Letter to Shareholders
www.apgsga.ch
At a glance - 1st half of 2023
Advertising revenue
CHF m
152.3 | 107.8 | 105.9 | 140.7 | 148.8 |
2019 | 2020 | 2021 | 2022 | 2023 |
EBIT
CHF m
24.4 | |||
12.9 | 12.8 | ||
-5.1 | 1.3 | ||
2019 | 2021 | 2022 | 2023 |
2020 |
Cash flow from operating activities
CHF m
12.5
4.8 | -16.5 | - 6.2 | - 2.0 |
2019 | 2020 | ||
2021 | 2022 | 2023 |
EBITDA
CHF m
29.7 | ||||
18.4 | 18.0 | |||
-0.2 | 6.4 | |||
2019 | 2020 | 2021 | 2022 | 2023 |
Consolidated net income
CHF m
19.4 | |||
10.2 | 10.5 | ||
-5.1 | 1.0 | ||
2019 | 2021 | 2022 | 2023 |
2020 |
Earnings per share
CHF m
6.46
-1.69 | 0.34 | 3.39 | 3.51 |
2019 | 2021 | 2022 | 2023 |
2020 |
APG|SGA SA Letter to shareholders July 28, 2023 3
Growth of advertising revenues in all segments.
Consistent development of digital portfolio.
Focus on growth projects in adtech, programmatic and data.
In brief
- Advertising revenue: CHF 148.8 million; +5.7% (Switzerland +5.8%, International +3.8%)
- EBITDA: CHF 18.0 million; - 2.4%
- EBIT: CHF 12.8 million; - 1.4%
- Consolidated net income: CHF 10.5 million; +3.4%
- Free cash flow: CHF - 3.3 million
Financial highlights
1st half of | 1st half of | ||
in 1 000 CHF | 2023 | 2022 | Change |
Advertising revenue | 148 787 | 140 732 | 5.7% |
- Switzerland | 141 924 | 134 122 | 5.8% |
- International | 6 863 | 6 610 | 3.8% |
Operating income | 150 282 | 143 214 | 4.9% |
EBITDA | 17 966 | 18 409 | -2.4% |
- in % of operating income | 12.0% | 12.9% | |
EBIT | 12 762 | 12 948 | -1.4% |
- in % of operating income | 8.5% | 9.0% | |
Consolidated net income | 10 515 | 10 168 | 3.4% |
- in % of operating income | 7.0% | 7.1% | |
Cash flow from operating activities | -2 010 | - 6 225 | -67.7% |
Free cash flow1 | -3 290 | - 6 638 | -50.4% |
Investments in property, plant, and equipment | 1 789 | 1 919 | -6.8% |
- advertising panel | 776 | 1 273 | -39.0% |
- other investments | 1 013 | 646 | 56.8% |
Earnings per share, in CHF | 3.51 | 3.39 | 3.5% |
EBITDA: Earnings before interest, taxes, depreciation of property, plant, and equipment, and amortization of intangible assets
EBIT: Earnings before interest and taxes
1 Cash flow from operating activities (operating cash flow) CHFt - 2 010 (previous year: CHFt - 6 225) less cash flow from investing activities CHFt - 1 280
(previous year: CHFt - 413), (see page 9 Consolidated statement of cash flows)
4 APG|SGA SA Letter to shareholders July 28, 2023
Dear Shareholder
General business development
Following a strong prior-year period, APG|SGA succeeded in increasing its revenues in the first half of 2023 and recorded positive development in all segments. This was accompanied by targeted expansion of the portfolio, particularly digital and programmatic products, along with further measures for process and cost optimization. The Group also created the organizational prerequisites that will allow the consistent on going exploitation of opportunities provided by advances in digitalization and technological developments.
The compelling qualities of Out of Home media, an advertising medium with wide reach and high impact, enabled it to increase its market share of the media mix. Nonetheless, the challenging geopolitical and macroeconomic framework conditions continue to lead to a pronounced short-term approach to planning and roll-out of campaigns on the part of advertising clients.
APG|SGA Group
In the first half of 2023, the APG|SGA Group achieved advertising revenues totaling CHF 148.8 million,
representingsales growth of 5.7%. Real estate revenue came in 5.6% below the previous year's period. Other operating income (gains from the sale of obsolete property, plant and equipment) amounted to just CHF 0.6 million in the reporting period (previous year: CHF 1.5 million). This resulted in operating income of CHF 150.3 million in the first half of 2023, representing an increase of 4.9%.
Fees and commissions represented 60.1% of advertising revenue in the first half-year of 2023, a slight increase on the previous year's level of 59.9%. Personnel expenses increased by 5.9% compared with the previous year's period. Compensation for short-time work reduced this expense in the previous year's period. Operating and administrative costs increased by 5.7% in the reporting period, driven by increased costs for
energy and services. Operating margins experienced a slight decrease compared with the previous year's
period - driven by temporary product mix effects and declining gains from sale of property, plant and equipment in particular - to reach 12.0% of EBITDA (previous year: 12.9%) and 8.5% of EBIT (previous year: 9.0%).
An improved financial result and a lower burden from income tax led to a 3.4% increase in consolidated net income in the first half-year of 2023, reaching CHF 10.5 million.
Cash flow
The first half of 2023 saw operating cash flow of CHF -2.0 million (previous year: CHF -6.2 million). This improvement over the previous year's period was primarily driven by the change in net current assets.
Cash flow from operating activities is subject to seasonal fluctuations and is always significantly lower in the first half of the year than the second. After cash flow from investment activities of CHF -1.3 million was taken into account, free cash flow amounted to CHF -3.3 million.
Balance sheet
The balance sheet total fell by CHF 32.6 million in the first half of 2023 to CHF 156.8 million. Although non-current assets decreased by only CHF 3.8 million, current assets decreased by CHF 28.8 million. As at June 30, 2023, cash and cash equivalents amounted to CHF 17.2 million. This reduction is primarily
APG|SGA SA Letter to shareholders July 28, 2023 5
due to the dividend payout. Equity amounted to CHF 68.7 million, representing an equity ratio of 43.8%. Current liabilities fell by CHF 8.5 million. This decrease was largely caused by the seasonality of accrued liabilities and deferred income.
Swiss market
For the first half of 2023, advertising revenues for APG|SGA stood at CHF 141.9 million, 5.8% above the
previous year. This is noteworthy insofar as the total advertising expenditure in the Swiss market - as
recorded in the gross advertising statistics of Media Focus - was well below that of the first half-year of 2022, with a drop of 6.1%. Overall, APG|SGA experienced positive revenue development in all its key communication spaces (streets and squares, stations, mountains, airports, public transport).
Although advertising investment in sectors such as wholesale/retail chains, banking/insurance and internet mail order developed positively compared with the previous year's period, revenues were below average in telecommunications, health insurance and - once again - the automotive sector.
Revenues generated by our digital advertising media continued to develop positively. This is due, on the one hand, to the fact that APG|SGA is providing advertisers with a constantly growing digital portfolio and, on the other hand, to the fact that clients and their agencies appreciate the ability to fllexibly book and broadcast
digital Out of Home at short notice, as well as the new programmatic options it offers. And our customers can have full confidence in the processes and guarantees of agreed broadcasts. PwC conducted a detailed audit and verified all processes, with approval in all categories (broadcast, content evaluation, hardware, etc.).
This proves that APG|SGA is setting a very high standard for transparency and security in its provision of services.
The Group secured an agreement with the passenger transport arm of SBB on a multi-year extension to contracts in the marketing of interior and exterior spaces of trains. However, APG|SGA will not be continuing its partnership with SBB in the area of the marketing and management of its promotional spaces from 2024.
Serbian market
APG|SGA is operationally active in Serbia, which accounts for 4.6% of Group sales.
Geopolitical uncertainties, the flare-up of conflict in Kosovo and problems in the global supply chain had a negative effect on the economic environment in Serbia throughout the reporting period. A very high rate of local inflation and the huge increase in energy prices also contributed to the difficult conditions.
Advertising revenues in local currency increased by 8.5% compared with the previous year's period. However, the weakening of the Serbian dinar resulted in an increase of just 3.8% in Swiss francs.
Organization
At the APG|SGA AG General Meeting on April 27, 2023, all members standing for re-election were confirmed for a further year. David Bourg, Group Chief Financial and Administration Officer of JCDecaux SE, was newly appointed to the Board of Directors. Stéphane Prigent, member of the Board of Directors of APG|SGA since 2015, is retiring and did not stand for re-election. The Board of Directors now comprises Dr. Daniel Hofer (Chairman), Xavier Le Clef (Vice-Chairman), David Bourg, Dr. Maya Bundt, Jolanda Grob and Markus Scheidegger. Jolanda Grob (Chair) and Markus Scheidegger were re-elected to the Board of Directors' Remuneration Committee.
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APG SGA SA published this content on 28 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2023 07:11:33 UTC.