Ringier’s 2007 results

Record profits of over a hundred million - Zurich Operating in ten countries, the Ringier media group posts record results the sixth time running. Even acquisitions and new product launches fail to staunch profit growth of more than 50 percent, to CHF 102.7 million. Turnover is up nine percent, to CHF 1.458 billion, with Switzerland, as always, accounting for the biggest part of the total.

Ringier’s 2007 profits were up 51.5 percent, to CHF 102.7 million, while cash flow rose to CHF 208.3 million. The 14.3 percent cash flow rate was correspondingly higher. Ringer Group turnover climbed nine percent, to CHF 1.458 billion. The seven percent profit margin of Switzerland’s biggest media concern was markedly higher than the previous year’s 5.1 percent. This proud result was accomplished with a global workforce of 7,016 (+129).

As in 2006, Switzerland, the Group’s domestic market, contributed the highest share of turnover, CHF 880.8 million. CHF 557.7 million thereof came from Publishing Switzerland. Magazine ad sales were up and Electronic Media turnover grew 16.4 percent. Turnover at Print Switzerland rose 17.2 percent, to CHF 323.1 million, a figure that includes Swissprinters Group’s small turnover increase.

Turnover in the Central and Eastern European markets rose 17.7 percent, to CHF 506.3 million. Not all markets performed the same. In no small part due to the contribution made by the newly launched tabloid ALO!, advertising sales in Serbia rose 113 percent. Strong growth also marked the Slovakian and Romanian markets, while growth in Hungary and the Czech Republic is best described as modest. Turnover in Asia rose 14.6 percent, to CHF 71.3 million, in part due to the growth of advertising volume in China and the Hong Kong job printing market’s recovery.

Investments and expenditures

Investments of CHF 123.8 million clearly beat the previous year’s CHF 88.7 million. Investments in Switzerland went into modernizing the Ringier Print Adligenswil newspaper printing plant, buying a share of Radio Energy Zurich and new printing machinery for the Swissprinters Group. In Central and Eastern Europe, one of the biggest single investments went into Aha!, a tabloid, and a new printing plant for the Czech Republic, a share in Romania’s Kanal D television channel and a majority share in the MediaLog distribution organization of Hungary. All investments were self-financed. Those in new products or markets were charged directly to the profit and loss statement. 12.2 percent higher payroll costs and 14.7 percent more materials costs boosted 2007 expenditures by 4.8 percent, to CHF 1,250.1 million.

The countries

Publishing Switzerland’s 2007 turnover was CHF 557.7 million. At CHF 227.9 million, Magazines in German- and French-speaking Switzerland made a 6.3 percent gain in advertising revenues. The effect of the industry-wide slow-down in newspaper sales impacted Ringier with a slight, 2.7 percent, decline. Turnover at the Newspaper division was CHF 190.8 million. Electronic Media’s ad revenues rose by 43.2 percent and its overall turnover by 16.4 percent, to CHF 58.2 million. For the first time Publishing Switzerland’s slightly lower turnover does not include CASH weekly and TV magazine Tele profits. The rollenwechsel.ch project at the Print Adligenswil newspaper printing plant – to be completed in 2009 – kicked off with a CHF 65 million investment.

Ringier Germany established itself in the premium segment with a turnover increase of 45.8 percent, to CHF 12.1 million. Cicero’s paid circulation rose to more than 75,000, Monopol’s circulation to 30,000 – the latter adding to its distribution figures with special editions.

Ringier Czech Republic’s turnover of CHF 153.1 million was up 4.9 percent year on year. The takeover of Aha! marks the ascent to number two in the market for tabloids, and number one in that for newspapers as a whole. Another 2007 milestone was internet media cooperation with Ringier Slovakia.

In spite of government belt-tightening, turnover at Ringier Hungary rose 12.5 percent, to CHF 130.6 million. The re-designed internet pages of Nemzeti Sport, Blikk, Fanzone and City Weekend boosted ad sales and the number of hits.

Ringier Romania’s turnover rose 16.8 percent, to CHF 84.3 million. Ringier and Turkey’s Dogan invested in a brighter multimedia future or more specifically, in the Kanal D television channel. To gain more printing capacity, in 2007 the decision was made to build a new printing plant in the Bucharest area. Ringier sold ProSport, a sports newspaper, for strategic reasons.

Ringier Slovakia’s turnover went up by an impressive 24 percent, to CHF 76 million. Last year also saw the strategic change to a multimedia publishing house, one benefit of which is the ability to serve Slovakian and Czech websites with a combined content management system.

Ringier Serbia is currently undergoing a growth phase, particularly in terms of advertising revenues. Turnover leapt to CHF 61.7 million – a 80.4 percent gain. The newly launched ALO! soon became the country’s leading tabloid, while free newspaper 24sata was well received among readers and advertisers both.

Due mainly to the lack of a proper distribution system Blik, the tabloid launched in Ukraine in May 2006, has yet to gain a market foothold. A new distribution strategy is expected to improve the situation.

Ringier’s turnover in Asia reached CHF 71.3 million, an increase of 14.6 percent. The launch of China’s first women’s magazine, Xinmin Bella, was indeed promising. Ringier Pacific’s inflight and trade magazines had a highly successful year and Ringier’s Hong Kong printing plant prevailed in a competitive market and took over a former competitor.

Ringier Group Communications