EANS-Adhoc: Goldbach Group AG / Annual Result 2011; high-margin growth

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annual report

06.03.2012

Ad hoc press release

Group result 2011:
Goldbach Group: High-margin growth

CHF 446 million net turnover (+35%) - EBIT CHF 30 million (+29%) -
CHF 6.0 million profit (+19%) - strong growth by Goldbach Media -
higher margin for Goldbach Audience - international expansion of
Goldbach Interactive - divestment of the print business - proposed
dividend of CHF 0.71 - single digit turnover and profit increase
forecast

Kusnacht, March 6th, 2012. The Goldbach Group generated CHF 446
million (prior year: CHF 329 million) in turnover in the 2011
business year, with EBIT of CHF 30 million (prior year: CHF 23.3
million) and a profit of CHF 6.0 million (prior year: CHF 5.1
million). Goldbach Group, the leading advertising logistics expert in
the German-speaking region, Eastern Europe and Russia in the
marketing of private, electronic, mobile and interactive media, as
well as in online marketing, increased net revenue throughout the
group by 35.4%, with a slightly higher EBIT margin in its core
business of 6.7% (prior year: 6.6%). This was particularly pronounced
in the Audience business line with 4.9% (prior year: 2.5%) The Annual
General Meeting shall decide on a proposed dividend of CHF 0.71. For
the current 2012 business year, Goldbach anticipates single-digit
growth in turnover and a significant increase in profit.

The reported definitive net turnover for 2011 was CHF 446 million
(prior year: CHF 329.4 million). This included CHF 337.7 million
(+61.9%) in the Media business line and CHF 75.1 million (-15.4%) in
the Audience business line and CHF 39.1 million (+4.1%) in the
Interactive business line. There was a 35.4% increase in turnover.
EBIT according to IFRS increased by 28.8% to CHF 30 million (prior
year: CHF 23.3 million). In the core business, excluding the print
division in Rumania, which was disposed of at the end of 2011, and
other one-time special effects, turnover increased by 36.3% and EBIT
by 38.4%. The Media business line contributed 76% (prior year: 64%)
to the total turnover in 2011, the Audience business line contributed
15% (prior year: 25%) and the Interactive business line 9% (prior
year: 11%). The portion of total turnover generated in the Swiss
business was 87% (prior year: 79%).

Strong profitable growth in the Media business line The sales success
recorded in the first half of the year in the Media business line, in
which the Goldbach Group combines the marketing of private TV, radio,
teletext and electronic advertising at attractive points of sale
(out-of-home), primarily in Switzerland and Austria, was consolidated
in the second half of the year. Turnover increased by 61.9% to CHF
337.7 million (prior year: CHF 208.6 million). Turnover in the TV
business increased by 70.7% (prior year: 10.8%). The new mandates
acquired in 2010 impacted turnover, while the existing portfolio also
grew significantly by over 20%. The TV business thus impressively
demonstrated its resistance to general economic trends and profited
from the ongoing shifting of advertising spending to electronic
media. Moving image advertising is also being used increasingly on
online platforms. Radio advertising sales also developed positively
(+25.9%; prior year: -0.4%). Planning and auditing tools were
introduced for sustained customer retention and important new
customers were gained. With the marketing of a local TV network in
Romania, the Media business line first became active in Eastern
Europe in 2011; which means the combined offer of TV and online, a
business model that has been successful in Switzerland, was
implemented in Eastern Europe for the first time. The Media business
line contributed 76% to the total turnover of the Goldbach Group in
2011 (prior year: 64%). EBIT for the Media business line increased by
60% in 2011, to CHF 34 million (prior year: CHF 21.3 million). The
segment contributed 85% to the Group EBIT (prior year 80%). The EBIT
margin remained constant at 10.1%, despite the strong growth (prior
year: 10.2%).

Margin doubling in the Audience business line Combined in the
Audience business line are the targeted placement of online
advertising and new types of offers for performance marketing in
Switzerland, Austria, Germany, the Adriatic region and Eastern
Europe, including Russia. Turnover decreased by 15.4%
(currency-adjusted: -9.3%) to CHF 75.2 million (prior year: CHF 88.8
million). EBIT amounted to CHF 3.7 million (prior year: CHF 2.3
million). Excluding the special effects, this corresponds to an
increase in EBIT for the core business of 62%.

The consistent forgoing of low margin business is reflected in the
improvement of the EBIT margin to 4.9% (prior year: 2.5%). The Swiss
Internet television company, Wilmaa, in which Goldbach holds a
majority stake and which is reported in the Audience business line,
continued to develop dynamically and profitably in 2011. Goldbach
continues to expand its range for multi-screen advertising with the
launching of the Goldbach Video Network, a comprehensive offer from a
single source for the use of moving images on any sort of screen (TV,
computer, smart phone, tablet). Marketing success in digital media
can be measured in real time with the TAO online reporting system
introduced in 2011. The TAO system can also be used for TV monitoring
by midyear. The applications are being constantly expanded and should
also enable the online evaluation of videos and moving images. In
total, the Audience business line contributed 15% (prior year: 25%)
to the overall turnover and 9% (prior year: 8%) to the Group's EBIT.

Extension of the value creation chain with international expansion of
the Interactive business line Goldbach's conceptual, design and
technological expertise pertaining to interactive communication and
marketing solutions for the Internet and mobile devices are combined
in the Interactive business line. The Goldbach Mobile competence
centre, which is part of the Interactive business line, develops
applications for mobile computers and smart phones, such as the
iPhone and iPad. The Social Media competence centre offers strategic
consultation to customers and campaigns are elaborated for platforms
including Facebook, Twitter and Xing, while content is created for
corporate communications with Internet communities. The Goldbach
Search competence centre facilitates better placement and greater
visibility for its customers in search engines and Internet
platforms. These offers enable Goldbach to cover the entire value
creation chain between the advertising client and online advertising
and also deepen customer relationships. Turnover increased in the
Interactive business line by 4.1% to CHF 39.1 million (prior year:
CHF 37.6 million); by 9.4% when currency-adjusted. The international
expansion of the Interactive business line proceeded according to
plan in the reporting year. The business line's services are offered
in Switzerland, Austria, Germany and since recently now also in
Poland. EBIT decreased, primarily due to the expansion costs (-27.0%)
and amounted to CHF 2.3 million (prior year: CHF 3.2 million). The
EBIT margin was 5.9% (prior year: 8.5%). The portion of overall
turnover generated by the Interactive business line was 9% (prior
year: 11%). The Interactive business lines contributed 6% to Group
EBIT (prior year: 12%).

Profit, special effects. Equity capital ratio and dividend proposal
The Goldbach Group's profit increased in 2011 by 18.7% to CHF 6
million (prior year: CHF 5.1 million). Special effects totalling CHF
2.6 million, among which CHF 1.6 million resulted from currency
losses, were generated by the disposal of the Romanian print
division, which was no longer part of the core business. In
consideration of all special effects, the profit amounted to CHF 8.4
million. The profit was again impacted by costs amounting of to CHF
1.3 million for the completed integration of ARBOmedia (squeeze-out).
The equity capital ratio increased from 28.8% to 31.4%, while the
operative cash flow amounted to CHF 29 million (prior year: 27.6
million). A dividend of CHF 0.71 per share will be proposed at the
General Meeting.

Outlook In the current 2012 business year, Goldbach anticipates
single-digit turnover growth during the transition to sustained
growth. Once the focus upon the core business and the implementation
of organizational measures are completed, profitability and profits
should increase again significantly.

"Due to the convergence of media and with the increasing mobility of
consumers, the electronic media are converging even more," stated
Klaus Kappeler, Goldbach Group CEO. "Our customers in Switzerland are
already profiting from the ongoing media convergence through the
launching of our new tool for multi-screen advertising. We intend to
incrementally transfer our successful business concept with its
comprehensive range for advertising and marketing in electronic and
mobile media to Eastern European countries and to further expand our
presence in Eastern Europe's leading economies, such as Poland and
Russia. The Eastern European countries still have a long way to go to
catch up in terms of advertising and marketing, which could
invigorate business in the medium term."

Further inquiry note:
Paul Riesen, Germaine Müller
Tel. +41 44 914 91 00
Mobile: +41 79 688 24 74
germaine.mueller@goldbachgroup.com
paul.riesen@goldbachgroup.com

end of announcement euro adhoc
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issuer: Goldbach Group AG
Seestrasse 39
CH-8700 Küsnacht
phone: +41 44 914 91 00
FAX: +41 44 914 93 60
mail: info@goldbachgroup.ch
WWW: www.goldbachgroup.ch
sector: Media
ISIN: CH0004870942
indexes: SPI, SPIEX
stockmarkets: Main Standard: SIX Swiss Exchange
language: English