Ringier substantially increased its sales for 2008. The Swiss media company that conducts business in ten different countries in Europe and Asia posted 5.3 percent growth to set a new turnover record of CHF 1,536 million. The course of business in Switzerland, the Czech Republic and Slovakia was one reason for the fine showing. Another was the rise in turnover for digital media, which accounted for 8.5 percent of total turnover in the year under review. The consolidated after-tax profit totalled CHF 62.2 million, which is close to the multi-year average.
The 8,129 employees achieved an after-tax return on sales of 4 percent while the cash flow rate totalled 9.6 percent. The cash flow declined from CHF 208.3 million to CHF 146.9 million. This decline was caused by various extraordinary divestments in 2007, including the sale of the TV programme magazines.
The digital media achieved particularly encouraging growth in earnings. These activities saw proportionally large growth due to the purchase of the media swiss group and today account for 8.5 percent of external turnover as opposed to just 5.5 percent in 2007.
Ringier Switzerland increased sales in 2008 by 6.6 percent. Printing business in Switzerland at Swissprinters and the Adligenswil printing plant expanded by 2.8 percent. Sales in the Central and Eastern European markets rose by 4 percent to CHF 526.7 million.
Ringier Czech Republic recorded the biggest growth of 18.6 percent, followed by Ringier Slovakia with 11 percent.
Romania fared less well, suffering a 27 percent decline in turnover mainly due to the sale of three titles, currency fluctuations and fierce competition. Turnover in Asia at Ringier China and Ringier Vietnam remained almost on a par with the year before at CHF 70.1 million (previous year: CHF 71.3 million).
Investments and expenses
Investments totalled CHF 321.9 million, a figure substantially higher than in the past. This increase can be traced primarily to the strong commitment to digital platforms (media swiss group, geschenkidee.ch). Other factors were investments in printing plants (newspaper and magazine printing in Switzerland, newspaper printing in Romania) and the buy-out of the minority shareholder in Serbia, where Ringier increased its shares by 25.1 percent to 100 percent. Expenses also increased over the year before by 11 percent largely owing to growth costs and to the higher personnel expenses (8 percent). The costs associated with in-house product development were directly charged against earnings.
In its domestic market, Ringier posted total turnover in 2008 of CHF 938.7 million. Publishing business at Ringier Switzerland accounted for CHF 606.5 million of that total and printing business at Print Switzerland for CHF 332.2 million. In the publishing segment, revenues from new media saw especially encouraging growth. They reached CHF 146.0 million due to the purchase of the media swiss group, a figure nearly twice as large as the year before. Turnover increased by 91.1 percent over the year before (CHF 76.4 million). Revenues from the Blick Group and the magazines were down slightly (minus 5 percent). Ringier Switzerland recorded turnover of CHF 190.1 million from the Blick Group and CHF 207.7 million from magazines. Revenues from external customers rose slightly for Print Switzerland (Swissprinters Group and Ringier Print Adligenswil), increasing by 2.8 percent. Turnover climbed to CHF 332.1 million.
Ringier Germany bucked the international trend to increase its turnover to CHF 12.5 million on rising circulation figures. By way of comparison, the two publications Cicero and Monopol recorded turnover of CHF 12.1 million in 2007.
Ringier Czech Republic had its best business year ever in 2008, recording turnover of CHF 181.5 million. This represents an increase of CHF 28.4 million over 2007. Especially striking was the strong performance of the tabloid Blesk in combination with the newly acquired daily Aha!.
Ringier Hungary boosted its turnover in a shrinking market to CHF 135.7 million in spite of the extreme weakness of the Hungarian forint. Circulation decreased but advertising revenues have remained stable thanks to newly launched supplements and insert magazines.
Ringier Romania saw earnings decline against the previous year due to the sale of three titles (two TV guides and the daily sports newspaper Pro Sport), currency fluctuations and the fierce competition, especially in the tabloid segment. The company earned CHF 61.5 million in turnover instead of CHF 84.3 million. Ad revenues fell by 21.4 percent. On a bright note, Libertatea retained its position as the widest selling newspaper in Romania, with a readership of 1.3 million.
Ringier Slovakia had another successful business year in 2008. Although turnover from print media edged downwards, ad revenues rose slightly over the previous year to CHF 41.1 million. The daily Nový Cas was the most successful title and market leader again by a wide margin.
Following strong growth in 2007, Ringier Serbia concentrated on consolidating its existing business in the year under review. Nevertheless, it posted a CHF 1.6 million increase in turnover over the year before, for a total of CHF 63.3 million. The nearly CHF 4 million rise in sales revenues was particularly encouraging.
China and Vietnam
Ringier China and Ringier Vietnam recorded turnover of CHF 70.1 million in the year under review, a slight decrease of 1.6 percent. Publishing business at Ringier China was substantially expanded in 2008, as evidenced by the launch of two new titles and the sharp increase in e-commerce. In Vietnam, the turnover from the fashion magazine Thoi Trang Tre exceeded the previous year's figure by 15 percent. Ringier Print Hong Kong, for its part, reported a declining number of contracts and large declines in sales due to the global financial crisis, which became increasingly acute as the year progressed.
Anniversary year with lasting effects
Ringier celebrated its 175th year in business in 2008. Customers and employees gathered at all business locations in Europe and Asia to celebrate this anniversary together. This special birthday was a chance to review the company history and to delight in culinary and cultural events. The celebrations also included the launch of various projects to ensure sustainability. In the future, the Ringier Academy will assist with the basic and continuing training of employees in all countries in which Ringier conducts business and will intensify the exchange of knowledge between everyone in the Ringier Group. With the MediaLAB, Ringier also created a group-wide competence centre for digital media. In yet another innovative step in this anniversary year, Ringier published its first Corporate Social Responsibility Report, prepared according to the standard of the Global Reporting Initiative (GRI). From now on, the company will use this publication to inform the public about its efforts on behalf of the environment and society and in conducting business in a sustainable manner.
Outlook for 2009
Ringier AG has had a new CEO at the helm since January 2009: Christian Unger. He succeeds Martin Werfeli, who switched to the Board of Directors of Ringier AG after six years as CEO. Ad revenues are likely to continue declining in the current year. The first signs of a recovery on the ad market are not expected until 2010 at the earliest. Ringier will therefore continue to work efficiently on the cost side while also stepping up its investments. These efforts will extend beyond the well-positioned newspapers and magazines to include also digital media, particularly the existing online platforms and the mobile range for the print titles.
Ringier Group Communications