Axel Springer begins new financial year with 11 percent growth

  • zoom+
  • zoom-


Axel Springer begins new financial year with 11 percent growth

To press release overview

Digital and international media post significant increase in revenues / EBITDA rises by 6.5 percent / High EBITDA margin of 17.2 percent / Strong free cash flow / Outlook for 2011 confirmed

Axel Springer got off to a good start in the 2011 financial year with strong growth and high profitability. With significant revenue increases in international print media and digital activities, the Group saw its total revenues rise sharply. The company was able to maintain a high level of profitability with a 6.5-percent increase in EBITDA and an EBITDA margin of 17.2 percent. In addition to a continuing strong organic growth in the first quarter, Axel Springer pressed ahead with its digitization strategy with the successful conclusion of the takeover of and the acquisition of a majority stake in

Axel Springer achieved an 11.0 percent increase in Group revenues to EUR 736.7 million (PY: EUR 663.7 million) during the first three months. When adjusted for consolidation effects the revenue increase comes to 5.0 percent. The Group saw revenues rise by 57.7 percent in the Print International segment and by 26.3 percent in the Digital Media segment.

When adjusted for non-recurring effects and purchase price allocations, earnings before interest, taxes and depreciation (EBITDA) rose in the first quarter by 6.5 percent to EUR 126.9 million (PY: EUR 119.2 million). This brought the EBITDA margin to 17.2 percent following 18.0 percent for the same period of the previous year. The Newspapers National segment achieved an EBITDA margin of 22.3 percent, and Magazines National maintained a high level of profitability with an EBITDA margin of 20.6 percent. Print International posted a new record EBITDA margin of 17.0 percent, while Digital Media also saw its margin grow significantly from 8.3 percent for the previous year to 12.8 percent in the current year.

Dr. Mathias Döpfner, Chief Executive Officer of Axel Springer AG, said: “Following the record year of 2010 Axel Springer got off to a good start in the new financial year. We grew at a high level while remaining highly profitable. Our digital and international activities, which had a dynamic start to the year, will become even more important during the next months. All in all we laid a strong foundation in the first quarter to be able to achieve our goals for the year as a whole.”

The Management Board of Axel Springer AG continues to expect a single-digit percentage growth in revenues in the 2011 financial year. It anticipates a slight decline in revenues generated by the German print activities, which will be over-compensated by growth in the Print International and Digital Media segments. The EBITDA is expected to increase in the low double-digit percentage range. The significantly growing earnings generated by international and digital activities will more than compensate for the slight earnings decline in the German print segments resulting mainly from higher paper costs.

Share of international revenues above 30 percent – circulation and advertising revenues rise

In the first quarter international revenues accounted for 31.1 percent of total Group revenues, thereby exceeding the 30-percent mark for the first time. International revenues rose by 45.4 percent to EUR 229.5 million (PY: EUR 157.8 million). The development of business in eastern Europe and the international expansion of digital activities contributed significantly to this development.

The Digital Media and Print International segments made a significant contribution to the growth of advertising and circulation revenues. During the first three months advertising revenues rose by 21.1 percent to EUR 362.1 million (PY: EUR 299.0 million). Magazines National enjoyed an increase in advertising revenues in addition to organic growth and consolidation effects of the international and digital activities. Axel Springer also saw circulation revenues develop positively, rising by 4.1 percent to EUR 289.8 million (PY: EUR 278.3 million). The initial consolidation of activities in eastern Europe more than compensated for the decline in revenues at most German print media and effects of deconsolidation.

Consolidated net income ahead of the previous year

Adjusted consolidated net income increased by 17.8 percent to EUR 73.0 (PY: EUR 62.0). Adjusted earnings per share went up from EUR 1.80 to EUR 1.92. Axel Springer saw consolidated net income improve slightly to EUR 63.0 million (PY: EUR 62.3 million) year on year.

Digital and international activities continue to drive growth

With an EBITDA margin of 22.3 percent, the Newspapers National segment remained the Group’s most profitable segment in the first quarter. Newspaper National revenues declined by 3.3 percent to EUR 279.9 million (PY: EUR 289.4 million). However, the segment’s circulation revenues of EUR 147.7 million nearly equaled the previous year’s figure (EUR 149.6 million). Copy price increases of WELT-Group newspapers and BERLINER MORGENPOST which were implemented in the course of the financial year 2010 contributed to this development. Advertising revenues fell to EUR 125.9 million (PY: EUR 132.7 million) mainly due to a decline in advertising revenues of the newsstand newspapers. The higher investments in the strong newspaper brands and the increase in paper costs had an effect on the segment EBITDA, which came to EUR 62.4 million following EUR 77.6 million for the first quarter of the previous year.

The Digital Media segment posted a strong 26.3 percent increase in revenues to EUR 202.2 million (PY: EUR 160.0 million), thereby further expanding the segment’s share of Group revenues. Pro forma revenues grew to EUR 216.6 million and accounted for a 28.8-percent share of the Group’s pro forma total revenues. Digital activities grew organically by 22.1 percent. These results reflect the effects of the initial consolidations of since March 2010 and since March 2011. Segment advertising revenues jumped 45.6 percent, while other revenues declined due to the divestment of StepStone Solutions below previous year’s figure. Digital Media nearly doubled its EBITDA in the first quarter to EUR 25.8 million (PY: EUR 13.3 million) and reached an EBITDA margin of 12.8 percent (PY: 8.3 percent).

The Magazines National segment reported a 1.7-percent increase in revenues adjusted for consolidation effects. Following the sale of the interest in Cora Verlag and the business and financial publications, segment revenues declined by 4.5 percent over the previous year’s first quarter to EUR 113.9 million (PY: EUR 119.2 million). Magazine advertising revenues gained 4.7 percent and even 8.4 percent when adjusted for consolidation effects. Circulation revenues were down by 9.0 percent but only 2.6 percent when adjusted for consolidation effects. Despite a slight decline in EBITDA to EUR 23.4 million (PY: EUR 25.2 million), the EBITDA margin of Magazines National remained at the high level of 20.6 percent.

The consolidation of companies brought by Ringier into the eastern European joint venture had a positive effect on revenues and earnings of international print media in the first quarter of 2011. The Print International segment revenues jumped 57.7 percent to EUR 112.9 million (PY: EUR 71.6 million). Advertising and circulation revenues rose by 75.2 and 45.3 percent, respectively. Revenues adjusted for consolidation and currency effects declined by 3.0 percent. Whereas adjusted advertising revenues rose 5.2 percent, adjusted circulation revenues fell 7.0 percent below the previous year’s figure. Earnings developed nicely with a significant increase in EBITDA from EUR 5.4 million to EUR 19.1 million. The EBITDA margin of 17.0 percent is a new record for the Print International segment.

The Services/Holding segment posted a 19.2 percent increase in revenues to EUR 27.9 million (PY: EUR 23.4 million) and an EBITDA of EUR -3.9 million (PY: EUR -2.2 million).

Strong free cash flow

The free cash flow amounted to EUR 74.3 million in the first quarter. The prior year figure of EUR 17.7 million had been affected by working capital and income tax effects. Due to the financing of the transaction, the net debt of Axel Springer as of March 31, 2011 amounted to EUR 402.0 million (Dec. 31, 2010: net liquidity of EUR 79.6 million). At this point in time the Group still had open lines of credit of EUR 935 million. The equity ratio at the end of the first quarter was 44.7 percent (PY: 49.2 percent). The average number of employees rose to 12,206 (PY: 11,267) due primarily to the further expansion of staff in the Digital Media segment and the consolidation of Ringier Axel Springer Media AG.

This press release (also in German), Group key figures and the complete quarterly report can be downloaded from

Press Contact Axel Springer SE: Edda Fels
Tel: +49 30 2591 77600