Financial targets achieved / Digital activities drive revenue and EBITDA growth / Revenues increase by 8.5 percent / EBITDA increases by 10.2 percent / Dividend proposal of EUR 1.80 per share / Additional investments in digital growth planned for 2016 / EBITDA is expected to increase by a low to mid single-digit percentage range in 2016
In the 2015 financial year Axel Springer achieved its financial targets and strengthened its position as one of the leading international digital publishers. The Group accelerated the expansion of its digital business models and invested specifically in digital journalistic offerings in the English speaking world. Digital activities contributed 62 percent of the total revenues and 70 percent of the Group’s EBITDA in the reporting period. Its share of total advertising revenues was 80 percent. In the 2015 financial year, Axel Springer generated nearly half of its total revenues in international markets.
Overall, Axel Springer increased total revenues by 8.5 percent in the 2015 financial year. EBITDA grew by 10.2 percent compared to the prior year. The EBITDA margin, already at a high level, improved from 16.7 percent to 17.0 percent. The adjusted earnings per share increased by 10.3 percent. The Executive Board and the Supervisory Board will propose a constant dividend payout of EUR 1.80 per share for the 2015 financial year to the Annual General Meeting. Due to the increased number of shares, the total dividend payout increases from EUR 178.1 million to EUR 194.2 million.
Dr. Mathias Döpfner, Chief Executive Officer of Axel Springer SE: “Today Axel Springer is one of the world’s largest digital publishers in terms of reach. We see considerable potential for the long-term increase in the value of our digital activities and will focus in 2016 on successfully developing the investments we have made in recent months.”
In the current financial year, Axel Springer will continue to invest in the accelerated expansion of its digital business models. The focus will be on the business and financial news portal Business Insider, the innovative content platform UPDAY, as well as the mobile US shopping platform Retale. In addition, the company will promote growth in its Classified Ad Models and in digital subscriptions for its Paid Models.
Axel Springer increased total revenues in the past financial year by 8.5 percent to EUR 3,294.9 million (PY: EUR 3,037.9 million) and therefore met its forecast. This increase was driven by growth in the Classified Ad Models and Marketing Models, which also showed pleasing organic growth. Adjusted for consolidation and currency effects, total revenues were 1.6 percent higher than in the prior year. The Group increased earnings before interest, taxes, depreciation, and amortization (EBITDA) adjusted for non-recurring effects by 10.2 percent, from EUR 507.1 million to EUR 559.0 million. This slightly exceeded expectations for the 2015 financial year. Axel Springer profited in particular from strong EBITDA growth in Classified Ad Models. The company’s EBITDA margin increased from 16.7 percent to 17.0 percent.
The net income increased by 29.2 percent to EUR 304.6 million (PY: EUR 235.7 million) in the past financial year. Thus, Axel Springer achieved earnings per share of EUR 2.50, following EUR 1.71 in the prior year. The consolidated net income adjusted for non-recurring effects as well as amortization and impairments from purchase price allocations improved by 11.2 percent to EUR 279.3 million (PY: EUR 251.2 million). As a result, the adjusted earnings per share increased to EUR 2.22 (PY: EUR 2.01). The forecast for the 2015 financial year was therefore met.
As a result of the continued increase in digital business as well as acquisitions, the average number of employees increased by 7.9 percent to 15,023 (PY: 13,917).
For the 2016 financial year, the Executive Board expects an increase in total revenues in the low single-digit percentage range. Adjusted for consolidation effects, above all the deconsolidation of activities in Switzerland, growth would be higher and be in the mid single-digit percentage range. The Executive Board assumes that the planned increase in advertising revenues will more than compensate for the decrease in circulation revenues and other revenues.
With regard to EBITDA, the Executive Board expects an increase in the low to mid single-digit percentage range. The EBITDA in the Classified Ad Models segment is expected to rise, whilst EBITDA in the Marketing Models segment is expected to be around the level of the prior year. For the Paid Models and Services/Holding segments, an EBITDA below the prior year’s levels is expected.
For the adjusted earnings per share, the Executive Board expects an increase in the mid to high single-digit percentage range.
The dynamic development of the digital business models is clearly reflected in the Group’s growth in 2015. Thus, pro-forma revenues from digital activities increased in the reporting period to EUR 2,004.6 million (PY: EUR 1,794.6 million) and therefore achieved organic growth of 11.7 percent. In 2015, they exceeded the EUR 2 billion mark for the first time.
As announced, Axel Springer accelerated the international expansion of its digital business models and invested in growth in the English-speaking market in particular. International revenues increased by 20.2 percent to EUR 1,573.5 million (PY: EUR 1,309.3 million). Therefore, in the past financial year, Axel Springer generated nearly half of its total revenues (47.8 percent) in international markets (PY: 43.1 percent).
Advertising revenues also increased significantly due to the strong growth in the Classified Ad Models and Marketing Models. They increased by 16.1 percent to EUR 2,107.6 million (PY: EUR 1,815.1 million). The company generated more than 80 percent of its advertising revenues through its digital activities. Within the circulation revenues, increasing revenues from digital sales were able to partially compensate for the structural circulation declines in the print business. Consequently, circulation revenues, at EUR 721.7 million, were only slightly lower than in the prior year (EUR 735.3 million). Other revenues recorded a decrease of 4.5 percent to EUR 465.7 million (PY: EUR 487.5 million), above all due to consolidation effects. Adjusted for these effects, they show an increase of 4.2 percent.
The Classified Ad Models segment again achieved the highest rate of growth in the 2015 financial year in terms of revenues and EBITDA. The revenues from the segment increased by 47.1 percent to EUR 753.1 million (PY: EUR 512.0 million). In addition to strong organic growth, consolidation effects from the first-time incorporation of @Leisure, LaCentrale, Jobsite, Immowelt and Yad2 were also noticeable here. Adjusted for these effects, revenues in the segment grew by 14.5 percent.
EBITDA from the Classified Ad Models increased significantly by 40.1 percent to EUR 305.0 million (PY: EUR 217.7 million.). Adjusted for consolidation effects, EBITDA rose by 17.1 percent. With an EBITDA margin of 40.5 percent (PY: 42.5 percent), the segment remained highly profitable. The Job category generated an EBITDA margin of 43.7 percent, the Real Estate category an EBITDA margin of 46.4 percent and the General/Other category an EBITDA margin of 30.7 percent.
In December 2015, the Group acquired the still outstanding 15 percent of Axel Springer Digital Classifieds GmbH. Since then, Axel Springer has controlled 100 percent of the company in which the majority of the classified ad business is concentrated.
In the Paid Models segment, the focus in the past financial year continued to be on increasing paid subscription sales for the BILD and WELT digital offerings. With a total growth rate of 26 percent in the annual average compared to the prior year, the digital subscription offerings of BILD and WELT recorded significant advances. As of the end of December 2015, the number of digital subscribers had increased to more than 310,000 for BILD and to around 74,000 for DIE WELT (IVW Paid Content 12/2015). In addition, Axel Springer pushed on with the international expansion of the segment, which included launching a European edition of POLITICO, the majority acquisition of Business Insider and the development of the content platform UPDAY.
The Paid Models segment generated revenues of EUR 1,582.2 million (PY: EUR 1,617.5 million) in the past financial year. EBITDA from the Paid Models was EUR 223.2 million and was therefore 11.2 percent lower than the prior year (EUR 251.4 million). This was mainly due to the higher restructuring expenses, as well as the decline in revenues. As a result, the EBITDA margin for the segment decreased to 14.1 percent (PY: 15.5 percent).
In the Marketing Models segment, Axel Springer pressed ahead, above all, with the further internationalization of the Bonial.com Group, which includes leading online portals for local trade advertising, such as kaufDA, Retale, Ofertia and Bonial. As a result, the Group has launched portals in six new countries in Latin America and Scandinavia in the last year. Revenues in the Marketing Models segment increased by 10.7 percent in the past financial year to EUR 878.9 million (PY: EUR 794.1 million).
The EBITDA was lower than the prior year’s figure due to higher expenses to strengthen the competitiveness of idealo, portfolio optimizations at aufeminin and expenses for the internationalization of the Bonial Group. The EBITDA for the segment decreased by 17.4 percent to EUR 88.0 million (PY: EUR 106.5 million). The EBITDA margin was 10.0 percent, a decrease from 13.4 percent in the prior year.
Revenues from the Services/Holding segment decreased significantly as a result of the consolidation effects in the reporting period, by 29.4 percent to EUR 80.7 million (PY: EUR 114.4 million). The EBITDA for the segment improved to EUR -57.1 million (PY: EUR -68.5 million).
Axel Springer increased the free cash flow by 22.8 percent to EUR 299.8 million in the reporting period (PY: EUR 244.1 million). The net debt was EUR 1,066.6 million as of December 31, 2015 compared to EUR 667.8 million at the end of 2014. This was mainly due to the financing of acquisitions made as part of the digitization and internationalization strategy. As of December 31, 2015, the Group had unutilized short-term and long-term credit facilities totaling EUR 902.0 million (December 31, 2014: EUR 511.0 million). Therefore, financially the Group is still based on very solid foundations. As of the reporting date, the company’s equity ratio was 38.6 percent (PY: 43.9 percent).