MIL OSI – Source: Axel Springer in English – Press Release/Statement
Headline: Strong growth in revenues and earnings for Axel Springer in the first quarter
Axel Springer profited from strong organic growth during the first three months of the 2017 financial year. At the same time, the digital business models further expanded their strong position within the company. They grew organically by 10.7 percent and accounted for 72 percent of total revenues. Their contribution to Group EBITDA also rose considerably from most recently 72 percent to 80 percent. The dynamic growth of the digital business was also reflected in foreign revenues. They increased by 11.3 percent to EUR 415.4 million (PY: EUR 373.3 million) and therefore accounted for half of the total revenues (49.7 percent, PY: 47.7 percent). Overall, Axel Springer increased revenues in the first quarter by 6.7 percent to EUR 836.2 million (PY: EUR 783.4 million). Adjusted for consolidation and currency effects, total revenues were 4.4 percent higher than in the prior year period.
Earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted for non-recurring effects, rose considerably by 16.9 percent to EUR 147.2 million (PY: EUR 125.9 million). This was mainly attributable to the positive development of the Classified Ad and Paid Models, whose EBITDA increased by 21.5 percent and 19.8 percent respectively. The Group’s EBITDA margin increased from 16.1 percent to 17.6 percent. Based on the good development during the first quarter, the Executive Board confirms its forecasts for the whole of 2017. Accordingly, Group revenues are expected to grow in the mid single-digit percentage range. For the EBITDA and the adjusted earnings per share, Axel Springer expects an increase in the mid to high single-digit percentage range.
Dr Mathias Döpfner, Chief Executive Officer of Axel Springer SE: “The substantial growth investments of the past few years have contributed to the good start to 2017. In the Classified Ad segment, the job portals of StepStone again had an excellent first quarter with organic revenue growth of 16 percent. And in the Paid Models segment, BUSINESS INSIDER, our international economic and financial news offering, achieved an increase in revenues of more than 50 percent compared to the prior year quarter. Today, Axel Springer is already Europe’s leading digital publisher and the world’s largest operator of classified ad portals.”
As a result of the expansion in the digital business, the average number of employees in the reporting period rose by 4.8 percent to 15,598 (PY: 14,886).
A significant increase in adjusted consolidated net income
The consolidated net income adjusted for non-recurring effects and impairments from purchase price allocations in the reporting period amounted to EUR 78.1 million (PY: EUR 65.3 million). The adjusted earnings per share increased by 18.7 percent to EUR 0.62 (PY: EUR 0.53). The unadjusted consolidated net income amounted to EUR 47.3 million (PY: EUR 209.4 million), and in the previous year was marked by significant one-time effects in connection with the founding of Ringier Axel Springer Schweiz AG and the sale of CarWale. The unadjusted earnings per share amounted to EUR 0.36 (PY: EUR 1.88).
Free cash flow rises sharply
Free cash flow increased by 31.5 percent to EUR 87.3 million in the first quarter of 2017 (PY: EUR 66.4 million.). Net debt decreased slightly from EUR 1,035.2 million at the end of 2016 to EUR 996.6 million, as of March 31, 2017. Of the existing long-term credit lines of EUR 1,500.0 million, an unchanged amount of EUR 680.0 million was utilized by the end of March. At the end of the quarter, the equity ratio was 41.2 percent (compared with 40.9 percent at the end of 2016).
Digital growth leads to increased revenue in all operating segments
During the reporting period, revenues from the Classified Ad Models segment continued to increase dynamically by 17.3 percent to EUR 249.7 million (PY: EUR 212.9 million). In addition to organic growth of 12.0 percent, which was primarily attributable to the job portals, consolidation effects from the inclusion of Land & Leisure and Traum-Ferienwohnungen also had an impact. With a strong increase of 21.5 percent, the segment’s EBITDA increased to EUR 101.1 million (PY: EUR 83.2 million). Adjusted for consolidation and exchange rate effects, EBITDA increased by 14.9 percent. The EBITDA margin, already at a high level, improved to 40.5 percent (PY: 39.1 percent).
The Paid Models segment increased revenues in the first quarter by 1.4 percent to EUR 345.7 million (PY: EUR 340.8 million). The drivers of this growth were digital offerings, especially abroad, with a particularly pleasing start to the year for BUSINESS INSIDER. They were able to overcompensate for the market-driven decline in the print business. In conjunction with ongoing cost discipline, international growth was also reflected in EBITDA, including the effects of the initial consolidation of eMarketer. The EBITDA of the Paid Models thus increased by 19.8 percent to EUR 44.5 million (PY: EUR 37.1 million). Adjusted for consolidation and currency effects, EBITDA increased by 6.0 percent. The EBITDA margin for the segment increased to 12.9 percent (PY: 10.9 percent).
Revenues in the Marketing Models segment increased by 7.0 percent in the first quarter to EUR 225.2 million (PY: EUR 210.5 million). Adjusted for consolidation effects, growth amounted to 10.5 percent. EBITDA declined from EUR 19.5 million to EUR 15.1 million in the reporting period. This was due to the challenging competitive environment for some of Axel Springer’s activities. The EBITDA margin for the Marketing Models was 6.7 percent (PY: 9.3 percent).