Business News
Edipresse Group 2009 half-year results
Tuesday 15. September 2009 - Edipresse resists the economic crisis: losses limited to CHF 3.2 million
· The implementation of IFRS standards renders any comparison with 2008 extremely difficult. Following the agreement with Tamedia, the results of Swiss activities cannot be completely integrated in the consolidated accounts and must be treated as “discontinued operations”.
· Revenues of CHF 91.3 million thus include all Edipresse magazine activities, but no longer its operations in Switzerland. On a pro forma basis and at constant exchange rates, turnover is down by 20% (-36 million), mainly due to the strong decline in advertising receipts.
· The loss of CHF -3.2 million for the first half of the year is comparable with the results of other major Swiss media groups.
The implementation of IFRS accounting standards not only makes reading the Edipresse Groups accounts for the 1st half of 2009 difficult, but also their comparability with 2008. Indeed, IFRS standards dictate that Edipresses Swiss activities, grouped under the company PPSR SA and completely managed by the Group in 2009, be immediately treated in a special category called “discontinued operations”. This decision is motivated by the signed agreement between Tamedia and Edipresse, forecasting a 49.9% shareholding of Tamedia in PPSR as of 1.1.2010, and 100% ownership in 2013. Although this operation has not been formally approved by the Competition Commission, IFRS standards demand the immediate implementation of this particular accounting measure.
Consequently, the Groups revenues published for the 1st half of 2009 amounted to CHF 91.3 million (CHF 173 million in 2008). This includes the revenues from all of Edipresses international magazine activities (Eastern Europe, Asia, Spain) as well as the luxury sector and Bilan (the Swiss activities which are not part of the PPSR structure), but no longer PPSR revenues. Turnover decreased by CHF 36 million compared to 2008 (-20%) on a pro forma basis and at constant exchange rates, which corresponds to the operational decrease in advertising revenues. Furthermore, the difference with 2008 is attributable to the sale of the Portuguese activities in 2008 (consolidated at CHF 25 million in the first half of 2008 and at zero for 2009), as well as to the accounting impact tied to the steep depreciation of currencies in Eastern Europe compared to the Swiss Franc (impact of CHF 21 million in the first half of 2009).
Because of the drop in revenues, operating profit of ongoing activities was down, as well as the final net income of the Group which stood at CHF – 3.2 million (CHF 24 million in 2008). However, last years result included an exceptional profit (sale of the Portuguese subsidiary) of CHF 20 million. Not counting the particular elements, the drop in revenues was limited by tremendous cost cutting efforts which worked to offset the negative impact of the brutal drop in revenues on net income.
Swiss activities, even though being accounted for as “discontinued operations”, were also affected by the crisis. Revenues for the 1st half of 2009 fell by CHF 38 million (-18%), mainly due to the decrease in advertising orders. But despite pressure on operating margins, the Swiss activities remained in the black.
The outlook for the 2nd half of 2009 and for 2010 is very unpredictable. Edipresse continues to focus on providing quality and innovative offerings to its clients as well as pursuing aggressive cost cutting measures both with its Swiss and international activities. A return to profitable results is expected in 2010.
Finally, Edipresse has modified article 6.3 of its administrative rules and regulations in terms of the formal definition of “General Management”. As per new criteria, the General Management team is to date comprised of Tibère Adler, CEO; Michel Preiswerk, CFO; Gregory Blatt, Managing Director of Marketing, Strategy and Communications; Philippe Gross, Real Estate Director.