Top Manager in Discussion: Hinnerk de Boer, MD of newspaper distributor Hungaropress
Hinnerk de Boer has been at the helm of Hungaropress, which predominantly sells foreign press products, for almost 10 years. By diversifying the business at the right time he has managed to keep the company in the black despite the financial crisis.
How was the last year for your company?
While we had a very good year in 2009, last year we felt the full effects of the crisis. Ours sales fell significantly from October 2009. Our turnover declined year-on-year by 10 per cent in our core area of business, the import of foreign press products. There was a more pronounced fall in the sales of daily newspapers than in those of magazines. That, however, was also related to general structural changes, in particular growing internet use and the great success of smartphones and tablets, rather than being solely a result of the crisis. Last year the exchange rate was somewhat more stable and considerably more predictable than in 2009. Our profit margin did not decline as much as our sales. Overall we closed a pretty good year. However, I should note that around 40 per cent of our turnover now comes not from press imports but from new areas of business that we have entered: press exports, book imports and logistics services. It is fortunate that we are now so broadly positioned. Ten years ago when I started, press imports made up 90 per cent of our turnover. If that were still the case today we would not now be in the black overall.
How are your news areas of business developing?
Press exports did best last year. From Budapest we supply Hungarian press products to the three neighbouring countries with a strong Hungarian minority, i.e. Slovakia, Romania and Serbia. We began turning our attention to that field of business around five years ago and gradually built up the necessary structures in those countries together with our subsidiaries. Those structures are now in place and we can increasingly reap the fruits of our work over many years to develop the business. The market for Hungarian-language press products in all three countries is growing dynamically. Hungarian press products can now be purchased in an increasing number of towns and villages there.
How is your trade in books?
The import of foreign-language titles is not developing spectacularly but is improving consistently. In December we also started selling Hungarian books via the Relay and Inmedia shops of Lapker, our Hungarian sister company. It has got off to a good start. Our turnover in both books and newspapers is the highest at the airport. That’s why we are optimistic regarding the effect of the completion of the new terminal building. We will have eight shops at the airport instead of six, and they will be more spacious on average than the previous six. That means we will be able to display considerably more books, both Hungarian and international.
Hungaropress is increasingly becoming a bookseller!
Yes, that is part of our diversification strategy and is nothing unusual in itself. Many core competencies are the same for the book and the press trade, as are the buyers. In general there are more and more overlaps between the two markets. However, nothing is automatic. We have to recognise and adapt to new trends.
What additional new projects are there at Hungaropress?
In general the aim is for there to be stronger cooperation among our sister companies. Certain print products are to be bought centrally by one company for all, rather than being bought independently by each company. In certain fields our company has been given the role of central buyer. We will be able to make better use of our capacities. Budapest’s role as a regional sales centre will continue to grow.
How is business in terms of logistics services?
Progress is rather slow in that field. Our fleet still transports almost exclusively print products. Attracting non-press products has turned out to be more difficult than expected.
Why?
It certainly cannot be because of the prices. Since our vehicles are on the road in any case and essentially it is a question of selling capacities that are available anyway, we can offer very attractive prices. The fact that we have not made progress as fast as we had expected is probably related to the fact that in every field of business there are certain distributors with excellent relations dating back many years to the management and owners of their clients. As long as the service is good and the prices are within certain limits, then customers are rather reluctant to switch. We are continuing to work on that question.
How have sales of German tabloid BILD, the barometer of the newspaper market, developed?
Sales were down year-on-year in 2010. That is a trend that I have observed since I joined Hungaropress ten years ago. In the 1990s on good days in the summer it was possible to sell as many as 20,000 copies of BILD. Today we are happy if we sell a quarter of that number. However, conclusions about Hungarian tourism can only be drawn from that to a limited extent. The falling sales fit in with the general picture: at the beginning of the 1990s BILD sold six million copies in Germany. This year sales of BILD in Germany will go below the three-million mark for the first time.
How has the number of dailies that you import changed?
The number of dailies imported has also declined. Today we import 20 dailies. Ten years ago we imported four times as many. The digitalisation of content makes physical sales less and less attractive to publishing houses.
What is your vision for the company? How would you like Hungaropress to be positioned in ten years’ time?
The diversification process will continue. The import of newspapers will continue to decline in importance. In the medium term we see ourselves as a trader in cultural goods, rather than newspapers predominantly. That profile is our vision. That is why I am particularly interested in goods that fall into that category, such as toys.
“Overall we closed a pretty good year. However, I should note that around 40 per cent of our turnover now comes not from press imports but from new areas of business that we have entered: press exports, book imports and logistics services. It is fortunate that we are now so broadly positioned. Ten years ago when I started, press imports made up 90 per cent of our turnover. If that were still the case today we would not now be in the black overall.”
– Hinnerk de Boer, Hungaropress
