EBITDA rises 16.2 percent to EUR 593.4 million / EBITDA margin improves to 18.6 percent / Revenues grow by 10.1 percent / Digital Media with significant increase in revenues and earnings / Proposed dividend of EUR 1.70
Axel Springer again achieved record results in 2011. During the recently completed financial year the Group EBITDA rose by 16.2 percent and total revenues improved by 10.1 percent over the previous year. This development was due to the significant growth of earnings and revenues in the Digital Media and Print International segments as well as the continued high profitability of the national print media. The Magazines National segment even posted a record EBITDA. The company grew both organically and through the consolidation of acquired companies. The EBITDA margin rose from 17.6 percent for the previous year to 18.6 percent. The 2011 results show that Axel Springer slightly exceeded its earnings guidance, which was issued in March and revised upward in fall with regard to the anticipated revenue growth. In view of the positive business development, the Management and Supervisory Boards will propose a dividend increase to EUR 1.70 per share (PY: EUR 1.60) at the annual shareholders’ meeting.
The Group saw earnings before taxes, interest and depreciation (EBITDA) adjusted for non-recurring effects and effects of purchase price allocations for the 2011 financial year rise by 16.2 percent to EUR 593.4 million (PY: EUR 510.6 million). With the increase in EBITDA margin to 18.6 percent Axel Springer demonstrated the strong and sustainable profitability of its business activities. National print media remained highly profitable with EBITDA margins of 24.3 percent for newspapers und 22.0 percent for magazines. The Digital Media segment posted a significant increase in earnings. The EBITDA margin of 16.4 percent was more than four percentage points higher than the previous year’s figure of 12.1 percent. The segment Print International also underscored its earnings power with a margin of 15.6 percent.
Total revenues increased by 10.1 percent to EUR 3,184.9 million (PY: EUR 2,893.9 million) in 2011. The Group was able to more than compensate for the slight decline in national print media revenues through the dynamic growth of digital and international print media activities. Axel Springer also grew organically with a 3.9-percent increase in revenues adjusted for consolidation effects.
Dr. Mathias Döpfner, Chief Executive Officer of Axel Springer AG, said: “The revenues and earnings of Axel Springer today rest upon several very stable columns. The persistent digitization of our business at home and abroad remains the key to the long-term success of the company. When we compare ourselves to listed European online companies, we see that our revenues from digital activities have now vaulted us into second place. In the category of media companies we are already in first place. The double-digit margin of our digital activities shows that our online growth does not mean growth for growth’s sake, but serves profitability.”
Under the assumption that general economic conditions do not experience a significant deterioration, the Management Board expects to generate a single-digit percentage increase in the Group’s total revenues in financial year 2012. The anticipated slight decrease in circulation revenues should be more than offset by the higher total advertising revenues and total other revenues, compared to 2011. The Management Board expects that the slightly lower revenues in the national and international print business will be more than made up by higher revenues in the digital media business. It is also expected that the Group’s EBITDA will be slightly higher than EBITDA for 2011. In that respect, the Management Board anticipates slightly lower earnings in the print business, and substantially higher earnings in the digital business, compared to 2011.
Axel Springer pressed ahead with its internationalization during the recently completed financial year. The Group increased international revenues by 29.0 percent to EUR 1,048.0 million (PY: EUR 812.3 million). Both the expansion of the print business in eastern Europe and the growth of international digital activities contributed to this development. The share of international revenues as percent of total revenues rose from 28.1 percent to 32.9 percent.
Advertising revenues improved by 16.0 percent to EUR 1,606.8 million (PY: EUR 1,384.8 million) in 2011. This revenue category thus accounted for approximately half of Group revenues. The Digital Media segment contributed significantly here with an increase of 41.5 percent. The consolidation effects of the joint venture Ringier Axel Springer Media during the first half of 2011 had a positive effect on the Print International segment where advertising revenues grew by 17.2 percent. Advertising revenues generated in the Newspapers National and Magazines National segments declined slightly as anticipated.
The circulation revenues of EUR 1,204.5 million in 2011 were 2.6 percent higher than the previous year’s figure (PY: EUR 1,174.3 million). The consolidation effects of the eastern European joint venture in the Print International segment contributed significantly to this increase. Circulation revenues generated in the Newspapers National segment remained at the previous year’s level, whereas Magazines National posted a slight decline.
Other Group revenues rose 11.6 percent to EUR 373.5 million (PY: EUR 334.8 million).
The consolidated net income grew by 5.6 percent from EUR 274.1 million to EUR 289.4 million in 2011. Consolidated net income adjusted for significant non-operating effects rose even stronger by 21.2 percent to EUR 343.3 million (PY: EUR 283.2 million). Earnings per share attributable to shareholders of Axel Springer AG increased 16.9 percent from EUR 2.60 to EUR 3.03. This figure was calculated on the basis of the weighted average shares outstanding in 2011 and thus reflects the 1:3 share split carried out in the reporting year.
The Newspapers National segment posted an EBITDA margin of 24.3 percent (PY: 24.8 percent) for the 2011 financial year despite a slight decline in revenues. Segment revenues amounted to EUR 1,164.9 million (PY: EUR 1,194.2 million). Following price increases for parts of the BILD circulation, circulation revenues remained at the previous year’s level, whereas advertising revenues declined slightly. Segment EBITDA was EUR 282.7 million (PY: EUR 296.0 million).
The Magazines National segment generated revenues of EUR 468.1 million (PY: EUR 486.1 million). Approximately half of the slight decline in revenues was attributable to consolidation effects following the sale of publications during the previous year. Advertising revenues fell by 4.2 percent and circulation revenues declined by 3.0 percent. Adjusted for consolidation effects advertising revenues declined by 2.9 and circulation revenues by 1.1 percent. Segment EBITDA rose to an all-time high of EUR 103.2 million (PY: EUR 101.0 million). The EBITDA margin for the entire year thereby improved from 20.8 percent for the previous year to 22.0 percent.
The development of the Print International segment in 2011 was characterized primarily by the consolidation effects of the joint venture Ringier Axel Springer Media in the first half of the year. In the second half of the year mainly the noticeable weaker economic condition in eastern Europe had an effect. Segment revenues rose 18.1 percent to EUR 473.5 million and segment EBITDA increased by 20.0 percent to EUR 73.8 million over the previous year’s figures. The integration of Ringier companies led to a 17.2 percent increase in advertising revenues whereas circulation revenues improved by 16.9 percent. EBITDA rose from EUR 61.5 million for the previous year to EUR 73.8 million, and the EBITDA margin improved slightly from 15.3 percent to 15.6 percent.
In the Digital Media segment Axel Springer enjoyed dynamic and profitable growth in all three core areas: content portals, online marketplaces and online marketing. The Group expanded organically and through targeted acquisitions and especially pushed forward the establishment of fee-based content models on the mobile internet. Segment revenues during the reporting period rose 35.2 percent to EUR 962.1 million (PY: EUR 711.8 million). The pro forma revenues in the Digital Media segment grew 20.6 percent to EUR 994.2 million (PY: EUR 824.7 million) and were just slightly below the one billion-euro mark. Advertising revenues rose 41.5 percent, while other revenues increased by 11.8 percent. Segment EBITDA improved by 84.2 percent to EUR 158.1 million (PY: EUR 85.8 million). The improved EBITDA margin of 16.4 percent (PY: 12.1 percent) demonstrates the profitable growth in this segment.
Revenues in the Services/Holding segment amounted to EUR 116.2 million in 2011. This corresponds to an increase of 15.3 percent over the previous year’s figure (EUR 100.8 million) and is attributable to the higher volume of revenues generated by service activities and the printing plants. EBITDA improved from EUR 33.7 million to EUR –24.4 million.
The free cash flow of EUR 293.9 million was slightly below the previous year’s level (PY: EUR 299.3 million). The Group’s net debt amounted to EUR 472.8 million as of December 31, 2011 (December 31, 2010: net liquidity of EUR 79.6 million). A major factor here was the financing of the acquisition of SeLoger.com. At the end of 2011 Axel Springer had an unused credit line of EUR 885.0 million. The equity ratio as of December 31, 2011 remained at the high level of 46.1 percent (December 31, 2010: 49.2 percent). The average number of employees rose to 12,885 (PY: 11,563) as the result of organic growth, consolidation-related increases in personnel, especially in the Digital Media segment, and the integration of Ringier Axel Springer Media.
This press release (also in German), Group key figures and the 2011 annual report can be downloaded from www.axelspringer.de/fy11.