APG|SGA posts mixed H1 2025 results amid challenging Swiss market

APG|SGA, Switzerland's leading out-of-home media company, released its first-half 2025 financial results on July 25, 2025, revealing a complex picture of modest revenue decline offset by improved operational efficiency and continued digital portfolio expansion.

The company reported advertising revenue of CHF 148.2 million for the six months ending June 30, 2025, representing a 1.5% decrease compared to the same period in 2024. This performance occurred against a backdrop of significant market headwinds, as advertising spend in traditional media across Switzerland declined by 3.9% according to Media Focus statistics.

Despite revenue pressures, APG|SGA demonstrated operational resilience through improved margins and cost management. EBITDA increased 3.6% to CHF 19.7 million, while EBIT rose 4.7% to CHF 14.9 million. Consolidated net income grew 2.4% to CHF 12.1 million, with earnings per share reaching CHF 4.05 compared to CHF 3.95 in the previous year.

The financial results reflect broader challenges facing the advertising industry, as noted by APG|SGA Chairman Dr. Daniel Hofer and CEO Markus Ehrle in their shareholder letter. "Geopolitical and economic uncertainties in the first few months of the year gave rise to a generally cautious approach to advertising investments," they stated.

Swiss market performance shows recovery signs

Within Switzerland, APG|SGA's core market, advertising revenues totaled CHF 141.0 million, down 1.6% from the previous year. The company noted that revenues "declined at the start of the year and then began to recover in May," suggesting improving market conditions in the latter part of the reporting period.

The Swiss market downturn was attributed to subdued economic conditions and consumer sentiment. However, APG|SGA's out-of-home advertising business demonstrated relative strength when accounting for cyclical factors. The company noted positive revenue development when excluding the "highly cyclical decline in political advertising in the first half of the year (elections and referendums) and the ban on tobacco advertising."

Sectoral performance varied significantly within the Swiss market. The trade, finance and culture sectors showed encouraging revenue development, while automotive, clothing, watches and institutions sectors underperformed compared to the previous year.

Digital expansion continues with landmark installations

A key highlight of the reporting period was APG|SGA's continued expansion of its digital advertising portfolio. The company renewed, expanded or acquired numerous key partnerships in the partner market, significantly increasing digital advertising spaces available in St.Gallen and Schaffhausen.

The most notable addition was the launch of Europe's highest Mountain ePanel on the Jungfraujoch, known as the "Top of Europe." This installation represents APG|SGA's commitment to innovation and premium positioning in the digital out-of-home sector.

The digital expansion aligns with broader industry trends. Recent industry analysis shows European digital advertising reaching €118.9 billion with 16% growth in 2024, as companies increasingly shift budgets toward digital channels.

International operations show growth momentum

APG|SGA's international operations, centered in Serbia, provided a bright spot in the financial results. The Serbian market represented 4.9% of total group advertising revenue, up from 4.8% in the previous year.

Serbian advertising revenues increased 2.4% in local currency terms compared to the already strong previous year performance. However, the weak performance of the Serbian dinar against the Swiss franc resulted in only a 0.2% increase when measured in CHF terms.

Financial position remains stable despite cash flow challenges

The company's balance sheet showed mixed signals, with total assets declining to CHF 151.4 million from CHF 193.2 million at year-end 2024. This CHF 41.8 million decrease was primarily attributed to dividend payments and seasonal factors.

Operating cash flow dropped significantly to CHF 26,000 from CHF 5.6 million in the previous year, primarily due to changes in net current assets. After accounting for investing activities, free cash flow turned negative at CHF -4.6 million.

Cash and cash equivalents stood at CHF 16.3 million as of June 30, 2025, down from CHF 56.4 million at the beginning of the year, largely due to the CHF 36.0 million dividend payout approved at the April 24, 2025 General Meeting.

Investment in advertising infrastructure continues

Despite challenging market conditions, APG|SGA maintained its commitment to infrastructure development. The company invested CHF 3.6 million in property, plant and equipment during the first half, representing an 18.2% increase compared to the previous year.

Advertising panel investments totaled CHF 2.7 million, up 79.9% from the previous year, demonstrating the company's focus on expanding and modernizing its physical advertising infrastructure. Other investments decreased 39.5% to CHF 965,000.

Operational efficiency improvements drive margin expansion

Cost management initiatives proved effective during the reporting period. Personnel expenses fell 2.6% compared to the previous year, driven by lower headcount due to vacancies and a cautious hiring approach, along with higher bonus payments in the comparative period.

Operating and administrative costs decreased 6.1% year-over-year, primarily due to lower marketing and advisory service costs. These reductions contributed to improved operating margins, with EBITDA margin reaching 13.2% compared to 12.6% in the previous year.

The operating margin improvement to 10.0% for EBIT, up from 9.4% previously, demonstrates management's ability to maintain profitability despite revenue pressures.

Leadership changes and sustainability progress

Organizational developments included the election of Dr. Felix Graf, CEO of NZZ, to the Board of Directors at the April 24, 2025 General Meeting. The appointment brings additional media industry expertise to the company's governance.

APG|SGA published its 22nd Sustainability Report in June 2025, confirming progress toward ambitious climate targets. The company reduced Scope 1 and 2 greenhouse gas emissions by 5.0% in 2024, supported by increased biogas usage and fuel consumption optimization measures.

The company outlined its Group-wide climate targets and net-zero roadmap for 2045, validated by the Science Based Targets initiative (SBTi), demonstrating commitment to environmental responsibility.

Market context and industry positioning

APG|SGA's performance occurs within a challenging Swiss advertising landscape. The 3.9% decline in traditional media advertising spend reflects broader shifts toward digital channels and economic uncertainty affecting advertiser confidence.

However, the company's position in out-of-home advertising provides certain defensive characteristics. As noted in the shareholder letter, "advertisers are relying on Out of Home Media. These channels remain an important, perhaps indispensable, tool in the media mix when it comes to achieving high reach and visibility quickly."

The ownership structure of APG|SGA has evolved significantly, with NZZ becoming the largest shareholder at 25% following JCDecaux's partial divestment in 2024.

Outlook emphasizes digital strategy and market leadership

Looking ahead, APG|SGA management expressed confidence in the company's strategic direction despite ongoing uncertainties. "The unpredictable geopolitical and economic situation continues to restrict planning and booking behavior to a short-term horizon," management noted.

However, the company's expanding digital service portfolio positions it to meet customer demands for flexibility. Management believes that out-of-home media will continue gaining market share, with APG|SGA maintaining its position as "market and innovation leader – in particular through the consistent development of the digital service portfolio."

The emphasis on digital capabilities aligns with industry-wide trends showing 72% of marketers planning to increase programmatic advertising investment in 2025.

Financial metrics demonstrate operational resilience

Key financial ratios illustrate the company's fundamental strength despite revenue challenges. The equity ratio of 38.5% as of June 30, 2025, provides financial stability, while the improved operating margins demonstrate management's effectiveness in cost control.

Fees and commissions accounted for 58.8% of advertising revenue, consistent with the previous year, indicating stable business model fundamentals. The maintenance of dividend payments, with CHF 12.00 per share approved for 2024, reflects management confidence in the company's financial position.

Timeline

• April 24, 2025: APG|SGA General Meeting approves CHF 12.00 dividend per share and elects Dr. Felix Graf to Board of Directors
• June 2025: APG|SGA publishes 22nd Sustainability Report showing 5.0% reduction in greenhouse gas emissions
• July 25, 2025: APG|SGA releases first-half 2025 financial results
• September 2024: ZVV awards five-year transport advertising contract to APG|SGA for 500+ vehicles
• June 2024: JCDecaux reshapes stake in Swiss OOH APG|SGA with NZZ becoming largest shareholder

Key Terms Analysis

Digital

Digital transformation represents the central theme of APG|SGA's strategic evolution. The company's digital portfolio expansion includes new installations in St.Gallen and Schaffhausen, culminating in Europe's highest Mountain ePanel on the Jungfraujoch. This digital infrastructure development aligns with industry-wide shifts toward programmatic advertising and data-driven targeting capabilities, positioning APG|SGA to meet growing demand for flexible, technology-enabled advertising solutions.

Revenue

Advertising revenue of CHF 148.2 million in the first half of 2025 reflects the company's financial performance amid challenging market conditions. The 1.5% decline demonstrates both external market pressures and APG|SGA's relative resilience compared to the broader 3.9% drop in traditional Swiss media advertising spend. Revenue distribution shows Switzerland accounting for 95.1% and Serbia contributing 4.9% of total advertising income.

Switzerland

Switzerland represents APG|SGA's core market and primary revenue source, generating CHF 141.0 million in advertising revenue during the reporting period. The Swiss market experienced sectoral variations, with trade, finance and culture sectors showing growth while automotive, clothing, watches and institutions underperformed. Recovery signs emerged in May 2025, indicating potential market stabilization.

Advertising

Advertising encompasses APG|SGA's fundamental business model, spanning traditional out-of-home formats and emerging digital solutions. The company maintains market leadership through comprehensive advertising offerings including poster campaigns, digital screens, transport advertising, and specialized formats. Advertising effectiveness remains strong despite economic uncertainty, with out-of-home media providing essential reach and visibility for brand campaigns.

Growth

Growth metrics demonstrate mixed performance across different financial indicators. While advertising revenue declined 1.5%, EBITDA grew 3.6% and EBIT increased 4.7%, reflecting operational efficiency improvements. Serbian operations showed 2.4% local currency growth, while digital portfolio expansion represents strategic growth investment for future market opportunities.

EBITDA

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) reached CHF 19.7 million, representing a 3.6% increase over the previous year. The EBITDA margin improved to 13.2% from 12.6%, demonstrating management's successful cost control initiatives. This metric indicates the company's underlying operational profitability excluding non-cash charges and capital structure effects.

Market

Market conditions significantly influenced APG|SGA's performance, with the Swiss advertising market declining 3.9% for traditional media. Geopolitical uncertainties and economic challenges created cautious advertiser behavior, restricting planning horizons. However, out-of-home media maintained its essential role in advertiser media mix strategies, providing defensive characteristics for APG|SGA's business model.

Investment

Investment activities totaled CHF 3.6 million in property, plant and equipment, representing an 18.2% increase year-over-year. Advertising panel investments of CHF 2.7 million, up 79.9%, demonstrate continued infrastructure expansion despite market challenges. These investments support digital transformation initiatives and maintain competitive positioning in the evolving advertising landscape.

Performance

Performance metrics reveal operational resilience amid revenue pressures. Improved margins, cost management success, and maintained profitability showcase management effectiveness. The company's performance relative to broader market declines demonstrates competitive advantages and strategic positioning strength within the Swiss out-of-home advertising sector.

Financial

Financial results encompass comprehensive metrics including revenue, profitability, cash flow, and balance sheet strength. The equity ratio of 38.5% provides financial stability, while negative free cash flow of CHF -4.6 million reflects seasonal dividend payments and working capital changes. Financial management maintained dividend payments of CHF 12.00 per share, indicating confidence in long-term prospects.

Summary

Who: APG|SGA SA, Switzerland's leading out-of-home media company, reported by Chairman Dr. Daniel Hofer and CEO Markus Ehrle

What: First-half 2025 financial results showing 1.5% revenue decline to CHF 148.2 million but improved profitability with 3.6% EBITDA growth to CHF 19.7 million and continued digital portfolio expansion

When: Results announced July 25, 2025, covering the six-month period ending June 30, 2025

Where: Switzerland (representing 95.1% of revenue) and Serbia (4.9% of revenue), with significant digital infrastructure expansion in St.Gallen, Schaffhausen, and the Jungfraujoch installation

Why: Performance reflects challenging Swiss advertising market with 3.9% decline in traditional media spend, offset by operational efficiency improvements, cost management initiatives, and strategic digital expansion positioning the company for future growth in the programmatic out-of-home advertising sector