Powerful growth for the Goldbach Group

The Goldbach Group has reported its results in three business lines since 1 January 2011. The Media business line is comprised of the former Offline segment, while the Audience and Interactive business lines were previously combined in the Online segment.

The Media business line is growing solidly, also with its long-standing portfolio
Turnover 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, grew powerfully in the first half of 2011 by 65.3% (currency adjusted: 65.6%) with sales amounting to CHF 154.1 million (prior year: CHF 93.2 million). The growth in turnover was largely generated in the TV business (+75.4%; prior year: +11.3%) and from sales of radio advertising (+24.2%; prior year: -2.1%). The Media business line significantly increased its mandates in 2010, which will impact sales and revenue this year. A substantial share of the turnover growth resulted from the long-standing Goldbach portfolio. The TV business profited from the ongoing shifting of advertising spending to electronic media and is booming in Switzerland. The radio advertising business has reco vered and may also grow in the second half of the year. The Media business line is becoming active in Eastern Europe for the first time with the founding and marketing of an association of local, private TV stations in Romania. The Media business line contributed 74% to the total turnover of the Goldbach Group in the first half of 2011 (prior year: 62%). The EBIT for the Media business line increased by 128% in the first half of the year and amounted to CHF 16.6 million (prior year: CHF 7.3 million). A ccordingly, the Media business line contributed 85% of the Group EBIT (prior year: 77%). The EBIT margin increased significantly to 10.8% (prior year: 7.8%).

Consistent margin strengthening in the Audience business line
In the Audience business line, which enables the targeted placement of online advertising and novel offers for performance marketing, turnover decreased in the first half of 2011 by 10.2% (currency a djusted -3.7%). Total turnover was CHF 38.4 million (prior year: CHF 42.7 million). This was primarily a result of a declining market in Switzerland, in which the Audience business line consequently opted out of low-margin business and is promoting higher-margin network marketing. Contact to the important customer group media agencies was further deepened with the introduction of TAO, an online reporting system for the current assessment of marketing success in digital media . Wilmaa, the Swiss Internet television, in which Goldbach holds a majority stake, is also part of the Audience business line, and has developed rapidly and profitably in the first six months of 2011. EBIT growth in the Audience bus iness line amounted to 28%; EBIT was CHF 1.6 million (prior year: CHF 1.3 million). The EBIT margin increased by 4.2% (prior year: 2.9%). The Audience business in Eastern Europe continues to be marked by great volatility, while the South Adriatic markets have recovered slightly. In total, the Aud ience business line contributed 16% (prior year: 28%) to the overall turnover and 8% (prior year: 13%) to the Group’s EBIT.

High demand for online marketing accelerates growth of the Interactive business line
Turnover in the Interactive business line, in which Goldbach’s conceptual, design and technological offers pertaining to interactive communication and marketing sol utions for the Internet and mobile computer are bundled, increased by 26% and when currency-adjusted, by 32.3% to CHF 20.1 million (prior year: CHF 16 million). With the high-margin offers of the Interactive business line, Goldbach Group seeks to extend the value creation chain while also deepening direct contact with advertising clients. Several weeks ago, with the founding of Goldbach Interactive Austria, the Interactive business line expanded its offer from Switzerland and Germany to the entire German -speaking region. The Goldbach Mobile competence centre, which is integrated in the Interactive business line, grew powe rfully in the first half of 2011 with its services and application developments for iPhone, iPad and other smartphones. The Social Media competence centre develops strategies and campaigns for platforms such as Facebook and Twitter, creates content and manages the dialogue with communities. Social Media also recorded strong growth in the first half of 2011. The Interactive business line contr ibuted 10% (prior year: 10%) to the overall turnover of the Goldbach Group; 7% to the Group EBIT (prior year: 10%). The EBIT margin increased by 7.1% (prior year: 5.5%).

Thus, in the first half of 2011, 74% (prior year: 62%) of the overall turnover was gen erated by the Media business line, 16% from the Audience business line (prior year: 28%) and 10% from the Interactive business line (prior year: 10%). Due to the strong growth of the Media business line, particularly in Switzerland and the foreign currency effects, the share of international business decreased to 14% in the first six months (prior year: 21%).

Sale of the print business and completion of the squeeze-out at ARBOmedia
At the end of June 2011, the Goldbach Group disposed a further company of the print division, which was part of the ARBOmedia acquisition and no longer belonged to the core business. Sales negotiations are far advanced for the remaining newspaper publisher in Romania. The deconsolidation of the two companies shall take place in the second half of 2011. In addition, t he General Meeting of ARBOmedia approved the squeeze-out in June, with few votes cast against it. With the listing in the comme rcial register at the Munich District Court on 1 August 2011, Goldbach Ost GmbH took over all the shares belonging to the minority shareholders in ARBOmedia and thereby completed the squeeze-out procedure. Goldbach Group also intends to delist ARBOmedia in the third quarter of this year.

Profit and equity ratio
The net profit reported in the core business amounted to CHF 3.8 million (prior year: CHF 3.0 million) and thereby increased by 27% over the prior year period. The net profit reported according to IFRS, will be impacted by CHF 0.7 million due to the disposal of the print business, and thus amounts to CHF 3.1 million and is slightly above the prior year’s figure. As of the end of June 2011, the equity ratio amounted to 28.9% (as of 31 December 2010: 28.8%). CHF 7.3 million in operating cash flow was generated in the first half of 2011 (prior year: CHF -3.2 million).

Outlook
On the basis of the strong growth in the first half of the year, the Goldbach Group confirms the progn osis made at the beginning of the year for 2011, if the economy does not significantly cool down. D espite a slowing of growth momentum and greater foreign cur rency uncertainties, the Goldbach Group anticipates an annual result showing double-digit growth in turnover and increase in EBIT.

According to Klaus Kappeler, CEO of the Goldbach Group, “with its innovative and comprehensive service and product portfolio for electronic media in Central and Eastern Europe, the Goldbach Group is uniquely prepared to anticipate future market developments and to cushion market volatility. Mobile and interactive communication is steadily growing, while TV and video are becomi ng interactive. The Goldbach Group has the capability to link the advertising industry with the rapidly growing number of online consumers like no other company.”

Contact
Goldbach Group Germaine Müller Seestrasse 39 8700 Kusnacht Switzerland Phone 044 914 91 00 Mobile 79 688 24 74 Fax 044 914 93 60