Goldbach Group AG

EANS-Adhoc: Goldbach Media AG
Sustained profitable growth for Goldbach Media

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6-month report

13.08.2010

Ad hoc press release

First half year result 2010: Sustained profitable growth for Goldbach Media

Organic growth rate 8.5% - more than 16% increase in EBIT - profit growth by 92.8% - market share gain in the offline and online segment - growth of online TV - development of network-centric online offers according to plan - very dynamic situation in Eastern Europe

Kusnacht, August 13th, 2010. The Goldbach Media Group, the leader in advertising marketing in private electronic, interactive and mobile media, increased its sales by 8.5% to CHF 151.2 million (prior year: CHF 139.4 million), its EBIT by 16.6% to CHF 7.1 million (prior year: CHF 6.1 million) and profit by 92.8% to CHF 3.1 million (prior year CHF 1.6 million). Goldbach Media anticipates continued profitable growth in fiscal 2010 and a clear year-on-year increase in EBIT.

The offline and online divisions evidenced identical growth rates of 8.5% each. The share in sales from the online division is 39% and the offline share is 61%. 23% of net sales and 5% of EBIT are generated from international business. The influence of currency effects on sales and EBIT remains marginal, since developments in Poland and the euro zone offset each other to a great extent. After the acquisition of additional 25% of the shares of an already consolidated Polish subsidiary and due to foreign currency effects, the equity ratio is 34.1% (end of December 40.2%).

Dynamic growth with TV in the offline division In the offline division which markets private TV, radio, teletext and electronic advertising to attractive points of sale (AdScreen), particularly in Switzerland and Austria, Goldbach Media achieved an increase in net sales, + 8.5%, of CHF 93.2 million (prior year: CHF 85.9 million) in the first half of the year as compared to the same period in the previous year. The rise in sales originates overwhelmingly from the TV business (+ 11.3%), where Goldbach Media benefits from the continued shift of advertising to electronic media and at the same time has been in a position to expand its market share. On 15 July 2010, SevenOne Media (Switzerland) AG announced that, from 2011 onwards, it was expanding its long-term partnership with the Goldbach Media subsidiary IP Multimedia (Switzerland) AG, which involves the marketing of ProSieben, to include the Swiss advertising windows of Sat. 1 and kabel eins. Sales of radio advertising were down slightly (-2.1%) with net sales of CHF 16.2 million (prior year: CHF 16.6 million). EBIT in the offline division rose by 22% to CHF 7.3 million (prior year: CHF 6.0 million). The contribution of the offline division to Group EBIT in the first half of the year is 77%.

Varied developments throughout the regions in the online division Net sales in the online division grew in the first half of 2010 by 8.5% to CHF 58.4 million (prior year: CHF 53.8 million), but showed trends in development that varied by region. The online division covers advertising logistics services for digital and interactive media, including online advertising on Internet TV and also network-centred performance marketing, which has been developed during the current year in close cooperation with the Adconion Group. While the markets in Eastern Europe grew with sales increases in the high double-digits, sales of display advertising in Switzerland and the Adriatic countries fell. Demand for performance marketing services on the other hand rose. In Switzerland, a transition phase expected to last a year is occurring prior to the launch of network-centred performance marketing. In the Adriatic countries, the economic recovery is likely to be reflected in higher online advertising volumes only after a time lag.

Increase in online TV advertising During the first half of the year, sales of advertising for online TV rose noticeably in Switzerland. An increasing number of Swiss are watching TV via their computers or their iPhone or iPad. The television and computer segments are growing together. As an interactive medium, online TV opens up additional marketing potential for Goldbach Media, also in the continuously developing sphere of performance marketing. The marketing know-how gained in Switzerland due to the holdings in the Internet TV Wilmaa should gradually also be applied in the area of international online business.

Growing demand for concepts and creation in online marketing The online segment consolidates Goldbach's conceptual, creative and technological concepts for digital and mobile media, as well as search engine marketing and marketing services for Internet advertising. The first half of 2010 saw a hike in the demand for creative services and technical implementation of online advertising, provided by the Goldbach Media enterprise orange8 interactive AG. Goldbach Media facilitates the entry into online advertising for their customers, at the same time lengthening the value creation chain, with this range of services, which is currently offered only in Switzerland and Germany. Goldbach Media intends to expand the service range for conceptual and creative online advertising and performance marketing, together with the new range currently developed for network-centred performance marketing, in the medium term in additional country offices as well.

Planned introduction of network-centred offers for online marketing The training of employees in the online division concerning the structural change that is developing in the online advertising business by the marketing of network-centred advertising and marketing offers took place during the first half of the year as planned. In the Adriatic zone, the foundations for the planned integration of network-centred marketing models have been laid during the first half of the year with the introduction of new ERP software; this will occur in Eastern Europe during the second half of the year. The migration of the relevant software is expected to be completed throughout the entire area of operations in 2011. Goldbach Media anticipates a significant impact on the value creation chain and the margins in online marketing from the development of the breakdown of the market into site-specific and network-centred advertising. Goldbach Media is already a leader in the site-specific marketing of performance marketing in the regions in which it is active. Due to the long-term strategic cooperation agreement entered into with the Adconion Group in November of 2009 and the exclusive use of the associated software, Goldbach Media can now offer its customers in Switzerland, Austria, the Adriatic countries and all of Eastern Europe additional network-centred products. Goldbach Media believes this will additionally reinforce its position as a leader in online marketing, as well as the marketing of online advertising via all interactive media such as the Internet, iPhone and iPad.

Outlook: Further profitable growth and clear year-on-year increase in EBIT anticipated The sustained profitable growth and decrease in market volatility during the first half of 2010 confirm the expectations formulated in March of this year: For 2010, Goldbach Media anticipates a continuation of profitable growth but a slightly reduced EBIT growth rate in comparison with the first semester on the whole. The expansion of network-centred online advertising in the current fiscal year should have a positive impact on margins as early as fiscal 2011 after one-time start-up costs for training employees and the associated software migration.

"TV and radio are being received increasingly frequently online and via mobile media such as iPhones and iPads. This media conversion requires that marketers possess knowhow in both worlds - TV and online marketing" says Klaus Kappeler, CEO of Goldbach Media Group. "As specialized advertising logistics experts in the TV and online areas, Goldbach Media can benefit from the emerging fusion of media together with the new range of products for network-centred performance marketing. The offline and online marketing model, which has proved successful in Switzerland, is setting a trend for development throughout Eastern Europe."

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ots Originaltext: Goldbach Media AG
Im Internet recherchierbar: http://www.presseportal.ch

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

Branche: Media
ISIN:      CH0004870942
WKN:        487094
Index:    SPI, SPIEX
Börsen:  SIX Swiss Exchange / Main Standard



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