Axel Springer Reports Robust Growth for First Half

Anna Game Lopata

August 3, 2016

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Berlin, Germany:  Files -  View Of German Newspaper Publisher Axel Springer'S Berlin Headquarters Taken 11 January 2006. Springer Said 01 February 2006 That It Was Abandoning Plans To Take Over Germany'S Second-Biggest Commercial Television Group, Prosiebensat1.   Afp Photo John Macdougall  (Photo Credit Should Read John Macdougall/Afp/Getty Images)
Photo credit: JOHN MACDOUGALL/AFP/Getty Images

Digital publishing giant Axel Springer SE grew EBITDA by 2.3 per cent in the first six months of the current financial year and recorded an organic revenue increase of 5.3 per cent.

The company says adjusted consolidated net income rose significantly by  7.1 per cent while its digital media also exhibited organic growth of 11 per cent.

In the first half Axel Springer further expanded its digital business models which contributed a total of 67 per  cent to total revenues, 72 per cent to consolidated EBITDA and 85 per cent to advertising revenues.

Despite significant deconsolidation effects resulting from integrating the Swiss activities into Ringier Axel Springer Schweiz AG, the company increased total revenues slightly by 0.5 per cent to EUR 1,585.3 million. Adjusted for consolidation and currency effects, revenues increased by 5.3 percent.

Earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted for non-recurring effects, increased by 2.3 per cent to EUR 272.9 million as a result of a sharp increase in Classified Ad Models again the major factor driving this growth.

Among other factors, the planned higher investments in digital growth projects impacted upon the other segments.

EBITDA margin improved slightly during the reporting period from 16.9 per cent to 17.2 per cent.

For the whole of 2016, the executive board – despite the numerous macroeconomic and political risks – adheres to the forecasts for EBITDA and earnings per share.

It slightly adjusts the outlook for group revenue, however, and now expects a stable development instead of the slight growth that was originally forecast. Organically, group revenue grows in the mid-single-digit percent range.

Axel Springer SE  CEO Dr Mathias Döpfner says the company has further improved its market position by means of targeted acquisitions, the most recent of which was eMarketer a leading provider of high-quality analyses, reports and digital market data based in New York.

The Group acquired about 93 per cent of the shares in eMarketer Inc and Döpfner says Axel Springer is confident that its investments in digital growth will increasingly pay off.

Targeted investments in digital growth

During the first half-year, the Group also invested, as announced, in the further development of the digital growth projects Business Insider and Upday as well as in the expansion of the US activities of the Bonial Group.

“We have expanded our portfolio of innovative Paid Models and strengthened our position with respect to business coverage and information,” Döpfner says.

Having acquired the majority shareholding in Traum-Ferienwohnungen GmbH in April – the Axel Springer-owned @Leisure Group also announced a voluntary public takeover bid to acquire all of the shares in Land & Leisure A/S in May.

Land & Leisure brokers vacation properties and vacation park accommodation in Denmark, Sweden, Norway, and Germany under the brand names DanCenter and Danland.

On July 25, 2016, @Leisure acquired 76.0 per cent of the shares for approximately EUR 47.0 million. The company has thus strengthened its position in Scandinavia.

Classified ad models most profitable

The Classified Ad Models further expanded their position as the Group’s most profitable segment during the first six months.

Their revenues increased by 19.5 per cent to EUR 424.7 million. Strong organic growth of 12.0 per cent and the consolidation effects, from the integration of Immowelt in particular, contributed to this positive development.

The EBITDA of the segment increased considerably by 17.0 per cent to EUR 171.4 million. The EBITDA margin from the Classified Ad Models has, with a 40.4 per cent increase once again reached a high level.

Paid models decrease

In the Paid Models segment, revenues decreased during the first half-year by 5.6 per cent to EUR 709.0 million.

The deconsolidation of the Swiss activities was a critical factor in this respect. Adjusted for consolidation and currency effects, revenues were, at 0.8 per cent, slightly higher in comparison to the prior year.

With almost 398,000 paying digital subscribers (IVW Paid Content 6/16), the journalistic Paid Models of BILD and WELT continued to develop positively. In comparison to the prior year, they generated growth of 20.4 per cent and 17.9 per cent respectively.

EBITDA from the Paid Models was EUR 83.0 million and was therefore 18.1 per cent lower than the prior year (EUR 101.3 million).

This was especially due to the planned growth investments in Business Insider and Upday. The national models recorded an EBITDA increase of 4.3 percent. The EBITDA margin for the segment was 11.7 per cent, a decrease after 13.5 percent in the prior year.

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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.