Axel Springer with strong digital growth in the third quarter
2017-11-29 08:10 [Médiainfó - www.mediainfo.hu]
During the third quarter, Axel Springer continued the positive development trend from the first six months, increasing revenues and earnings in all operating segments.
The Group particularly benefited from the continued growth dynamic of the digital business models. In the first nine months, they grew organically by 11.7 percent and accounted for 70.6 percent of total revenues. The EBITDA of digital media rose by 24.4 percent from EUR 328.1 million to EUR 408.0 million. The share of digital business in Group EBITDA increased considerably to 77.1 percent (PY: 72.4 percent). The growth of the digital activities was also reflected in international revenues. They rose by 10.3 percent in the reporting period to EUR 1,259.1 million (PY: EUR 1,141.4 million) and therefore generated half of the total revenues (49.3 percent, PY: 47.8 percent). Overall, Axel Springer increased revenues in the first nine months by 7.0 percent to EUR 2,554.7 million (PY: EUR 2,386.8 million). Adjusted for consolidation and currency effects, the Group achieved a 5.7 percent growth in revenues.
During the first nine months, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted for non-recurring effects, increased considerably by 13.0 percent to EUR 473.4 million (PY: EUR 419.0 million). The decisive factors here were activities in the Classifieds Media segment with a 17.7 percent rise in EBITDA and activities in the News Media segment, which increased its EBITDA by 23.2 percent. Also, a significant improvement in earnings in the Marketing Media segment (+ 39.6 percent) had a positive effect in the third quarter. This was driven above all by the reach-based portals aufeminin and idealo. The Group increased its EBITDA margin in the first nine months from 17.6 percent to 18.5 percent.
Based on the nine-month earnings, the Executive Board confirmed the forecast raised in the Interim Financial Report, which predicted a rise in EBITDA and adjusted earnings per share in the high single-digit percentage range for the whole year. Axel Springer continues to expect a rise in total revenues in the mid single-digit percentage range.
Dr Mathias Döpfner, Chief Executive Officer of Axel Springer SE: "Once again we have grown in all operating segments. Classifieds Media continued to be the strongest driver of this growth. We are also particularly pleased with the rise in revenues and earnings for News Media. The continued success of BUSINESS INSIDER and the extraordinarily good development in the advertising market - particularly with BILD - played a defining role here. Based on the strong developments in the first nine months, we are optimistic for the last weeks of this year. We therefore confirm our forecast."
Thanks to the continued expansion of the digital activities, the average number of employees at Axel Springer increased in the first three quarters by 4.0 percent to 15,745 (PY: 15,143).
Significant increase in adjusted consolidated net income
The consolidated net income adjusted for non-recurring effects and impairments from purchase price allocations rose considerably in the first nine months by 17.0 percent to EUR 244.4 million (PY: EUR 208.9 million). The adjusted earnings per share increased by 16.1 percent to EUR 1.98 (PY: EUR 1.71). The unadjusted consolidated net income amounted to EUR 163.4 million (PY: EUR 363.4 million). The decrease was the result of significant one-off effects associated with the incorporation of Ringier Axel Springer Schweiz AG and the sale of CarWale in the prior year period. The unadjusted earnings per share was EUR 1.29, compared to EUR 3.23 in the prior year period.
Free cash flow continues to rise
During the first nine months, Axel Springer increased its free cash flow, excluding the effects of real estate transactions, by 71.7 percent to EUR 268.5 million (PY: EUR 156.4 million). This rise is mainly based on the significant increase in operating cash flow, attributable to positive earnings performance, higher payments from long-term compensation and restructuring programs in the prior year, and tax refunds from prior years received during the reporting period. The net debt amounted to EUR 1,225.2 million as of September 30, 2017 (December 31, 2016: EUR 1,035.2 million). Of the existing long-term credit lines of EUR 1,500.0 million, EUR 475.0 million was utilized by the end of September (December 31, 2016: EUR 680.0 million). As of September 30, 2017, the equity ratio was 39.6 percent, compared with 40.9 percent at the end of 2016.
Growth in revenues and earnings in all operating segments in the third quarter
Revenues in the Classifieds Media segment increased in the first nine months by 15.5 percent to EUR 745.3 million (PY: EUR 645.0 million). This was mainly attributable to job and real estate portals. The consolidation effects resulting, in particular, from the integration of Land & Leisure were also a factor. Adjusted for consolidation and currency effects, Classifieds Media's revenues increased by 12.9 percent. The EBITDA of the segment increased considerably by 17.7 percent to EUR 307.6 million (PY: EUR 261.4 million). Adjusted for consolidation and currency effects, the EBITDA increased by 15.4 percent. With an improved EBITDA margin of 41.3 percent (PY: 40.5 percent), Classifieds Media remained highly profitable.
The News Media segment continued its positive development in the third quarter. For the nine-month period, News Media recorded an earnings increase of 1.9 percent to EUR 1,095.3 million (PY: EUR 1,075.1 million). The decisive factor here was the continued growth of the digital business models, especially abroad, with strong growth for BUSINESS INSIDER. The development of advertising revenues in both digital and print business was also pleasing in the third quarter, already reaching the prior year level after nine months. The EBITDA increased considerably by 23.2 percent to EUR 165.1 million (PY: EUR 134.0 million); the growth in revenues was a contributing factor here, alongside the continued cost discipline. Adjusted for consolidation and currency effects, including the initial consolidation of eMarketer in the prior year, the increase was 15.1 percent. The EBITDA margin improved from 12.5 percent in the prior year period to 15.1 percent.
The Marketing Media segment increased revenues in the reporting period by 9.6 percent to EUR 669.5 million (PY: EUR 610.8 million). Adjusted for consolidation and currency effects, revenues increased by 11.8 percent. After weaker development in the first half of the year, the EBITDA picked up noticeably in the third quarter and increased by 39.6 percent. This was mainly attributable to Reach Based Marketing and Performance Marketing. The EBITDA for the nine-month period therefore amounted to EUR 56.3 million, compared with EUR 57.9 million for the prior year period. The EBITDA margin for the segment was 8.4 percent, after 9.5 percent in the prior year period.
Source: Axel Springer