PubliGroupe Half-Year Results 2012

1

“FINANCIAL RESULTS HY1 2012PubliGroupe shows net profit 2012 of CHF 10.8 million – online revenue continues to gain in importance – Media Sales posts loss – announced measures largely implemented

“

2

Overview presentation order

Agenda item

Overview of HY1 2012 figures & main developments & overview segment results

Key financials group & update real estate

Conclusion & outlook 2012

Presenter

Hans-Peter Rohner: CEO & Chairman of the Board

Andreas Schmidt: Chief Financial Officer

Hans-Peter Rohner: CEO & Chairman of the Board

1

2

3

3

Good results in search & online business; Media Sales posted loss

Hans-Peter RohnerCEO & Chairman of the Board

Overview HY1 2012 Figures

“ “

4

Note relating to accounting principlesAdditional information re: change to Swiss GAAP FER

Additional information regarding PubliGroupe Swiss GAAP FER financial statements:• Income statement: the structure of the income statement was reviewed in order to comply with Swiss GAAP FER.

Therefore, a new line "non-operating result" has been added for income and expenses related to in-vestment properties and for gains and losses related to disposals of subsidiaries, associates and properties. As a result, the lines "EBIT" and "EBITDA" (that included "non-operating result") had to be removed. Instead, PubliGroupe will use the line "operating result" for its external communication. The advantage of these changes is that the pro forma key figures presented in previous years (i.e. excluding non-recurring items) are no longer necessary.

• Balance sheet: the significant decrease in the total assets is mainly due to the offset of the acquired goodwill (and related intangible assets) with the equity as allowed by Swiss GAAP FER.

Net revenue: • Due to changes in the business models, PubliGroupe now presents its revenues from the commercialisation of ad

space with the net revenue method (commission earned only). Previously the revenues were presented with the gross method including the total value of the commercialised ad space. For sake of clarity, the total amounts billed to clients, including the value of ad space, is presented under the line "Billings" and may be compared to the gross revenue presented in the past.

Consolidation of local.ch & Zanox – pro forma figures: • Due to the current discussion with the SIX Exchange Regulation, local.ch and Zanox will not be consolidated

proportionally in the half year results 2012 as announced earlier by PubliGroupe. Instead the previous consolidation methods are applied, which means that LTV is fully consolidated with presentation of the minority interests and Swisscom Directories/ local.ch and Zanox are presented with the equity method.In order to more clearly describe the business development and performance of the affected segments (Search & Find for local.ch and Digital & Marketing Services for Zanox), a pro forma segment presentation for the two segments has been added. The term "pro forma" refers to the presentation with proportional consolidation. The pro forma segment reporting is not part of the SWISS GAAP FER consolidated interim financial statements.

5

HY1 2012 group resultsResults impacted by non-recurring elements; stable net revenue;

1

2

3

0

50

100

150

200153.0 152.3

05

10152025

4.1

23.3

2.3

10.8

1st half year 2011 restated

1st half year 2012

Operating result Net result

Operating and Net Results, in millions of CHF

Net Revenue, in millions of CHF

0%

1st half year 2011 restated 1st half year 2012

-43%

-53%

• Net result of CHF 10.8 million for the first six months 2012 under Swiss GAAP FER (previous year CHF 23.3 million 2011)

• Operating result CHF 2.3 million (previous year: CHF 4.1 million)

• Results benefited from non-operating elements of CHF 15.4 million, same as last year

• Reported net revenue remained stable at CHF 152.3 million (previous year CHF 153 million), drop in revenue at Media Sales offset by higher revenue at Search & Find

• On the basis of billings, group generated revenues in the first half-year of CHF 582.6 million (previous year: CHF 634.4 million).

• With pro forma* inclusion of revenue generated by Zanox and local.ch accumulated online revenue of CHF 147.3 million (+1.5% and +6% at constant exchange rates).

• Online revenue accounts for 52% of PubliGroupe’s total business on a pro forma* basis.

*Pro forma (with proportional consolidation of local.ch and zanox)

6

HY1 2012 business segment summarySe

arch

& F

ind

• Lower 1st half results due to a stronger-than-expected downturn in the market overall

• Cost-cutting measures announced at the end of 2011 introduced more rapidly than had been planned; over course of 2012 they will gradually contribute to a further reduction in the cost base

Cor

pora

te

& o

ther

sD

MS

• Affirmation of impressive earnings power and successful shift to online and mobile business.

• Difference at the operating level also due to seasonal pattern changes at LTV, which generated more business in first half

• Drop in operating result because of lower operating results at Zanox, launch costs for start-up Spree7 and differences in valuation of purchase options of the Zanox subsidiary Digital Windows

• Prior-year benefited from Emphasis Video Entertainment in Hong Kong that was sold in 2011.

Med

ia S

ales

Operating result, in millions of CHF

1

2

3

-10

-5

0

5

10

15

-1.7

3.8 4.6

-3.6

-8.2

14.3

2.0

-6.5

Media Sales

Corporate & others

Search & Find

Digital & Marketing Services


7

HY1 2012 online performanceOnline revenue over half of business

• With the pro forma* inclusion of PubliGroupe's share of revenue generated by the Zanox Group (PubliGroupe holds 47.5%) and local.ch (in which PubliGroupe holds a 49% stake), PubliGroupe achieved accumulated revenue of CHF 147.3 million (+1.5% and +6% at constant exchange rates).

• Online revenue accounts for 52% of PubliGroupe’s total business on a pro forma* basis.

• At Publicitas numerous online initiatives are under way that should have a positive impact on online sales; currently level highly unsatisfactory (especially in Switzerland where online revenue is below 5%)

Online revenues, in millions of CHF

1

2

3

*pro forma (with proportional consolidation of local.ch and zanox)

0

20

40

60

80

100

120

140

160

125.3 125.2

15.3 17.54.6 4.6


1st half year 2012


Search & Find

Media Sales

+1.5%

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Media SalesMedia Sales suffers under weak market environment

• Downturn in net revenue concentrated in two main areas: major daily newspaper/financial press as well as in so-called national market

• Management contracts ("Regieverträge") still play an important role, relative importance lessened again

• Volume of international business, around 25% of business, with decline of 15% to CHF 17.5 million in 2012 (CHF 20.6 million). Downturn due to weakness, in particular in the European and US markets, and the sale of the business in Australia. In contrast, the Asian markets performed well

• The net result of CHF -5.5 million (previous year: CHF -2.3 million) benefited from non-operating proceeds stemming from the disposal of its share in Südostschweiz Publicitas and were negatively impacted by re-structuring costs at Publicitas

• -100 FTEs; 1,128 FTEs worldwide (end of June 2011: 1,228 FTEs)

1

2

3



0

40

80

12086.6

74.3

-10

-8

-6

-4

-2

0

-1.7 -2.3

-8.2

-5.5



1st half year 2012


-14%

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Measures taken along two pillarsStrengthen traditional business and accelerate growth of digital activities

Grow digital footprint:

Further invest in digital initiatives

Develop new digital products to drive growth

ACCELERATE the digital agenda& explore new opportunities

Optimisation measures being launched:

Become yet leaner and more adapted to market

Intervention and enrichment of print offerings along three areas: Switzerland, international, central functions

STRENGTHEN the traditional print business

Leaner and more flexible cost structure

Higher share of digital turnover

1st PILLAR

2nd PILLAR

10

Costs decreased to adjust to lower volumesCost reduction measures continue at accelerated pace

1. According to Swiss GAAP2. According to Swiss Gaap excluding of depreciation3. Including the effect of non-operating income and expenses

-40-30-20-10

01020 13.0

-29.0 -29.0

0.5

-'11.5

150

200

250

300293.7

271.7230.1

179.7166

,0,500

1,0001,5002,0002,500 1,966 1,736

1,296 1,174 1,029

Rev

enue

Expe

nses

Cost-cutting measures announced at the end of 2011 are being introduced more rapidly than had been planned

Over the course of 2012 they will gradually contribute to a further reduction in the cost base

EBIT

CHF M

CHF M

CHF M2007 2008 2009 2010 2011

(10) (8) (6) (4) (2)

-

-1.7

-8.2

-6.83

-30

20

70

120 85 78

430450470490510530 517

449Bill

ings

1O

p. E

xpen

ses2

Op.

Res

ult1

CHF M

CHF M

CHF MHY2011 HY2012

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Search & Find

• Very strong year of Search & Find thanks to local.ch: operating result was CHF 14.3 million for 2012 versus CHF 3.8 million in 2011 due to seasonal pattern changes with LTV, which generated more business in the first half of the year

• Revenue for online and mobile products up 16.3%; use of traditional telephone books continues to perform at a high level.

• Overall, online and mobile products make up 32% of the business. 55% of order intake is with digital products, while 45% is with print products.

• In the first half-year of 2012, local.ch continued strategy to move from being a provider that operates exclusively in the area of “find” to one that is also a provider in the areas of “search, find, book”.

• Stable headcount for segment

1

2

3


0

20

40

60

34.1

51.2

0

5

10

15

3.8

8.0

14.3

10.5


1st half year 2012


+32%



+50%

Very good result of Search & Find with local.ch

12

Search & Find

• On a pro forma* basis, proportional consolidation of the entire business of local.ch, the operating result grew to CHF 13.4 million for 2012 from CHF 10.8 million in 2011

• On a pro forma* level the revenue is up 8% at CHF 56.2 million. At local.ch revenue for online and mobile products was up 16.3%. At the same time, the use of traditional telephone books continues to perform at a high level

1

2

3

*pro forma (with proportional consolidation of local.ch)


0

20

40

60 52.0 56.2

0

5

10

1510.8

8.0

13.410.5


1st half year 2012

+8%


+32%


+24%


Online and mobile very strong

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Consolidation local.ch

0

10

20

30

4029.4

34.2

HY1 2011 HY1 2012

Prof

itabi

lity

EBITDA growth (*HY1 2011 restated) +13%

EBIT growth (*HY1 2011 restated) +21%

Rev

enue

+16%

In millions of CHF

Print

Online

Other

Total revenue

HY1 2012

47.5

34.2

24.9

106.6

HY1 2011restated

42.4

29.4

26.0

97.8

%

12%

16%

-4%

9%

1

2

3

Unique audience HY1 2012, in millions

Online (consolidation 100%), in millions of CHF

0.0500.0

1,000.01,500.02,000.02,500.03,000.03,500.0

• Print growth due to seasonal pattern changes

• Online growth also driven by existing and new (mobile) products

Strong online position confirmed, head-to-head with search.ch

14

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul0.0

200,000.0

400,000.0

600,000.0

800,000.0

1,000,000.0

1,200,000.0

1,400,000.0

1,600,000.0

1,800,000.0

2,000,000.0

Local.chSuccessfully strengthened leading position on mobile

Source: Official platform Stores (iOS,Android,Blackberry,W7,Nokia) Source: Usage rating by Apple

1.8 million downloads

54% usage growth

Cumulative downloads on all platforms

App

dow

nloa

ds, i

n m

illio

ns

Monthly use all platform

s, in millions

2011 2012

• 1.8 million down-loads of local app on all mobile platforms (iOS,Android,Black-berry,W7,Nokia)

• 54% usage growth of local.ch app on iPhone since August 2011

• Uncontested #1 in Mobile search & find

1

2

3

15

Digital & Marketing Services Solid first half for DMS; Zanox strengthens leading market position

1

2

3

0

5

10

15

4.6 4.12.0

11.8


+186%


-57%


0

10

20

30

21.1 20.6

3.9 3.6

HY1 2011

DMS Net Revenue, in millions of CHF

-3%

Digital SVB

HY1 2012

25.0 24.2

Note: Zanox Group not included, Namics Jan-May

• Slight reduction in net revenue of 3% and high net result (+186%) due to the sale of Namics

• In addition to Zanox and SVBmedia, Spree7 JV with MediaMath, the leading demand-side platform provider, contributed to the DMS result. PubliGroupe owns 80% of the new company, MediaMath 20%

• Lower operating result due primarily to the lower operating results at Zanox, investment costs during the launch phase of the start-up Spree7 and a temporary high financial gain last year in connection with foreign exchange effects in the valuation of purchase options of the Zanox subsidiary Digital Windows, which was acquired in 2009

• Headcount (excluding Zanox) down from 366 (end 2011) to 53 at June 2012. On a comparable basis (excluding Namics) a decrease of 16% (66 to 53 FTEs).

16

Digital & Marketing Services Pro forma view including Zanox

1

2

3

*pro forma (with proportional consolidation of zanox)


0306090

120150180

144.6 149.1

0

5

10

15

7.44.15.2

11.8


1st half year 2012

+3%


+186%


-30%


• On a pro forma* basis (including a proportional consolidation of Zanox), net revenue is CHF 149.1 million versus CHF 144.6 million in 2011, a growth of 3%

• On a pro forma* basis, the operating result is CHF 5.2 million versus CHF 7.4 million in 2011, a drop of 30%.

• Negative currency exchange effect impacts EUR businesses (Zanox, SVBmedia, Namics Deutschland for the months before sale) with about -5%.

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Digital & Marketing Services Zanox defends top position in competitive European market

HY1 2011 HY1 20120

50

100

150

200

250207.9 218.5

HY1 2011 HY1 20120.0

5.0

10.0

15.0 13.310.4

• Zanox maintains its top position in European affiliate network segment with a 5% increase in net revenue to a total of EUR 218.5 Mio (Previous Year +22%)

• Investments in technology and new markets - on top of a very competitive market environment - lead to a temporary reduction in profitability

• While the strong position in Europe has been maintained, the international expansion into attractive markets continues (Brazil, Poland, Turkey)

Zanox Sales (100%), in millions of EUR

-22%

+5%

Zanox EBITDA (100%), in millions of EUR

1

2

3

18

Spree7: DSP service provider founded as a JV with MediaMath

1

2

3

MARKET

• Strong interest in DSP-RTB in the market - window of opportunity is open now

• International players have positioned themselves, new local players still entering the market

BACKGROUND & POSITIONING

• Joint Venture with MediaMath - a leading DSP technology provider

• Service provider for efficient buying of digital ad space and result driven campaign optimization

• Operating in DACH region, headquartered in Berlin

CURRENT STATUS AND NEXT STEPS

• Core team hired and operational, further recruiting in progress

• First campaigns successfully set-up, focus on ongoing sales & execution efforts

• Emphasis in coming months on further ramp up of operations and sales

topRTBtech

campaignsolutions

spree7

RTBme-toos

self-service DSPs

managed-service DSPs+ independent & agency trading-desks

managedservice

specialists (e.g. lead, retargeting)

no/lowservice

poorRTBtech


19

“Solid balance sheet; Group’s equity at CHF 174.1 million

Andreas SchmidtChief Financial Officer

Key Financials Group

“

20

P&L Group 1

2

3

in millions of CHF 1st half year 2012 1st half year2011 restated

Billings * -8% 582.6 634.4

Net revenue 0% 152.3 153.0Purchases -16% -7.0 -8.3

Gross profit 0% 145.3 144.7

Expenses -2% -153.7 -157.3

Depr. & Amort. -28% -2.3 -3.3

Share in associates -34% 13.1 20.0

Operating result -43% 2.3 4.1Financial result - -2.8 1.2

Ordinary result - -0.5 5.3Non-operating result 0% 15.4 15.4

Income taxes - -1.7

Minority interests - -2.4 2.6

Result -53% 10.8 23.3Headcount (FTE) -421 1'784 2'205

* Billings represent the gross amounts billed to clients (including the value of ad space).

Stable revenue thanks to Search & Find; negative financial result

21

Non-operating ResultNon-operating represents important part of result

1

2

3

in millions of CHF

1st half year 2012 1st half year 2011 restated

Gain on Namics sale 10.3

Gain on SOP sale 3.1

Gain on EVE sale 11.6

Gain on City Media & Huashang sale 1.9

Real Estate income 2.7 2.8

Ordinary offices charges for investment properties -0.1 -0.2

Real Estate depreciation (investment properties) -0.6 -0.6

Non-operating result 15.4 15.4

22

Operating result by segmentVery good Search & Find

1

2

3

in millions of CHF


Media Sales - -8.2 -1.7

Search & Find - 14.3 3.8

Digital & Marketing Services -57% 2.0 4.6

Corporate & Others +85% -6.5 -3.6

Operating result -43% 2.3 4.1

23

Headcount by segment 1

2

3

FTE End June 2012 End June 2011

Media Sales -100 1’128 1’228

Search & Find -2 530 531

Digital & Marketing Services -313 53 366

Corporate & Others -7 73 80

Total Headcount -421 1’784 2’205

FTE reduction at MS according to plan, smaller DMS (without Zanox)

24

Financial Result 1

2

3

1st half year 2012 1st half year 2011in millions of CHF restated

Interest income 0.1 0.7

Currency exchange differences -1.2 -0.7 Tamedia 0.7 0.5 China - 2.1

Income from marketable securities 0.7 2.6 Tamedia -1.8 -0.0 Others 0.1 0.1

Gains (loss) on marketable securities -1.7 0.1 Income from investments -0.0 0.0

Income from marketable securities and investments -1.0 2.7

Financial Income -2.1 2.7

Fincancial Expenses -0.7 -1.5

Net Financial Result -2.8 1.2

Lower financial income mainly due to Tamedia position

25

Cash flow statementUnsatisfactory operational cash flow

1

2

3

in millions of CHF


Cash and cash equivalents as of 1 January 109.3 102.5

Cash flows from operating activities 2.6 -25.1

Cash flows from investing activities 4.9 22.6

Cash flows from financing activities -21.2 -19.1

Cash and cash equivalents as of 30 June 95.6 80.9

26

Group balance sheet Strong balance sheet & cash positions

1

2

3

in millions of CHFas of 30 June 2012 as of 31 December 2011

restatedCurrent assets 335.7 368.4

Non-current assets 175.8 173.8

Total assets 511.5 542.2

Current liabilities 250.2 264.2

Non-current liabilities 76.0 90.6

Equity, shareholders of PubliGroupe Ltd 174.1 171.0

Minority interests 11.2 16.4

Total liabilities and equity 511.5 542.2

Equity in % of assets 34% 32%

27

Events subsequent to the balance sheet dateReal estate assets sold in August

1

2

3

• Three buildings in Lausanne (Toises 12, Mon Repos 22 and Mousquines 4) and one building in Bern (Seilerstrasse 8) were sold in August 2012

• The disposal of four real estate properties in August 2012 will produce an after-tax book profit in the amount of CHF 39 million, a major part of which to be returned to the shareholders of PubliGroupe, as announced in early 2012.

• In the fourth quarter of 2012 the details on how these proceeds will be distributed to shareholders will be announced.

28

Conclusion & outlook 2012

Hans-Peter RohnerCEO & Chairman of the Board

Conclusion

“ “

29

• Trend towards advertisers paying only for marketing that delivers specific, demonstrable results continues; in the digital area, the number of users via smartphones is exploding

• Digital forms of advertising are continually growing in importance, while the business models in these segments are subject to constant change.

• Amidst this challenging market environment, PubliGroupe achieved a weaker result compared to the previous year, while online continues to grow in importance; a negative result from Media Sales, was again only partially offset by very good numbers from Search & Find and a solid result from DMS.

• Measures announced in December 2011 have been introduced and implemented to a large extent

• At Media Sales, for the full year 2012, PubliGroupe anticipates a loss that will be made up of two equally poor half-year periods. At Search & Find, the very good performance in the online and mobile areas should help this segment to slightly outperform the prior-year level. The second semester will not profit from the seasonal effects as witnessed during the first semester. The different participations of DMS should confirm or slightly beat the trends witnessed during the first half year 2012.

• On a group level, the annual result 2012 will profit from strong non-operating results, namely the sale of the real estate properties

Conclusion & outlookSignificant additional steps needed, implementation speed continues

1

2

3

30

Backup Slides

31

Consolidated income statement Backup

in millions of CHF1st half year 2012 1st half year 2011

restatedBillings * 582.6 634.4Net revenue 152.3 153.0Purchases -7.0 -8.3Gross profit 145.3 144.7Personnel expenses -115.6 -119.4General and administrative expenses -39.2 -38.4Depreciation of tangible assets -1.9 -2.7Amortisation of intangible assets -0.5 -0.6Other operating income 1.4 0.5Other operating expenses -0.3 -Share in result of associates 13.1 20.0Operating result 2.3 4.1Financial result -2.8 1.2Ordinary result -0.5 5.3Non-operating result 15.4 15.4Result before income taxes and minority interests 14.9 20.7Income taxes -1.7 -Result before minority interests 13.2 20.7Minority interests -2.4 2.6Result attributable to shareholders of PubliGroupe Ltd 10.8 23.3

Earnings per share (in CHF) 4.5 9.9

* Billings represent the gross amounts billed to clients (including the value of ad space).

32

Consolidated balance sheetAssets

Backup

as of 30 June 2012 as of 31 December 2011in millions of CHF RestatedCash and cash equivalents 95.6 109.3Marketable securities 12.6 14.4

Trade receivables (net) 167.0 198.0Other receivables 18.6 18.3Accrued income and prepaid expenses 41.9 28.4

Current assets 335.7 368.4Investment properties 46.7 42.9

Owner-occupied properties 17.8 22.3Equipment 10.0 10.8Intangible assets 1.8 2.1

Investments in associates 70.8 76.8Financial assets 24.5 14.9Deferred tax assets 4.2 4.0

Non-current assets 175.8 173.8Total assets 511.5 542.2

33

Consolidated balance sheetLiabilities and equity

Backup

as of 30 June 2012 as of 31 December 2011in millions of CHF RestatedCurrent debts 10.0 0.2Trade payables 121.3 128.1Other payables 26.8 33.1Accrued expenses and deferred income 86.3 94.2Current provisions 5.8 8.6Current liabilities 250.2 264.2Non-current debts 40.0 50.0Investments in associates 26.4 30.9Deferred tax liabilities 3.0 3.0Non-current provisions 6.6 6.7Non-current liabilities 76.0 90.6Total liabilities 326.2 354.8Share capital PubliGroupe Ltd 2.5 2.5Treasury shares -34.5 -43.9Capital reserves -0.3 5.6Retained earnings 206.4 206.8Equity, shareholders of PubliGroupe Ltd 174.1 171.0Minority interests 11.2 16.4Total equity 185.3 187.4Total liabilities and equity 511.5 542.2

34

Cash flows from operating activities Backup

in millions of CHF1st half year

20121st half year

2011 restatedResult before minority interests 13.2 20.7

Share in result of associates -13.1 -20.0

Depreciation and amortisation (incl. non-operating) 3.0 3.9

Changes in provisions (incl. deferred income taxes) -2.3 -4.3

Gain/loss on disposals of fixed assets -0.1 -0.1

Gain/loss on disposals of subsidiaries and associates -13.4 -13.4

Adjustments for other non-cash items 5.2 -0.6

Dividends received 16.7 10.0

Interest received 0.2 0.7

Interest paid -0.7 -1.7

Taxes paid -2.3 -2.2

Change in net trade receivables 22.6 34.4Change in net assets from other receivables, accrued income and prepaid expenses -16.4 -23.0

Change in trade payables -6.2 -22.3

Change in other payables, accrued expenses and deferred income -3.8 -7.2

Cash flows from operating activities 2.6 -25.1

35

Cash flows from investing activities Backup


20121st half year

2011 restated

Acquisitions of tangible assets -2.1 -1.6

Disposals of tangible assets 0.2 0.4

Acquisitions of intangible assets -0.3 -0.2

Acquisitions of subsidiaries, net of cash acquired -0.2 -4.3

Disposals of subsidiaries, net of cash disposed of 6.9 13.2

Disposals of associates 3.7 0.3

Investments in financial assets -3.3 -1.0

Divestments of financial assets - 15.8

Cash flows from investing activities 4.9 22.6

36

Cash flows from financing activities Backup


20121st half year

2011 restated

Increase / decrease (-) in bank debts - 0.9

Repayment of non-current debt -0.1 -

Purchase of treasury shares -1.3 -1.1

Sale of treasury shares 1.1 1.1

Increase in capital reserves 0.1 0.1

Decrease in capital reserves -5.2 -

Dividend paid to shareholders of PubliGroupe Ltd -8.9 -14.1

Dividends paid to minority interests by Group companies -6.9 -6.0

Cash flows from financing activities -21.2 -19.1

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PubliGroupe Half-Year Results 2012

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