Ringier defies the crisis and ends the year with a profit

Ringier defies the crisis and ends the year with a profit - Zurich Last year, the Ringier Group's sales and profit, like those of other companies, were adversely affected by the economic crisis and the collapse of the advertising market. Turnover in 2009 reached CHF 1.3 billion (previous year: CHF 1.54 billion) with EBITDA of CHF 70.8 million (previous year: CHF 121.6 million) and an annual net profit after taxes of CHF 17.2 million (previous year: CHF 62.2 million). Vigorous cost-cutting programmes enabled the company to break even, while its steadfast early positioning on the digital growth markets already brought the first signs of an upward trend in the 4th quarter. Ringier was able to maintain or improve its strong market positions practically everywhere. Online portal visitor numbers and sales increased.

The media corporation, which operates in ten countries of Europe and Asia, achieved turnover of CHF 1.3 billion, i.e. 15.6 percent down on the previous year’s figure. The 9.5 percent decline of sales on the Swiss market was accompanied by a massive sales downturn in some Eastern European countries. The weak currencies of the East European countries had a further negative impact on the result. In the Czech Republic and Slovakia in particular, this factor detracted from the otherwise good results.

At CHF 112.3 million, the stated digital revenues were mathematically lower than in the previous year (CHF 130.5 million) although revenues for the individual products were higher in almost every case. For example, with 17.5 million visitors in December alone, Blick.ch became the most frequently visited news portal in Switzerland and made a profit. The stated reduction of digital revenues is explained primarily by a different method of calculation. As a proportion of total sales, digital revenues rose to 8.7 percent.

Cashflow in 2009 stood at CHF 93.8 million, i.e. CHF 53 million or 36.2 percent down on the previous year – largely attributable to pressure on the operating result and also to lower depreciations in the East European business (in the previous years some exceptional writedowns had been made here, including the closure of the Ukraine operation). The 7,448 employees achieved a ratio of earnings to sales of 1.3 percent, with an EBITDA margin of 5.5 percent and return on cash flow at 7.2 percent. Investments totalled CHF 96.8 million. One of the most important was the construction of the integrated newsroom for the Swiss Blick Group.

Country information:

Ringier Switzerland and Germany generated sales of CHF 825.3 million in 2009. The publishing business of Ringier Switzerland and Germany contributed CHF 548.9 million to this total, while Ringier Print Switzerland (Swissprinters) achieved CHF 276.4 million in the contract printing business. The year saw sharp downturns on the advertising market which led to a reduction of sales by around CHF 60 million compared to 2008.

In summer 2009, Ringier Switzerland defined a new strategy. Firstly on its home market Ringier aims to be Number 1 in its traditional core business. Secondly, Ringier plans to become the leading private business in the entertainment sector. With that end in view, the newly created entertainment business area is being extended dynamically. Thirdly, Ringier aims to be the leader in online business and is investing in transaction-based platforms, i.e. in e-commerce activities and the classified advertising business. With the re-launch to mark its 50th anniversary in October 2009, Blick has refocused on the core of its brand with a strong tabloid strategy, a separate sports section and a broadsheet format.

Together with SonntagsBlick, Blick am Abend and Blick.ch, it will be produced in the integrated newsroom, the biggest editorial room in Switzerland with some 200 employees. The aim is to publish information and entertainment at the right time on the right channel. Blick am Abend managed to increase its readership by 12 percent; this figure does not even include the extension of its territorial coverage to central and eastern Switzerland. The periodicals segment also attracted large numbers of readers. Schweizer Illustrierte, GlücksPost, L’illustré, L’Hebdo and TV8, in particular, won a great many new readers.

The success of the platform strategy pursued with newspapers and periodicals is illustrated by the example of the Blick Group, who’s online and offline publications reach over 2.5 million people in Switzerland every week.

The tenacious implementation for some considerable time of a diversification strategy has enabled losses on the advertising market to be offset at least in part. Turnover of the media swiss group on the classified advertising markets, for example, proved more resistant to the impact of the economic crisis. The media swiss group has gained an established position as the leading Swiss competence centre for online technology, online marketplaces, online directories and also for the marketing of online and offline advertising. geschenkidee.ch also achieved a further substantial increase in sales and is now making an important contribution to the annual result of Ringier Switzerland and Germany. The same goes for Betty Bossi with its equally successful platform strategy in which the “cooking” experience segment is covered perfectly by print publications, the online platform and kitchen appliances. In the entertainment sector, Good News was enthusiastically received by more than 800,000 visitors to a total of 125 concerts.

In Germany, the art magazine monopol has been able to consolidate its position in the high end readership segment. The magazine for political culture Cicero also increased its print run for the 19th time in succession quarter on quarter.

The Swiss print market had to contend with declining sales. This is explained by the continuing existence of spare capacity amounting to some 35 percent. Even more serious than this adjustment is the diminishing margin which accompanies the spare capacity; this has affected the Swissprinters Group in which Ringier is the majority shareholder with 58.8 percent. That being so, processes and organisations are being constantly optimised to increase productivity and ensure that the printing works are able to stand the test of competition. That is the background to a historical decision taken last year: Ringier Print Zofingen is abandoning the rotogravure technology which it did much to shape and develop over several decades and will be producing its periodicals and printed advertising material by the rotary offset technique instead.

In the economically challenging year 2009, Ringier Czech Republic succeeded in maintaining its market position; at the end of the year it was still Number 1 among the Czech publishing houses, even if advertising revenues declined and most print runs fell slightly. The print titles performed very successfully again in 2009. With a circulation of 412,238 copies, Blesk remains the most widely read newspaper in the Czech Republic. The success of Blesk is also mirrored in its online presence: in 2009 blesk.cz reported on average 814,567 unique clients equivalent to a 27 percent increase on 2008. With bleskprozeny.cz, Ringier Czech Republic has also successfully launched a women’s portal.

In 2009, Ringier Slovakia, in common with all other media businesses, had to contend with falling advertising revenues. Nevertheless Ringier successfully defended its position as market leader. That was achieved not least thanks to its balanced portfolio. The circulation figures for Ringier Slovakia fell slightly, while visitor numbers to the online portals were maintained. Cas.sk recorded a 56 percent increase to just under 556,000 unique clients per month. The women’s portal lesk.sk and men’s portal adam.sk have been completely redesigned and also reported growth; in the case of adam.sk, this reached just under 36 percent.

Hungary was more severely affected than many other countries by the economic downturn. Nevertheless Ringier acquired all the shares in the Euromedia joint venture from the Bauer media group, restructured the periodicals business and brought its profitability back to the previous year’s level. Among the tabloids, Ringier’s Blikk is the unchallenged Number 1 with 1.1 million readers daily. With 573,389 unique clients per month, the online portal Blikk.hu is one of Hungary’s leading news portals. In the shape of neon.hu and pink.hu, Ringier has created a new portal for young people and another for women, so further strengthening its presence on the internet.

The Romanian newspaper advertising market collapsed by some 70 percent in 2009 – with a corresponding impact on Ringier Romania. Even the re-launch of the daily newspaper Libertatea and the women’s journal Libertatea pentru femei did not change that situation. Ringier Romania imposed a stringent cost-cutting programme, as a consequence of which the free newspaper Compact was closed. On the other hand, the popularity of the internet advanced greatly in Romania in 2009: libertatea.ro increased its monthly visitor numbers by 82 percent to more than 1.26 million unique clients. The other big Ringier portals also made substantial gains thanks to the new Online Division. The year’s highlight was the completion of the new printing works in Bucharest in May 2009.

Ringier Serbia defended its position as the Number 1 publishing house. The successful portfolio consisting of the tabloid papers BLIC and ALO!, the free newspaper 24sata, BLIC Zena for women, Puls and the Sunday edition of BLIC, was augmented in 2009 by the magazine NIN. With NIN, Ringier has acquired Serbia’s second oldest press product from the State. With its 152,199 copies sold, BLIC remains the most widely read newspaper in the country. In Serbia too use of the online media has increased. The number of unique clients of alo.rs has practically tripled. Blic.rs has been extended to include the women’s portal zena.blic.rs and is one of the most frequently visited news sites in Serbia.

Because of the dramatic collapse of the print advertising market, Ringier China was unable to continue publication of the women’s magazine Xinmin Bella and the in-flight magazine Oriental Sky. The English language time out magazine for Shanghai and Beijing, City Weekend on the other hand won further market shares in the course of the year. The cityweekend.com.cn digital platform reported further growth and launched its cityfu.com platform. 2009 was also an eventful year for Ringier Trade Media. Three professional magazines were launched for the Middle East; they are published in Dubai. On the other hand, business with clients from Hong Kong and Taiwan has contracted. Nevertheless, the Chinese market still holds out the prospect of double digit growth rates.

In Vietnam, the cookery magazine Bep Gia Dinh was launched in 2009 on the Betty Bossi and Betty’s Kitchen model. The Ringier subsidiary media swiss group also opened an online portal for real estate which is being supplemented by a regional print magazine and extended by special interest sites.

Corporate Social Responsibility

Ringier Hungary published its own CSR report for the first time modelled on the guidelines set out in the GRI Global Reporting Initiative. Through a number of projects in the area of office ecology and in its printing facilities, Ringier cut its environmental emissions. Ringier’s social commitment was aimed primarily at socially disadvantaged people. In Vietnam, the Dariu Foundation’s microcredit programme won another award as one of the finest in its category. By now, over 12,000 families are participating in this programme which has given them the prospect of a better future.

Ringier Group Communications