Photo: Adam Ihse
Chronicle: With because of Stampen submitted application for company writes Peter Hjörne on the way forward.
yesterday was a heavy day. Then the Stampen Group, which owns GP, applications for company. To undergo a reconstruction is not something you want to do, it’s something you do because you have to. It is the last resort after all other avenues been tried and closed.
It’s no secret that the Stampen has had and still have a large debt burden, we pulled on us by the leveraged acquisitions we made, mainly through the purchase of Centertidningar 2005.
the background is this: We at Stampen realized early on that the digitization and online would create a tougher competition. We were convinced that the GP and Bohusläningen, who was the group’s only newspapers would find it difficult to cope alone, not least because we had great printing investments ahead. Therefore, we decided for an acquisition strategy. The idea of acquiring other newspapers and printing was to put together the various units and to create synergies, primarily in the industrial parts: pressure, distribution and administration. Savings would mean that we could better protect journalism, which thus would not have to save as much as otherwise. We also wanted to share the high development and conversion costs and printing investments on more devices.
We were and are not alone in this analysis. When Centertidningar acquired enrolled no less than 18 companies and consortia. Stampen, along with the VLT and My Media, won a photo finish to the future market price – 1.8 billion. The consolidation, that is the consolidation of media companies, as we were early, has continued and is essential in the increasingly intense competition. The problem for the Stampen is that we acquired early and at high prices, while recent mergers become “cheaper”.
Our strategy worked well until 2012, when the structural transformation and digitization accelerated in a way that I think few had predicted. Stampen newspapers lost a billion in advertising revenues and only in 2013 we lost half a billion. Profits fell sharply and thus we could not handle the debts. As further påbröd came the so-called printing VAT judgment which meant that we were just like any other printing company would pay back the VAT, in our case the order of half a billion. This put additional pressure on our ability to pay.
With the benefit of hindsight, we can conclude that the strategy did not work all the way. We would also have rationalized more rapidly and to take home synergies. As the main shareholder and board member, I have, of course, responsibility for the decision that I was involved. My family has been active in the GP and eventually in Stampen in nearly 100 years. In everything we have been doing journalism and credible, local journalism has been the core. When we at the beginning of the 00s realized that alone is no longer strong, but that mergers would be needed, we had to choose to acquire or be acquired. We chose to stay and try to protect the local, non-profit Swedish journalism, which is so important for our society.
We thus tried to take responsibility historically and for my part I feel I also have a great responsibility ahead. That’s why I two years ago went on as Board Chairman for working with the new management and the board to solve the problems we placed ourselves in.
We have managed to turn the problems in operations and we have streamlined the Group. Today we have a turnover of SEK 3 billion and has more than 3000 employees. In 2015, we showed an operating profit of 150 million. Stampen consists of the 14 newspapers on the West Coast, including the GP, and a number of digital media. We reach over 2 million people every day with our news – digitally and on paper. We are growing among the fastest in Sweden digitally today. The group also includes V-TAB is the largest printing group, which pushes many of Sweden’s daily newspapers, as well as VTD, our distribution company. Overall, the Group consists of 35 different companies. We are an important player for journalism, democracy and opinion formation.
business is no longer the problem, and we are seeing today is no need for extensive rationalization or layoffs. It’s debt that is the problem. Stampen was facing a situation where we would not be able to meet our obligations. It is thus to avoid a liquidity shortage that yesterday we filed for reorganization. Exactly how the reconstruction will look like we do not know. But we know, and that is that the editorial and advertising departments will continue to work, the papers will be printed and distributed, and our readers will get their news as usual.
Thus, the GP will as usual – the same strong local voice that provides a place for debate and different opinions, that drives public opinion, providing local news and research that would not otherwise see the light of day, which gives outlooks and insights that are at Gothenburg’s page for Gothenburg’s best!
Now it on journalism and democracy at local level, it is about the West Swedish votes in an increasingly centralized media Sweden and it is about 3000 employees and their jobs. We hope that our readers, advertisers, clients and suppliers support us through the process. You are important to us! We hope and believe that we are important to you! And we are convinced that we have every opportunity to succeed!
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a reconstruction is a method, designated by the State in a special law, to save companies that basically are well placed to cope in the long term but who need breathing space to sort out their problems. One can say that the state precipitates a protective umbrella over the company while it is working with the administrator, that is, an attorney who specializes in reconstructions, to find ways out of the difficulties. It is the court that decides on the reconstruction and administrator.
The time you wear to create a sustainable plan is three months with possibility of extension. In the meantime, business as before. When the reconstruction is completed and approved, also by the district court, the company shall be able to continue working without protective umbrella, but bolstered by reconstruction.
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