12 Quarterly Financial Report as of September 30, 2012
Group Key Figures Quarterly Financial Report as of September 30, 2012 Axel Springer AG 2 3rd Quarter 9 Months millions Q3/2012 Q3/2011 Change 9M/2012 9M/2011 Change Group Total revenues 787.3 792.6 0.7 % 2,407.7 2,318.2 3.9 % Digital Media revenue share (pro forma) 35.7 % 32.3 % 34.6 % 31.5 % International revenue share 35.2 % 32.9 % 34.4 % 32.7 % Circulation revenues 298.5 320.5 6.8 % 879.0 908.9 3.3 % Advertising revenues 396.2 382.8 3.5 % 1,248.0 1,145.2 9.0 % Other revenues 92.6 89.3 3.6 % 280.8 264.1 6.3 % EBITDA 1) 150.6 157.6 4.4 % 459.3 446.3 2.9 % EBITDA margin 1) 19.1 % 19.9 % 19.1 % 19.3 % Consolidated net income 29.1 82.0 64.5 % 188.7 233.2 19.0 % Consolidated net income, adjusted 1) 79.2 91.2 13.2 % 256.9 259.6 1.0 % Segments Revenues Newspapers National 268.4 289.0 7.1 % 836.7 854.1 2.0 % Magazines National 108.1 119.8 9.8 % 339.0 353.1 4.0 % Print International 100.7 113.4 11.2 % 320.0 350.0 8.6 % Digital Media 281.1 242.6 15.9 % 823.3 677.7 21.5 % Services/Holding 29.1 27.7 4.8 % 88.8 83.3 6.6 % EBITDA 1) Newspapers National 60.1 75.0 19.9 % 197.2 203.6 3.1 % Magazines National 22.2 26.8 17.3 % 71.0 82.1 13.4 % Print International 12.4 16.3 24.4 % 41.1 56.8 27.6 % Digital Media 55.2 40.5 36.4 % 165.9 111.9 48.3 % Services/Holding 0.8 1.1-16.0 8.1 - Liquidity and financial position Free cash flow 2) 113.1 150.5 24.9 % 286.0 260.7 9.7 % Capex 3) 17.1 20.0-49.6 83.8 - Total assets 4) 4,454.1 4,187.5 6.4 % 4,454.1 4,187.5 6.4 % Equity ratio 4) 50.1 % 46.1 % 50.1 % 46.1 % Net liquidity/debt 4) 198.8 472.8-198.8 472.8 - Share related key figures Earnings per share 5) 0.19 0.75 74.8 % 1.62 2.11 23.4 % Earnings per share, adjusted 6) 0.66 0.82 19.4 % 2.21 2.30 4.0 % Closing price 33.72 25.93 30.0 % 33.72 25.93 30.0 % Market capitalization 7) 3,331.2 2,556.8 30.3 % 3,331.2 2,556.8 30.3 % Free float 41.3 % 41.1 % 41.3 % 41.1 % Average number of employees 13,547 13,040 3.9 % 13,504 12,779 5.7 % 1) 2) 3) 4) 5) 6) 7) Adjusted for non-recurring effects and purchase price allocation effects. Cash flow from operating activities, minus capital expenditures, plus cash inflows from disposals of intangible assets and property, plant, and equipment. Capital expenditures on intangible assets, property, plant, and equipment, and investment property. As of September 30, 2012 and December 31, 2011, respectively. Diluted. The adjusted earnings per share (diluted), adjusted for non-recurring effects and purchase price allocation effects, was calculated on the basis of the weighted average shares outstanding in the reporting period (9M: 98.708 million, Q3: 98.790 million). Based on outstanding shares at the closing price, excluding treasury shares.
Quarterly Financial Report as of 30 September 2012 of the Axel Springer Group Quarterly Financial Report as of September 30, 2012 Axel Springer AG 3 Business developments and operating results at a glance Development of revenues and earnings The Axel Springer Group continues to benefit from the increasing digitization of its business activities. At 2,407.7 million, consolidated revenues in the first nine months of 2012 were 3.9 % higher than the corresponding year-ago figure, driven by growth in the Digital Media segment. Adjusted for consolidation effects, total revenues were 0.4 % higher than the year-ago figure. EBITDA of 459.3 million was 2.9 % higher than the corresponding year-ago figure. The earnings increase was driven by profitable growth in the Digital Media segment, which more than offset the lower earnings of the print segments. Business performance in line with expectations Axel Springer s revenue and earnings performance in the first nine months of the current year were essentially in line with management s expectations, as expressed in the Annual Report 2011. The 3.9 % increase in total revenues was in line with our expectations of an increase in the single-digit percentage range. As planned, we increased our advertising revenues as well; in that respect, the performance of our print media activities came out on the lower end of our expectations, although that effect was more than offset by the growth of digital media activities. The development of earnings in the first nine months of 2012 has confirmed our expectation of a slight increase in earnings for the full year. Outlook for 2012 In financial year 2012, Axel Springer will continue to pursue its threefold strategy of expanding its market leadership position in the German-language core business and advancing the processes of internationalization and digitization. We expect to generate a single-digit percentage increase in the Group s total revenues in financial year 2012. The anticipated slight decrease in circulation revenues compared to 2011 should be more than offset by the higher total advertising revenues and total other revenues. We expect that slightly lower revenues in the national and lower revenues in the international print business will be more than made up by higher revenues in the digital media business. We also expect that the Group s EBITDA will be slightly higher than EBITDA for 2011. In that respect, we continue to anticipate lower earnings in the print business and substantially higher earnings in the digital business, compared to the respective year-ago figures. Please refer to the Forecast Report (starting on page 22) for a detailed discussion of the company s outlook. Enhanced transparency in the Digital Media segment As of the Semiannual Report 2012, Axel Springer reports revenues and EBITDA not only for the Digital Media segment overall, but also for each one of the three pillars of our digitization strategy (see page 14). This level of detail reflects the increased importance of this segment and accommodates the capital market s heightened need for information on this subject. It will also enable interested parties to follow the performance of our digital business and the implementation of our strategy more closely. Implementation of the Group s business strategy We systematically pursued our threefold strategy aimed at profitable growth in the first nine months of 2012. Expanding the Group s market leadership position Axel Springer successfully defended its strong position in the German print market in the first nine months of 2012. Based on paid circulation, Axel Springer remains the biggest newspaper publisher and the third-biggest magazine publisher in Germany. We reinforced our strong position in the German market also by means of intensively linking the print and online editorial teams of our media offerings and by means of cross-media reach marketing. Internationalization Axel Springer operates in Switzerland, France, the United Kingdom, and Spain, but is particularly active also in central and eastern Europe, through the joint venture Ringier Axel Springer Media. In this market and in other important markets for us, our internationalization efforts are focused on digitizing and further developing our activities.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 4 Digitization In the first nine months of 2012, Axel Springer s digitization efforts were focused on consolidating the Group s online classified activities under the roof of a new company, accompanied by the strategic partnership with the financial investor General Atlantic (see page 6). Other important steps were StepStone s acquisition of Totaljobs Group Ltd. in the United Kingdom, in April, and the conclusion of an agreement on the acquisition of a 75 % equity interest in Onet.pl S.A. by the joint venture Ringier Axel Springer Media in June. Furthermore, the acquisitions of allesklar.com AG and Immoweb S. A. were contractually initiated in August and November, respectively. General economic conditions State of the economy Global economic growth was dampened by growing economic uncertainties in the reporting period. Although the injections of additional liquidity into the monetary systems of many industrialized nations have had a positive effect on financial stability, production, and employment, the effectiveness of those stabilization measures is beginning to diminish, according to the International Monetary Fund (IMF). Also according to the Autumn Report of the leading German economic research institutions, the global economy is losing steam. The prolonged debt crisis in the euro zone has had a major adverse impact on economic growth. Furthermore, the recovery of the U.S. economy has slowed since the beginning of the year. And the momentum of the Chinese economy had already begun to diminish in the previous year. The euro crisis and the weakening global economy are placing a strain on the German economy. The business expectations measured by the ifo Institute for Economic Research have deteriorated continually since April. According to the Autumn Report, companies expectations are affecting business investment, which has declined in spite of favorable funding conditions. Consumer spending is growing at a slower pace, even though consumer sentiment as measured by GfK remained stable in the third quarter. Thus, consumer sentiment has been stabilized by the persistently strong purchasing propensity of German consumers. The economic slowdown is also increasingly affecting the jobs market. Although employment has continued to rise so far in 2012, the rate of growth has slowed. According to calculations of the German Federal Statistical Office, consumer prices rose at a rate of 2.0 % in the first nine months of 2012. According to the German Federal Employment Agency, the number of unemployed job seekers fell to 2.8 million in September 2012, reflecting a decrease of 0.3 % from the year-ago period. The unemployment rate was 6.3 %. Industry environment Press distribution market Once again, the German press distribution market contracted slightly. The total paid circulation of newspapers and magazines was 3.6 % less than the corresponding year-ago figure. Due to price increases, however, circulation revenues declined by only 1.4 %. The 367 daily and Sunday newspapers tracked by IVW generated total sales of 21.3 million copies per issue, reflecting a decrease of 3.1 % from the comparable yearago period. As in the year-ago period, newsstand sales declined by a much greater margin ( 7.7 %) than subscription sales ( 2.2 %). Within the press distribution market, the demand for daily and Sunday newspapers declined by 3.5 %, weighted for their respective publication frequencies. Total sales of general-interest magazines (including membership and club magazines) came to 110.2 million copies per issue, 1.0 % less than the corresponding year-ago figure. The number of titles tracked by IVW was 877 (+ 0.1 % from the year-ago period). Weighted for their respective publication frequencies, demand for general-interest magazines fell by 3.7 %. Advertising market Based on surveys conducted by Nielsen Media Research, gross advertising expenditures in the German advertising market in the period from January to September 2012 were roughly on the level of the corresponding year-ago figure. According to these surveys, the revenues of the gross advertising market amounted to 15.1 billion in the first nine months of 2012, reflecting a small nominal increase of 0.2 % over the year-ago period. This gain resulted from the growth of online media, TV, and radio advertising.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 5 Unless otherwise noted, the following discussion of the advertising market in Germany is based on the latest survey of gross advertising revenues (excluding media advertising) conducted by Nielsen Media Research. This data only refers to advertising for services, branded products, and large-scale retailers, and does not include classified ads and brochure supplements. Therefore, it does not fully reflect the actual, overall business performance. Furthermore, gross advertising revenues are based on standard advertising rates and do not take discounts or free ad space into account. In general, it can be assumed that net advertising revenues lag behind gross advertising revenues in terms of their development. At 4.41 billion, the gross advertising revenues of the print media (excluding classified ads and supplements, as well as media advertising) were 8.4 % less than the corresponding figure for the first nine months of 2011, mainly due to the 10.3 % decrease in display ad volumes in newspapers (Nielsen Media Research; excluding classified ads and media advertising). The lower advertising expenditures in many sectors (particularly retail, home and garden, energy, finance, textiles, and transportation) were not offset by the higher advertising expenditures of other sectors, including automotive, services, personal-care products, entertainment electronics, and body-care products, for example. The decrease in retail advertising expenditures resulted mainly from the lower ad volumes of technology stores and discounters. According to Zeitungs Marketing Gesellschaft (ZMG), the net ad volume of regional subscription newspapers (including classified ads) in the period from January to August 2012 was 8.7 % less than the corresponding year-ago figure. All categories of classified ads were lower, but job ads ( 11.8 %), real estate ads ( 11.8 %), and travel ads ( 6.3 %) sustained the steepest declines. On average, the ad volumes of national newspapers (including classified ads) were 16.2 % less than the corresponding figure for the first three quarters of 2011 (S+H-Medienstatistik). At 1.82 billion, the gross advertising revenues of general-interest magazines (excluding media advertising) were 6.6 % less than the corresponding year-ago figure, according to Nielsen. The categories sustaining the biggest declines included current-interest magazines ( 7.1 %), TV program guides ( 13.8 %), weekly women s magazines ( 11.8 %), biweekly women s magazines ( 11.4 %), and business magazines ( 11.9 %), while other categories, including supplements (+ 4.6 %) and sports magazines (+ 1.8 %), generated higher advertising revenues. According to Nielsen Media Research, the gross advertising revenues (excluding media advertising) of the German online market (conventional banner advertising, excluding search term marketing and affiliates) amounted to 1.94 billion, reflecting an increase of 17.2 % over the corresponding year-ago figure. Most of this increase occurred in the categories of automotive, retail, tourism, services, body-care products, and textiles. Also in the case of the online market, the development of gross advertising revenues does not adequately reflect the real development. Nielsen Media Research has published advertising market figures for mobile devices for the first time ever this year. According to their data, gross advertising expenditures on mobile advertising have risen by 71.4 % to 33.7 million. According to Nielsen Media Research, the gross advertising revenues (excluding media advertising) of advertisingfinanced television in Germany amounted to 7.03 billion, reflecting an increase of 1.8 % over the corresponding year-ago figure. Whereas the gross advertising revenues of privately owned TV stations rose by 1.8 % to 6.76 billion, public-sector TV stations increased their advertising revenues by 2.7 % to 267.4 million. At 963.7 million, the gross advertising revenues (excluding media advertising) of radio stations were 4.5 % higher than the corresponding year-ago figure. The gross advertising revenues of public-sector radio stations were 9.5 % higher and those of privately owned radio stations were 2.3 % higher than the respective year-ago figures. The gross advertising revenues of billboard advertising amounted to 696.7 million in the first nine months of 2012, reflecting a decrease of 4.5 % from the corresponding year-ago figure.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 6 Business performance of the Group Important events that influenced the Group s business performance In the first quarter of 2012, Axel Springer entered into an agreement with the global growth investor General Atlantic LLC, under which General Atlantic purchased a 30 % equity interest in the newly formed company Axel Springer Digital Classifieds GmbH, within which Axel Springer s online classifieds business is now consolidated. Axel Springer contributed the leading French real estate portal SeLoger, its majority stake in the German real estate portal immonet, and the European jobs exchange StepStone to the joint venture. These assets were valued at 1.25 billion for purposes of the transaction. Now that the transaction was finalized in the second quarter of 2012, Axel Springer is the majority shareholder, holding a 70 % interest in Axel Springer Digital Classifieds GmbH. By having bundled its various equity investments and taken in General Atlantic as an experienced partner and co-investor, Axel Springer is now in a better position to expand its presence in a targeted manner and become a leading international player in the attractive business of online classified markets. Besides taking advantage of investment and growth opportunities in Europe, the joint venture is also contemplating investments in other developed and emerging markets. Axel Springer took the first step in its planned growth initiative in the online classified business already in early April, when StepStone acquired the United Kingdom s biggest online recruiting firm, Totaljobs Group Ltd., for a purchase price of about 130 million. Founded in 1999, the Totaljobs Group has about 340 employees and operates a total of seven online portals from its headquarters in London. In the first nine months of 2012, the platforms of the Totaljobs Group were used by an average of 6.7 million unique visitors, who submitted an average of 3.7 million applications per month. Through the acquisition of Totaljobs, StepStone further strengthened its position as one of Europe s leading online job exchanges, with a leading presence in one of the biggest European markets. In early October, Axel Springer Digital Classifieds acquired allesklar.com AG. Founded in 1996, this company has about 300 employees today. Its most important property is Germany s leading regionally focused portal meinestadt.de, which complements our portfolio of national classified marketplaces ideally. The meinestadt.de portal offers comprehensive information on more than 11 thousand German cities and towns and reaches an average of 6.7 million users a month. Ringier Axel Springer Media took an important step towards the digitization of its business by signing an agreement to purchase 75 % of the equity of the Polish company Onet.pl S.A., a wholly owned subsidiary of the Polish media company TVN S.A., for a purchase price of PLN 956.3 million (about 215 million). As the leading online portal in Poland, Onet.pl reaches about 70 % of all Polish Internet users. The transaction was approved by the competent Polish cartel authority and was finalized on November 6, 2012. Operating results of the Group At 2,407.7 million, Axel Springer s revenues were 3.9 % higher than the corresponding figure for the first nine months of last year (PY: 2,318.2 million), due to higher revenues in the Digital Media segment. Adjusted for consolidation effects, Axel Springer achieved a slight revenue increase of 0.4 %; additionally adjusted for currency effects the revenue increase was also 0.4 %.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 7 Revenues Segment Revenues millions Circulation 264.1 1,145.2 Advertising Other 280.8 1,248.0 Newspaper National Magazines National Print International Digital Media Services/Holding 3.7 % 34.2 % 908.9 879.0 34.7 % 2,318.2 9M/2011 9M/2012 2,407.7 13.3 % 14.1 % The circulation revenues of 879.0 million were 3.3 % lower than the corresponding year-ago figure (PY: 908.9 million), as a result of declines in all three print segments. They accounted for 36.5 % (PY: 39.2 %) of the Group s total revenues. At 1,248.0 million, advertising revenues were 9.0 % higher than the corresponding year-ago figure (PY: 1,145.2 million). This increase resulted from revenue growth in the Digital Media segment. More than half (55.5 %) of total advertising revenues were generated in the Group s digital activities. The advertising revenues of the Group s print activities were lower than the corresponding year-ago figure. Altogether, advertising revenues accounted for 51.8 % (PY: 49.4 %) of the Group s total revenues. The other revenues of 280.8 million were 6.3 % higher than the corresponding year-ago figure (PY: 264.1 million) and accounted for 11.7 % (PY: 11.4 %) of the Group s total revenues. The increase resulted primarily from growth in the Digital Media segment. A comparison of segment revenues shows continued strong growth in the Digital Media segment, on the one hand, and declining revenues in the print segments, due to market conditions, on the other hand. Whereas the revenues of the Group s domestic newspapers and magazines declined by 2.0 % and 4.0 %, respectively, the revenues of the international print business were 8.6 % less than the corresponding year-ago figure, due to the difficult market conditions in certain countries. The revenues generated on the Group s digital activities showed substantial growth of 21.5 %. The underlying organic growth trend was bolstered by consolidation effects. The pro-forma revenues of the Digital Media segment rose to 837.2 million (PY: 755.8 million), reflecting an organic growth rate of 10.8 %. Thus, the proportion of pro-forma total revenues contributed by the pro-forma digital revenues rose from 31.5 % to 34.6 %. The proforma revenues contain the revenues of the companies acquired in 2011 and 2012, on the basis of unaudited financial information.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 8 Digital Media Revenues (Pro forma) millions in percent of total revenues 31.5 % 755.8 34.6 % 837.2 companies acquired in the prior year and in the current financial year. The purchased goods and services of 764.8 million were on the level of the corresponding year-ago figure ( 763.2 million). The ratio of purchased goods and services to total revenues declined to 31.8 % (PY: 32.9 %) because much of the revenue increase was generated in companies of the Digital Media segment, which have proportionally lower expenses for purchased goods and services. 9M/2011 The international revenues of 827.2 million were 9.2 % higher than the corresponding year-ago figure and accounted for 34.4 % (PY: 32.7 %) of Axel Springer s total revenues. This increase can be attributed to the growing internationalization of the Group s digital business. International Revenues millions in percent of total revenues 32.7 % 757.8 9M/2011 9M/2012 9M/2012 34.4 % 827.2 At 2,157.8 million, the Group s total expenses were 5.6 % higher than the corresponding figure for the first nine months of 2011 (PY: 2,043.8 million). This increase resulted mainly from consolidation effects related to the At 673.4 million, the personnel expenses were 51.1 million or 8.2 % higher than the corresponding figure for the first nine months of 2011 (PY: 622.4 million). This increase resulted mainly from the consolidation of new subsidiaries, the higher number of employees in the fast-growing Digital Media segment, and the restatement of the Group s virtual stock option programs. The depreciation, amortization, and impairments of 130.2 million were higher than the corresponding yearago figure of 95.7 million, mainly due to the greater effects of purchase price allocations related to companies acquired in the prior year and in the reporting year. In addition, impairment losses of 17.4 million were recognized in the Digital Media segment. The other operating income of 48.6 million was 11.5 % lower than the corresponding year-ago figure (PY: 54.9 million), mainly because the year-ago figure contained higher income from the reversal of provisions and currency translation. This decrease was partially offset by income from the restatement of option liabilities related to company acquisitions in the reporting period. The other operating expenses of 589.3 million were 4.8 % higher than the year-ago figure of 562.5 million. This increase resulted mainly from the restatement of the assets held for sale of the online games provider gamigo ( 17.1 million) and from consolidation effects related to company acquisitions. The income from investments of 8.9 million was less than the corresponding year-ago figure (PY: 17.2 million), particularly due to the recognition of an impairment of an investment in the Digital Media segment.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 9 The net financial result of 40.3 million was significantly below the corresponding prior year figure ( 19.9 million). In connection with the refinancing of the Group s credit facilities, effects related to the valuation of interest rate hedges, which had previously been recognized in equity, were recorded to interest expenses in the reporting period. Other factors contributing to this development were the lower interest income on receivables resulting from the lower level of market interest rates, and the higher effects of compounding of liabilities. The income taxes for the first nine months of 2012 amounted to 82.7 million (PY: 96.0 million), corresponding to a tax rate of 30.5 % (PY: 29.2 %). At 459.3 million, the earnings before interest, taxes, depreciation, and amortization (EBITDA) were 2.9 % higher than the corresponding year-ago figure (PY: 446.3 million). The EBITDA margin declined slightly to 19.1 % (PY: 19.3 %). The EBITDA figure does not contain non-recurring effects such as gains or losses on the sale of divisions and investments or purchase price allocation effects. EBITDA millions EBITDA margin in % 19.3 % 446.3 9M/2011 9M/2012 19.1 % 459.3 Consolidated net income amounted to 188.7 million (PY: 233.2 million). Adjusted consolidated net income amounted to 256.9 million (PY: 259.6 million). Consolidated Net Income millions 9M/2012 9M/2011 Consolidated net income 188.7 233.2 Non-recurring effects 19.0 1.5 Effects of purchase price allocations 59.7 35.4 Taxes attributable to these effects 10.5 10.4 Consolidated net income, adjusted 256.9 259.6 Attributable to non-controlling interest, adjusted 38.6 32.2 Adjusted consolidated net income attributable to shareholders of Axel Springer AG 218.3 227.4 Earnings per share (diluted) amounted to 1.62 (PY: 2.11). The adjusted earnings per share (diluted) amounted to 2.21 (PY: 2.30; based on weighted average shares outstanding of 98.7 million in the reporting period). The adjusted consolidated net income and the adjusted earnings per share are not defined under International Financial Reporting Standards, and should therefore be regarded as supplementary information to the consolidated financial statements. Business developments and operating results of the segments Newspapers National The Newspapers National segment mainly comprises the newspapers of the BILD Group and WELT Group, along with HAMBURGER ABENDBLATT, BERLINER MORGENPOST, and B.Z. These titles are among the leading daily newspapers in Germany. Nonetheless, the Newspapers National segment sustained declines, in line with the general trend. In June, Europe s widest-reach daily newspaper BILD celebrated its 60th anniversary by delivering 41 million copies of a special edition, BILD für ALLE, to nearly every household in Germany free of charge. Many large corporations participated as marketing partners in this one-ofa-kind promotion. In view of the positive response, the tabloid-format version of BILD HAMBURG, which was
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 10 published on the occasion of this anniversary, was continued to the end of 2012. Both readers and advertising customers have been pleased with the new format. Published on October 3, 2012, the second holiday edition BILD am FEIERTAG was equally successful as the first holiday edition published on May 1, 2012. Besides featuring the proven mix of Sunday topics, the new edition focused on Germany Unity Day. Circulation and Reach Newspapers National Thousands Circulation Change 9M/2012 1) yoy Reach 2) Change Bild 2,707.3 6.2 % 12,307.1 1.6 % Bild am Sonntag 1,377.1 8.8 % 10,467.2 2.7 % Die Welt/Welt Kompakt 251.3 0.2 % 861.9 2.0 % Welt am Sonntag/ Welt am Sonntag Kompakt 402.6 2.0 % 1,079.5 2.9 % The Group s premium regional newspapers HAMBURGER ABENDBLATT and BERLINER MORGENPOST were not completely immune to the difficult economic environment in our regional core markets of Hamburg and Berlin. However, the strength of both these regional brands was evidenced by an increase in their cross-media net reach, which rose by 10.3 % to 4.0 million and by 26.7 % to 1.1 million readers, respectively, compared to 2011. B.Z. successfully defended its position as Berlin s biggest and widest-reach newsstand newspaper. Despite lower circulation numbers, it still had an average paid daily circulation of 152.8 thousand copies and reached 815.0 thousand readers per day in the Berlin-Brandenburg area. Key Figures Newspapers National millions 9M/2012 9M/2011 Change External revenues 836.7 854.1 2.0 % Share in cons. revenues 34.7 % 36.8 % Hamburger Abendblatt 206.8 4.2 % 595.0 13.9 % Berliner Morgenpost 121.2 2.9 % 324.9 10.1 % B.Z./B.Z. am Sonntag 152.8 8.8 % 815.0 2.0 % 1) 2) Source: IVW, average paid circulation. Source: ma 2012 Pressemedien II. Circulation revenues 454.5 464.5 2.1 % Advertising revenues 360.7 369.8 2.5 % Other revenues 21.5 19.8 8.2 % EBITDA 197.2 203.6 3.1 % EBITDA margin 23.6 % 23.8 % Our national media brand DIE WELT will harmonize its brand architecture by publishing all its media offerings in print, online, and mobile under the uniform brand name DIE WELT in the future. Only the Sunday editions WELT am SONNTAG and WELT am SONNTAG KOMPAKT will retain their former names. The new brand architecture results from the orientation of production processes to the online segment and reflects the complete editorial integration of print and online activities. Journalistic work will be guided even more by content and news, and less by the respective publication channel. The new configuration reflects the strong position of the WELT Group as the No. 1 cross-media brand among national premium newspapers; this position was recently confirmed in the latest consumer analysis report VA 2012-I, which found a cross-media net reach of 4.5 million readers. At 836.7 million, the total revenues of the Newspapers National segment were slightly lower, by 2.0 %, than the corresponding year-ago figure (PY: 854.1 million). The decrease resulted from both lower circulation revenues and lower advertising revenues. The circulation revenues of 454.5 million were 2.1 % less than the year-ago figure (PY: 464.5 million), due to lower circulation numbers. The decrease in advertising revenues from the strong corresponding year-ago figure can be attributed to the general market trend and third-quarter advertising revenues were influenced by second-quarter pull-forward effects in favor of the successful special edition BILD für ALLE. Total advertising revenues amounted to 360.7 million, reflecting a decrease of 2.5 % from the corresponding year-ago figure.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 11 At 197.2 million, segment EBITDA was 3.1 % less than the corresponding year-ago figure (PY: 203.6 million). Besides the lower revenues, this decline also resulted from higher restructuring expenses. The EBITDA margin remained on a high level, at 23.6 % (PY: 23.8 %). Key Figures Newspapers National 3rd Quarter millions Q3/2012 Q3/2011 Change External revenues 268.4 289.0 7.1 % Share in cons. revenues 34.1 % 36.5 % Circulation revenues 158.1 165.1 4.2 % Advertising revenues 103.4 117.7 12.2 % Other revenues 6.9 6.2 10.9 % Europe s biggest automotive magazine, AUTO BILD, continues to be Germany s leading automotive magazine, with a market share of 57.0 % based on paid circulation. According to the latest Media-Analyse survey, it reached 2.7 million readers. AUTO BILD s special editions also achieved positive results. Readers appreciated the considerably greater information content of the large-format XXL specials on automotive topics of current interest. Circulation and Reach Magazines National Thousands Circulation Change 9M/2012 1) yoy Reach 2) Change Hörzu 1,294.8 3.7 % 4,312.1 1.7 % TV Digital 1,890.9 5.3 % 4,234.0 2.8 % EBITDA 60.1 75.0 19.9 % EBITDA margin 22.4 % 26.0 % Bild der Frau 907.0 5.6 % 6,044.9 4.2 % Auto Bild 552.9 4.6 % 2,740.4 2.2 % Magazines National The activities of our TV program guides and women s magazines, as well as our automotive, computer, and sports titles, are bundled within the Magazines National segment. In accordance with expectations, the key performance indicators of this segment were mainly below the respective comparison figures for the first nine months of 2012; nonetheless, the Magazines National segment is still highly profitable, with a very solid EBITDA margin. In the category of TV program guides and women s magazines, Germany s first TV program guide for digital television, TV DIGITAL, has been particularly successful. This magazine expanded its market share further, as paid circulation rose by 5.3 % to an average of 1.9 million copies. HÖRZU is still Germany s biggest weekly TV program guide, read by an average of 4.3 million people per issue. 1) 2) Computer Bild 519.0 9.4 % 3,970.8 7.8 % Sport Bild 427.8 3.0 % 4,357.8 2.8 % Source: IVW, average paid circulation. Source: ma 2012 Pressemedien II. Already in the first quarter, the COMPUTER BILD group decided to combine the print and online editorial teams of COMPUTER BILD, COMPUTER BILD SPIELE, and AUDIO VIDEO FOTO BILD under the roof of COMPUTER BILD Digital GmbH, as part of the Group s digitization strategy. This step is aimed at further intensifying the existing link between print and online activities. SPORT BILD affirmed its market leadership position and defended its market share of 48.5 % in 2012. It published numerous special editions, especially on the subject of the Champions League and the European Soccer Cup, in the reporting period. The Group s market-leading automotive, computer, and sports titles solidified their strong positions further in the first nine months of 2012.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 12 Key Figures Magazines National Key Figures Magazines National 3rd Quarter millions 9M/2012 9M/2011 Change External revenues 339.0 353.1 4.0 % Share in cons. revenues 14.1 % 15.2 % millions Q3/2012 Q3/2011 Change External revenues 108.1 119.8 9.8 % Share in cons. revenues 13.7 % 15.1 % Circulation revenues 233.1 240.4 3.1 % Advertising revenues 86.7 95.0 8.7 % Other revenues 19.2 17.7 8.7 % Circulation revenues 77.5 85.9 9.7 % Advertising revenues 24.6 29.0 15.0 % Other revenues 5.9 5.0 17.7 % EBITDA 71.0 82.1 13.4 % EBITDA margin 21.0 % 23.2 % EBITDA 22.2 26.8 17.3 % EBITDA margin 20.5 % 22.4 % At 339.0 million, the total revenues of the Magazines National segment were 4.0 % less than the corresponding year-ago figure (PY: 353.1 million). Some of this decrease, particularly in the third quarter, resulted from the smaller number of publication dates in the reporting period, due to calendar effects. The circulation revenues of 233.1 million were 3.1 % less than the corresponding year-ago figure of 240.4 million, mainly due to lower circulation numbers. At 86.7 million, the advertising revenues of the Magazines National segment were 8.7 % less than the corresponding year-ago figure (PY: 95.0 million). Positive effects in the sports and automotive magazines were not enough to offset the declines in women s magazines, TV program guides, and computer magazines. Segment EBITDA of 71.0 million was 13.4 % less than the corresponding year-ago figure (PY: 82.1 million). This decline resulted from both lower revenues and higher restructuring expenses. Print International The international print publications, including both newspapers and magazines, are bundled in the Print International segment. Switzerland, the Czech Republic, and Poland continue to be the highest-revenue countries for Axel Springer. Taken on the whole, the individual titles exhibited a very mixed development. Central and eastern European markets The joint venture with Ringier, Ringier Axel Springer Media, asserted its leading position in the segment of masscirculation dailies in the four central and eastern European countries in which it currently operates: the Czech Republic, Poland, Slovakia, and Serbia. Ringier Axel Springer successfully defended its position as the leading publisher in the Czech Republic, reaching an average of 3.8 million readers with its newspapers and magazines. That corresponds to a market share of 15.9 %. Nonetheless, our titles were not immune to the difficult market environment and therefore sustained circulation losses in the reporting period. With an average paid circulation of 386.9 thousand copies per day and a reach of 1.8 million readers per day, FAKT asserted its leading position as the biggest and most-widely read mass-circulation daily in Poland. NEWSWEEK POLSKA continued its impressive performance in the reporting period. Under a new editor-in-chief, the magazine became Poland s most popular and best-
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 13 selling weekly magazine within just a few months. The average paid circulation rose significantly, by 24.3 %, to 137.1 thousand copies. The magazines AUTO SWIAT and KOMPUTER SWIAT also expanded their market positions further, as their average paid circulation rose by 6.3 % to 99.3 thousand and by 6.5 % to 43.5 thousand copies per issue, respectively, compared to the year-ago period. Our titles in Slovakia were not immune to the difficult market environment. Taken together, the market shares of our newspapers and magazines dropped slightly. However, the daily newspaper NOVY CAS defended its leading position in its segment and stabilized its paid circulation at an average of 123.4 thousand copies, despite the copy price increase. The reach of Serbia s biggest daily newspaper BLIC was relatively stable, with a decline of only 2.4 %, despite having raised its copy price in late March. In Montenegro, DAILY BLIC was successfully introduced to the market on June 22. This new regional edition reports on regional topics related to politics, society, business, culture, and sports. The daily newspaper ALO! increased its paid circulation by 4.2 % to 122.3 thousand copies and its reach by 15.4 % to 562.2 thousand readers. In Hungary, KISKEGYED defended its position amid a difficult economic environment. With 761.1 thousand readers and a stable paid circulation of nearly 200 thousand copies, it is still the widest-reach women s magazine in that country. With 522.6 thousand readers, VASÁRNAP REGGEL asserted its market leadership position in the segment of Sunday newspapers and sustained only a minor decrease in its paid circulation. With an average of 1.1 million readers, the reach of the Russian edition of the news magazine FORBES was slightly less than the corresponding year-ago figure. The reportage magazine GEO increased its reach by 5.1 % to 1.1 million readers. And GALA BIOGRAFIA, which was relaunched under a new design in August, increased its reach by 16.5 % to 973.7 thousand readers. Western European markets According to the latest survey, the leading Swiss general-interest magazine BEOBACHTER increased its reach from an average of 990 thousand readers in the year-ago period to 1.0 million readers in the reporting period (+ 2.1 %). The environment and nature magazine BEOBACHTER NATUR increased its reach by 3.7 % to 421 thousand readers. In the category of business media, PME MAGAZINE increased its reach by 5.0 % in the same period. During the reporting period, the editorial team of STOCKS, the widest-reach investor magazine in Switzerland, entered into a cooperation arrangement with the online platform finanzen.ch, in order to create an unrivalled source of information for the financial center of Switzerland. In France, the cooking magazine MARMITON set a new sales record by selling more than 100 thousand copies per issue. It now appears every two months instead of four times a year. The automotive titles published through the joint venture with Mondadori, including AUTO PLUS, defended their strong market positions and kept their paid circulation numbers steady. In contrast, the circulation numbers of the cooking magazine VIE PRATIQUE GOURMAND and the TV program guide TELE MAGAZINE were lower than the respective year-ago figures. Most of Axel Springer s automotive, computer, and video game magazines in Spain maintained their leading positions in their respective market segments, despite the economic crisis affecting that country. As a result of the tough macroeconomic conditions, however, five titles were discontinued. Key Figures Print International millions 9M/2012 9M/2011 Change External revenues 320.0 350.0 8.6 % Share in cons. revenues 13.3 % 15.1 % Circulation revenues 191.3 204.1 6.2 % Advertising revenues 108.3 124.2 12.8 % Other revenues 20.4 21.7 6.0 % EBITDA 41.1 56.8 27.6 % EBITDA margin 12.8 % 16.2 %
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 14 The general economic conditions, particularly in eastern Europe, remained difficult. At 320.0 million, the total revenues of the Print International segment were considerably lower, by 8.6 %, than the corresponding figure for the first nine months of last year. In contrast to the yearago comparison period, consolidation effects did not play an important role in the reporting period; adjusted for these effects, the revenue decline came to 8.3 %. However, currency effects had a more noticeable impact on the results for the first nine months of 2012; additionally adjusted for these effects, the revenues of the Print International segment were only 6.0 % less than the corresponding year-ago figure. Circulation revenues, which were 6.2 % less than the year-ago figure, or only 3.6 % less after additionally adjusting for consolidation and currency effects, did not fall as sharply as advertising revenues of 108.3 million, which were 12.8 % less than the year-ago figure, or 10.5 % less after additionally adjusting for consolidation and currency effects. Substantial declines were reported particularly in the Czech Republic, Hungary, and Poland. As a result of lower revenues, as well as higher restructuring expenses compared to the year-ago period, segment EBITDA of 41.1 million was substantially less, by 27.6 %, than the corresponding year-ago figure (PY: 56.8 million). Consequently, the EBITDA margin declined from 16.2 % to 12.8 %. Key Figures Print International 3rd Quarter millions Q3/2012 Q3/2011 Change External revenues 100.7 113.4 11.2 % Share in cons. revenues 12.8 % 14.3 % Circulation revenues 62.8 69.5 9.6 % Advertising revenues 31.0 37.0 16.4 % Other revenues 6.9 6.9 0.7 % EBITDA 12.4 16.3 24.4 % EBITDA margin 12.3 % 14.4 % Digital Media Thanks to strong growth rates, digital media activities are making an increasingly important contribution to the success of Axel Springer. Since the Semiannual Report 2012, Axel Springer has additionally published key indicators on the three areas of competence within its digitization strategy: 1. Content portals and other digital media 2. Performance marketing 3. Axel Springer Digital Classifieds Content portals and other digital media With respect to content portals, the online sites of our German print publications continued on a course of growth in the first nine months of 2012. Once again, Bild.de was Germany s most-visited mobile media brand in the first nine months of this year. In its recent study mobile facts 2012-I, the online research cooperative AGOF published a ranking for the first time, in which it makes no difference whether visitors use an app or visit a mobile website directly. With an average of 3.9 million unique users per month, the mobile portal of Bild.de had more visits than any competing portal in Germany. Following a bidding process initiated by the German National Soccer League, Bild.de was awarded the contract for the exclusive exploitation rights to the national soccer league highlights for web-tv and for mobile terminal devices in April. These rights will remain in effect for four years, starting with the 2013/2014 season. With this offer, our leading online medium will further expand this highly promising future digital information channel. As part of its multi-platform strategy, BILD expanded its digital offering to Internet-capable TV sets and introduced a new version of the BILD TV app to the market. This application is already pre-installed on the hybrid TV sets of all major manufacturers and is also integrated with the portals of satellite TV operators. In August, the app was also integrated with Sony s Google TV and Deutsche Telekom s T-Entertain, so that BILD is now represented on all relevant TV platforms.
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 15 After successfully establishing its German tablet app, AU- TO BILD, the undisputed market leader in this segment, introduced its first international ipad app in late September. The monthly AUTO BILD International App provides an English-language summary of the best content from four weeks of AUTO BILD. In August, SPORT BILD launched a new offering for smartphones and tablets: the digital magazine SPORT BILD PLUS. It appears every Sunday directly after the last German National League soccer match, so as to accommodate those users who wish to read the latest analysis and opinions even more quickly. In the segment of German premium newspapers, the WELT Group operates some of the most successful portals for the stationary and mobile Internet. WELT ONLINE and WELT MOBIL are among the widest-reach portals in their segment, with approximately 4.9 million unique visitors (comscore) and 1.6 million unique users (AGOF) per month, respectively. And the ipad app of the WELT Group has been consistently successful. It continues to be one of the most-downloaded newspaper apps and the best-selling apps in the German app store. Furthermore, DIE WELT is one of the most successful daily newspapers on Kindle. Since August, moreover, DIE WELT has offered a new, more extensive app for Tablet PCs using the Android operating system, thereby strengthening its pole position in the mobile segment. In addition, the best articles from WELT and WELT am SONNTAG are available in summarized form in E-Books. The online offerings of our international print media also exhibited a largely positive development in the reporting period. In Poland, Ringier Axel Springer Media joined the national online payment system of Piano Media in July. Its simple payment process allows users to quickly access a large number of publications and premium content on 42 different Polish websites. Ringier Axel Springer Media is represented in this group with forbes.pl. The online version of the country s biggest newspaper, fakt.pl, increased its traffic by 59.3 % to 2.5 million unique visitors. The online portals of Axel Springer Russia s licensed magazines FORBES and GEO registered substantial increases in the number of unique visitors compared to the first nine months of last year. The main reasons for this growth were the political and business news environment as well an improved visual presentation. Traffic Figures Content Portals (Selection) Millions (monthly average) 1) 2) 3) 4) Unique visitors Change 9M/2012 1) yoy Visits Change 9M/2012 2) yoy aufeminin.com 32.5 7.1 % 127.2 3) 58.1 % computerbild.de 4) 11.3-41.6 - Bild.de 10.3 5.5 % 217.7 28.5 % welt.de 4.9 6.9 % 43.0 19.8 % azet.sk 2.7 18.1 % 41.7 5) 1.2 % fakt.pl 2.5 59.3 % 52.4 6) 1.0 % transfermarkt.de 2.4 20.5 % 26.9 13.9 % onmeda.de 1.9 7.1 % 4.0 1.4 % abendblatt.de 1.9 17.1 % 11.3 17.1 % autobild.de 1.7 18.2 % 7.6 9.1 % blesk.cz 1.7 36.7 % 15.4 7) 19.0 % forbes.ru 1.5 29.8 % 3.7 8) 3.5 % cas.sk 1.3 15.0 % 11.4 5) 21.3 % finanzen.net 1.2 28.9 % 16.6 9.7 % morgenpost.de 1.2 30.0 % 5.6 26.3 % Source: comscore. Source: IVW. Source: company data. Including idealo.de since June 2011. 5) 6) 7) 8) Source: AIM. Source: Gemius Traffic. Source: NetMonitor. Source: XiTi Traffic Sources. As it continues to pursue a course of internationalization, the French women s portal aufeminin.com is now active in 13 countries. Furthermore, it now offers multi-lingual content in countries like Canada and Belgium. In August, the women s portal acquired the online casting agency Etoile Castings, a website that links artists with more than 2,000 professional partners. Europe-wide, aufeminin.com received an average of 32.5 million unique visitors per month, 7.1 % more than in the first nine months of last year. Schweizer Wirtschaftsnetz ( Swiss Business Network ), an umbrella portal that aggregates the online offers of the Group s business media, continues to perform very well in its second year. It served an average of 409.6 thousand unique clients (NET-Metrix-Audit) in the first nine months
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 16 of 2012. Since the beginning of 2012, Germany s biggest financial portal finanzen.net is also represented in Switzerland with finanzen.ch. Together with bilanz.ch and handelszeitung.ch, this portal is also available on the Swiss Business Network. idealo.de continues to be the leading and widest-reach portal for product searches and price comparisons in Germany. On average, more than 6 million unique visitors used the portal in the first nine months of 2012. Also, it referred 21 % more search queries than it did in the comparable period of 2011. Under the new umbrella brand Bonial International Group, the kaufda concept, involving the provision of locally centered shopping information to consumers, which had already been successfully established in Germany, was further internationalized and extended to Spain, Russia, and Brazil. In the first nine months of 2012, Smarthouse Media, a leading provider of complex web-based financial applications to banks, online brokers, and other financial services providers throughout Europe, expanded its operations in the financial center of London, stepping up its sales activities and adding new staff. Performance marketing The zanox Group (including the affiliate networks Affiliate Window and M4N, and eprofessional) solidified its position as a leading network for performance-based online marketing in Europe. Under this model, advertising customers pay a fee only when an ad placement (usually a product sale) is triggered through the use of one of zanox s platforms. The zanox Group countered heightened competition by making further improvements to its offerings and services. In May, for example, it introduced new statistical tools with which its customers and agencies can analyze the performance of partner programs and websites even more easily, more quickly, and more effectively than before. Besides defending its position as the leading affiliate network in Germany, zanox continued to internationalize its business by stepping up its activities in Switzerland and the Netherlands and by entering new growth markets, such as Turkey and Brazil. Axel Springer Digital Classifieds The integration of Axel Springer s classified ad portals SeLoger, StepStone, and immonet in Axel Springer Digital Classifieds GmbH was completed in the second quarter of 2012. The strategic partnership with General Atlantic has considerably improved the starting position for the Group s growth initiative in the online classifieds business. (See page 6 for more information on Axel Springer Digital Classifieds and on the acquisitions of Totaljobs and allesklar.com.) SeLoger, which is celebrating its 20th anniversary in 2012, is one of the innovation leaders in its segment, as France s leading real estate portal. By increasing the user-friendliness of its website even further, SeLoger managed to increase the number of subscribers for push notifications by 57 % within a period of 12 months. Through the acquisition of villaweb, which operates the website vacances.com, in June 2012, SeLoger strengthened its activities and broadened its offering also in the segment of leased vacation properties. Thus, SeLoger continued to pursue a course of expansion. In the first nine months of 2012, immonet.de, which is one of Germany s leading real estate portals, increased its customer base significantly over the corresponding period of 2011. It also intensified its cooperation with SeLoger and introduced a new service, the professional online appraisal of residential properties. In fact, it is the first German real estate portal to offer such a service. In connection with the strategic partnership with the Madsack Group, which was agreed in February 2012, immonet is now integrated with all of Madsack s newspaper portals, considerably widening the reach of real estate searches using immonet. In August, immonet also introduced an ipad app for real estate searches. Thanks to the positive economic environment in Germany, StepStone benefited from the continuing high demand for online job ads. In the first nine months of 2012, StepStone increased its traffic by 15.8 % over the comparable year-ago period, and it continues to be the mostvisited private-sector job exchange in Germany, with an average of 7.7 million visits per month. This portal, which specializes in expert and managerial positions, received twice as many visits as its main competitor, for the first
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 17 time ever. The acquisition of Totaljobs, the biggest online recruiting company in the United Kingdom, in April of this year strengthened StepStone s position in that country considerably. Key Figures Digital Media millions 9M/2012 9M/2011 Change External revenues 823.3 677.7 21.5 % Share in cons. revenues 34.2 % 29.2 % Advertising revenues 692.3 556.2 24.5 % Other revenues 130.8 121.5 7.7 % Content portals & other digital media 261.7 209.0 25.2 % Performance marketing 326.6 312.1 4.6 % Axel Springer Digital Classifieds 234.9 156.6 50.0 % EBITDA 1) 165.9 111.9 48.3 % Content portals & other digital media 57.1 46.1 23.7 % Performance marketing 15.9 18.5 14.1 % Axel Springer Digital Classifieds 101.8 54.6 86.5 % EBITDA margin 1) 20.2 % 16.5 % Content portals & other digital media 21.8 % 22.1 % 1) Performance marketing 4.9 % 5.9 % Axel Springer Digital Classifieds 43.3 % 34.9 % Segment EBITDA includes non-allocated costs of 8.8 million (PY: 7.3 million). At 823.3 million, the total revenues of Axel Springer s digital activities were substantially higher, by 21.5 %, than the corresponding year-ago figure (PY: 677.7 million). This increase resulted from both consolidation effects and organic growth. Advertising revenues registered the biggest increase, rising by 24.5 % over the year-ago figure (PY: 556.2 million) to reach 692.3 million. This gain was partially due to consolidation effects, including the acquisitions of Totaljobs, SeLoger, Visual Meta, and M4N, but also organic growth, especially at StepStone, idealo, and the content portals. Furthermore, other revenues rose by 7.7 %, from 121.5 million to 130.8 million, driven primarily by gains at Schwartzkopff TV and SeLoger. The pro-forma revenues of the Digital Media segment rose from 755.8 million to 837.2 million, reflecting organic growth of 10.8 %. The percentage of pro-forma total revenues represented by pro-forma digital media revenues rose from 31.5 % in the year-ago period to 34.6 % in the first nine months of 2012. Segment EBITDA rose by 48.3 % from 111.9 million to 165.9 million. Adjusted for consolidation effects, the increase came to 27.0 %. The EBITDA margin of 20.2 % was significantly higher than the corresponding year-ago margin (PY: 16.5 %). Key Figures Digital Media 3rd Quarter millions Q3/2012 Q3/2011 Change External revenues 281.1 242.6 15.9 % Share in cons. revenues 35.7 % 30.6 % Advertising revenues 237.3 199.1 19.2 % Other revenues 43.8 43.5 0.7 % Content portals & other digital media 85.8 75.2 14.2 % Performance marketing 109.8 106.1 3.5 % Axel Springer Digital Classifieds 85.5 61.3 39.4 % EBITDA 1) 55.2 40.5 36.4 % Content portals & other digital media 13.9 14.7 5.5 % Performance marketing 5.3 5.2 2.2 % Axel Springer Digital Classifieds 38.1 23.5 62.1 % EBITDA margin 1) 19.6 % 16.7 % Content portals & other digital media 16.2 % 19.6 % 1) Performance marketing 4.8 % 4.9 % Axel Springer Digital Classifieds 44.6 % 38.4 % Segment EBITDA includes non-allocated costs of 2.1 million (PY: 3.0 million).
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 18 Services/Holding The Services/Holding segment comprises the three Group-owned national newspaper printing plants, as well as the internal department of Logistics and various other service and holding company functions. Key Figures Services/Holding millions 9M/2012 9M/2011 Change External revenues 88.8 83.3 6.6 % Share in cons. revenues 3.7 % 3.6 % EBITDA 16.0 8.1 - At 88.8 million, the external revenues of the Services/ Holding segment were 6.6 % higher than the corresponding year-ago figure (PY: 83.3 million), mainly because of higher service revenues due to consolidation effects. Segment EBITDA of 16.0 million was substantially less than the corresponding year-ago figure (PY: 8.1 million). In this respect, charges related to the valuation of the company s share-based compensation programs were partially offset by income from the Kirch insolvency. Key Figures Services/Holding 3rd Quarter millions Q3/2012 Q3/2011 Change External revenues 29.1 27.7 4.8 % Share in cons. revenues 3.7 % 3.5 % EBITDA 0.8 1.1 - Liquidity Cash flows At 335.2 million, the cash flow from operating activities was slightly less than the corresponding figure for the first nine months of 2011 (PY: 344.1 million), despite the higher operating profit. This decrease resulted mainly from higher tax refunds in the year-ago period. The cash flow from investing activities amounted to 171.6 million (PY: 628.2 million), mainly in connection with StepStone s acquisition of 100 % of the equity of Totaljobs, the operator of the United Kingdom s leading online jobs portal. In the first nine months of 2011, the cash flow from investing activities was mainly influenced by cash outflows related to the acquisition of the French real estate portal SeLoger. The cash flow from financing activities in the amount of 0.6 million (PY: 71.9 million) was mainly influenced by the dividend payment to the shareholders of Axel Springer AG and by the receipt of the sale price from General Atlantic for the 30 % equity interest in Axel Springer Digital Classifieds GmbH. In addition, Axel Springer issued a promissory-note loan in the nominal amount of 500.0 million on the capital market, to replace expiring credit facilities. Other financing activities undertaken in the first nine months of 2012 included the payments received from General Atlantic to finance the acquisitions of Totaljobs and allesklar.com. In the yearago period, the cash flow from financing activities was primarily influenced by borrowing in connection with the acquisition of SeLoger, as well as the dividend payment to the shareholders of Axel Springer AG. Net liquidity and financing Total cash and cash equivalents rose from 244.0 million at year-end 2011 to 407.9 million as of September 30, 2012. Over the same period, the Group s financial liabilities were reduced from 716.9 million to 606.7 million. As of the reporting date, therefore, Axel Springer s net debt amounted to 198.8 million (December 31, 2011: 472.8 million). To replace a 500.0 million credit facility that expired in August 2012, Axel Springer issued a promissory-note loan on the capital market in the nominal amount of 500.0 million in April 2012. The promissory-note loan has a term of four years (nominal amount of 269.5 million) and six years (nominal amount of 230.5 million). Aside from the credit facility that expired in August 2012, Axel Springer is mainly reliant upon another credit facility in the total amount of 1.0 billion, which can be used both for general business purposes and to finance ac-
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 19 quisitions. Drawdowns under this credit facility will fall due in August 2013. As of September 30, 2012, an amount of 40.0 million was drawn down from this credit facility (December 31, 2011: 635.0 million; including drawdowns from the credit facility that expired in August 2012). As of the reporting date, the total amount of unutilized short-term and long-term credit facilities was 980.0 million (December 31, 2011: 885.0 million; including the credit facility that expired in August 2012). In September 2012, we entered into an agreement on a new 900.0 million credit facility to replace the credit facility that will expire in August 2013. Drawdowns under this new credit facility will fall due in September 2017. The promissory-note loan and the new credit facility can be used for both general business purposes and for financing acquisitions. Financial position At 4,454.1 million, total consolidated assets were higher than the corresponding figure at year-end 2011 (December 31, 2011: 4,187.5 million) by 266.7 million or 6.4 %. The development in the first nine months of 2012 was influenced by the acquisition of Totaljobs, among other factors. In connection with the provisional allocation of the purchase price ( 130.4 million), intangible assets (including goodwill) were recognized in the total amount of 148.9 million. The current other assets of 108.7 million were higher than the comparison figure by 29.5 million or 37.3 %. This increase resulted, among other factors, from the fair value measurement of forward exchange deals concluded in 2012 to hedge purchase price obligations. a result of this transaction, non-controlling interests and accumulated retained earnings rose by a total of 237.0 million. A further increase resulted from the payments received from General Atlantic to finance the acquisitions of Totaljobs and allesklar.com. The equity ratio rose to. 50.1 % (PY: 46.1 %). Non-current provisions and liabilities amounted to 1,308.0 million (December 31, 2011: 1.382.8 million). The decrease from the comparison figure resulted mainly from the repayment of financial liabilities. A countervailing effect resulted from the increase in pension provisions, due to the adjustment of the discount factor to reflect the current level of market interest rates. The current provisions and liabilities of 914.5 million were 40.6 million higher than the comparison figure (December 31, 2011: 873.9 million). This increase resulted in part from the reclassification of drawdowns under the credit facility as current liabilities, but also from the increase in provisions for employee compensation accruing during the year, as well as from deferred income recognized in respect of advance payments for services still to be rendered and from the initial consolidation of Totaljobs. The increase was partially offset by the lower amount of trade payables. The Axel Springer share and investor relations Share price The price of the share of Axel Springer AG exhibited a stable development in the first nine months of 2012, as the closing price at September 30, 2012 was 1.6 % higher than the share price at the beginning of the year. However, the Axel Springer share did not perform as well as the relevant comparison indexes DJ EuroStoxxMedia and the MDAX, which gained 5.5 % and 20.5 %, respectively. At 2,231.6 million, the Group s equity was 300.9 million (15.6 %) higher than the corresponding figure at year-end 2011, despite the payment of the dividend for financial year 2011 in the amount of 167.6 million. The increase in equity resulted in part from the consolidated net income, but mainly from the sale of a 30 % interest in Axel Springer Digital Classifieds GmbH to General Atlantic. As
Quarterly Financial Report as of September 30, 2012 Axel Springer AG 20 Performance Axel Springer Share 40 35 30 Axel Springer MDAX DJ EuroStoxx Media Following a positive performance in the final quarter of 2011, the Axel Springer share started the new year at 33.21. After reaching an intermediate high in February, the share reached its high for the year to date of 39.52 on March 26, 2012. In the second quarter, the share temporarily lost ground again, reaching its low for the year to date of 31.96 on June 5, 2012, before recovering significantly, especially in the third quarter. Towards the end of the third quarter, however, the share price retreated again and closed at 33.72 on September 28, 2012. As of the reporting date, the company s market capitalization amounted to 3.3 billion. Share Information Closing price: 33.72 01/02/12 09/28/12 9M/2012 9M/2011 Change Earnings per share 1) 1.62 2.11 23.4 % Earnings per share, adjusted 2) 2.21 2.30 4.0 % Closing price 33.72 25.93 30.0 % Highest price 39.52 41.67 5.2 % Investor relations In the first nine months of 2012, we attended nine investor conferences, two of which in the third quarter. We also participated in road shows in Frankfurt, London, New York, and Boston, and held numerous talks with investors and stock analysts in Berlin. We held telephone conferences with investors and stock analysts on the occasion of the publication of Axel Springer s Annual Report on March 7, 2012, the interim financial report for the first quarter on May 9, 2012, and the interim financial report on the first half on August 8, 2012. These conferences were transmitted live on the Internet and were made available on our website afterwards. Furthermore, all our financial reports and presentations are available for download on the company s website. Analyst coverage Research reports covering the Axel Springer share are currently published by 19 brokers, including Morgan Stanley, which commenced coverage in late June. Eight firms have issued a buy recommendation for the Axel Springer share, eight have issued a hold/neutral recommendation and three have issued a sell/underweight recommendation. The latest recommendations and share price targets can be found in the Investor Relations section of our website at www.axelspringer.de. Information on Listing Share type Stock exchange Registered share with restricted transferability Germany (Prime Standard) Security Identification Number 550135, 575423 ISIN Thomson Reuters Bloomberg DE0005501357, DE0005754238 SPRGn.DE SPR GY Lowest price 31.96 24.98 27.9 % 1) 2) 3) Market capitalization in millions 3) 3,331.2 2,556.8 30.3 % Daily traded volume (Ø, in thousands) 5,620.5 7,645.4 26.5 % Diluted. Diluted, adjusted for non-recurring effects and purchase price allocation effects and calculated on the basis of weighted average shares outstanding in the reporting period (98.708 million). Based on shares outstanding at the closing price, excluding treasury shares. Annual shareholders meeting The annual shareholders meeting of Axel Springer AG was held in Berlin on April 25, 2012. About 450 shareholders representing 84.5 % of voting capital attended the meeting. All proposed resolutions of the management, including the distribution of a dividend of 1.70 per qualifying share, were adopted with majorities of at