PubliGroupe preparing for growth in digital and continued print decline; intention to return CHF 45 million to shareholders through share buy-back programme and extraordinary dividend

PubliGroupe CEO Arndt Groth seeks further growth in the digital and mobile arena in Switzerland and selected international markets, while preparing the Group for continued declines in the print market. To this end PubliGroupe will implement a structure to strengthen the management on the business segment level and focus the role of the PubliGroupe headquarters on key competencies in finance and strategic development. Further business optimisation measures at Publicitas are in place to achieve a break-even operating result for 2013 in a declining print market. For the business year 2012, Publicitas anticipates a larger than expected loss. In 2012, PubliGroupe is projecting a small operating loss despite continued strong performances in the Search & Find segment with a very positively performing local.ch and a solid result by Zanox within Digital & Marketing Services (DMS). The sale of a significant portion of the real estate portfolio and the participation of Namics will allow achieving a net result for the Group of over CHF 41 million for 2012. It is the intention to return CHF 45 million to shareholders through a share buy-back programme via a second trading line on the SIX Swiss Exchange and an extraordinary dividend.

PubliGroupe anticipates that the print market will continue to decline at the rate witnessed over the last years, while digital and mobile will continue to gain in importance, reshaping the entire market landscape and affecting previous value chains between advertiser and publishers. At the same time the automatisation of trading between the buy- and sell-side will rapidly grow in relevance and the move towards technology-oriented media buying and selling will continue, requiring market actors to attain the highest possible degree of automation, while relying on the predictive power of big data. Today’s highly scattered marketplace will see consolidation where primarily only premium inventory will still rely on personal sales and a high degree of customisation. Large parts of publisher inventory and advertising space and therefore the majority of media buying and planning will increasingly be commoditised.

Arndt Groth, CEO of PubliGroupe: "We are preparing PubliGroupe and its companies for a much smaller print market and an increasingly digital and mobile future. New measures are being taken with immediate effect to be leaner, more flexible, more innovative and entrepreneurial. The guiding principle for PubliGroupe for the future is to offer a high-performance regional, national and international network. The media business will continue to be our primary DNA, but we will seek to quickly automate processes, focusing on connecting supply and demand and increasingly offering self-service solutions and IT platforms for print ad processing and automated trading (DSP or SSP technology) as well as CRM tools, media buying and planning software and services."

 

PubliGroupe Ltd. to become more focused and leaner holding

The advertising and marketing landscape of the future will remain in a state of flux with strong adaptability to trends on a continuous basis acting as a prerequisite for success. In order to strengthen its strategic development role and continue to focus on its function as a financial holding, fewer but more focused functions shall be allocated on the holding level as in the fields of merger and acquisition and innovation incubation. Overall Group overhead costs shall continue to be reduced progressively. As of 2013, 32 employees will be employed at its headquarters in Lausanne, down from 43 in 2011.

As the Group functions become more focused, the management shall be strengthened on the operational level, supervised by a coherent Board logic across all participations and segments, as is already the case with local.ch and Zanox. At Publicitas a new Board will be formed which will replace the Steering Committee. Consequently, as of 1 January 2013, the CEOs of the business segments will no longer be part of the Group Executive Committee as is currently the case for Media Sales CEO Beat Roeschlin.

On a Group level Renato Martignoni is being promoted to Head of Corporate Development and joining the Executive Committee. In the future, the participations within Digital & Marketing Services (DMS) will all be managed through their respective Board and management structures. The reporting structure for Media Sales, Search & Find, Digital & Marketing Services as well as Corporate & Others is maintained.

As of 2013 the Executive Committee of PubliGroupe will be composed of the following members: Arndt Groth, CEO, Andreas Schmidt, CFO, Jean-Denis Briod, General Secretary, Brigitte Schleipen, Head of Human Resources, Renato Martignoni, Head of Corporate Development.

 

Share buy-back and special dividend to return proceeds to shareholders

PubliGroupe intends to return to shareholders around CHF 45 million of funds generated by selling properties. To this end, the Group will start a share buy-back programme in January 2013 of up to CHF 25 million. For the purposes of capital reduction, the share buy-back will be processed via a second trading line on the SIX Swiss Exchange. The intention is to start dealings on the second trading line on 3 January 2013. The buyback programme is expected to run until 30 April 2013. It is planned that the Board of Directors will propose to the 2013 Annual General Meeting an extension of the buyback programme or a new programme, depending on the volume that has been repurchased by then. A proposal to pay a special dividend for the balance will also be put to shareholders at the 2013 AGM.

Even after returning these funds, and despite weaker than expected results at Media Sales, the Group continues to be solidly financed and possesses significant scope for investment.

 

New cost and growth measures at Publicitas

In 2012, the shift in favour of digital markets has further accelerated, rendering the optimisation measures announced at Publicitas for the current year insufficient to make up another loss of top line revenue in the traditional print sector on the order of 15%. For 2012, PubliGroupe therefore foresees an operating loss for its Media Sales unit in the order of CHF -22 million, above previous guidance, despite a reduced cost base of CHF 10 million against 2011. An important part of this loss is related to one-off restructuring costs. In 2013, further cost reductions already implemented of CHF 16 million and new, mostly digital business should allow Publicitas to reach a break-even operating result in a still-diminishing print market environment.

Assuming continued revenue declines in the traditional print business outweighing new business from digital revenues, Publicitas is intensifying its plans to further reduce today's cost base and diversify and further accelerate its product portfolio. To that end publisher relationships shall be defined such that they allow Publicitas to manage a sales and service organisation with full operational autonomy that can realise efficiencies on a constant basis. Publicitas shall focus on its role as an efficient and highly technology-oriented regional, national and international partner for media owners to outsource their sales and processing and for advertisers to receive effective advertising solutions.

Publicitas is further investing in a new processing infrastructure and tool landscape. By 2014, Publicitas will be running its operations for all types of media, in Switzerland and abroad, on a new, highly flexible software solution that will act as the end-to-end digitalisation backbone. The underlying cloud technology represents a key factor enabling reduction of deployment and operating costs, as well as speeding up implementation of business requirement changes.

Starting in 2013 the headcount (FTE) at the business segment Media Sales will be 1,040 (FTE) compared to 1,196 at the end of in 2011.

 

PubliGroupe with small operating loss for 2012 and net result of over CHF 41 million

PubliGroupe is projecting a small operating loss for the business year 2012. The lower than expected result at Media Sales cannot fully be compensated by the very good performance in the online and mobile area at Search & Find and at DMS, notably Zanox. The sale of a significant portion of the real estate portfolio and the participation of Namics will allow the Group to achieve a net result of over CHF 41 million for 2012. For 2013, PubliGroupe anticipates a strong improvement at Publicitas against the 2012 result due to a substantially lower cost burden and contributions at roughly the same level, or slightly higher in the case of Search & Find, for the other segments. PubliGroupe will continue to have significant liquidity reserves even after the share buyback programme has been completed and the special dividend has been paid.

 

For further information:

 

PubliGroupe Ltd.

Beat W. Werder

Head of Corporate Communications

Tel.: + 41 21 317 72 15

E-Mail: bwerder(at)publigroupe.com

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