Editorial by the Chairman of the Board of Directors

Good prospects thanks to innovation and sustainability

Dr. Pietro Supino, Chairman & Publisher

Dear Shareholders

As a broad-based media group and operator of popular platforms, our fortunes tend to reflect what is happening in wider society. It is hardly surprising therefore that the main impact on our businesses in 2020 was from coronavirus – the event that dominated the year. Luckily for us, however, the impact was not wholly negative.

The crisis was hard to deal with, particularly with various activities still in a critical transformation phase and with us having introduced a new organisational structure. The employees and management of the TX Group and our companies have taken up these challenges. On behalf of the Board of Directors and Group Management, I would like to express our acknowledgement and sincere gratitude for the great commitment and valuable collaboration shown.

It is really pleasing to see how well our companies and the central services are coping with the ongoing crisis situation. From the very start, the transition to home working has gone mostly smoothly by. There was no real negative impact in terms of the reliability and quality of our services. In the extraordinary situation we currently face, the journalism provided by Tamedia and 20 Minuten is particularly valuable. The marketplaces and other digital platforms also managed to keep their important services going.

In fact, with things generally slowing down, this has possibly helped people get used to the new decentralised Group structure. The changes proved to be particularly challenging for the central services. At the same, we are also looking to make cost savings of around 20 per cent. This includes the setting up and expansion of our own service centre in Belgrade, although current travel restrictions have led to delays in making the site fully operational.

The new organisation also involves some modernisation of infrastructure. This is particularly important for the core issue of data and opens up new prospects. The modernisation of infrastructure was also crucial for “cyber security” and has proven itself in the face of massive attacks.

One motivation behind the new decentralised Group structure was to create an optimal framework for the development of Tamedia. Today, the “new” Tamedia has a narrative and a clear strategy once more. The focus is on journalism and digital transformation of the business model.

The crisis year of 2020 was particularly difficult for 20 Minuten. Although it proved possible to keep print circulation at around 80 per cent, the loss of revenue was high. This has gone hand-in-hand with very positive developments in terms of digital use, including its commercialisation in the second half of the year. The new app and the overall revision of the digital presence have certainly helped too.

Goldbach was hit hard by the crisis as well, although it did benefit from the surprising recovery in advertising expenditure in the second half of the year. Besides classic advertising marketing, the development of the network business and the associated investments in ad tech are of critical importance.

TX Markets showed resilience during the crisis. The marketplaces Ricardo and Tutti enjoyed strong growth and achieved record figures. The mobility platform Car For You is showing very good momentum. The job platforms JobCloud and karriere.at in Austria have been affected by the economic impact of the crisis. There is much less volatility, however, compared with how dependent job advertisements used to be on the wider economy. The value creation associated with our classified advertising and market place businesses is increasingly being incorporated into clients’ own processes. This added value is also promoting stability and opening up further potential for growth.

Our opportunity lies in innovation and restoring our positions of strength, which we can then build on. I would like to thank our shareholders for their readiness to invest and for their commitment to sustainability. As announced a year ago, the Board of Directors will recommend to the Annual General Shareholders’ Meeting that no dividend be paid for the 2020 financial year. This should be an exception, and our objective is still to ensure healthy profitability across all our companies. In future, just like before, the intention will be to reinvest around two-thirds of profits earned into the business and its development and to pay out around a third as dividends. The only way we can continue to invest more in our businesses and in journalism than any other media company is by taking due account of the legitimate interests of all stakeholders and achieving above-average revenue levels. We are only too aware of this, and it is and remains our ambition.

Dr. Pietro Supino

Chairman & Publisher