10.03.2015 – 07:02

Goldbach Group AG

EQS-Adhoc: Goldbach Group AG: Annual Result 2014
Realigned Goldbach Group ready for profitable growth

EQS Group-Ad-hoc: Goldbach Group AG / Key word(s): Final Results
Goldbach Group AG: Annual Result 2014 / Realigned Goldbach Group ready
for profitable growth

10.03.2015 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.

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Ad hoc press release

Annual Result 2014:
Realigned Goldbach Group ready for profitable growth

Strategic refocusing on advertising services in German-speaking Europe
(DACH region) including Poland - Realignment of business portfolio results
in one-time charges - Revenue increase to CHF 464 million and net profit of
CHF 2.5 million despite portfolio realignment - First-time financial
reporting according to Swiss GAAP FER shortens balance sheet; segment
reporting according to business areas - Successful extension of partnership
with SevenOne Media (Schweiz) AG ensures continuity - Build-up of business
activities in Germany opens opportunities - Unchanged dividend of CHF 0.80
per share proposed - Substantial improvement of net profit expected for
FY2015

Küsnacht-Zurich/Switzerland, March 10th, 2015. The business year 2014 of
SIX Swiss Exchange listed Goldbach Group AG was characterized by
significant strategic decisions and operational challenges. The detailed
review of all business areas as announced by the board of directors and
management thus resulted in the refocusing on the group's renowned core
competencies as advertising services provider with a focus on the DACH
region including Poland. In parallel, the exit from Russia and Romania, the
closing of the agency business in Poland and the sale of the Goldbach Group
stake in the Wilmaa web-TV platform was forced. It was further decided to
withdraw from the Adriatic market region. The realignment of the business
portfolio as announced by management last year has thus been concluded and
material balance sheet risks have been eliminated. The charges as well as
write-offs for these measures led to an extraordinary result 2014 of CHF
-4.4 million. Against this, the core activities of the group developed
stably as net sales increased slightly to CHF 464 million. Earnings before
depreciation and amortization EBITDA of CHF 27.5 million, corresponding to
a margin of 5.9%, are 21% below the previous year's level due to lower
profitability in the Swiss TV business as well as investments into the
build-up of the German market,  in the amount of CHF 1.2 million. Net
profit attributable to Goldbach Group shareholders for the financial year
2014 amounts to CHF 2.5 million, against CHF 2.7 million in the prior year
(-5%).

Development of revenues and earnings
Following a challenging first half-year 2014 Goldbach Group during the
second half achieved respectable revenue growth of 3.8%, thus resulting in
a slight increase of 1.2% in net sales to CHF 464 million for the full
year. Advertising Sales (Ad Sales)Switzerland, at CHF 394 million the
largest contributor to group sales, recorded an increase of 1.5% mainly
driven by the growing TV business. Radio advertising put the trough behind
and recovered markedly during the second half-year with an increase of 18%.
Against this, the online segment remains challenging, as sales losses in
the display business could not fully be compensated by double-digit sales
growth in the video business. Thanks to the successful extension of the
cooperation with SevenOne Media (Schweiz) AG, Goldbach Group assumes
advertising sales in Switzerland to continue the stable revenue
development. Net sales of "Ad Sales Other" came in at CHF 26 million, 20%
below the previous year's level mainly due to the withdrawal from
unprofitable markets (Russia, Romania). In contrast, the remaining markets
Austria and Poland developed stably. Marketing Services could extend its
direct-to-the client activities by 7% to around CHF 49 million and thus
confirmed its role as important pillar with in the Goldbach Group
portfolio.

During the financial year 2014 gross profit amounted to CHF 93 million or
20% of net sales, against CHF 100 million in the prior year. The reduction
by 7% was due to a different revenue mix (higher contribution of the lower
margin TV business) as well as decreasing commission rates under
advertising contracts. The margin reduction is structurally caused and is
not a general trend since the increasing fragmentation of the TV channel
landscape will support the gross margin in the medium term. EBITDA of CHF
27.5 million was 21% below the prior year due to the lower profitability of
the TV business as well as investments of CHF 1.2 million in connection
with the market expansion in Germany. EBITDA margin of 5.9% is thus 170
basis points below the previous year's level. The segment "Ad Sales
Switzerland" remains a significant earnings pillar, generating an EBITDA of
CHF 33 million or 8.4% of segment revenues. Despite declining sales of "Ad
Sales Other", a break-even result could be achieved in this segment.
Marketing Services' EBITDA of around CHF 0.5 million from the continuing
DACH markets could not compensate for the set-back by the Adriatic
business, reducing EBITDA by CHF 1 million compared to the prior year to
CHF 0.2 million.

Change of accounting standards to Swiss GAAP FER
The board of directors of Goldbach Group AG decided in October 2014 to
switch its financial accounting from IFRS to Swiss GAAP FER with
retroactive effect for the financial year 2013. In connection with this
conversion, the change in market segment at the SIX Swiss Exchange from the
Main Standard to the Domestic Standard took place as of December 8, 2014.

Switching accounting standards from IFRS to Swiss GAAP FER mainly leads to
adjustments where company mergers are involved (treatment of goodwill and
immaterial assets from acquisitions), the treatment of cumulative foreign
currency differences in equity, and the calculation of benefit liabilities.
The balance has been reduced by CHF 34 million due to the new treatment of
goodwill as well as the lower benefit liabilities. Uncommitted funds have
been partially used to pay media partners early, thus reducing free cash
flow by around CHF 10 million. Equity capital as of end of 2014 amounts to
CHF 32 million, corresponding to an equity ratio of 21.2%. A detailed
re-conciliation to account for the change from IFRS to Swiss GAAP FER is
included in the 2014 Annual Report on pages 7 f.

Focusing of strategic alignment
Within the framework of an intense strategy process during the past year,
the board of directors and management have paved the way for the focusing
of Goldbach Group on its accredited core competencies as advertising
services provider with a concentration on the DACH region including Poland
as well as full service agency in the area of Marketing Services.
Accordingly, during the transition year 2014 unprofitable business units
have thus been closed, restructured or sold. Based on the excellent
position in the home market of Switzerland the advertising of moving images
on all channels is to now be expanded concertedly. At the forefront are the
markets Austria and Germany, the latter the largest advertising market in
Europe with a volume of EUR 4.3 billion TV spendings annually. For this
purpose, the foundation of Goldbach Germany has created a strong starting
point. "With the build-up of the business in the very promising German
market we use our long-standing know how as advertising services provider
in a concerted manner to organically develop the potential of the many
digital channels with local managers as partners, thus laying the
foundation for sustainable, profitable growth" states Michi Frank, CEO
Goldbach Group, with conviction.

Outlook and dividend
For the current financial year Goldbach Group from today's perspective
expects a positive sales development of the continued operations in the
lower single-digits, driven by continuous growth in the TV business as well
as a sustained recovery in the radio business. Thanks to the improved
profitability of the core operations and the non-recurring nature of
special items, the group anti-cipates net profit to improve substantially,
despite build-up costs for the German market.

The board of directors of Goldbach Group proposes to the General Meeting of
April 14, 2015 to pay an unchanged dividend of CHF 0.80 per share.
Furthermore, the board will nominate Mirjana Blume and Dr Erica Dubach
Spiegler as new members of the board of directors to replace Ronald Sauser
and Peter A. C. Blum, who have decided to step down.

The Annual Report 2014 of Goldbach Group AG is available for download via
our website:
http://www.goldbachgroup.com/Investor-Relations-en/Annual-Reports/Annual-R
eport-2014

Goldbach Group Company Profile
The Goldbach Group is the leading network for electronic communication
solutions and a logistics centre for the marketing and representation of
advertising in private electronic media in the areas of television,
internet television, radio, digital out of home, online display, in-game,
search advertising and mobile advertising. The company is based in
Switzerland (Kusnacht-Zurich) and is active in the whole DACH region
(Switzerland, Germany, Austria), in Poland and in the Adriatic region
(Slovenia, Croatia, Serbia). The Group's core business comprises planning,
consulting, creation, concept development, purchasing and implementation
through to assessment of the deployment of electronic offline and online
media and cross-media campaigns.

Goldbach Group has been quoted in the main standard of the SIX Swiss
Exchange since June 15th, 2007 resp. in the domestic standard since
December 8th, 2014 (Valor 487094, ISIN CH0004870942, Ticker-Symbol: GBMN).

Further information: www.goldbachgroup.com or www.goldbach.com

Contact:
Goldbach Group AG
Germaine Müller, Investor Relations Manager
Jürg Bachmann, Corporate Communication / Public Affairs
Seestrasse 39
8700 Küsnacht-Zurich
Phone +41 (44) 914 91 00
Fax +41 (44) 914 93 60
www.goldbachgroup.com

End of ad hoc announcement

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Additional features:

Document: http://n.equitystory.com/c/fncls.ssp?u=UYFNKPRQWY
Document title: Goldbach Group AG key figures 2014

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10.03.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news
archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.

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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:      Foreign Exchange(s) SIX


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331535 10.03.2015