November 1, 2017 / 10:11 AM / a year ago

UPDATE 1-APG SGA wins renewed Swiss Federal Railways ad space contract ​

(Adds details about scope of contract, shares, rivals and analyst estimates)

ZURICH, Nov 1 (Reuters) - APG SGA shares jumped on Wednesday after the Swiss outdoor advertising said it won a new contract from Swiss Federal Railways for advertising space in Switzerland’s train stations as well as for interiors and exteriors of all trains.

The shares rose 7.6 percent to 435 Swiss francs ($435) by 1007 GMT — the biggest gain for the company’s stock since February 2015. It is 30 percent owned by French advertising giant JCDecaux SA.

APG SGA, which has the existing contract, said the renewed deal starts on Jan. 1, 2019, and will run for between five and 10 years. The ad company said it will make “substantial investments”, in particular in digital advertising in train stations.

Neither APG SGA nor Switzerland’s federal train system gave financial details in separate releases, although analysts at Zuercher Kantonalbank estimate the existing contract is worth as much as 20 percent of the advertising company’s 315.4 million Swiss francs ($315.27 million) in annual sales.

There had previously been speculation that APG SGA would win the majority of the new contract, but that some portions might go to other companies that participated in the railway’s public tender.

Switzerland’s billboard advertising sector benefits from the country’s system of direct democracy, as political parties and referendum supporters and detractors use the medium to sway public opinion before frequent votes.

APG SGA competes in Switzerland with Clear Channel as well as smaller rivals including Tamedia. ($1 = 1.0004 Swiss francs) ($1 = 1.0006 Swiss francs) (Reporting by John Miller, editing by John Revill)

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