newspaper printing centres.

However, Tamedia also generated declining profits with its commuter newspapers. Operating profit fell by 22 per cent to CHF 14.7 million due to declining print advertising revenues.

Tamedia increases stake in Zattoo to over 50 per cent

In contrast, Tamedia was able to increase profits in the segment with digital offerings. The Marketplaces and Holdings segment increased its operating profit by 12 per cent to CHF 53.2 million. In particular, the job platforms JobCloud developed well, Tamedia writes in this regard. With the half-year figures, Tamedia also announced that the company had increased its stake in the Internet TV service Zattoo to over 50 per cent (Werbewoche.ch reported). The partnership between Tamedia and Goldbach will result in new synergies for the marketing of Zattoo in Switzerland and Germany, according to a statement. Tamedia's majority takeover of Zattoo is still subject to approval by the Swiss Federal Competition Commission. (SDA)

Tamedia 1st semester 2018
Key figures2018-62017-6Change
in CHF millionin CHF mas a percentage
Tamedia Group
Operating income477.5477.8-0.1
Earnings before interest, taxes, depreciation and amortization (EBITDA)85.4127.3-32.9
Margin (in percent)17.926.6-32.9
Operating result (EBIT)52.795.2-44.6
Margin (in percent)1119.9-44.6
Result39.976.6-47.9
of which attributable to Tamedia shareholders26.365.5-59.9
Cash flow from operating activities98.8106.9-7.6
Balance sheet total2 514.82 513.310.1
Equity ratio (in percent)²78.378.41-0.1
Paid media
Operating income285297.9-4.3
thereof intersegment7.79.1-14.8
EBITDA21.637.1-41.8
EBITDA margin (in percent)³7.612.5-39.2
Commuter media and marketing
Operating income75.871.85.5
thereof intersegment0.31-68
EBITDA14.718.9-22.2
EBITDA margin (in percent)³19.426.3-26.3
Marketplaces and investments
Operating income124.9118.25.7
thereof intersegment0.20.169
EBITDA53.247.611.9
EBITDA margin (in percent)³42.640.25.9
Average number of employees⁴3 2243 308-2.5
Source: Tamedia

¹ as at 31.12.2017

² Equity to balance sheet total

³ The margin refers to the operating income

⁴ The average number of employees does not include employees of associated companies / joint ventures.

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