Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TX Group AG (XSWX:TXGN) reported a significant increase in cash flow and net liquidity, with cash and cash equivalents rising by over 90 million to 380 million.
• The company's free cash flow before MOA increased to 232 million, driven by an extraordinary dividend from SMG.
• SMG showed a positive development with a 13% sales growth and a significant increase in earnings.
• The company is focusing on sustainable growth by investing in existing portfolios and exploring new opportunities in the classified space.
• TX Group AG (XSWX:TXGN) has a strong equity balance sheet with 76% equity, indicating financial stability.

Negative Points

• Revenues, earnings, and margins were down compared to the previous year, with a 4% decline in revenue.
• The media and advertising markets faced challenges, particularly in the second half of 2024, impacting revenue negatively.
• The company incurred one-off costs of almost 60 million, including restructuring costs and provisions for reclaims.
• The job market and traditional advertising market were particularly challenging, affecting segments like 20 Minutes and Tamedia.
• Despite lower wages and salaries, personnel expenses grew due to one-off costs and restructuring expenses.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Sign with XSWX:TXGN.

Q: Can we expect another difficult year for JobCloud in 2025, or are there signs of market improvement? A: It's challenging to predict the market environment for 2025 due to ongoing uncertainties. While there are some positive developments, the market remains unpredictable, making it difficult to say if 2025 will be significantly better than 2024. (Unidentified_4)

Q: Regarding the $60 million in extraordinary costs, which costs might recur in 2025, and which are settled? A: Most of these costs are provisions recognized in the 2024 profit and loss statement. While some will impact cash flow in the coming years, the major costs related to strategic decisions have already been accounted for in 2024. (Unidentified_3)

Q: What are the main reasons for the downturn in the job market, despite a stable economy? A: The job market is cyclical, and current uncertainty is causing companies to hesitate in recruiting. We believe we are at the bottom of the curve and expect growth to resume, supported by ongoing investments in product and innovation. (Unidentified_4)

Q: Are there plans for acquisitions or expansions in the digital recruiting business? A: We remain positive about the digital recruiting business and are open to both organic and inorganic growth opportunities. This could include increasing our stake in existing ventures or exploring new acquisitions. (Unidentified_2)

Q: Can you provide an update on the real estate business and future plans? A: We are developing tailored property strategies for each location. For example, a new office building in Zurich is planned for completion by 2028. We are also exploring partnerships for other properties to fully realize their value. (Unidentified_4)

Q: What is the current EBITDA margin for Goldbach, and how should it be interpreted? A: The EBITDA margin is available in the presentation, but caution is advised due to IFRS 16 impacts. It's better to consider the adjusted margin for a clearer view of profitability. (Unidentified_3)

Q: Is there potential for Swiss Marketplace Group's EBITDA margin to improve in the coming years? A: Yes, the ambition is to achieve margins similar to top European peers, which suggests room for improvement beyond the current 40%. (Unidentified_2)

Q: What milestones are needed for Swiss Marketplace Group to be IPO-ready? A: SMG is on track for IPO readiness by 2026, with ongoing developments in governance and regulatory aspects. The decision on timing will depend on both company readiness and market conditions. (Unidentified_2)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.