Wednesday, August 3, 2011

Axel Springer AG reports strong earnings and revenue growth, which it attributes to its digital, international

The big question in media circles this past year and a half has been not only whether to invest in more digital publishing platforms (see Time Inc. announcement), but whether that investment would ultimately payoff. German media giant Axel Springer AG said yesterday that they believe it has.
The publisher of newspapers and magazines yesterday reporting good earnings growth, as well as very solid (very, very solid) revenue growth. Earnings grew almost 10.5 percent to 288.7 million euros, while sales grew 11.8 percent to 1.53 euros, according to the company's earning announcement.

(For you financial folk out there, you might be interested to know that the company also announced that it was operating at a EBITDA margin of 18.9 percent, as well.)

The big takeaway may be, however, that the company is crediting its digital strategies for its good earnings results.

“The results confirm our strategy. Axel Springer’s digital and international activities are not only the driving forces behind our growth but now account for nearly 40 percent of our operating profit," Dr. Mathias Döpfner, Chief Executive Officer of Axel Springer AG, said. "In our digital business we achieved a higher earnings contribution in particular of our content and classified advertising portals. Our paid-content initiative in the Internet is making progress, and we will insistently continue to pursue this long-term change in paradigm.”

Axel Springer AG is one of the few publishers currently reporting strong ad sales – in this case, an increase of 18.6 percent, this despite a decline in national print media that it says is due to last year's strong showing during the World Cup which Germany hosted last year.