Tamedia posts solid net income – organic growth for Free Media as well as Marketplaces and Ventures – print advertising down by CHF 35 million

Zurich, 13 March 2018 – Tamedia's operating revenues fell by 3.0 per cent or CHF 30.6 million in the past financial year to CHF 974.2 million. This was due to the structural decline in publishing, Tamedia's core business. Print advertising revenue shrank by CHF 35 million year on year. Operating income before depreciation and amortisation (EBITDA) increased by CHF 44.2 million or 22.0 per cent to CHF 245.2 million, notably due to lower actuarial pension costs under IAS 19. The EBITDA margin rose from 20.0 per cent in the previous year to 25.2 per cent, bringing operating income (EBIT) up by 59.3 per cent or CHF 67.3 million to CHF 180.7 million. This increase is partly due to lower depreciation and amortisation resulting from extending the operating life of the printing centres. No impairment on goodwill was recognised in 2017 (previous year CHF 11.0 million). The EBIT margin rose from 11.3 per cent in the previous year to 18.6 per cent. The reported net income for 2017 of CHF 170.2 million represents an increase of 39.1 per cent or CHF 47.9 million on the previous year's level of CHF 122.3 million. Disregarding the abovementioned one-off effects, net income was up by 21.5 per cent or CHF 24.0 million year on year. Eligible Tamedia employees have a profit participation of CHF 6.5 million in net income (previous year: CHF 5.8 million).  

Pietro Supino, publisher and Chairman of the Board of Directors at Tamedia: “With the new organisational structure at our daily newspapers we are well positioned to keep on producing good-quality journalism in an alteringmedia industry. This is and will remain the core of our family business. At the same time, we have laid the foundations for new offers and future growth.”  

Work done in the 2017 financial year has set the stage for expanding Tamedia's offering even further. Christoph Tonini, CEO of Tamedia: “Due to the  investments we have made over the past few years, we are now able to keep pace with our international competitors in terms of reach in Switzerland. We want to build on this and give our advertising customers a truly 360-degree offering in the future together with Neo Advertising [out-of-home] and Goldbach [TV, radio and digital].”

Paid Media: fall in print advertising but rise in digital subscriptions

Net income in the Paid Media business division, which includes the paid media as well as the newspaper printing facilities, was affected by the significant decline  in the print advertising market. This contrasted with a pleasing trend in paid digital content. Revenues (operating revenues) from third parties generated by the Paid Media business division fell by a total of 5.0 per cent in 2017 to CHF 586.0 million (previous year: CHF 616.8 million). Consequently, operating income before depreciation and amortisation (EBITDA) dropped by 12.2 per cent to CHF 82.6 million (previous year: CHF 94.1 million). This also affected the EBITDA margin, which now stands at 13.7 per cent (previous year: 14.7 per cent).

Free Media: digital income offsets decline in print advertising

The newly created Free Media business division comprises the national media brands 20 Minuten, 20 minutes, the investment in 20 minuti in Ticino and the investments in BT and Metroxpress in Denmark, L'essentiel in Luxembourg and Heute as well as heute.at in Austria. As at Paid Media, print advertising also declined at Free Media. However, the significant rise in advertising revenue in the digital segment more than made up for the decline in print advertising in Switzerland. Revenues (operating revenues) from third parties generated by the Free Media business division fell by 5.6 per cent in 2017 to CHF 153.2 million (previous year: CHF 162.3 million) as a result of a consolidation measure (incorporating the Danish commuter newspaper Metroxpress into a joint venture with one of Tamedia's non-controlling interests). Operating income before depreciation and amortisation (EBITDA) rose by 30.0 per cent to CHF 50.7 million (previous year: CHF 39.0 million), pushing the EBITDA margin up to 32.8 per cent (previous year: 24.0 per cent).

Marketplaces and Ventures: further development on the agenda

The Marketplaces and Ventures business division once again generated a good result in the reporting year. Following a strong growth phase spanning several years, the focus in the previous year lay on further developing the platforms. Revenues (operating revenues) from third parties generated by the Marketing and Ventures business division rose by 4.1 per cent in 2017 to CHF 235.0 million (previous year: CHF 225.6 million), driven mainly by organic growth from the two platforms JobCloud AG and homegate.ch. FashionFriends, meanwhile, no longer contributes any revenues following its sale in 2016. Operating income before depreciation and amortisation (EBITDA) rose by 7.6 per cent to CHF 91.8 million (previous year: CHF 85.3 million), while the EBITDA margin climbed further to 39.0 per cent (previous year: 37.4 per cent).

Iwan Rickenbacher to step down from Board of Directors – Sverre Munck put forward as his successor

Prof. Dr. Iwan Rickenbacher is to step down from the Tamedia Board of Directors with effect from the next Annual General Meeting. Formerly General Secretary of the Christian Democratic People's Party of Switzerland (CVP) and Honorary Professor at the University of Bern, he was elected to the Board of Directors of what was then TA-Media AG in 1996 and currently works as a politics and communications consultant. His roles over the past few years have included member of the Board of Directors' Journalism Committee and Business Development Committee. The Board of Directors would like to thank Iwan Rickenbacher for his many years of commitment and the invaluable contribution he has made to growing the company into a nationwide media group.

The Board of Directors will propose to the Annual General Meeting on 20 April 2018 that Dr. Sverre Munck be elected to its ranks. Born in Norway in 1953, Dr. Munck has been a member of the Advisory Board for Media Technology and Innovation since October 2013. He worked for the Norwegian media group Schibsted from 1994 to 2013, holding posts including CFO, Executive Vice President of the Multimedia business division and, most recently, head of Group Strategy and Corporate Development with responsibility for International Editorial. Sverre Munck has been an investor and professional board member since 2013, including chairing the Board of Directors of Opera Software ASA and the Oslo Science Park. He studied economics at Yale University and received his PhD from Stanford University in 1983.

New signatories to the founding family's shareholders' agreement – increase in the free float

Tamedia's founding family is reinforcing its long-term commitment to the media group, which was set up 125 years ago by their ancestor Wilhelm Girardet. Following a representative of the fifth generation, who signed up to the shareholders' agreement last year, another member of the next generation has now turned 18 and is to join the group of shareholders drawn from the founding family in 2018. At the same time, a member of the founding family is currently engaged in selling some 2 per cent of Tamedia shares as part of his succession plan. This will reduce the founding family's holding from 71.8 per cent in early 2017 to 69.8 per cent, causing the percentage of shares in free float to rise from 28.2 to around 30.2 per cent.

Report on quality monitoring in publishing media

As part of the information it is providing on its annual results for 2017, Tamedia is also presenting its first report on quality monitoring in its publishing media. The monitoring is based on the “Quality in the Media” manual introduced last year. Led by project manager Res Strehle, all of Tamedia's newspapers and magazines were monitored closely in consultation with independent experts. The quality report indicates that Tamedia's editorial teams produce journalism that is crafted well – exceptionally well in some cases – and that is factually correct, fair, and clear on the distinction between fact and opinion. It also identified weaknesses, namely the occasional lack of distance to the sources and the partly blurring of the lines between editorial content and advertising. The monitoring function will be continued in the coming years and further developed as more experience is gained.

Press conference and information for financial analysts

The press conference will take place today, 13 March 2018, at 10.00 a.m. at the Tamedia head office at Werdstrasse 21 in Zurich. An analysts' conference will also be held for analysts and investors at 12.00 p.m. If required, a conference call in English will be offered tomorrow, 14 March 2018,  for investors and analysts from abroad.

Information on the Annual General Meeting 2018

The Annual General Meeting of Tamedia Ltd will take place on Friday, 20 April 2018 at 3.00 p.m. at Lake Side, Bellerivestrasse 170, 8008 Zurich.