2023-05-16 17:42:24
More difficult times, especially for smaller companies in the book industry
Vienna (PK) – The treatment of the report on Facultas Dom Buchhandels GmbH in today’s meeting of the book industry offered an interesting insight into the currently very difficult framework conditions in the book industry Audit Committee. It is a small corporation that was selected at random on the basis of a random sample, informed RH President Margit Kraker. Since, with the exception of the 2020/21 financial year, when the company received corona subsidies, sales have fallen continuously since 2015, a continuation of the restructuring path is expressly recommended. In addition, strategic options, such as sales opportunities, should be examined.
The managing director Rüdiger Salat, who was invited to provide information, admitted that the state’s corona aid had ensured the “survival of the company” and the employees. Due to the generally falling demand in the book industry, a bundle of improvement measures was put together long before the corona crisis, with the main focus being on control, marketing and cooperation. The pandemic then came to an “emergency stop” of the positive development. Since sales are currently still 15% below the level of 2019, the economic situation is currently very difficult.
The report was accepted unanimously.
Continuous decline in sales makes further restructuring steps necessary
In a report, the Court of Auditors examined the financial restructuring and corporate organization of the book trading company Facultas Dom, which was supported by the public sector during the COVID-19 pandemic, the deliberations of which were already postponed once. The reviewed period essentially comprised the financial years 2015/16 to 2020/21 (III-691 d.B.). At the time of the financial audit, Facultas Dom Buchhandels GmbH operated four bookshops and a specialist shop for religious handicrafts in Vienna and Lower Austria. Two thirds of the company were owned by Facultas Verlags- und Buchhandels AG, one third belonged to an ecclesiastical foundation of the Archdiocese of Vienna. Facultas AG, in turn, was owned equally by the Austrian Students’ Union at the University of Vienna and the Austrian Students’ Union at the Vienna University of Economics and Business.
The auditors of the Court of Auditors encountered negative annual financial statements in all financial years except the last audited one. Accordingly, the revenues generated fell by more than 21% in the reporting period. The examiners attributed the positive result for 2020/21 primarily to the funding in connection with the COVID-19 pandemic. In the 2020/21 financial year, for example, the Facultas Dom received almost €324,000 from the revenue replacement funding instrument and the NPO fund, as well as almost €155,000 from short-time work funds, for a total of around €479,000.
In its report, the Court of Auditors pointed out deficiencies in Facultas’ internal control system, such as the lack of a documented risk assessment, as required under the GmbH Act. It would also be important that the division of the shares between the ÖH University of Vienna and the ÖH Medical University of Vienna in Facultas AG, which was preceded by years of legal dispute, is completed quickly.
The fact that the Facultas Dom recognized the difficult situation and initiated remedial measures before the start of the financial review was rated positively. This included, for example, negotiations regarding purchasing conditions for all branches with the publishers, the planning of joint sales focuses or the implementation of joint campaigns. The corporate restructuring measures were fundamentally suited to increasing the attractiveness for customers and thus having a positive impact on sales. As a result of the COVID-19 pandemic, a final assessment of whether the measures were sufficient to improve the earnings situation was not possible.
Sales in the entire book industry have been declining for years
In response to detailed questions from MPs Yannick Shetty (NEOS), Agnes Sirkka Prammer (Greens) and Hans Stefan Hintner (ÖVP), Managing Director Rüdiger Salat explained that the billing for the services had always been in writing. This should now also be expressed within the framework of a clear contractual basis. He is grateful for the Corona aid because it would have ensured the company’s continued existence in an extremely difficult time. There were only problems with the first application to the NPO support fund in December 2020. The fact that no NPO had a stake of more than 50% in Facultas Dom, although the majority owner Facultas AG owned exactly 50% each of two students: in this case led to rejection. The risk survey and assessment prepared by the Court of Auditors was an important impetus, but the issues associated with it had already been discussed with the auditor once a year. The Facultas managing director also pointed out to Karin Greiner, spokesman for the SPÖ, that no change of auditors was planned because it would involve too much effort.
One is generally confronted with the international trend that sales in the entire book industry are declining, stated Rüdiger Salat. In Germany alone, ten million readers have been lost as potential buyers of books in the last ten years. Inflation would also have led to people spending less money on books. He also doesn’t expect that the reluctance to buy will change. Salat pointed out that a number of restructuring measures had been implemented in his group of companies in recent years. However, he pointed out that the scope for a small company, for example when purchasing goods, is not very large. Further reductions in staff would also be at the expense of advice and security. The deficits that occurred in previous years were covered from own funds and by bridging financing, he informed. The sales figures are currently only a few percent above the previous year’s level, explained Salat, but an increase of around 20% is needed. As far as a possible sale is concerned, he classified this as hopeless.
A report (III-917 d.B.) on investments in Upper Austria and Styria, which was only on the agenda to meet the deadline. (continued Court of Auditors Committee) see below
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