Axel Springer: Surge in profits thanks to classifieds
The booming classifieds business brought the Axel Springer media group noticeably higher revenues and profits in 2014. Earnings before interest, taxes, depreciation and amortization (EBITDA) climbed by 11.6 percent to 507 million euros.
This was announced by the publisher of Bild and Welt on Wednesday. An increase in the low double-digit percentage range had been planned. Turnover increased by 8.4 percent to 3.04 billion euros. An increase in the mid single-digit percentage range had been targeted. "In the current year, we will continue to invest consistently in digital expansion," announced Group CEO Mathias Döpfner. The biggest growth driver was business with classified ads on the Internet, such as real estate, job and car portals. Earnings in these classifieds climbed by 35.2 percent to 221 million euros within a year, contributing around 44 percent of total Group profit.
Classified ad business as a trump card
Axel Springer is increasingly shifting its business to the Internet and, with the help of acquisitions, is primarily expanding areas outside of traditional journalism. Comparatively lower personnel and distribution costs are incurred here. Springer is therefore relying heavily on the highly profitable classifieds business. The entire digital business contributed a good half of revenue in 2014 and around three quarters each to advertising revenue and profit. The share of international business in total revenue rose to 43 percent. For 2015, the media group expects Group-wide revenue growth in the low to mid single-digit percentage range. Profit is expected to increase in the high single-digit percentage range. The biggest project for this year is the conversion of Axel Springer SE into a partnership limited by shares (KGaA). This is intended to secure the Springer family's control and at the same time provide access to external capital for larger investments. In addition, the Group wants to regain 100 percent control of its highly profitable classifieds division.
Joint venture in Switzerland
In Switzerland, Axel Springer plans to merge its magazine business with the Zurich-based media company Ringier, as announced in mid-December. To this end, the two groups are planning to establish a joint venture, which still has to be approved by the Competition Commission. Axel Springer Switzerland's portfolio includes Der Beobachter, Tele, Bilanz and Handelszeitung as well as various online platforms. (SDA)
