TX : Half-Year Report 2022 - Letter to Shareholders and Half-Year Report

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TX Group Half-Year Report 2022

Zurich, 30 August 2022

Dear Shareholders dear Staff Members

dear Friends and Partners of the TX Group

The year 2022 has brought unpleasant developments: We started the year full of hope for a swift end to

the global Corona crisis. However, increasing worries soon overshadowed our hopes: War on our doorstep, an energy crisis within reach, the still unresolved pandemic and an unstable economic situation

- all of these events trigger uncertainty.

TX Group cannot avoid these events, on the contrary. Our media are challenged to cover these challenging times with solid journalism. Providing citizens with independent information and the associated opportunity to form their own opinions is our responsibility and our contribution to a free democratic society - in these times more than ever. Reliable reporting in both Tamedia's paid media and 20 Minuten's free media is and remains the backbone of our business, that especially in a difficult phase fills us with pride.

Meanwhile, our media are in the process of adapting to today's social developments. We currently still reach the majority of readers through printed newspapers at Tamedia, while digital offerings already dominate at 20 Minuten. Both 20 Minuten (social media-first strategy) and Tamedia (introduction of new digital subscription models) took important steps towards digitalization at the beginning of the year. The development of a pioneering technology platform is at the top of the agenda for our advertising marketer Goldbach. This innovative strength is essential for the further development of our business models.

The challenging environment coupled with the transformation of the industry is leaving its mark on our traditional companies. Particularly in the case of Tamedia, the necessary growth of the digital user market and new revenue streams are unsatisfactory. The Group's organic revenue growth of 12 percent is largely due to new business in Goldbach's out-of-home advertising and JobCloud's exceptional performance. Last year's newly established Swiss Marketplace Group (SMG), to which we contributed our other online marketplaces (Homegate, Ricardo, Tutti, and Car For You) and in which we hold around 31 percent, has now established itself, laying the foundations for a promising future.

As the year advances, we need to build on the successes of out-of-home advertising, job portals and marketplaces, and also develop the growth areas in journalism with diligence and thoughtfulness to ensure our long-term success. In parallel, we must devote our attention to the challenging transformation within journalism and advertising. Sustainable business models must be developed and established so that we can fulfill our role within our free society - this is and remains irreplaceable and indispensable.

Yours sincerely,

TX Group Half-Year Report 2022

Dr Pietro Supino Chairman and Publisher

Operational reporting by TX Group	3
on the first half of 2022

Alternative key performance figures

The TX Group uses the following alternative key performance figures:

• Operating income before depreciation and amortisation (EBITDA)
• Operating income before effects of business combinations (EBIT b. PPA)
• Cash flow after investing activities in property, plant and equipment and intangible assets (FCF b. M&A)
• Consolidated normalised income statement

Detailed information on how the alternative key performance figures are derived can be found at www.tx.group/en/investor-relations/alternative-performance-figures.

The figures shown are rounded in every table. As the calculations are made with a higher level of numerical accuracy, it is possible that small rounding differences may occur.

TX Group Half-Year Report 2022

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TX Group Half-Year Report 2022

Key figures

in CHF mn		30.06.2022	30.06.2021	Change 1
Income statement
Revenues		445.7	453.3	-1.7%
Operating income / (loss) before depreciation
and amortisation (EBITDA)		61.5	72.5	-15.1%
Margin 2		13.8%	16.0%	-2.2 %p
Operating income / (loss) before the
effects of business combinations (EBIT b. PPA)		28.7	48.2	-40.4%
Margin 2		6.4%	10.6%	-4.2 %p
Operating income / (loss) (EBIT)		3.7	15.4	-76.2%
Margin 2		0.8%	3.4%	-2.6 %p
Net income / (loss) (EAT)		1.0	21.2	-95.2%
Margin 2		0.2%	4.7%	-4.5 %p
Segment share of total revenues with third parties
TX Markets		15.9%	23.9%	-8 %p
Goldbach		14.6%	10.9%	3.7 %p
20 Minuten		10.9%	10.5%	0.4 %p
Tamedia		49.1%	47.4%	1.7 %p
Group & Ventures		9.4%	7.4%	2 %p
Employee key data
Number of employees (FTE) 3		3 371	3 667	-8.1%
Revenue per employee	in CHF 000	132.2	123.6	7.0%
Balance sheet
Current assets		701.3	577.4	21.5%
Non-current assets		2 676.7	2 199.5	21.7%
Total assets		3 377.9	2 776.9	21.6%
Liabilities		744.0	703.6	5.7%
Equity		2 633.9	2 073.3	27.0%
Cash flow
Cash flow from / (used in) operating activities		66.0	61.1	8.1%
Cash flow from / (used in) investing activities		23.8	(15.8)	n.a.
Cash flow after investing in property, plant
and equipment and intangible assets (FCF b. M&A)		50.3	49.3	2.0%
Cash flow after investing activities (FCF)		89.8	45.3	98.3%
Cash flow from / (used in) financing activities		(134.8)	(37.4)	260.5%
Change in cash and cash equivalents		(45.4)	8.1	n.a.
Financial key data
Equity ratio 4		78.0%	74.7%	3.3 %p
Return on equity 5		0.0%	2.0%	-2 %p
Net debt / (net liquidity) 6		(207.0)	(194.2)	6.6%
Debt factor 7	x	-	-	n.a.
Key figures per share
Net income / (loss) per share (undiluted)	in CHF	(1.68)	0.85	n.a.
Share price	in CHF	115.00	85.90	33.9%
Market capitalisation		1 218.8	910.3	33.9%

1. No indication is given for changes in comparative variables with different signs (n.a.). The change in relative values (e.g. margins) is given in percentage points (%p).
2. As a percentage of revenues.
3. Average number of employees, excluding employees in associates / joint ventures.
4. Equity to total assets.
5. Net income / (loss) including non-controlling interests (projected for 12 months) to shareholders' equity as of 30 June.
6. Current and non-current financial liabilities less cash and cash equivalents.
7. Net debt to cash flow from / (used in) operating activities.

Normalised consoldiated income statement

			30.06.2022			30.06.2021
in CHF mn	Comment	Income	One-off	Normalised	Income	One-off	Normalised
		statement	effects	income	statement	effects	income
				statement			statement
Advertising revenue		113.2	-	113.2	110.1	-	110.1
Revenue from classifieds & services		123.8	-	123.8	143.7	-	143.7
Revenue from commercialisation
and intermediary activities		37.5	-	37.5	35.4	-	35.4
Revenue from subscriptions and individual sales		116.0	-	116.0	121.3	-	121.3
Revenue from print and logistics		39.6	-	39.6	32.6	-	32.6
Other operating revenue		12.0	-	12.0	9.3	-	9.3
Other income	1	3.5	(2.5)	1.0	0.9	(0.8)	0.2
Revenues		445.7	(2.5)	443.3	453.3	(0.8)	452.6
Costs of material and services	2	(77.2)	-	(77.2)	(67.6)	(0.3)	(67.9)
Personnel expenses		(212.5)	-	(212.5)	(230.9)	-	(230.9)
Other operating expenses	3	(100.9)	4.3	(96.7)	(91.9)	(1.6)	(93.5)
Share of net income / (loss) of associates / joint ventures 4	6.4	10.1	16.5	9.5	1.7	11.2
Operating income / (loss) before depreciation		61.5	11.9	73.4	72.5	(1.0)	71.5
and amortisation (EBITDA)
Depreciation and amortisation		(32.8)	-	(32.8)	(24.3)	-	(24.3)
Operating income / (loss) before the		28.7	11.9	40.6	48.2	(1.0)	47.2
effects of business combinations (EBIT b. PPA)
Amortisation resulting from business combinations	5	(25.1)	25.1	-	(32.8)	32.8	-
Operating income / (loss) (EBIT)		3.7	37.0	40.6	15.4	31.8	47.2
Financial income	6	10.7	(2.2)	8.5	14.7	(11.8)	2.9
Financial expense	7	(9.5)	0.6	(8.9)	(3.0)	-	(3.0)
Net income / (loss) before taxes (EBT)		4.9	35.3	40.2	27.1	19.9	47.1
Income taxes	8	(3.8)	(4.6)	(8.4)	(5.9)	(2.8)	(8.7)
Net income / (loss) (EAT)		1.0	30.8	31.8	21.2	17.1	38.4

1. Normalisation for 2022 relates to all incoming payments from the invoicing periods for 2016 and earlier that could not be allocated to any invoice or repaid. These were reversed in the income statement (Tamedia, Group & Ventures and Goldbach segments). Normalisation for 2021 relates to hardship funds for Neo Advertising AG (Goldbach segment).
2. Normalisation for 2021 relates to extraordinary federal subsidies to finance basic services of the national news agency Keystone-SDA in order to relieve the burden on the media (Tamedia segment).
3. Normalisation for 2022 relates to full repayment of CHF 3.1 million of the extraordinary federal support received in 2021 for the reduced supply of subscription daily and weekly newspapers
   (press subsidies), with the amount received for the first half of the year being fully normalised in 2021 (Tamedia segment). In addition, CHF 1.1 million was normalised in 2022 for the valuation allowance in relation to and the sale of old receivables (Group & Ventures, Goldbach and Tamedia segments).
4. Normalisation for 2022 relates to pro rata depreciation and amortisation from business combinations associated with the associate SMG Swiss Marketplace Group AG in the amount of CHF 10.1 million (TX Markets segment, after deferred taxes). Normalisation for 2021 relates to impairment on goodwill for the associated company BTMX P/S in the amount of CHF 1.7 million (20 Minuten segment).
5. Depreciation and amortisation from business combinations are normalised in full. Allocation to the segments according to "Segment information".
6. Normalisation for 2022 relates to income from the sale of 0.09% of the shares in SMG Swiss Marketplace Group AG to General Atlantic SC B.V. (Group & Ventures segment). Normalisation for 2021 relates to damages from legal proceedings involving Trendsales ApS in the amount of CHF 11.8 million, in which TX Group AG was the plaintiff (Group & Ventures segment).
7. Normalisation for 2022 relates to the dilution effect from a capital increase and therefore a reduction in share due to employee participation programmes at SMG Swiss Marketplace Group AG (Group & Ventures segment).
8. The tax effects associated with one-eff effects are normalised accordingly.

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TX Group Half-Year Report 2022