- Strategy consistently pursued in 2011 with some CHF 100 million invested in equity stakes and partnerships, including DeinDeal, jobs.ch, InfrontRingier and Edipresse Romania
- Solid EBITDA result, despite start-up losses, challenging conditions in the advertising and print markets and a strong Swiss franc
- Revenues in line with 2010 after adjusting for special factors
- Digital component of overall sales significantly increased
- Ringier intends to continue diversifying through strategic investments while simultaneously strengthening its publishing business.
Ringier, Switzerland’s largest internationally active media company, continued to pursue its transformation strategy in 2011, achieving a solid EBITDA result of 64 million Swiss francs in the face of demanding market conditions. The Group generated total revenues of 1.147 billion Swiss francs, which, though slightly lower than their level a year earlier, were in line with 2010 after adjusting for special factors such as the marked appreciation of the Swiss franc and the downturn in the print business. Ringier continued to post pleasing growth rates in its digital and entertainment businesses, partly as a result of a number of promising acquisitions. Across the Group as a whole, revenues rose to nearly 14 percent of the consolidated total, while in Switzerland they exceeded the 20 percent mark. In 2012, Ringier plans to diversify its sources of revenue through strategic acquisitions, while also strengthening its publishing business.
In 2011, the Ringier Group achieved a solid EBITDA of 64 million Swiss francs. While this was lower than CHF 115 million generated a year earlier, the 2010 result also included the one-off effects resulting from the creation of Ringier Axel Springer Media. Ringier’s 2011 revenues were 1.147 billion Swiss francs, 9 percent lower than in 2010.
Ringier CEO, Marc Walder, summarized the Group’s 2011 performance as follows: „We can be satisfied with the results we achieved in 2011. Our strategy is working and we are continuing rapidly to develop Ringier into a media company with a diversified value chain. In 2011, our sales and profits were lower than the year before for three reasons. First, the marked decline of the print business. Second, the strength of the Swiss franc, to which, as an internationally active company, we are particularly sensitive. And third, the Europe-wide economic slowdown which began in mid 2011. Ringier will continue to diversify in the years ahead, while simultaneously strengthening its publishing business.”
The overall result reflects both the dynamic nature of the changes sweeping across media markets worldwide and the heightened economic uncertainty which again plagued Europe’s economies during the year. While 2011 started on a positive note, this optimism proved short-lived. The economic climate turned noticeably cooler from mid-year onwards, resulting in a decline in revenues which cost-cutting measures could not fully offset.
Consistent strategy implementation maintained in the face of difficult market conditions
The substantial appreciation of Switzerland’s currency, particularly in relation to its European counterparts, had a noticeably adverse effect on the Group’s annual revenues and EBITDA, which are consolidated in Swiss francs. After adjusting for these exchange-rate effects, Group sales and EBITDA present a significantly more positive picture. Besides reflecting increasingly difficult market conditions, the decline in the Group’s EBITDA results compared to their 2010 levels is also testimony to Ringier’s consistent pursuit of its investment and transformation strategy. In 2011, the Ringier Group’s total investments in new products and markets amounted to 96 million Swiss francs.
Digital and entertainment businesses grew, partly thanks to exciting acquisitions
Ringier’s revenue performance clearly endorses the Group’s strategic emphasis on diversification and the development of its digital media business, where 2011 sales were a substantial 19 percent up on their levels a year earlier. Sales in Ringier’s core newspaper and magazine publishing business, on the other hand, were adversely affected by declining advertising revenues. Overall, the Group’s newspapers and magazines saw their advertising sales diminish by 15 percent. Print volumes contracted substantially in the face of fierce European competition, a trend exacerbated by the strength of Swiss franc. The changes in Ringier’s business protfolio can be seen in the composition of Group sales. While the print divisions’ share of consolidated revenues declined to 21 percent (compared to 23 percent in 2010), the proportion of total sales generated by the digital businesses rose from 10 to 14 percent. In addition to the strong organic sales growth achieved in this area, this increase also reflects a number of acquisitions. Sales and advertising, which generated 28 and 24 percent of total revenue respectively, nevertheless remained the largest components of Ringier’s overall business. The Group’s entertainment business continued to post very good sales growth, and is developing, as planned, into a key component of Ringier’s strategic portfolio. The same applies to the digital business, where Ringier has initiated a whole range of new activities as well as further developing existing ones.
RESULTS BY COUNTRY
Sound core business in Swiss domestic market, with foreign and printing operations adversely affected by the strong Swiss franc
Sales at Ringier Switzerland and Germany (excluding print operations) amounted to CHF 610 million in 2011, a satisfactory result. Some 65 percent of 2011 revenues were generated in the traditional core businesses in newspapers, magazines, printing and online portals. In a demanding competitive environment, the Blick Group’s performance significantly exceeded expectations.
This pleasing result is attributable to the growth in advertising volumes achieved by the Blick am Abend free sheet. In magazine publishing, where revenues were maintained at 2010 levels, Ringier used some of the strong margins this area continues to generate for new line extensions and, most notably, the very successful launch of the new Schweizer LandLiebe title, which is expected to make a significant contribution to earnings over the medium term.
2011 saw continuing expansion of the publishing content available on digital platforms. The Blick Group alone added four additional apps to its existing repertoire. The total number of downloads generated from all eleven of the Blick Group’s applications reached an impressive one million. With more than 40 million site visits and 518 million page impressions in January 2012, the Blick.ch online portal has established itself as the undisputed leader among news platforms in Switzerland. Schweizer Illustrierte’s e-magazine was ranked among the world’s best ten iPad apps.
Ringier titles also achieved good progress in French-speaking Switzerland, with L’illustré spearheading the advance. Since autumn 2011, Ringier Romandie has been achieving some notable successes in marketing the Swiss advertising slots for TF1, France’s leading private TV broadcaster.
In 2011, the share of its total revenues Ringier Switzerland generated from its digital business reached 23 percent. Last summer, Ringier acquired 60 percent of deindeal.ch, Switzerland’s leading group-purchasing platform. In February, through its Scout24 Switzerland subsidiary, Ringier secured a strategic 15 percent stake in jobs.ch, the country’s principal employment website. May 2011 also saw the launch of the Qualipet Digital AG e-shop, with more 10 000 individual pet product lines.
The entertainment businesses also did well, with Ticketcorner expanding both its sales and its profits, while InfrontRingier, the sports marketing company, acquired the marketing and sports rights to a number of sports events, including those for the Football Super League, Swiss Cycling races and evaluates Switzerland’s candidacy for the 2022 Winter Olympic Games.
Cicero and Monopol held their own in Germany’s highly competitive market for readers and advertisers. Both titles are well positioned in their respective segments and both serve demanding target groups. In August, Ringier Publishing Germany acquired Literaturen from Friedrich Berlin Verlag.
Swissprinters was confronted by challenging market conditions in 2011. Despite achieving average capacity utilization of close to 100 percent, the company saw its earnings come under pressure from thinner margins and the accelerating decline in print market volumes. The situation was further exacerbated by the strength of the Swiss franc and the resulting reduction in orders from other European countries. The company responded by adapting its strategy to evolving market conditions and initiating a number of forward-looking changes. These included a decision, announced in October 2011, to close the St.Gallen plant on June 30, 2012.
The company had already invested in new 72-page web offset infrastructure in 2010, thus equipping itself for its future focus on industrial printing work. The emphasis here is on web offset technology and productivity gains derived from increased automation. Swissprinters continued to pursue these objectives during 2011. This resulted in a decision to discontinue direct execution of sheet-fed orders, which are generally used in smaller print runs, in German-speaking Switzerland. Accordingly, Swissprinters sold this part of its operations to a partner firm in the Zurich area. With effect from late 2011, the company also reconfigured its direct marketing capabilities towards the needs of high-volume customers. As a result of these changes, Swissprinters will in future operate two plants in Switzerland – one in the German-speaking part of the country and one in the French-speaking region. Thanks to these changes and its clear strategic focus, the company is now positioned to meet future market challenges.
2011 was another year in which, by adopting innovative and creative solutions, Print Adligenswil continued to develop successfully in an intensely competitive newspaper market. A number of new individual mandates, and a disciplined approach to cost management, meant that Ringier Print Adligenswil was able to hold its revenues steady at 2010 levels. Ringier’s newspaper printing plant is the first in Switzerland to join the myclimate environment protection scheme.
Ringier’s Central Europe business generated revenues of 274 million francs in 2011. These comprised the sales of Ringier Hungary, Ringier Romania and 50 percent of the sales of Ringier Axel Springer Media, the Group’s joint venture with German media company Axel Springer.
In Hungary Ringier has not yet secured regulatory approval for the merger of its local businesses with those of its partner Axel Springer. The Group’s Hungarian business was substantially depressed by the economic difficulties the country is facing.
Particularly positive results were achieved in Romania, despite the slump in the local economy. Thanks to its acquisition of Edipresse Romania, newly deployed business models and effective cost controls, the Romanian business unit succeeded in boosting its results significantly above their levels in 2010.
Ringier Axel Springer Media AG is one of Eastern Europe’s leading multi-media companies. Combining the Ringier and Axel Springer businesses in Poland, the Czech Republic, Slovakia and Serbia has made this joint-venture company both the leading tabloid publisher in each of these markets and one of the region’s largest publishers of magazines. 2011 saw the company continue the implementation of its digitalization strategy. Ringier Axel Springer Media AG’s 2011 sales amounted to 332 million francs, 50 percent of which are consolidated into the Ringier Group’s revenues. In 2010, the company’s total sales amounted to 379 million francs. The decline experienced in 2011 essentially reflects the appreciation of the Swiss franc.
Ringier Axel Springer Media was particularly active in Slovakia, where it acquired azet.sk, the country’s leading online portal in December 2010, as well as setting up an integrated newsroom. NOVY CAS, the company’s tabloid title, is Slovakia’s biggest-selling newspaper, with a market share of 43 percent. The company’s women’s magazines are also performing very well.
In Serbia the joint venture acquired a licence to publish a local edition of AutoBild, the world’s leading car magazine, a move which enabled Ringier Axel Springer Serbia to secure highest sales circulation in this segment. The Blic tabloid newspaper maintained its number one slot among Serbian newspaper readers, while Blic Zena held its own as Serbia’s most widely read women’s magazine and the celebrity magazine ALO! again succeeded in increasing its circulation and geographical sales footprint. Among digital media, blic.rs remains Serbia’s leading news portal.
Ringier Axel Springer is the largest newspaper and magazine publisher in the Czech Republic. Two of its titles, BLESK and AHA!, the country’s leading tabloid newspapers, were particularly successful in 2011. Their combined market share reached 51 percent, the first time it had overtaken that of all other daily newspapers put together. Nedelni BLESK was the Czech Republic’s most widely read Sunday newspaper in 2011. Ringier Axel Springer Media Czech Republic also developed and launched five integrated newsrooms last year.
Ringier Axel Springer Media is also the largest newspaper publisher in Poland. Fakt, the country’s best-known tabloid title, maintained its number one position among Polish daily newspapers. In August, Ringier Axel Springer Poland acquired a licence to publish a Polish edition of the car magazine Top Gear from BBC Magazines in the UK. Thanks to the combined sales generated by Fakt and Przeglad Sportowy, a national sports daily, the company holds a 36 percent share of Poland’s daily newspaper market.
In its Asia Pacific operations – comprising Ringier China, Ringier Vietnam and Ringier Trade Media – the Group achieved revenues of 43 million francs.
China, too, saw its overall media market, particularly that for print products, adversely affected by the generally lackluster state of the global economy. Advertising sales remained under pressure. Despite these challenges, Ringier China continued to streamline its existing print magazine portfolio and managed to grow its digital revenues by a pleasing 40 percent from their 2010 levels.
Sales of the specialist magazines published by Ringier Trade Media advanced significantly in 2011. Thanks to the robust business climate prevailing in the manufacturing sector, Ringier Trade’s 25 Chinese specialist titles saw their sales achieve double-digit percentage growth, while its four South-East Asian magazines increased their sales by more than a third. Ringier Trade’s digital business is also doing well, thanks to its industrysourcing.com portal. The company now offers its customers eight separate iPhone and iPad apps, providing users with virtual access to its 32 magazine titles.
In Vietnam the combined effects of economic growth and inflation kept many companies to the sidelines as far as new investments were concerned. Despite this somewhat negative business climate, Ringier Vietnam continued to perform successfully. By adding a licence for a Vietnamese edition of ELLE to its portfolio, the company nearly doubled its overall sales in 2011.
Ringier Corporate Communications