PubliGroupe Zurich, 07 March 2014 Financial results 2013

1. PubliGroupe
Financial results 2013
Zurich, 07 March 2014
0
Overview presentation order
Agenda item
Presenter
1
Overview of FY 2013 figures, main
developments, overview segment results
Arndt C. Groth:
CEO
2
Key financials group
Andreas Schmidt:
CFO
3
Conclusion & outlook 2014
Arndt C. Groth:
CEO
1
1

2. Balanced operating result –
net result 2013 of CHF -5.9
million – in line with
guidance
Arndt C. Groth
PubliGroupe
CEO
2
Andreas Schmidt
CFO PubliGroupe
Group overview
Full-year results 2013
• Progress made in the second half-year 2013 allowed PubliGroupe to achieve a
balanced operating full-year result; net loss of CHF -5.9 million – results confirm
guidance of Nov. 2013
• Substantially reduced cost base at Media Sales / Publicitas; drop in revenue
due to much higher than expected print market declines in Switzerland;
implementation of strategy on track
• Search & Find, driven by the clear Swiss market leader local.ch, provided solid
operating results, relying on digital, future-oriented revenue
• Zanox net revenue grew by 5%, growth consumed by lower margins in the
affiliate domain and investments in network; growth companies Improve Digital
and Spree7 saw good growth
3
2

3. Overall performance
Full-year results 2013
Net Revenue, in millions of CHF
• Slightly positive break-even operating
300
285.1
• Persistently difficult market in
Switzerland with loss at Media Sales
main reason for the net loss
• Search & Find, mainly driven by the
market leader local.ch, provided solid
operating results based on digital,
future-oriented revenue
• Operating result of DMS was marked
by substantial development costs at
Improve Digital and Spree7
267.3
-6%
result and net loss of CHF -5.9 million
200
100
0
2012
2013
Operating and Net Results, in millions of CHF
60
50
40
30
20
10
0
-10
2012
2013
50.2
1.6
0.8
Operating result
-5.9
Net Result
4
Business segment summary
DMS
Search & Find
Media Sales
Full-year results 2013
• Definition of strategy & management team
• Achievement of costs reductions: OPEX down
Operating result, in millions of CHF
2012
CHF -17.3 million (-11% vs. 2012)
• Implementation of new system solution
30
25.5
(Mediaspectrum)
• Successful merger of white & yellow books
• Lower printing costs
• Strong growth in online & mobile
• Investments in young growth enterprises
• 2012 benefited from 6 months of Namics
result
2013
22.4
20
10
6.1
0
-0.5
-10
Corporate
& others
-11.7
• Continuous FTE reduction at headquarters
• Press investment position positive but lower
in line with weakness of Swiss print market
-20
-9.7
-16.1 -14.5
Media Sales Search &
Find
Digital & Corporate &
Marketing
Others
Services
5
3

4. FY 2013 digital performance
Digital revenue continues to gain in importance
• Digital revenue grows across the Group in all segments 1
• Overall digital growth of 33% 2
• Media Sales online growth: 3%
• Continuing to focus growth initiatives and investments on digital media
Online revenues in the main associates of PubliGroupe (not consolidated),
in local currency
%
in millions
Local 100%
Zanox 100%
(in millions of CHF)
(in millions of EUR)
2012
2013
13%
5%
71.7
461.4
81.1
486.3
1) Excl. Namics in 2012
2) Incl. Improve Digital not incl. in 2012
6
Segment Reporting
Loss at Media Sales;
on operating level
compensated by
Search & Find
7
4

5. Media Sales
Full-year results 2013
• Net revenue fell by 10%. Billings
dropped from CHF 895.4 million in
2012 to CHF 805.2 million in 2013
• Substantially reduced cost base is
CHF 17.3 million lower than 2012. The
reduction in 2013 resulted from lower
personnel expenses as well as a
reduction of office space
Net Revenue, in millions of CHF
160
140
120
100
80
60
40
20
0
149.4
134.6
-10%
2012
2013
Operating and Net Results, in millions of CHF
• International business grew by 8% in
5
net revenue
2012
2013
0
• At the end of 2013, headcount (FTE) at
847 compared to 1'066 at the end of
2012; 2/3 of reduction in staff from sale
of 51% of xentive to Mediaspectrum
-5
-10
-15
-20
-16.1 -14.5
Operating result
-13.5
-15.6
Net Result
8
Costs reductions in line with lower volumes
Op. Result
Op. Expenses
Billings, CHF M
Cost measures of >CHF 17m not sufficient to compensate market decline
1'500
• Operational expenses were
1'031
895
1'000
805
500
reduced by CHF 17.3 million
(minus 11%) against
previous year
• The reduction in 2013
0
200
171
157
140
150
100
• Stronger than expected
50
Swiss print market decline;
print net ad volume
excluding magazines and
special publications declines
~ 13% 1
0
(5)
(10)
resulted from lower
personnel expenses as well
as reduction of office space
-5.1
(15)
-14.5
-16.1
(20)
2011
2012
2013
• Strategy in execution,
focusing on necessary
improvement on the top-line
1) WEMF figures -13.4 % in 2013 vs 2012.
Including: daily, regional, weekly, Sunday, finance and business media
9
5

6. Publicitas on track
First results indicate successful implementation of strategy
Strategic pillars
First results
Implementation of systems solution of Mediaspectrum
on track. NZZ and Le Temps are first key partners
•
Centralisation of European and Swiss back-office
•
New pricing structure defined and already applied on
ongoing negotiations
•
Full portfolio
Renewal of partnerships and new partnerships (e.g.,
AZ Medien, CdT, FAO, Arena Cinema, Editoria Abril,
Globo, S1, Sweet Spot, Bloomberg TV & Digital, CBS)
•
Become efficient and cost
leader in marketing advertising
space
Appointment of David Klement as CTO, started 2014,
completing the management team. Main responsibility:
development and introduction of Publicitas ad
exchange
•
Full automation
•
Rightsizing of organisation in Switzerland & Europe
completed resulting in 847 employees worldwide as of
December 2013
Offer the most relevant media
portfolio to advertisers
Variabilisation
Focus
“Flexed” cost base to address
contract gains or losses
Focus on core activities
10
Search & Find
Full-year results 2013
• Operating result increased by CHF 3.1
million to CHF 25.5 million
• Considering entire (100%) business of
local.ch, the operating result for the
twelve months of 2013 decreased
slightly from CHF 52.6 million in 2012
to CHF 51.7 million in 2013
• Online business reached 41% of
consolidated revenue in 2013 (vs 34%
2012; 29% in 2011)
• At the end of 2013, the headcount
(FTE) was 549, up 37 from the
previous year
Net Revenue, in millions of CHF
120
100
103.2
115.9
+12%
80
60
40
20
0
2012
2013
Operating and Net Results, in millions of CHF
2012
30
25
20
15
10
5
0
22.4
2013
25.5
16.6
Operating result
16.3
Net Result
11
6

7. PubliGroupe & Swisscom
15+ years of successful cooperation
PUBLIGroupe SA
Swisscom AG
49%
49%
51%
51%
Swisscom
Directories AG
LTV GelbeSeiten AG
100%
JV since 1998
One management since 11/2010
Rebranding since 2011
local.ch AG
12
Local.ch
Profitability maintained while shift to online continues
Revenue (consolidation 100%), in millions of CHF
%
2012
2013
C-Media
E-Media
Other
-20%
13%
-3%
86.1
71.7
51.1
68.8
81.1
49.7
Total revenue
-4%
208.9
199.6
in millions of CHF
• As of Dec 2013, 2/3 of order intake with digital products
• New local guide a success; merger of print products allow for substantially
lower printing costs
• 4.2 million monthly unique clients
13
7

8. local.ch: most popular search platform
New offers – extension of market leadership
− Commercial success
- >CHF 200 m revenue
on 100% basis
- ~25% EBIT margin
− More local
- city-specific start page
- improved search results
−
More offers
couponing offers
− booking restaurants
− deeper map integration
−
−
Improved usability
tablet optimised user
interface
− autocomplete
− fault tolerance
−
14
local.ch with higher digital reach
Outperformed against #2
100%
4.5
4.0
80%
70%
3.5
60%
50%
3.0
40%
30%
18% 19%
18% 19%
16% 17%
16% 15%
15%
2.5
10% 10%
local.ch search.ch [rel. position]
Unique ClientsNetMetrix [mm]
90%
20%
10%
5%
2.0
0%
Nov Dez Jan Feb Mar Apr May Jun
Jul
Aug Sep Oct
2013
1 Source: Unique Netmetrix
15
8

9. local.ch No 1 in Mobile
Uncontested leadership
1.8
100%
90%
# unique clients [mm]
80%
1.4
70%
60%
1.2
50%
1.0
40%
26%
25%
24%
22%
22% 22% 23% 21%
21%
18%
17%
0.8
30%
local.ch search.ch [rel. position]
1.6
20%
0.6
10%
0%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
0.4
2012
2013
1 Source: Uniques Netmetrix - registered since Feb/2013
16
Digital & Marketing Services
Full-year results 2013
• Operating result of CHF -0.5 million vs
CHF 6.1 million in 2012; net revenue
and net result lower due to Namics
sale in June 2012
• Substantial investments at Improve
Digital and Spree7; Improve Digital net
revenue grew 43% to CHF 5.8 million;
Spree7 operational as of July 2013
• At Zanox revenue growth allows to
cement position as leading
performance advertising network in
Europe
• DMS headcount (excluding Zanox) up
from 59 FTE in 2012 to 111 in 2013
DMS Net Revenue, in millions of CHF
40
30
other DMS
namics
Improve Digital
27.7
-57%
20
20.7
11.8
7.0
5.8
6.0
2012
2013
10
0
Operating and Net Results, in millions of CHF
2012
20
15.8
15
10
10.3
namics
6.1
5
5.5
0
-5
2013
-0.5
Operating result
-0.2
Net Result
17
9

10. Zanox
Full-year results 2013
• Revenue growth despite competitive
landscape in affiliate domain;
confirmation of top position in Europe;
international expansion continues
• Zanox 5% growth in net revenue and
operational efficiencies largely
consumed by lower margins and
investments in network
• Successful entry into data
management business with
acquisition of Metrigo in 2013
• From a 100% perspective, Zanox net
revenue of EUR 486.3 million in 2013;
EBITDA reached EUR 20.5 million
Zanox Net Revenue (100%), in millions of EUR
600
461.4
500
486.3
+5%
400
300
200
100
0
2012
2013
Zanox EBITDA (100%), in millions of EUR
30
28.0
25
20.5
20
15
10
5
0
2012
2013
18
Improve Digital
Leading European publisher trade technology
Proposition
Management Team
• #1 European Publisher Ad Exchange and SSP
• Offices in Benelux, Germany, UK, and Spain
• >40 FTE, mostly in tech and sales
• >100 premium publisher customers
• >250 connected demand-side partners, incl. all key DSPs
• State-of-art platform, fully RTA enabled, premium-format,
mobile- / video-enabled, customisable private exchange
• Won several awards, including 2013 High Growth Awards,
Deloitte Fast 500, Red Herring 100, Inspiring 50
Clients
Joelle Frijters (CEO)
Janneke Niessen (CIO)
Financials
eCPM (EUR)
Billing (EUR)
Impressions (in Mill.)
91
75
48
0.46
0.52
34
2012
2013
2012
2013
19
10

11. Powered by
Spree 7
Transparent trading desk for independent advertising agencies
Proposition
Management Team
• Young, Berlin-based growth company
• Trading desk for independent agencies and nonagency represented advertising customers
• Exclusive Mediamath partner in DACH
• Small, strong team of dynamic ad trade experts
• Aim to grow trade volumes, data usage, and
eventually develop trade platform
Victor Zawadzki
(CEO)
Selection of clients/partners
Dirk Fiebig
(Vice President Technology &
Operations)
Milestones
• Fully operational since July 2013
• Signed 26 agencies to date, aiming to get to 50 in
2014
• Ran more than 100 campaigns in past 6 months;
about 20-50 campaigns per month at present
• Strong focus and good progress on analytics / data
20
Key financials Group
Andreas Schmidt
CFO PubliGroupe
21
11

12. P&L Group
Net loss vs. large profit in 2012
in millions of CHF
2013
2012
-7%
1'058.0
1'134.6
Net revenue
-6%
267.3
285.1
Purchases
32%
-22.5
-17.1
Gross profit
-9%
244.8
268.0
Operating Expenses
-9%
-263.1
-289.0
Depr. & Amort.
-6%
-4.5
-4.8
Share in associates
-14%
23.6
27.4
Operating result
-48%
0.8
1.6
Financial result
-98%
-
-1.8
Billings *
-
0.8
-0.2
Non-operating result
Ordinary result
-96%
2.7
66.1
Income taxes
-67%
-4.0
-12.0
46%
-5.4
Minority interests
Net Result
Headcount (FTE)
-3.7
-
-5.9
50.2
-137
1'565
1'702
* Billings represent the gross amounts billed to clients (including the value of ad space)
22
Non-operating result
Practically no non-operating items in 2013
2013
2012
Gain on Namics sale
-
10.3
Gain on SOP sale
-
3.1
in millions of CHF
Gain on xentive sale
Real Estate - Gain on sale
Real Estate - Rental inc./Cost & depr on properties
Other (mainly rent elimination)
Non-operating result
0.4
-
49.6
2.4
4.4
-0.1
-1.3
2.7
66.1
23
12

13. Operating result by segment
Higher Search & Find profit allows break-even result
in millions of CHF
Media Sales
2013
2012
-14.5
-16.1
Search & Find
25.5
22.4
Digital & Marketing Services
-0.5
6.1
Corporate & Others
-9.7
-11.7
-
0.9
0.8
1.6
End December
2013
End December
2012
Eliminations Group
Operating result
24
Headcount by segment
Fewer FTEs at Media Sales and Group
FTE
Media Sales
847
1'066
Search & Find
549
512
Digital & Marketing Services
111
59
Corporate & Others
Total Headcount
58
65
1'565
1'702
25
13

14. Financial Result
Balanced result 2013
2013
2012
Interest income
0.9
0.5
Income from marketable securities and investments
2.5
1.3
in millions of CHF
Financial income
3.4
1.8
Interest expenses
-1.9
-1.3
Loss on marketable securities and investments
-1.1
-1.5
Financial expenses
-3.0
-2.8
Net currency exchange differences
-0.4
-0.8
-
-1.8
Net financial Result
26
Cash flow statement
Substantially lower cash position due to share buy-back, dividend & loss
2013
2012
Cash and cash equivalents as of 1 January
162.2
109.3
22.0
in millions of CHF
Cash flows from operating activities
-21.7
Cash flows from investing activities
-30.8
63.1
Cash flows from financing activities
-52.3
-31.8
Effect of exchange rates on cash and cash equivalents
-0.9
-0.4
Cash and cash equivalents as of 31 December
56.5
162.2
• Reasons for lower operating cash:
1/3 growth-related , 1/3 market conditions-related; 1/3 one-time effects
• Reasons for lower investing cash:
mainly financing of Digital Window acquistion by Zanox
• Reasons for lower financing cash:
extraordinary dividend payment and share buy-back
27
14

15. Group balance sheet
Reduced balance sheet after share buy-back
as of 31 December
2013
as of 31 December
2012
Current assets
292.4
379.2
Non-current assets
163.7
153.0
Total assets
456.1
532.2
Current liabilities
286.9
250.9
22.4
72.6
135.0
195.6
11.8
13.1
456.1
532.2
30%
37%
in millions of CHF
Non-current liabilities
Equity, shareholders of PubliGroupe Ltd
Minority interests
Total liabilities and equity
Equity in % of assets
28
Conclusion & Outlook
by the CEO
Arndt C. Groth
CEO PubliGroupe
29
15

16. Accomplishments since 2012
Progressing along three distinct paths
• Reduction of overhead costs; currently 29 FTE at
1.
Streamlining of
operations
headquarters in Lausanne, further reductions planned
• Appointment of new CEO at Publicitas with turnaround
• Lean and focused HQ
experience; continued rightsizing at Media Sales
structure to control and
very selectively support
assets
• At local.ch/Zanox efficiency programs in place, with
effects to be realised in 2014 and 2015
2.
Focusing on
core assets
• Operational efficiencies
• Sale of 3 buildings in Bern & Lausanne
• Sale of Namics, IT consultancy firm
• Sale of 51% of Xentive to Mediaspectrum, Boston-
realised within key
assets
• Divestment of non-core
based company offering premier software solutions
• Sale of further non-strategic assets planned
assets
ongoing
• Focus on technologyoriented companies in
the media & advertising
sector
• Acquisition of Improve Digital, leading European
3.
Developing
tech-oriented
assets
•
•
•
supply-side platform operator
Successful acquisition of data management platform
(DMP) Metrigo through Zanox
Establishment of Spree7 together with MediaMath as
a leading demand-side platform (DSP) provider that
caters to marketers’ media buying needs
Establishment of automated media marketplace at
Publicitas, together with Mediaspectrum
ongoing
ongoing
30
Key agenda points General Assembly 2014
• The Board of Directors decided to schedule the introduction of the principle
of "one share – one vote" for the Annual General Meeting to be held on 29
April 2014
• At the next Annual General Assembly (AGM), the Board will propose an
adaptation of the Articles of Association in conformity with the "Ordinance
Against Excessive Compensation in Listed Companies“
• The Board of Directors will propose a dividend of CHF 2.0 per share,
resulting in a dividend payment of about CHF 4.4 million
• Further details will be communicated with the invitation to the General
Meeting in the beginning of April
31
16

17. Conclusion and Outlook
Full year results 2013
• Progress made in the second half-year 2013 allowed PubliGroupe to achieve a
balanced operating full-year result
• Divestment of non-core assets or assets that are not providing satisfactory
financial returns will continue as will the adaptation of the holding
• In particular at Publicitas, the further execution of strategy of an increasingly
automated sales platform across all media categories, as announced in August
2013, remains the key focus in order to return to the path of profitability
• In 2014 Search & Find should provide results in the same order of magnitude
as 2013; DMS will slightly improve its results. At Zanox several measures are
in place to capitalize on its leading market position
• PubliGroupe will maintain focus on building a Group of leading advertising
technology-oriented companies
32
Backup Slides
33
17

18. Consolidated income statement
in millions of CHF
Billings *
Net revenue
Backup
2013
2012
1'058.0
1'134.6
267.3
285.1
Purchases
-22.5
Gross profit
244.8
268.0
Personnel expenses
-183.9
-211.6
General and administrative expenses
-17.1
-81.1
-78.8
Depreciation of tangible assets
-2.2
-3.8
Amortisation of intangible assets
-2.3
-1.0
Other operating income
2.3
1.9
Other operating expenses
-0.4
-0.5
Share in result of associates
23.6
27.4
Operating result
Financial result
0.8
1.6
-
-1.8
Ordinary result
0.8
-0.2
Non-operating result
2.7
66.1
Result before income taxes and minority interests
3.5
65.9
Income taxes
-4.0
-12.0
Result before minority interests
-0.5
53.9
Minority interests
-5.4
-3.7
Result attributable to shareholders of PubliGroupe Ltd
-5.9
50.2
Earnings per share (in CHF)
-2.7
21.2
* Billings represent the gross amounts billed to clients (including the value of ad space)
34
Consolidated balance sheet
Backup
Assets
as of 31 December
2013
as of 31 December
2012
Cash and cash equivalents
56.5
162.2
Marketable securities
13.5
12.9
172.9
167.4
in millions of CHF
Trade receivables
Other receivables
30.1
20.9
Accrued income and prepaid expenses
19.4
15.8
292.4
379.2
32.7
34.0
Current assets
Investment properties
Owner-occupied properties
0.6
0.1
Equipment
4.8
7.0
4.1
5.0
Investments in associates
Intangible assets
79.5
79.3
Financial assets
39.3
25.3
Deferred tax assets
2.7
2.3
Non-current assets
163.7
153.0
Total assets
456.1
532.2
35
18

19. Consolidated balance sheet
Backup
Liabilities and equity
in millions of CHF
as of 31 December
2013
Current debts
Trade payables
as of 31 December
2012
42.6
0.9
114.3
122.2
Other payables
26.5
29.3
Accrued expenses and deferred income
97.7
89.5
Current provisions
Current liabilities
Non-current debts
Share in negative equity of associates
5.8
9.0
286.9
250.9
0.2
40.3
12.3
22.8
Deferred tax liabilities
3.9
2.2
Non-current provisions
6.0
7.3
22.4
72.6
309.3
323.5
Non-current liabilities
Total liabilities
Share capital PubliGroupe Ltd
2.3
2.5
Treasury shares
-34.5
-35.0
Capital reserves
-0.3
-0.3
Retained earnings
167.5
228.4
Equity, shareholders of PubliGroupe Ltd
135.0
195.6
Minority interests
11.8
13.1
Total equity
146.8
208.7
Total liabilities and equity
456.1
532.2
36
Cash flows from operating activities
Backup
in millions of CHF
2013
Result before minority interests
-0.5
53.9
-23.6
-27.4
Depreciation and amortisation (incl. non-operating)
5.5
6.1
Changes in provisions (incl. deferred income taxes)
-2.7
2.7
0.1
-49.7
-0.4
-13.4
2.8
13.4
16.7
21.6
Share in result of associates
Gain/loss on disposals of fixed assets
Gain/loss on disposals of subsidiaries and associates
Adjustments for other non-cash items
Dividends received
Interest received
2012
0.6
0.4
Interest paid
-1.6
-1.4
Taxes paid
-5.2
-5.6
Changes in trade receivables
-7.1
25.3
Changes in other receivables, accrued income and prepaid expenses
-9.7
12.2
Changes in trade payables
-8.8
-14.0
Changes in other payables, accrued expenses and deferred income
Cash flows from operating activities
12.2
-2.1
-21.7
22.0
37
19

20. Cash flows from investing activities
Backup
in millions of CHF
2013
Acquisitions of tangible assets
-1.2
-2.9
-
81.4
Disposals of tangible assets
2012
Acquisitions of intangible assets
-5.5
-1.4
Acquisitions of subsidiaries, net of cash acquired
-0.2
-16.1
-
6.9
Disposals of subsidiaries, net of cash disposed of
Acquisitions and capital increases in associates
-7.6
-
-
3.7
Investments in financial assets
-17.3
-4.1
Divestments of financial assets
5.4
-
-4.4
-4.4
-30.8
63.1
Disposals of associates
Taxes paid
Cash flows from investing activities
38
Cash flows from financing activities
in millions of CHF
Increase in bank debts
Repayment of bank debts
Repayment of non-current debt
Purchase of treasury shares
Sale of treasury shares
Backup
2013
2012
2.4
-
-0.9
-
-0.3
-10.2
-25.2
-1.8
0.2
1.1
Increase in capital reserves
-
0.1
Decrease in capital reserves
-
-5.2
Dividend paid to shareholders of PubliGroupe Ltd
Dividends paid to minority interests by Group companies
Cash flows from financing activities
-22.1
-8.9
-6.4
-6.9
-52.3
-31.8
39
20