Slight rise in advertising expenditure in 2017


The domestic sector of advertising is examined in a recent study of Infobank Hellastat S.A. According to Alexis Nikolaidis, Economic Research & Sectorial Studies Senior Analyst, in 2017, the market trend continued to be slightly upward, with the total advertising expenditure rising by approximately 2%; a shift derived from television, while losses in newspapers and magazines continued.

According to sector operators, during the January-October period, TV advertising showed an increase of 12% per annum, which reflects – among other things – the reinvestment, to a certain extent, of amounts saved from the abolition of advertising tax on TV advertising.

Actually the outlook is positive for the immediate future, as well, due to the fact that, as of 1.4.2018, TV advertising tax has been reduced to 5% from 20% on advertisements that are broadcast solely by the channels that will be issued with an operating license within the context of the new licensing process.

With reference to print media, in 2017, a further decrease was noticed by 19.6% in total newspaper sales, to 57.61m copies, while magazine sales dropped by 15.4% to 22.73m copies.

However, the market is concerned about the new institutional framework of direct invoicing (Law 4,279/2014), which has not been applied yet, although it has been voted since August 2014, as a result of the fact that its entry into force has been postponed more than once due to reactions by the Association of Greek Advertising Companies (EDEE), and the resulting difficulties. According to the latest postponement, direct invoicing should have entered into force as of 1.2.2018; however, based on information derived from the market, the overwhelming majority of invoicing is still performed in the traditional way.

Furthermore, according to the Law 4,487/2017, the airtime allocation platform should have been operating since early 2018, while direct invoicing would be applied to it, which has not been implemented yet.

According to Mr. Nicolas Gouzelos, Chairman & CEO of Infobank Hellastat, “The negative economic circumstances, in conjunction with the ongoing technological development, have already shifted the interest of advertisers and those advertised, from traditional, to online means of communication, and primarily to the Internet and mobile telephony. Therefore, those advertising companies that will invest in online / interactive advertising technologies are expected to benefit from the situation. Actually, on an international level, online advertising has shown a much higher rate of growth than conventional forms of advertising.”

Financial analysis

In the study of ΙΒ.HS, the financial statements of 72 advertising companies are analyzed. The key conclusions can be summarized as follows:    In 2016, Turnover recorded an increase of 14.4%, at €311.15m.
  • EBITDA amounted to €10m, versus €5.5m in 2015, whereas EBT more than doubled, at €7.56m.
  • The EBITDA margin and the EBT margin fell to 3.5% and 2.1%, respectively.
  • Capital leverage deteriorated to 4 over 1.
  • Receivables were collected within a period of 6 months.
Moreover, in the study of ΙΒ.HS, the financial statements of 20 media shops are analyzed. The key conclusions can be summarized as follows:
  • In 2016, Turnover increased by 12.5%, at €227.88m.
  • EBITDA increased by 20.5%, at €3.6m, whereas EBT dropped by 6.4%, amounting to €3.24m.
  • The EBITDA margin and the EBT margin increased to 1.8% and 1.7%, respectively.
  • Capital leverage deteriorated to 16 over 1.
  • Receivables were collected within a period of 6 months.
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