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A good fiscal year for Ringier in 2017: Increase in EBITDA and digital business models
The Ringier Group managed to increase its operational earnings in fiscal year 2017 – for the third consecutive year. With EBITDA (earnings before interest, taxes, depreciation and amortisation) in the amount of CHF 110.6 million, Ringier achieved an EBITDA margin of 11.0%, with revenues of CHF 1,002.9 million. Despite a historically difficult market environment in the traditional publishing business, operational earnings rose once again in 2017. This was thanks to further growth in digital marketplaces in every country and also to consistent efficiency measures throughout the entire company.
Digital business models now represent 42% of the Ringier Group’s revenues (38% in the previous year). And in 2017 a full 66% of the operational earnings (EBITDA) came from digital business (62% in the previous year). This means that Ringier is one of the leading companies in Europe when it comes to digitalisation. As a comparison, in 2012 the digital share of EBITDA was zero.
Ringier CEO and Managing Partner Marc Walder: ‘The transformation of the Ringier Group from a publishing house to a diversified and digitalised international company is on track. Our strategy of investing in digital, transaction-based businesses and relying on strong partnerships remains successful and will continue. For 2018, we expect the digital contribution to operational earnings to come in at over 70%.’
A decline in revenue in the print reader market and the traditional advertising market pushed the Ringier Group’s overall revenues down by 4.4% to CHF 1,002.9 million. The newspaper and magazine business continues to be affected by the structural decline in advertising revenue. As with all other media companies, Ringier’s advertising revenues on digital, journalistic platforms are in competition with the major international technology platforms, which receive the lion’s share of digital advertising spend.
Changes are possible with the advertising marketing company Admeira. Together with Swisscom, Ringier is talking about a possible takeover of the SRG SSR stake of 33.3% in the joint venture. It is still the goal to win additional partners / inventory providers for Admeira, in order to strengthen the Swiss advertising market. The marketing of the advertising time of SRG SSR is not affected by this and will continue to be marketed by Admeira in the long term. Negotiations between the three partners are still ongoing.
In 2017, the Ringier Group streamlined its organisation and further increased the Group Executive Board’s focus on the two business areas of Publishing and Marketplaces. Robin Lingg now has Group-wide responsibility for digital marketplaces at Ringier. Ralph Büchi was named COO of the Ringier Group and has overall responsibility for all journalistic activities, with the exception of the Blick Group, which will continue under the successful guidance of Alexander Theobald, COO Ringier Switzerland.
With this reorganisation three international teams were created: the International Publishing Unit, the International Marketplace Unit and the International Monetization Unit. Each unit consists of about 10 internal experts, with a cross-border and cross-divisional composition, and reports directly to the Group Executive Board. Their primary task is to pool expertise and drive key initiatives within the Group.
All business activities are currently overshadowed by the murder of investigative journalist Jan Kuciak and his fiancée Martina Kusnirova, presumably due to his reporting on our Slovakian online news platform Aktuality.sk. In close consultation with our partner Axel Springer, we are making every effort to continue Jan Kuciak’s investigations and to force thorough exposure of this appalling crime. Following the attack, the last article from the journalist about Mafia ties in Slovakia was published posthumously in several dozen newspapers, news portals and magazines. In Bratislava, an international newsroom has been established where journalists from various media companies and different countries can carry forward the investigative work of Jan Kuciak. We are committed to the critical, independent journalism that Ringier represents.
Ringier Group areas:
The share of Marketplaces in EBITDA increased again in 2017. Marketplaces are now a key, strategic pillar of the Ringier Group. Both Scout24 Schweiz AG with its market-leading vehicle and property areas, and the C2C (consumer-to-consumer) platform anibis and JobCloud AG put in another convincing showing in the past fiscal year, with excellent performance alongside ongoing strategic development.
About 200 colleagues are working on the steadily growing success story of JobCloud. In 2017, the team reached a milestone in revenue development: the job portal broke the CHF 100 million revenue barrier for the first time. This outstanding result was made possible by favourable economic conditions, innovative new product launches and further strong growth in the SME customer base.
Along with the digital marketplaces, Ticketcorner further expanded its market leadership in Switzerland with a successful concert season and an expanded product range. This includes the company’s entry into dynamic pricing for ski ticket sales. An independent study described Ticketcorner as ‘Switzerland’s strongest digital retail brand’.
The e-commerce platforms Deindeal.ch/MyStore and the digital gift advice service Geschenkidee.ch are among the leading flash sales and deal providers in Switzerland. The technological and operational merger of Deindeal.ch and MyStore was completed in 2017, setting the course for further sustainable growth and expansion of a leading market position in a hotly contested digital business area.
In 2017, Ringier acquired a minority share in the Ukrainian next-generation marketplace company LaLaFo, which includes a significant component of innovative artificial intelligence technology in its business model. The goal is to make publication of advertisements as simple and intuitive for the user as possible, right across the Group.
To enable early detection of promising market developments, the investment vehicle Ringier Digital Ventures is also actively investing in start-ups.
In the previous fiscal year, the Publishing division systematically expanded its digital models for newspapers and magazines, generating steady growth. Blick.ch in particular should be mentioned as the strongest reach portal, which achieved powerful growth once again in 2017, reaching more than 700,000 unique users every day. Leading examples of these diverse, innovative digital publishing products are the Beobachter legal advice platform Guider and the new GaultMillau channel. Increased revenue from subscriptions to individual print titles and sustainable cost reduction in sales and production managed to counteract the decline in Swiss advertising revenues. Monetisation of advertising inventory is strengthened by the marketing platform Admeira, established in 2015.
In 2017, the Blick Group significantly enhanced its journalistic profile. Under its new leadership, the Blick Group succeeded in setting the agenda in both traditional print journalism and multimedia narrative formats. In the video area, the Blick Group once again increased its annual call-up figures significantly – up to 360 million video views. The digital channels across the whole Blick Group, including social media and Blick am Abend, are now accessed more than 60 million times (visits) per month, with about 765 million page views.
We also saw strong journalistic work from our joint venture Ringier Axel Springer Schweiz AG once again in 2017. The western Switzerland newspaper Le Temps, for example, received a number of prestigious awards; it was the only European media brand to receive the ‘Online Journalism Award’ for projects in the digital area. Another highlight for Ringier Axel Springer Schweiz was the opening of the modern headquarters Medienpark in Zurich-Altstetten. However, after years of losses we were forced to close the western Switzerland news magazine L’Hebdo. Shares in the Ticino Sunday newspaper il Caffè were sold in a strategic portfolio adjustment.
There were some difficult and painful decisions to be made in 2017. A historic and dramatic moment for the owner family and employees was the closure of the newspaper printing works in Adligenswil. Unfortunately, constantly declining order revenues left no option. The decision to close the plant was accompanied by provisions in the seven-digit range, which had a significantly detrimental one-off impact on the results in 2017.
There was some good news for the Energy Group in 2017: Energy Zürich consolidated its position as the clear number 1 in the private Swiss radio market. And Energy also developed into one of Switzerland’s leading digital media brands. The successful launch of the media brand izzy, driven by social media, means that the company is now reaching Switzerland’s young, urban, demanding target group. The prestigious music festival Moon & Stars at Piazza Grande in Locarno was staged by the Energy Group for the first time in 2017.
In international business, developments in Eastern Europe remained highly positive. Here, too, great advances have been made on the path to digitalisation. With the joint venture Ringier Axel Springer Media AG (RASMAG), Ringier is the market leader in publishing throughout Poland, Hungary and Serbia. EBITDA also increased here, with Poland and Hungary recording particularly strong growth. The largest contribution came from the news platform Onet in Poland and the job portal Profession in Hungary. The Baltic job portal CV Keskus, acquired in 2017, also made a positive contribution to the growth of RASMAG.
Activities in Romania (100% owned by the Ringier Group) also recorded growth compared with the previous year. The largest proportion of EBITDA in Romania is generated by the market-leading classified services eJobs and Imobiliare, which both experienced growth.
The market potential in Africa is considerable and growing, and Ringier is continuing to invest consistently to open up a number of different regions.
Ringier is now a market leader in two key areas in sub-Saharan Africa: digital media – including complete marketing solutions – and digital marketplaces. In 2017, the marketplace activities of the joint venture Ringier One Africa Media (ROAM), were bundled together with the global Australian company Seek, in which Ringier will acquire a majority stake in 2018. The top position in African markets will be further consolidated with leading technical expertise for digital platforms.
In Asia, the focus is on expansion of local units with a digitalisation strategy in Vietnam and further development of the property portal Muabannhadat.vn. In Myanmar there was successful expansion of digital content websites. The Marry network was replicated from Vietnam. The news and entertainment platform Duwun already reaches several million unique users – half of internet users in the country.
The Chinese business was sold in 2017, as there were no longer any long-term development opportunities in our market segment available.
Technology & Data
Within the Ringier ecosystem strategy, Technology & Data functions as a key pillar that unites Ringier AG’s international content and marketplace business, leveraging and consolidating synergies at every level and remaining a relevant destination. As part of the strategy implementation, a technology and data platform was developed that allows customers to perceive brands through all online touchpoints and thus enhance the digital customer experience.
Responsible data handling and the greatest degree of customer transparency are top priorities. Ringier CEO Marc Walder: ‘The events of recent weeks have shown that Ringier’s approach of combining technical feasibility with the strictest statutory compliance is the right path to take. Customer confidence in our data handling is an extremely valuable asset, something that we cannot jeopardise at any price.’
What distinguishes the Ringier platform from other products is the large-scale, coordinated use of leading artificial intelligence technologies (AI), such as natural language processing, sentiment analysis and taxonomy classification. At the Global BIGGIES Awards a few days ago in New York, Ringier confirmed its commitment to playing a pioneering role in the international media industry. The BIGGIES Awards recognise the most innovative media companies in the world, the ones pointing the way forward with their responsible use of business models based on artificial intelligence and data.
Ringier AG, Corporate Communications
Ringier is a diversified media company with about 6,900 employees across 18 countries. Founded in 1833, Ringier manages leading brands in print, TV, radio, online and mobile media and runs successful print, entertainment and internet businesses. In a history that spans more than 180 years, Ringier stands for a pioneering spirit, independence, freedom of expression and diversity of information. Ringier is a Swiss family-owned business with head offices in Zurich.