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PubliGroupe investors' day 4 december 2012


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PubliGroupe Investors Day

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PubliGroupe investors' day 4 december 2012

  1. 1. PubliGroupeInvestors Day 20121Lausanne, 4 Dec 2012
  2. 2. Overview presentation order Theme Speaker TimeGroup Intro / Market Analysis / Strategic Overview A. Groth, CEO PubliGroupe 30 min.Segments Anticipating changes in print and media — Seeking efficiencies and automation R. Petrikowski, CFO Publicitas 20 min. — Strengthening the digital portfolio Ch. Morgan, Head P-Digital 10 min. Q&A PART 1BREAK |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| ||||||||||||||||||||||||||||||||||||||||||||||||||||||| 30min. Shaping a digital & mobile future — Driving digital and mobile growth E. Baehler, CEO 20 min. — Developing new businesses R. Martignoni, COO DMS 20 min.Group Share buy-back programme & other finance A. Schmidt 20 min. Concluding remarks A. Groth 10 min. Q&A PART 2 . End official partDemo Improve Digital J. Frijters 30 min. CEO Improve Digital2
  3. 3. PART GROUPPreparing the Groupfor the digital marketingworldArndt C. GrothCEO PubliGroupe3
  4. 4. Situationanalysis market01Market conditionsin constant change4
  5. 5. Rapid change, in particular in print, requires Groupto prepare faster for future ad market Key advertising trends1 Massive pressure on print The scenario we are  Long term structural pressure, especially on print expecting for  Stronger than expected decline 2012-15 ‘advertising 2020’  Majority of digital2 Digital “wins” and impacts all sectors inventory will be traded  Digital media win through automated platforms  RTA, mobile, social as key trends in digital  Especially premium will  Digital is setting scene also for other segments remain people business, though with3 Competitors move fast in complex landscape higher degree of  Value chain highly fragmented & specialised centralisation  Large players like Google covering key positions  Efficiency, creativity and  Other sales houses invest in 360° marketing comprehensiveness will capabilities and tech-based solutions win5
  6. 6. 1 Massive pressure on print Latest, apparently structural, loss of print ad revenues went beyond expectations Print ad-spend vs. GDP, Switzerland Forecast 4.0% 2,487 -0.1% 2,369 2,406 2,294 2,299 -12.3% 550 543 527 533 2,302 Since 2008 497 516 517 Publicitas lost 467 2.5% 1.3% 455 0.1% 15% top line 479 3.8% 2.3% print revenues 2.6% 2,001 in average yoy 2,004 -10.0% 1,915 1,803 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 6 1. GDP calculation based on production statistics GDP in CHF bn1 Ad spend print in CHF m Source: WEMF; Stiftung Werbestatistik Schweiz; IMF; SECO; OC&C analysis
  7. 7. 1 Massive pressure on print Recent decrease of print exceeded expectations and appears to be accelerating Expectation for Swiss display ad revenues in print Print outlook print 2012 2012 vs. 2011 2013 1% 0% -3% -3% -2% -5% - - Ø -8% -6% +1% -6% -10% -7% -16% Increasing -10% Ø -10% momentum! “Last Investors’ “Also depending on -16% Day” GDP development” Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. 7 Source: WEMF; Stiftung Werbestatistik Schweiz; SECO; IMF; OC&C analysis
  8. 8. 2 Digital “wins” and impacts all sectors Market trends – Online double digit growth In Europe, substantial growth expected in video and mobile Ad Spend, EMEA, 2011 Ad Spend, EMEA, 2011-2016F EUR€ bn1, % share per medium EUR€ bn1, % share per online medium CAGR 2011-16F 100.2 37.8 2.0 Video +34% 13.6 +13% 33.8 2,5 Mobile +32% 1.6 29.9 2,0 1.3 6.7 Classified +9% 20.5 26.3 1,6 6.2 23.2 5.7 20.5 5.2 10.1 Display +13% 30.7 4.8 9.0 4.4 8.0 7.0 6.2 5.5 15.0 16.6 Search +12% 35.3 11.9 13.4 9.6 10.7 RTV Print Online Other Total 2011 2012E 2013F 2014F 2015F 2016F 2011 Source: PwC, October 2012, DMS analysis 8 Note: 1) In 2011 Euros, converted from US$
  9. 9. 2 Digital “wins” and impacts all sectors Digital, mobile, automation and social key trends Mobile / small Broadscreen RTA Social screen  …has  Main area of  “SALES” surpassed inventory Premium traffic on growth portals in US  Big oppor -  Share of RTA  … is winningSegmented tunity e.g. display sales market Inventory Mid-Tail for increasing share in  Challenge display in  Instead of for display most sales skills, advertising geographies platform and as new Rest technology  Social models need skills are successful to be found needed on mobile 9
  10. 10. 2 Digital “wins” and impacts all sectors Digital covers all marketing disciplines Performance-based models highly attractive to advertisers Marketing Targets Awareness Interest Desire Action Contacts Visitors Sales Reach CPM CPC CPS Cost per Mille Cost per Click Cost per Sale Display / Brand Search Performance Advertising Advertising Advertising Performance Model Cost per Action Cost per Order Cost per Lead Cost per Click CPO CPC CPA CPL 10
  11. 11. 2 Digital “wins” and impacts all sectors Right strategy mix is needed Combination of branding + transaction leads to success Brand Traffic User Creatives Awareness Creation Lead Generation Action Banner Ads Text Ads Email CPM CPC CPL CPA Contextual Ads Keywords 11
  12. 12. 3 Competitors move fast in complex landscape Digital ecosystems increasingly complex Fragmentation across the entire digital display ecosystem Ad Exchange ADVERTISER AUDIENCE Agency Demand- Supply- Agency Trading Side Side Publisher Desk Platform Platform Ad Network 12 Source: IAB; Google; Press
  13. 13. 3 Competitors move fast in complex landscape Other ad marketers are transforming at high speed: Video, agency services and platforms in focus Competitive trends Other “Expand “Expansion of scope to TV “Expansion of 360°cross- commercials the growth media towards and future- “Centrali- solutions built cross-linked, oriented sation, ad on a broad multimedia mobile efficiency and inventory of commu- advertising mobile” own and nication segment” clients’ titles” concepts”  Mobile special  Ringier bundles all  Tailor-made cross-  Expansion in the advertising formats magazine ad sales Own Products media solutions area of video ("G+J ConnectAd" ) in one unit &  Cover own and advertising  Performance-  ToFo Media invests Developments client inventory  Commercialisation oriented campaigns in studies on ad  Invest in platforms of HbbTV effectiveness, (“optimobile”) mobile products and wins new 3rd party  Participating in the clients Acquisitions  Foundation of  Acquisition of ad network  8 regional German & creative agency Adyard (Postview Ad Audience newspaper groups Foundations "Sugar Ray" marketer) in 2010 form alliance for national ad sales 13 Source: Company information; press
  14. 14. Situation analysisPubliGroupe 02Group with broadrange of assets,refocus needed14
  15. 15. PubliGroupe with a wide range of activitiesOrganised into three segments that operate mostly independently Media Sales Search & Find Digital & Marketing Services * Partner for media owners and Producer and seller of media Portfolio of leading international advertisers worldwide, using products facilitating the search for marketing and technology service effective advertising solutions. persons, companies, products companies, helping brand owners and services focusing on local to spend marketing budgets more markets. effectively. 15 * Improve Digital acquisition pending COMCO approval
  16. 16. In 2012 PubliGroupe executed on Group level…All Group issues addressed and executed PubliGroupe execution of its strategic cornerstonesCorporate — End of double mandate of HP RohnerGovernance — Announcement made to end voting restrictions after restructuring of Publicitas, latest by 2014Sale real estate — Divested 4 assets in 2012: 3 Lausanne buildings, 1 in Bern — Sale proceeds to be returned to shareholders; intention to return CHF 45 m to shareholders through share buyback and special dividendChange accounting — Switched accounting standard from IFRS to Swiss GAAP FERstandard — Media Sales and DMS (SVBmedia) revenue disclosed as commission earned instead of the total billing of ad space, providing for more transparencyDividend — Strong dividend return upheld in 2012 with the distribution of the amount of CHF 6 per share, composed of a dividend of CHF 3.80 and of CHF 2.20, distributed tax-free from reserves from paid-in capital.16
  17. 17. … and strengthened operational assetsRestructuring Media Sales, strengthening leadership positions and Zanox, while investing in growth fields SSP and DSP Segment execution of its strategic cornerstonesMedia Sales — Operational savings of CHF 10 m vs. 2011; In 2013, further cost reductions already implemented of CHF 16 m — Starting in 2013 FTE of 1,040 vs. to 1,196 at the end of 2011 — Developed and launched new digital products such as Ad4MaxGeo, The MarkSearch & Find — Further strong growth of digital revenue, whereby online revenue keeps at double digit pace; online order intake outperforms print — Uncontested #1 on mobile with > 2 m downloads; 42% ahead on No. 2 with apps in use for iOS in October 2012 — Successful entry into new areas (restaurant booking and web site production)DMS — Focus sharpened towards technology-oriented scaleable business models with sale of Namics and acquisition of Improve Digital * — Zanox extended market lead in performance advertising — Entered fast growing RTA market with Spree7 / Improve Digital*Corporate & Others — Continued divestment of non-strategic assets17* Improve Digital acquisition pending COMCO approval
  18. 18. However, still huge differences between segmentsS&F and DMS well positioned, refocus needed at Publicitas Search & Find Media Sales DMS Positioning Strategy Ready for 202018
  19. 19. PubliGroupe well represented in complex ecosystemPubliGroupe with stakes across the entire digital display ecosystemDigital display ecosystem and selected PubliGroupe investments "TheMark" Ad ExchangeADVERTISER AUDIENCE Agency Demand- Supply- Agency Trading Side Side Publisher Desk Platform Platform Ad Network * 19 Source: IAB; Google; Press * Improve Digital acquisition pending COMCO approval
  20. 20. Strategy03To play key role indigital advertisingmarket20
  21. 21. Group positioningAdvertising revenue remains key monetisation driver for content owner •It‘s not about e-commerce Media is the DNA •But media services around media buying and selling •Connecting Supply and Demand Owning the end to end •Disintermediation of sales houses leads to automisation relationship between supply •As a result need to offer self service solutions and demand •Data is a going to be a key USP Operating the technological •IT-platform for print ad processing platforms for publishers, •Automated trading platform (DSP or SSP technology) agency and advertiser partners •CRM-Tools, media-buying and -planning software and services •Premium media cannot be fully automised Premium media sales •Every publisher contract and each single order needs to be profitable where appropriate •In shrinking markets outsourcing is becoming even more important Entrepreneurial independency •Exclusive contracts will only apply if we’ll get a premium to run the business (i.e. with excl. publisher really profitably contracts) •Applying the arbitrage model to realise higher margins •Huge opportunity for Publicitas International in Digital Media Optimise •New content owners not prepared for ad sales international network •Very few remaining competitors in premium media 21
  22. 22. PubliGroupe must manage strategic shiftIn order to achieve profitable, sustainable business position 22
  23. 23. Based upon trends and priorities, focus onfollowing strategic themes going forward PubliGroupe Digital MarketingSearch and Find Media Sales Corp & Others ServicesFurther develop Redefine publisher Capitalise on Leaner group mobile & digital relationships to Zanox leadership structure offering obtain operational in Europe Management ofInvest in autonomy Materialise on key non-strategic transaction- Accelerate growth trends - RTA, asset oriented fields (ie initiatives and mobile, data online booking) growing digital StrengtheningIncrease sales Further portfolio through force efficiency harmonizing M&A and effectiveness processes + IT “Transformation and growth in sales and services”23
  24. 24. Holding Structure – Status QuoThe business segments are treated differently Holding Function Search and Find Media Sales DMS Operations Strategy Finance 24
  25. 25. Holding Structure – ObjectiveEqual treatment of all business segments Holding Function Search and Find Media Sales DMS Operations Strategy Finance 25
  26. 26. PubliGroupe as lean holding going forwardFocus on financial, M&A and innovation functions,strengthening operational management on business level Board CEO * A.C. Groth CFO * Head of HR * A. Schmidt B. Schleipen General Secr.* Head of CC J.-D. Briod B. Werder Head of CD * R. Martignoni Board Board Media Sales Search & Find DMS Board Zanox Board* Member of PubliGroupe Executive Committee effective Jan 1st, 2013 Other: ID SVB26
  27. 27. Group KPIs (on Swiss GAAP basis)Financial objectives for Group PubliGroupe Target Target 2015 Result 2011 * indicator Profitability Operating result CHF 40 - 50 m CHF 21.9 m Earnings per share ** CHF 12 - 17 CHF 9.1* restated, Swiss GAAP FER** 2015: after share buy-back programme 27
  28. 28. Key immediate actionsWhat How - Leaner holding, reduced FTE count1. Holding - Refocus on key activities - Increase speed of innovation and reinforce corporate development on Group level A) Strengthening management2. Publicitas - Operate through Board only - Fill open executive positions B) Transform business model - Redefine publisher relationships to obtain operational autonomy - Continue restructuring as client-facing organisation - Ongoing right-sizing to anticipate market development28
  29. 29. PART MEDIA SALESReducing costs, redefiningpublisher relationships &accelerating digitalRüdiger Petrikowski, Chris MorganCFO Publicitas Head of P-Digital29
  30. 30. Situation, mid-term objective and measuresPublicitas is continuously reducing its cost base and acceleratinggrowth initiatives in Switzerland and internationallySituation• 2012 a year with a loss of around CHF 22 m due to a much stronger market decline than expected and loss of market share• Expected net revenue decline 2011/12 of around CHF 26 m• Savings of announced measures of CHF 10 m achieved. Not sufficient for 2012, however with additional impact of CHF 16 m in 2013Mid-term objective• Move to portfolio sales addressing broader advertising segments• Grow share of non-print/digital net revenue significantlyMeasures• Redefine publisher relationships to obtain operational autonomy• Ongoing right-sizing to anticipate market development• Accelerate growth initiatives in Switzerland and internationally
  31. 31. Market environment 2012 SwitzerlandPublicitas suffers from a strongly decreasing print marketaccompanied by an insecure economic situation Print advertising CH1 Internet advertising CH1 CHF m CHF m -10% 2004 1’803 Professional, +5% specialized, consumer, finance, 667 805 12 business press 769 Affiliate 595 10 34 29 18 Video 16 84 Mobile 101 Banner/Display 195 Classifieds 176 Daily, weekly regional, and 1’337 Sunday papers 1’208 362 401 Search Digital -19% newspaper 75 61 advertising 2011 2012e 2011 2012e1) PWC Swiss Entertainment and Media Outlook 2012–2016
  32. 32. Major effects on 2012 operating resultSavings of announced measures of CHF 10 m achieved, withnoticeable effect for 2013 ACT 2011 Net revenue Realised Opex 2012e decline savings 0 -5 -5 ~-16 -6 ~-22 ~-26 +10 Op. Result Non-recurring Other effects
  33. 33. Effect of initiatives in 2013Valuable starting point for a break-even result whilst anticipatinga 8% downturn in the Swiss print market Op. result effect 2013 in CHF 1 Cost measures >16 m Implemented: Personnel reduction effective beginning 2013 10 m Implemented: Overhead and IT reduction 6m Right-sizing to anticipate market development effective 2014 ongoing (partly compensated by digital build up) 2 Growth initiatives 5-6 m Digital growth in Switzerland and Europe driven by the real time 2m advertising sell side platform Customer and portfolio expansion in TV, OOH, digital 3-4 m
  34. 34. Organisation adapted to the market downturnSmaller and leaner organisation in 2013FTE Implemented leaner organisation 1.196 ~1.040 1 Full year effect 2013 of a smaller • 388 and leaner organisation ~370 31 29 2 Operational efficiency secured • ~45 through centralisation ~25 3 Build up of digital competences • 748 -150 FTE ~600 4 Further adaptation according to • market development with a shift -20% from print to online capabilities Closing 2011 Beginning 2013 International Network Cinecom Dedicated digital CH Publicitas CH
  35. 35. Strategic initiatives 2012Leaner cost base anticipated for 2013 & new products launched Objectives Achievements1st PILLAR Swiss business • Process harmonisation • Completed • Depending on publishers Exploit print • Centralisation of sales back-office • Organisation implemented with business: • Improvement of sales efficiency time delay International Leaner and more • Americas implemented flexible cost • Divesture and restructuring Transparent service levels and fair Europe stronger efforts needed • pricing structure Central cost • Publisher negotiations ongoing • Completed • Optimisation of admin services • Implementation for Jan.14 • Optimisation of IT2nd PILLAR Grow Digital Accelerate • At least in line with the • Digital resources unified the digital agenda • New products launched market & explore new • Mobile initiative started opportunities: Higher share of Grow new business • Acceleration of local OOH digital turnover and adjacent media • Expand in adjacent business business in India sales business • Acceleration of TV business in Asia
  36. 36. Business challenges of representation businessA dedicated sales approach limits scalability due to asymmetricinterest between publishers and Publicitas Title 3 Title 4Dedicated Sales: (mono-media) (mono-media) Title 1Sales resources are directly (mono-media)allocated to single titles.Publicitas as an outsourced Title 5sales force for print (mono-media) Title 2publishers (mono-media)• Limited scalability due to lack of operational Title 6 autonomy (mono-media)• Low resource utilisation• Declining relevance to advertiser Title 7 Title 8 Title 9 Title 10 Title 11 (mono-media) (mono-media) (mono-media) (mono-media) (mono-media)
  37. 37. Pursued business modelA portfolio sales approach allows Publicitas to benefit fromeconomies of scale and maximise the advertisers’ share of walletPortfolio Sales:Sales resources sell mediaportfolios that address alarge part of advertisers’need.Publicitas as a match-maker for multiple mediaportfolios Media portfolio (multiple media)• Scalability• Higher sales effectiveness• Maximisation of advertisers’ share of wallet
  38. 38. Mid-term product and geographic mixGrowth in digital and international markets does not compensatefor a strong decline in the Swiss print businessMedia Sales Total Net revenue in CHF mnBy media By geography ~145 ~145 ~13% ~125 ~125 ~23% 30-40% 35-40% ~87% ~77% 60-70% 60-65% 2012e 2015e 2012e 2015e Non-print Print International Switzerland
  39. 39. International Publicitas NetworkAccelerate restructuring, strengthen business and leverageindustry expertise in more than 20 countries Montreal Vancouver Toronto New York BeijingLos Angeles London Amsterdam Brussels New Delhi Shanghai Miami Frankfurt Paris Dubai Honolulu Munich Vienna Hong-Kong Basel/Zurich/Geneva Mumbai Milan Bangkok, Madrid Kuala Lumpur Singapore
  40. 40. Journey to future business modelMeasures initiated as strategic initiatives 20131st PILLAR Swiss business & Central cost • Finalise sales efficiency Exploit print • Reduce IT landscape complexity massively and implement business: scalable system based on standard software • Continue right-sizing to anticipate print market decline Leaner and more flexible cost International structure • Accelerate restructuring and leverage industry expertise Transparent service levels and operating autonomy • Redefine publisher relationships2nd PILLAR Grow Digital Accelerate • Accelerate digital and mobile product offering to address the digital agenda multiple advertising segments & explore new opportunities: Higher share of Grow new business digital turnover and adjacent media • Accelerate development of comprehensive media portfolio sales business
  41. 41. Publicitas’ digital and adjacent product portfolioAdvertising products are sold in Switzerland and overseas inmore than 20 countries Advertisers Product PublishersCH Local & SME Google, FacebookRegional Ad4Max Geo Leading online premium publishersCH National Performance-oriented advertisers Cost effective cross-border Ad4Max inventory sources Media agencies, national clients Leading Swiss print and online AdMarket media owners National clients Swiss online media owners Instanz Lead Generation Media agencies, trading desks, Leading Swiss and international The Mark major clients online premium media ownersInter- (Premium SSP)national Media agencies, key clients International online premium Premium Websites media owners (worldwide) 41
  42. 42. Dive-in: Publicitas Digital - advertiser oriented servicesLocal and regional products• A media package built on top-tier digital platforms• Turnkey media management service, with real-time reporting for time-pressed SME advertisers• Geo-local advertising footprint• Leveraging our long-lasting relationships with SME clients• Sold by Publicitas local/regional sales force and dedicated P-Digital Sales unit 42
  43. 43. Dive-in: Publicitas Digital - advertiser oriented servicesLead generation by Instanz• Tailor made scalable lead generation solutions for B2C businesses• Full service agency covering the complete lead generation funnel• Long-lasting client relationships• Insurance price comparison engine for media platforms• Innovative IT lead generation solutions (Augmented reality, mobile) 43
  44. 44. Dive-in: Publicitas Digital - advertiser oriented servicesNational products for agencies and clients• “Open Media Services” - neutral market positioning• Delivering digital media services and consulting to media agencies and key accounts• Tools for the planning, calculation, booking, processing, controlling and reporting of campaigns for Swiss media agencies• Uniquely comprehensive data resource covering the Swiss media landscape• Helps to drive much-needed efficiencies for agencies 44
  45. 45. Dive-in: Publicitas Digital - publisher oriented servicesNational and international products for media owners• A digital marketplace, where premium media owners enable their inventory to be sold to real-time / automated buyers• Leveraging Publicitas existing relationships as a trusted media sales partner for premium publishers• Leveraging the Publicitas international network of sales offices in 21 countries• Underpinned by Improve Digital’s leading-edge technology 45
  46. 46. PART SEARCH & FINDCapitalizingon new onlineand mobile offeringsEdi BählerCEO local.ch46
  47. 47. Search & FindFurther driving digital growth capitalisingon new online and mobile offeringsEdi Bähler4 December 2012
  48. 48. SMEs evolving marketing and communication needs facing increasing complexity Pay-per-performance models Lead SEM generation  Emerging models (quotations…) Groupon-like  Strong growth  User generated content  Measurable ROI  Editorial content CRM models  User knowledge (Direct marketing) Vertical BookingTraditional portals"Search & SMEs Advertising needsFind" and (marketing & communication) Offline contentonline Online content (flyers, posters) (website, video…)marketing Local media Classified (press, radio, outdoor) Online Events, Directories exhibition Print Directories  Classical media. shows  Poor growth.  Not performance-based Communication and offline medias 48
  49. 49.  Market dynamics – there are markets with distinct growth potential Others Google Couponing -5% to -15% DeinDeal, Groupon, .. Booking Market Maturity Renovero, … +25% … +15% Lead Generation Directories +10% to +20% Website creation & content Online content +10% to +20%,..,…,,… Classifieds Homegate,Immoscout24,home… Online Printed Search &49 Directories Find
  50. 50. Matchmaking dynamics – maximise value for customers & users, monetise on services Sales Channels customer loyalty Fieldsales Inbound T. entry customers Outbound T. products advertising Key Account SME products transactions Special Sales Self Service Matchmaking / Conversion ➜ Value Direct OrganicPopulation users AdWords Partner Others App-Dwnld App-Usage Audience Matchmaking user loyalty Traffic 50
  51. 51. Key drivers for successful matchmaking Leader in audience Strong monetization engine Managed audience  Products (Print, Online, Mobile) (Print, Online, Mobile) - User experience design - Optimise - Search engine optimisation - Local editorial content - User generated content   - New - Mobile - Lead generation  Sales power & efficiency: Brand strength – Incentive – Role Model – CRM – Multichannel Operational excellence Match-making data People and culture IT  User insights  Harmonised employer conditions Processes  Deeper advertiser information  Strategic personnel resource management Print cost structure 51
  52. 52. Uncontested #1 on mobile with > 2m downloads Total downloads on all platforms1 2.2 2 m downloads 2.0 2mm downloads1 1.8 [mm] of local app on all 1.6 mobile platforms 1.4 1.2 1.0 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2011 2012 42% ahead on No. 2 Unique clients2 iOS (October 2012) with apps in use for iOS in October 2012 411 Achieved exclusively with matchmaking +42% ahead traffic No.2 289 0 100 200 300 400 500 [k]52 1 Source: Official platform Stores (iOS,Android,Blackberry,W7,Nokia) 2 Source: Netmetrix Mobile iOS (
  53. 53. #1 internet page of Switzerland in terms of unique visitors Biggest internet pages of Unique clients1 Switzerland1 in October 2012 3.7 3.5 Unique 3,616.000 3, 3,110.000 [mm] 3.1Blick Online 3, 3,057.000 3,035.000 site migrationMicrosoft Ad 2,852.000 2,525.000 1,675.000 2.5NZZ Online 1,539.000 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2011 2012 No.253 1 Source: Netmetrix
  54. 54. New (2012) mobile & online products accountfor a substantial portion of total order intakeYTD Online Broad & content Presence Web Plus Mobile  Successful launch of a web product with big potential Mobile First Selective  Launch of a second Banner Couponing successful mobile Mobile product with big Business potential Alert 54
  55. 55. Offer evolution towards changing user habits and needs – buyers guideLocal Guide Still more than 70% of household usage of print Increase attractivity with local editorial content Editorial Content Cross-media offers under one brand Environmental sustainability55
  56. 56. New restaurant special guide & booking feature launched 10/2012 "RestoGuide"• Finding restaurants   Localina Products • • • Online reservations Reservation management Customer CRM• Find and select restaurants• Book restaurants • Settings & analytics October 2012 (first month live) • ca. 1.5 [k] total reservations • 20 bookable restaurants56
  57. 57. Online order intake compensates decline ofprint order intake Order intake 2008 2009 2010 2011 2012 2013 E‐Media order intake C‐Media order intake SUM order intake 57
  58. 58. Conclusions  Review:  Online revenue keeps on growing with double digit and online order intake outperforms print decline UPDATE PUBLIGROUPE  Biggest Internet page in Switzerland in terms of unique visitors  Uncontested #1 in mobile matchmaking  Print offer evolution towards changing user habits and needs  New (2012) mobile & online products account for a substantial portion of total oder intake YTD  New restaurant special guide & booking feature launched 10/2012  Outlook:  Driving further digital and mobile growth  Capitalise on leading position and strong heritage  Develop new revenue models on the basis of continued above-average profitability 58
  59. 59. PART DIGITAL & MARKETING SERVICESCapitalising on Zanoxleadership & trendsin RTARenato MartignoniCOO DMS59
  60. 60. Market trendsFour key trends that guide DMS’ strategic priorities Continuing shift to online 1 Online advertising continues to grow at double digit rates, despite low overall growth Shift to mobile 2 A key driver of online growth is increasing usage and anticipated spend on mobile devices Shift to real-time advertising 3 New, efficient and ‘intelligent ’ RTA-based business models will gain in importance Data-driven consolidation 4 Intermediaries in the advertising ecosystem will consolidate to maximize access to intelligence 60 Source: DMS Analysis
  61. 61. Market trends – shift to onlineOnline, with display in particular, continues to grow above market ratesAd Spend, EMEA, 2009-2016FEUR€ bn1, % share per medium CAGR CAGR 2009-12E 2012E-16F +4% +5% 93 98 100 103 107 113 119 125 100% 15% 14% 14% 13% 13% 12% 12% 12% Other 4% 5% 5% 5% 5% 6% 6% Online Classifieds 2 +11% +10% 4% 5% 5% 6% 7% 8% 9% 9% 10% Online Display 2 +18% +16% 8% 9% 10% 11% 12% 12% 13% 14% Online Search 2 +15% +12% 12% 11% 11% 10% 10% 10% 9% 9% Print Magazines -1% +2% 22% 21% 20% 19% 18% 17% 16% 16% Print Newspapers -2% 0% 5% 5% 5% 5% 5% 5% 4% 4% Radio +2% +2% 29% 31% 30% 30% 30% 30% 29% 29% TV +4% +4% 2009 2010 2011 2012E 2013F 2014F 2015F 2016F 61 Source: PwC, October 2012, DMS analysis Note: 1) In 2011 Euros, converted from US$; 2) Display includes video, and all online categories include 1/3 of mobile
  62. 62. Market trends – shift to mobileThe gap between mobile ad spend and mobile time spent is expandingAd Spend vs. Time Spent, USA, 2012 Mobile Ad Spend vs. Time Spent, USA, 2009-12% share per medium % share (percentage point (pp) difference) 40% 39% 12% Mobile Time Spent Ad Spend Time Spent 11% Anticipated Ad Spend Trend 10% 9% 25% 8% 21% 7% ∆=10pp 6% 5% 13% ∆=7pp 12% 12% 4% 9% 9% 3% ∆=5pp 2% Mobile 3% 2% Ad Spend 2% 1% 0% TV Online Radio Mobile Print Print 2009 2010 2011 2012 Newspapers Magazines 62 Source: eMarketer, October 2012, DMS analysis
  63. 63. Market trends – shift to real-time advertisingRTB is expected to double its share of online display transactionsRTB vs. Non-RTB Display Ad Spend, Germany, 2011-15FUS$ bn, % share per type CAGR 2011-15F +11% 1.7 1.8 1.9 2.2 2.5 100% 4% 8% 13% 17% 20% RTB Ad Spend +68% 96% 92% 87% 83% Non-RTB Display 80% Ad Spend +6% 2011 2012E 2013F 2014F 2015F 63 Source: IDG, 2011, DMS analysis
  64. 64. Market trends – market consolidationThe RTB-driven ecosystem is consolidating to maximise access to data Horizontal Consolidation Trading Ad Sales Agencies Desks DSP Tech SSP Tech Exchanges Networks Houses Publishers • The ‘classic’ advertising ecosystem is highly fragmented with insulated unique data assets • Data is key for effective targeting and RTB- bidding strategies • Through consolidation, more consistent data can be used to define and execute a bidding strategy • This will result in a higher value per (targeted) inventory asset, and a higher RoI for advertisers 64 Source: DMS analysis
  65. 65. DMS strategyFocusing on adding sustainable value to our key clients and consumers * Agency / RTB Trade RTB Trade RTB Trade RTB Trade Publisher Advertiser Desk Technology Technology Desk … Internal DataInternal Data External Data, Data Management, Data Analytics Internal Data Video Mobile Web KEY VALUES KEY VALUES Usability Intelligence Trust “Offer the best user “Offer the most intelligent “Offer the highest standards experience throughout data-driven pricing and in privacy, data and the booking process” placement strategy” transaction security” 65 Source: DMS analysis Note: *) Mediamath is an independent partner of PubliGroupe
  66. 66. DMS performance overviewFinancial Recap 2009-12 in CHF m 300 Portfolio 200Revenue* (from 2013, pending approval) 100 49.4 50.6 52.1 0 2009 2010 2011 2012 • Zanox not fully reflected in DMS P&L due to accounting restrictions 18 • RTB-DSP provider Spree7 launched in Berlin in cooperation with MediaMathOperating 12 Result* 9.7 • Acquisition of Improve Digital (85% 6 7.4 stake) is awaiting regulatory approval 2.3 0 2009 2010 2011 2012 • Namics business sold to the partners - 2012 results not fully comparable Reported proforma * Reported view: in 2012, Namics is included January - May. Full year included in 2009-2011. 66 Proforma view: includes share of Zanox (47.5%); excludes Namics; calculated at constant exchange rate (2012).
  67. 67. DMS performance contributors (proforma)Zanox (47.5%) is to DMS performance 185 193 • Zanox is our largest investment with a significant EBIT contribution SVBmediaRevenue* HQ Spree7 • SVBmedia is a profitable media Zanox agency in the Netherlands Q1-3 2011 Q1-3 2012 • Spree7, Berlin, launched in May 2012 is a RTA trade desk, FTE 8 9 • All units invest in future digital 6 developmentsOperating Result* Spree7 SVBmedia HQ Zanox Q1-3 2011 Q1-3 2012 67 * Proforma view: includes share of Zanox (47.5%); excludes Namics; calculated at constant exchange rate (2012).
  68. 68. ZanoxThe European leading performance advertising network Performance = Sales European Leadership #1 position in market #2 Engaging > 4000 advertisers Connecting relevant publishers
  69. 69. ZanoxOutgrowing our closest competitor Revenues (€M) EBITDA (€M)1) +5% +32% +20% -14% 327 18 312 -8% 16 260 -9% +35% 14 -87% 227 210 191 11 8 1 9M/2010 9M/2011 9M/2012 9M/2010 9M/2011 9M/2012 9M/2010 9M/2011 9M/2012 9M/2010 9M/2011 9M/2012 zanox group Tradedoubler zanox group Tradedoubler Note: Tradedoubler exchange rate SEK/EUR 0,11 69 1) Tradedoubler EBITDA 2010 not including amortization of loans of €26,6M Source: Tradedoubler Interim Reports Jan-Sep 2011 & 2012
  70. 70. ZanoxOpportunities and challenges Opportunities Challenges • Online advertising markets in Europe • Difficult macro-economic environment still growing – driven by budgets shifting – with reduced consumer spending in from offline to online and rapidly growing some key industries and markets (esp. online retail sales Southern Europe) • Online advertising continues to move • Pricing pressure growing – as more and more towards performance- especially large advertisers demand based models – as advertisers increase volume discounts and insource their focus on ROI • Performance-based alternatives to • Synergies from zanox network gaining in affiliate marketing gaining ground – e.g. importance – for serving large re-targeting, real time bidding international advertisers and from a cost perspective 70 Source: zanox analysis
  71. 71. ZanoxZanox has a sound strategy in place 1 • Further acquiring and growing advertisers and Network publishers network – locally and globally growth • Leveraging 3rd party cooperations 2 • Core affiliate platform evolution Product • Mobile innovation innovation • New performance-based models 3 • Profitably growing our new countries (Brazil, International Eastern Europe, Turkey) expansion • Evaluating further expansion moves (organic and M&A) 71 Source: zanox analysis
  72. 72. Spree 7DSP start-up in partnership with leading tech provider Mediamath Powered by: Company facts • Start-up, founded mid 2012 with headquarters in Berlin • Grown to 8 employees since foundation • Oliver Busch • Exclusive relationship with Mediamath in DACH region (Managing Director) • 2012 focus was on business incubation; • Alexander Thurner 2013 focus will be on gaining market traction and growth (Director Sales DACH) • German RTA market is expected to grow at a rate of 68% in coming years• PubliGroupe participates with 80% in Spree7, Mediamath holds the remaining 20%• Mediamath is a leading global DSP technology provider, headquartered in the United States, that gained the #1 position in recent Forrester research• Spree 7 is a managed service provider to agencies and advertisers in the DACH region, with preferred access to Mediamath technology• PubliGroupe intends to develop a leadership position in DACH DSP markets, combining best-in- class service provision with leading technology 72
  73. 73. Improve DigitalLeading European SSP player Company facts • Founded in 2008 with headquarters in Amsterdam and offices in London, Madrid, Munich and Paris; 60 employees • Joelle Frijters (CEO) • Proprietary technology, RTA enabled - the 360 Yield • Janneke Niessen (CIO) Platform • Over 70 premium European publishers • Billings in 2012 expected to reach CHF 20 m, more than double compared to last year• PubliGroupe acquires 85% of Improve Digital • Close to 100 bn ad impressions running through the platform• Acquisition is subject to approval by the Swiss Comco• Part of PubliGroupe investment to fuel growth of Rising Star 2011 Award company and accelerate its geographical expansion• Publicitas will use Improve Digital technology for its high premium market place 73
  74. 74. ConclusionThree key points to win Capitalise on Zanox leadership in Europe 1 Leverage innovation and efficiency investment through clients and publishers European network Execute consistently on key initiatives - Improve Digital, Spree7 2 Hire and retain key people to achieve consistent and timely execution 3 Embrace and focus on key trends - RTA, Mobile, Data Drive profitable growth 74
  75. 75. PART FINANCESolid financial situation;share buy-back programmeAndreas SchmidtCFO75
  76. 76. Agenda1 Divestment results2 Financial situation: cash, returns & investment capacity3 Share buy-back programme4 Non-operating assets5 Conclusion76
  77. 77. Divestment results Continuation of strategic asset management in 20121 • Disposal of 91% interest in Net book gain from divestments, in millions of CHF Namics AG (including German and US subsidiary) 60 52.4 • Disposal of 50% interest in 50 Südostschweiz Publicitas AG 40 (SOP) 39.0 30 • Disposal of four real estate properties in August 2012 for a 20 total of CHF 85 m, resulting in 10 28.4 after tax gain of CHF 39 m. 15.5 13.4 0 In total approx. CHF 52 m net 2010 2011 2012 estimate book gain in 2012 accounts Namics Divestment 37% BAZ Medien / Emphasis Video (EVE) Südostschweiz 19.9% Edipresse Huashang Interactive of non-core Real estate Baden / City Media Publicitas AG assets Lausanne Real Estate St. Gallen Real Estate Bern & Lausanne 2010 2011 2012 77
  78. 78. Divestment results Four real estate assets were sold in August 20121 Lausanne Bern (Mon-Repos) • Three buildings in Lausanne (Toises 12, Mon Repos 22 and Mousquines 4) and one in Bern (Seilerstrasse 8) were sold in August 2012 • Disposal of four real estate properties will produce an after-tax Lausanne Lausanne book profit in amount of CHF 39 m. (Mousquines) (Toises) • An important part of the proceeds will be returned to the shareholders of PubliGroupe, as announced in early 2012 78
  79. 79. Financial situation: Strong cash position despite unsatisfactory operational cash flow2 * 79Note: *) Contains dividends paid to shareholders of PubliGroupe and dividends paid to minority interests by Group companies
  80. 80. Financial situation: Sufficient investment capacity to finance future growth2 Outlook 2012 / 2013 1st half year in millions of CHF (+) Net proceeds from real 2012 estate sale Available cash 95.6 (-) Planned refund to shareholders (early 2013) Free bank facilities 35.0 (-) Bank debt repayment Operating cash need -30.0 (+/-) Expected operational cash flow for the 2nd half year of zero Financial headroom 100.6 Expected financial headroom for 2013 remains in the range of CHF 100 m after all transactions 80
  81. 81. Share buy-back programme Ambition to return CHF 45 m to shareholders3 Planned return of proceeds: • As announced previously, PubliGroupe intends to return a big part of the proceeds generated by the sale of the real estate assets to its shareholders • The ambition of the board is to pay back a total of CHF 45 m • A share buy-back programme of CHF 25 m via a second trading line on the SIX Swiss Exchange, approved by the Board of Directors will be launched early 2013 • It is planned that the Board of Directors will propose to the 2013 Annual General Meeting: − Extension of the buyback programme or a new programme, depending on the volume that has been repurchased by then. − A proposal to pay a special dividend for the balance. 81
  82. 82. Share buy-back programme Timing and conditions3 Key characteristics of the share buy-back programme: • Trading period from 3 January 2013 to 30 April 2013 • The share buy-back will be processed via a second trading line on the SIX • The repurchase price on the second line will be driven by the share price on the first line • Based on a current share price, approx. 9% of the total shares outstanding could be repurchased by PubliGroupe 82
  83. 83. Non-operating assets: real estate Zurich Neumühlequai remains an important asset in our portfolio4 Zurich | 1982 | 4695m2 • After the divestment of 4 buildings in Lausanne and Bern, PubliGroupe holds 3 real estate assets • The most important of these assets is the office building at Neumühlequai in Zurich. The building is rented to a third party with a long term contract • The Board of Directors Paris | 1970 | 365m2 Delémont | 1992 | 1045m2 has decided not to sell this asset for the moment 83 Note: Location | Year of construction | Surface area
  84. 84. Non-operating assets: press participations Assets in participations and securities in amount of CHF 68 mio. 4 Book values (June 2012), in millions of CHF FPH (Freie Presse Holding) % owned • Subsidiary of the Swiss publishing house Neue Zürcher Zeitung, combining all major 42.8* Participations press participations of the group 25% Press SNP (Société Neuchâteloise de Presse) • Part of the Hersant Group and one of the 29% prominent newspaper publishers in French 4.1 speaking Switzerland Südostschweiz Presse und Print AG • Subsidiary of the Südostschweiz Medien 2.4 20% GroupMarketable &non-current Tamedia securities 11.5 Other (several positions) 7.1cash flows Expected  Dividends from press participations: CHF 2.6 mio. (operational cash-flow) 2012  Dividends from marketable & non-current securities: CHF 1.0 mio. (financial result, operational cash flow) 84 Note: *) Decrease in book value compared to 2011 is a result of the change to Swiss Gap FER (goodwill being offset through equity)
  85. 85. Conclusion Solid financial situation and return CHF 45 m to shareholders5  PubliGroupe has divested some CHF 100 m non-operating respectively non-strategic assets in 2012  For 2012 PubliGroupe expects an operating cash-flow close to zero  PubliGroupe BoD has the ambition to return CHF 45 m to shareholders. As a first step, a share buyback programme will start on 3 January 2013  PubliGroupe enjoys a solid financial situation and will have sufficient funds for financing future growth after the announced returns to shareholders  There are still important non-operating assets on the balance sheet of PubliGroupe which could be sold in the future 85
  86. 86. PART GROUPOverall conclusionby the CEOArndt C. GrothCEO PubliGroupe86
  87. 87. ConclusionPreparing the Group for the digital marketing world Market conditions are in constant change --- print will continue to decline, digital and now especially mobile will continue to gain in importance. PubliGroupe with broad range of assets that need to be refocused to strengthen regional, national and international network. Media business will continue to be primary DNA, but automation of processes necessary, focusing on connecting supply and demand. For 2012 small operating loss and net profit of over CHF 41 m; for 2013 strong improvement at Publicitas expected against 2012 result that should allow break-even operating result and contributions at roughly the same level, or slightly higher in the case of Search & Find, for the other segments. Ambition to return CHF 45 m to shareholders. As a first step, a share buy- back programme that will start on 3 January 2013. Solid financial situation and sufficient funds for financing future - also after share buy-back programme. Still important non-operating assets on the balance sheet of PubliGroupe. 87
  88. 88. DEMO IMPROVE DIGITALMaximising fullpotential ofinventory88