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PubliGroupe going forwardFocus on a portfolio of technology-oriented companies in media & advertising sector
Vontobel Medientag – Zurich, 27 January 2014
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From news release of 19 November 2013:
“… PubliGroupe confirms the anticipated achievement of a balanced operating result for the full year 2013 as announced in late August along with an expected net result around the level of the 2013 half-year report. The half-year result for 2013 came to CHF -9.5 million. The two business segments Search & Find and Digital & Marketing Services (DMS) are developing positively … progressing according to plan are the announced measures to realign capacities and structures at the Holding and Publicitas levels as well as the implementation of the new strategy for Publicitas presented at the end of August 2013 with the goal of a more efficient and increasingly automated media sales approach.”
PubliGroupe financial results on 7 March 2014
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Key investment highlights of PubliGroupe
Key Driver Measures
Profitability Increasingly digital company with mix of established and fast-growing companies
Stopping cash drain at Publicitas under new management
Continued divestment of non-core assets or assets that are not providing financial returns
Adaptation of holding in line with industry benchmarks
Growth potential Increasing market demand for ad technology and ad trading services
Relevant market share; leading players in respective markets
Leading media sales house in Switzerland with Publicitas; local.ch leader in Swiss directory match-making market; European leadership with Improve Digital and Zanox
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PubliGroupe investment highlights (detail 1)
Internet ads growing at double digit rate, driven by continued increase in online penetration and higher share of ads budget allocated to this media
PubliGroupe focuses on online and is ideally positioned to capture the growing demand for ad trading and ad technology solutions
1. Capitalising on digital transformation… 2. and value enhancing services
Offering a comprehensive palette from branding to lead generation
Investing in transaction-oriented fields and fast growing RTA/programmatic buying market that provides better rates for long-tail inventory
Source: PubliGroupe Investors Day 2012
Western Europe Internet ad spend 2005-2015FUS$ bn, % share of total Ad Spend
05 06 07 08 09 10 11 12 13F 14F 15F
5.3
28.6653887035702
5%
28%
Market Share
Western Europe Ad Spend CAGR 2005-2015F
Newspapers
Magazines
Television
Radio
Cinema
Outdoor
Internet
(4.4%)
(4.8%)
(0.3%)
(0.1%)
(0.2%)
0.3%
12.0%
Source: ZenithOptimedia, Advertising Expenditure Forecasts September 2013.
CAGR 19%
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Advertiser & agency services
PubliGroupe investment highlights (detail 2)
Technological platforms operated for publishers, agencies and advertisers
Owning the end to end relationship between supply and demand
Digital covers all marketing disciplines
3. Solutions across the value chain … 4. … and leading in attractive markets
Publicitas leading media sales organisation in healthy Swiss economy
Uncontested #1 position of local.ch (50% PubliGroupe) on mobile devices in Switzerland
Capitalise on Zanox (47.5% PubliGroupe) leadership in Europe
Further develop Improve Digital growth in Europe
AD
VE
RT
ISIE
R
AD
UIE
NC
EPerformanceMarketingAgency
Demand-Side
Platform
Premium publisher services
Supply- Side
PlatformPublisher
Digital display ecosystem and selected PubliGroupe investments
“The Mark”
# 2 position in market
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• Lean and focused HQ structure to control and very selectively support assets
• Operational efficiencies realised within key assets
• Divestment of non-core assets
• Focus on technology-oriented companies in the media & advertising sector
a
Accomplishments since 2012Progressing along three distinct paths
1.Streamlining of operations
2. Focusing on core assets
3.Developping tech-oriented
assets
• Reduction of overhead costs; currently 29 FTEs at headquarters in Lausanne, further reductions planned
• Appointment of new CEO at Publicitas with turnaround experience; continued, effective rightsizing at Media Sales
• At local.ch/Zanox efficiency programs in place, with effects to be realised in 2014 and 2015.
• Sale of 3 buildings in Bern & Lausanne
• Sale of Namics, IT consultancy firm
• Sale of 51% of Xentive to Mediaspectrum, Boston-based company offering premier software solutions
• Sale of further, non-strategic assets planned
• Acquisition of Improve Digital, leading European supply-side platform operator
• Establishment of Spree7 together with MediaMath as a leading demand-side platform (DSP) provider that caters to marketers’ media buying needs
• Establishment of automated media marketplace at Publicitas, together with Mediaspectrum
aa
aaa
aongoing
ongoing
a
ongoing
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Portrait core assets
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PubliGroupe segments & companies
Media Sales
‘The companies within the business segment Media Sales are united in their common mission: to be the preferred partner for media owners and advertisers worldwide, selling media using effective advertising solutions
Search & Find
‘Search & Find’ produces and sells media products facilitating the search for persons, companies, products and services
Digital & Marketing Services
‘DMS’ brings together a portfolio of international marketing and technologyservice companies
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Performance-oriented full-service provider
• A Group organised into 3 segments: Media Sales, Search & Find and Digital & Marketing Services
• Each segment has a clear strategy, defined growth targets and agreed performance objectives
• Across the Group one mantra: performance-oriented full-service provider, employing state-of-the-art data processing tools and information technology
Media Sales Search & Find Digital & Marketing Services
*
* In Oct. 2013 PubliGroupe concluded the sale 51% of xentive AG to the Boston-based Mediaspectrum Inc
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Highlights
• Number 1 marketer in Switzerland
• Historic track record as marketer for 123
years
• Unique partner for advertisers, agencies
and media owners, offering a wide media
portfolio with over 7’000 products
• International footprint with local offices in
more than 20 countries including
emerging markets, access to media in
more than 100 countriesOperations with local offices Operations only
Number 1 marketer …
…with an international footprint
Billings 2012 in m in CHF
1) Annual Report 2012: Net Sales2) Annual Report 2012: Operating Revenue
Publicitas Goldbach Publisuisse
895
445322
1 2
#1 marketer in Switzerland Wide media portfolio; international footprint
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Strategic pillars
• Appointment of David Klement as CTO, starting 2/14, completing the management team. Main responsibility: development and introduction of Publicitas ad exchange.
• Renewal of partnerships and new partnerships (e.g., AZ Medien, CdT, FAO, Arena Cinema, Editoria Abril; S1)
• Implementation of system solution of Mediaspectrum on track. Ongoing conversations with media owners re. system solution of Mediaspectrum; NZZ and Le Temps are first key partners, choosing the new platform.
• Rightsizing of organisation in Switzerland & Europe completed resulting in 860 employees worldwide as of January 2014.
First results
Strategy implementation under new CEORightsizing of organisation
Full Automation
Full Portfolio
Variabilisation
Focus
Become efficient and cost
leader in marketing
advertising space
Offer the most relevant
media portfolio to
advertisers
“Flexed” cost base to
address contract gains or
losses
Focus on core activities
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- Commercial success- >CHF 200 m revenue
on 100% basis - ~25% EBIT margin
- More local- city-specific start page - improved search results
- More offers- couponing offers - booking restaurants- deeper map integration
- Improved usability- tablet optimised user
interface- autocomplete - fault tolerance
local.ch: most popular search platform New offers – extension of market lead
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Nov Dez Jan Feb Mar Apr May Jun Jul Aug Sep Oct2.0
2.5
3.0
3.5
4.0
4.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
5%10% 10%
16% 17% 18% 19%15%
18% 19%16% 15%
Un
iqu
e Cl
ien
tsN
etM
etri
x [m
m]
loca
l.ch
sea
rch
.ch
[re
l. p
osit
ion
2]
2013
1 Source: Unique Netmetrix
local.ch with higher digital reachOutperformed against search.ch
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Performance MarketingMaximising sales conversion through performance advertising
Summary
• E-commerce & CPA-based performance marketing tools continue strong growth
• Demand for client acquisition (e-tailers) and referral monetisation (online platforms) tools stays strong
• Expansion of available tools, incl. affiliate networks and performance display
• PubliGroupe offers leading affiliate and performance network in Europe, as well as key German performance agency
700667
593
467 490
2008
+5%
+13%
2012201120102009
Affiliate Commission Income, UK, 2008-12£m
Performance Network Performance Agency
Source: IAB UK
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ZanoxEurope’s leading performance advertising network
Proposition
Thomas Joosten (CEO)
More than 4’000 Advertisers
Management Team
Stephanie Lüdecke (CSO)
MichaelVon Stern (CFO)
ChristianRebernick (CTO)
• #1 Affiliate Network in Europe
• Focus markets DACH, UK, France, Italy, and Benelux
• >4000 advertisers / merchants
• >700 FTE, mostly in commercial sales and account management roles
• Automated marketplace platform drives campaign management
• Mobile enabled
• Won several awards, incl. Best Affiliate Network in 2012
460
165
20122007
Revenue
Financials (EURm)
• #1 in DACH
• #1 in Benelux
• #1 in France
• #1 in UK
• #2 in Italy
• #2 in Spain
• #2 in Nordics
Market position
23% CAGR
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Premium Publisher ServicesSupporting premium media owners to monetise their ad inventory
Summary
• Real-Time Advertising is growing exponentially
• Publisher Trade Technology is becoming essential for media owners
• Inventory Yield Optimisation (Direct and Programmatic Ad Sales) becoming a key capability for media owners
• PubliGroupe offers leading technology and yield management services throughout Europe
529 667 783 866 928
207
455
701
301192
38
427202
+39%
Direct
2017E
2,055
+145%
Mobile &Video
2016E
1,522
2015E
1,069
79
2014E
781
2013E
554
201220112010
Indirect
Real-Time Advertising Spend, France, Germany, UK, 2010-17EUS$ m
Publisher Trade Technology
Source: IDC
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Improve DigitalLeading European publisher trade technology
Proposition
Joelle Frijters (CEO) Janneke Niessen (CIO)
Clients Financials
Management Team
• #1 European Publisher Ad Exchange and SSP
• Offices in Benelux, Germany, UK, and Spain
• >40 FTE, mostly in tech and sales
• >100 premium publisher customers
• >250 connected demand-side partners, incl. all key DSPs
• State-of-art platform, fully RTA enabled, premium-format, mobile- / video-enabled, customisable private exchange
• Won several awards, including 2013 High Growth Awards, Deloitte Fast 500, Red Herring 100, Inspiring 50
91
75
2013*
0.52
2012
0.46
Impressions (in Mill.)
eCPM (EUR)
47
34
2013*2012
Billing (EUR)
*2013 preliminary
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Advertiser & Agency services Helping advertisers & agencies to optimise and execute media strategy
Summary
• Online ad spend continues to grow at double digit rates
• New online trade tools offer better monetisation options and add complexity
• Advertisers and agencies need more help defining complex trade strategies
• PubliGroupe assists advertisers and agencies to optimise ROI and execute best-in-class trade strategies
+3%
RTV +2%
Newspapers -1%
Magazines 0%
Online +10%
Other +2%
2016E
128
42
25
13
40
8
2015E
124
41
25
13
37
8
2014E
120
40
25
13
33
8
2013E
115
39
25
13
30
8
2012
112
39
26
13
27
8
Advertising Spend, Western Europe, 2012-16EUS$ bn
Trade Desk Media Agency
Powered by
Source: Zenith Optimedia
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Spree 7Transparent trading desk for independent advertising agencies
Proposition
Selection of clients/partners
Management Team
Thomas Kaczensky (VP Tech)
Victor Zawadzki(CEO)
• Trading desk for independent agencies and non-agency represented advertising customers
• Exclusive Mediamath partner in DACH
• Small, strong team of dynamic ad trade experts
• Early-stage investment
• Berlin-based
• Aim to grow trade volumes, data usage, and eventually develop trade platform
Powered by
Milestones
• Fully operational since July 2013
• Signed 26 agencies to date, aiming to get to 50 in 2014
• Ran more than 100 campaigns in past 6 months; about 20-50 campaigns per month at present
• Strong focus and good progress on implementation of data (e.g. Zanox)
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Creation of value through leveraging the different assets in the Group, building a portfolio of leading advertising technology-oriented companies
Effective measures at Publicitas being implemented under new management
Divestment of non-core assets or assets that are not providing financial returns will continue
Adaptation of holding to the level of profit of the remaining Group in line with industry benchmarks
Executive summary:PubliGroupe will deliver growth & profits
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Solid balance sheet; focus on core assets
Andreas Schmidt, Chief Financial Officer
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Solid balance sheetRecorded equity does not fully reflect full value of the group
Þ Conservative balance sheet approach
Þ Participations and real estate values only partly included
No goodwill With the Swiss GAAP FER presentation, all goodwill is offset with equity
Negative Zanox value Zanox is recorded with a negative equity (-CHF 19.6 m) because of this goodwill treatment
Under-valued real estate In addition, real estate is recorded with adjusted acquisition cost
as of as of
CHF mio 30.06.2013 31.12.2012
Current assets 331.8 379.2
Non-current assets 146.3 153.0
Total assets 478.1 532.2
Current liabilities 263.1 250.9
Non-current liabilities 71.4 72.6
Equity, shareholders of PubliGroupe Ltd 137.3 195.6
Minority interests 6.3 13.1
Total liabilities and equity 478.1 532.2
NOTE: HALF-YEAR 2013 MATERIAL
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Key assets in PubliGroupe portfolio
Þ PubliGroupe is increasingly becoming a digital company with mix of
established and fast-growing companies
Local JV with Swisscom 50% Leading search platform
Zanox JV with Axel Springer 47.5% N°1 European affiliate network
Improve Digital 85% Well positioned SSP
Spree 7 80% Promising DSP partnership w. leading tech company MediaMath
Neumühlequai Zürich 100% Top location ZH
Publicitas 100% Leading media sales organisation in CH
with international assets (especially Asia)
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PubliGroupe real estate portfolio - key figures3 assets located in Switzerland and in France
Zürich Delémont Paris
1982 | 4'695m2
3'518 TCHF1992 | 1'045m2
53 TCHF1970 | 365m2
41 TCHF
Þ Total surface : 6’105 m2
Þ Total rental revenue : CHF 3.6 m
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PubliGroupe press participations
29%
25%
20%
Stake%
Part of the Hersant Group and one of the prominent
newspaper publishers in French speaking Switzerland
Key media : L'Express and L'Impartial
FPH (Freie Presse Holding) Subsidiary of the Swiss publishing house Neue
Zürcher Zeitung, combining all major regional press participations of the group
St. Galler Tagblatt, Thurgauer Tagblatt, LZ Medien are only some of the titles in FPH portfolio
Südostschweiz Presse AG
Subsidiary of the Südostschweiz Medien Group in
charge of printing well known titles such as
Südostschweiz Graubünden, Bündner Tagblatt,
Bündner Woche
SNP (Société Neuchâteloise de Presse)
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Thank you; Q&A
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