Goldbach Group AG

DGAP-Adhoc: Goldbach Group in transition: further consolidation of business activities - adjusted full-year results in line with forecasts

Goldbach Group AG  / Key word(s): Half Year Results/Half Year Results

20.08.2014 07:00

Release of an ad hoc announcement pursuant to Art. 53 KR
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Ad hoc press release

Half Year Result 2014:
Goldbach Group in transition: further consolidation of business activities
- adjusted full-year results in line with forecasts

Net Sales CHF 217 million - net sales decrease 1.6 % - EBIT CHF 9.7 million
- EBIT-decrease 26 %; according to forecasts in spring - net profit CHF 1.1
million - challenging TV- and radio business - further consolidation of
business activities in Central Eastern Europe - full year results
declining, adjusted though expected according to forecasts

Küsnacht-Zurich, August 20th, 2014. In the first half of 2014, the Goldbach
Group posted sales of CHF 217 million, a slight drop of 1.6 % over the same
period last year (previous year CHF 221 million). The EBIT fell within the
expected range announced in early 2014 at CHF 9.7 million (-26 %). Net
profit for the first half of 2014 amounted to CHF 1.1 million. Net sales
for the Goldbach Group, the market leader in the marketing of private
electronic, mobile and interactive media and online marketing, remained
robust in the DACH region, but were more sluggish in Eastern Europe due to
the announced consolidation measures and customer restraint in the Adriatic
region. The EBIT margin was 4.5 % in the first half of the year (previous
year: 5.9 %). For the current fiscal year, the Goldbach Group expects its
adjusted earnings to be in line with forecasts, including the market exits
from Russia and Romania and the pull out of the agency business (Goldbach
Interactive) in Poland.

DACH region
In the Goldbach Group's main markets of Switzerland, Germany and Austria,
net sales of CHF 209.8 million represented a 0.9 % increase over the same
period in the previous year.

The TV market in Switzerland showed a slight upturn. The TV business of the
Goldbach Group, however, presented challenges. This is due in large part to
a shift in advertising budgets to other channels for the Olympics and the
World Cup as well as adjustments in the measurement of TV reach. After a
sluggish start in the radio business over the first quarter, the second
quarter saw a marked improvement with the acquisition of new customers and
the impact of the new management. In the audience business, the video
product line continues to drive growth and is expanding at double-digit
pace. The Goldbach Interactive (Switzerland) division, which merged with
Goldbach Mobile, is characterised by investments aimed at the further
growth of the agency and has kept pace with expectations in the first half
of the year.

In Austria, where Goldbach Austria operates with Goldbach Media, Audience
and Interactive, the first half of the year saw positive sales growth in
all three business segments.

In addition to the existing performance marketing and search business of
Goldbach Interactive (Germany), the investigation into a market launch in
other sectors in Germany will be completed by the end of the year.

The EBIT generated in the DACH region was CHF 14.0 million (-22.4 %) in the
first half of the year.
Central and Eastern Europe region (CEE)
Due to the announced consolidation measures in Central and Eastern Europe,
i.e. the withdrawal from the Czech Republic and Russia, net sales dropped
44 % to CHF 5.3 million (previous year CHF 9.5 million). The EBIT is CHF
-0.7 million (previous year -0.3 million), although the withdrawal from
Russia represents a one-off effect.

In Poland, the Goldbach Group remains the market leader among independent
online marketers, although sales lag somewhat behind expectations. In the
context of the ongoing concentration of business activities, the group has
decided to pull out of the agency business (Goldbach Interactive) in
Poland.

Economic conditions in Romania remained difficult in the first half of 2014
and developed less positively than expected, which led to the Goldbach
Group's decision to pull out of the Romanian market as part of its ongoing
strategic process.

Adriatic region
In the first half of 2014, net sales in the Adriatic region dropped -
albeit on a low level - by 60.0 % to CHF 2.3 million (previous year CHF 5.7
million). This is mainly due to customer loss in the tourism sector, where
industry-related advertising spendings make a difference in the first half
of the year. The EBIT for the Adriatic region was CHF 0.03 million (-93.7
%).

In the current strategy process, stability measures will also be evaluated
for the Adriatic region by the end of the year.

Profit and equity ratio
The net profit is CHF 1.1 million (previous year CHF 2.6 million), which is
57.9 % below the same period of the previous year. By the end of June 2014,
the equity ratio was 22.9 % (end of December 2013: 24.4 %). The operative
cash flow generated in the first half of the year was CHF -1.3 million
(previous year CHF -10.2 million).

Outlook
In view of the difficult market environment, for the full year the Goldbach
Group expects adjusted net profits as forecasted in early 2014 - including
the market exits in Russia and Romania and the pull out of the agency
business (Goldbach Interactive) in Poland - to be in line with the
(adjusted) figures for 2012.

To analysts, investors and media representatives:
You will find the Goldbach Group 2014 half year report on our website, at:
http://www.goldbachgroup.com/investor-relations-en/annual-reports/half-yea
r-report-2014

Contact:
Goldbach Group AG
Germaine Müller, Project Manager Investor Relations
Corinne Laverrière, Public Relations Manager
Seestrasse 39
8700 Küsnacht-Zurich
Phone +41 (44) 914 91 00
Fax +41 (44) 914 93 60
www.goldbachgroup.com


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Language:               English
Company:                Goldbach Group AG
                        Seestrasse 39
                        8700 Küsnacht-Zürich
                        Switzerland
Phone:                  +41 44 914 91 00
Fax:                    +41 44 914 93 60
E-mail:              info@goldbachgroup.com
Internet:            www.goldbachgroup.com
ISIN:                   CH0004870942
Valor:                  487094
Listed:                 SIX

End of Announcement                             EQS Group News-Service

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