14.06.2018
Bastei Lübbe AG DE000A1X3YY0
DGAP-News: Bastei Lübbe AG: Despite positive development in core business strong burden on earnings in 2017/2018 financial year
DGAP-News: Bastei Lübbe AG / Key word(s): Preliminary Results
Bastei Lübbe AG: Despite positive development in core business strong burden
on earnings in 2017/2018 financial year
14.06.2018 / 13:30
The issuer is solely responsible for the content of this announcement.
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Press Release
Bastei Lübbe AG: Despite positive development in core business strong burden
on earnings in 2017/2018 financial year
- Core business of book publishing: Increase in revenue and adjusted EBIT in
2017/2018 financial year
- Balance-sheet adjustment hits consolidated earnings for 2017/2018 by
around EUR 18 million
- Comprehensive efficiency programme on schedule
- 2017/2018 consolidated financial statements to be published on 31 July
2018
Cologne, 14 June 2018. Based on provisional calculations, Bastei Lübbe AG
(ISIN DE000A1X3YY0) generated in the 2017/2018 financial year consolidated
revenue of around EUR 140 million, an EBITDA of EUR 0.5 million (previously:
approx EUR 5 million) and an EBIT of minus EUR 18 million (previously:
approx. minus EUR 11 million). Several factors negatively impacted on
earnings by EUR 18 million, including the loss of the affiliated company
BuchPartner GmbH sold on 31 March 2018, as well as unscheduled impairments
at further affiliated companies. Additional impairments stemmed from the
reassessment of the course of amortization on capitalised royalties. The
positive development of revenue and income in the core business of book
publishing was not enough to offset this.
Revenue in the core business of book publishing was up by around 20% on the
previous year at approx. EUR 85 million in the past financial year. There
were several factors in this positive performance, including best-sellers by
Dan Brown and Ken Follett, which were ranked first and second on the German
book market in terms of sales. The 12th volume in the "Diary of a Wimpy Kid"
series by US author Jeff Kinney became the year's best-selling book for
children and young adults in just ten weeks. In addition, the high level of
"digital" share in the book business compared to the competition, which
accouns for around 30% is contributing to this pleasing performance.
Adjusted for one-time effects, the provisional operating result (EBIT) in
the core business rose by around EUR 1 million to approx. EUR 3.5 million,
this includes that the fourth quarter was below budget partly due to high
remissions. "Although it is not properly reflected in the earnings for the
current financial year due to the non-recurring factors, we can be really
pleased with the operating performance in our core business, despite the
rather subdued final quarter. Even so, we need to improve our efficiency in
order to be successful again in future in what remains a challenging
environment. Overall, we firmly believe that we are on the right track,"
explained Carel Halff, CEO of Bastei Lübbe AG.
The comprehensive efficiency programme launched in January 2018 is
progressing as planned. Initial successes have been attained, and are
already leading to improvements in the publishing catalogues. By the end of
this year, marketing, sales and processes will also have been extensively
reviewed and measures will have been instigated. Overall, the Management
Board is therefore targeting a sustained improvement in the EBIT margin in
the core business by 2 to 3 percentage points to between 6% and 8% in the
medium term. "We still have a long way to go before Bastei Lübbe AG is in a
position where we can properly leverage the potential of our business. At
present, our cost structure doesn't allow us to generate the returns that
appear possible and appropriate for our business. However, we are working
hard to change this. But the most important thing is that our foundations
are strong: we have a competitive, strong catalogue and a team of motivated
employees who are getting on with the job together," stated Carel Halff, CEO
of Bastei Lübbe AG.
One-time effects hit earnings hard in the 2017/2018 financial year.
Unscheduled impairment at the affiliates and subsidiaries BookRix GmbH & Co.
KG, Beam Shop GmbH and und B + M Entertainment GmbH resulted in a total
negative impact of around EUR 5.5 million. Following a strategic and
economic analysis in consultation with the Supervisory Board, the Management
Board has decided to divest itself of these subsidiaries.
In capitalised royalties, the impact on earnings with no effect on cash flow
amounts to EUR 8 million. This largely involves a one-time effect stemming
from the reassessment of the course of amortization. In January, the
Management Board assumed that the negative impact would be EUR 3 million
lower. The detailed analysis carried out on the annual financial statements
revealed a higher need for amortization and impairment.
The subsidiary Deadalic Entertainment GmbH managed in the "Digital" segment
increased its revenue by around 40% to approx. EUR 9 million and fulfilled
expectations with EBITDA of around EUR 3 million. The main drivers here were
the successful games "Shadow Tactics" and "The Long Journey Home". However,
the blockbuster game "The Pillars of the Earth", developed at great expense,
failed to perform and sell as well as expected in the last quarter of the
past financial year, thus necessitating an unscheduled impairment of around
EUR 3 million.
The loss (EBIT) of the affiliated company BuchPartner GmbH, deconsolidated
on 31 March 2018, amounted to around EUR 6 million in the last financial
year. This includes the loss of approximately EUR 1.6 million from the sale
of the company.
"Overall, the negative impact from the necessary balance-sheet adjustment
was higher than we expected in February of this year. This is particularly
evident in the light of the fact that the original estimate of the effects
from the valuation of royalties could not be carried out with the same
degree of detail as in the annual inventory that has now taken place.
Nevertheless, applies: With an equity ratio of still 30%, the company has
sufficient resources to withstand these high non-recurring negative impacts.
Besides, most of these effects have not impacted on the Group's liquidity.
And by selling BuchPartner, we have also reduced our debt by some EUR 10
million," explained Ulrich Zimmermann, CFO of Bastei Lübbe AG.
The consolidated financial statements for the 2017/2018 financial year,
including an outlook for 2018/2019, will be published on 31 July 2018 due to
the considerable additional work involved in this year's annual financial
statements. The publication of the financial statements was originally
planned for 2 July 2018.
The Management Board is confident about the progress of the current
financial year. Firstly, the publishing group has an attractive autumn
programme for 2018. Along with volume 13 of "Diary of a Wimpy Kid", which is
regarded as a sure candidate for contributing revenues, the best-selling
author Timur Vermes should be following up his huge hit "Look Who's Back"
with a sensational political and media satire. Best-sellers are also
guaranteed from authors in the LYX and Bastei Lübbe Paperbacks stables,
especially Mona Kasten and Petra Hülsmann. The paperback edition of Dan
Brown's "Origin", to be released in September, is a serious contender for
topping the best-seller list.
On the other hand, following an intensive analysis and the progress of the
portfolio adjustment, the Management Board now expects that the focus on the
core business has also significantly improved the predictability of the
earnings situation. With regard to the negative one-time effects at
affiliates as well as the conversion of the accounting method for
capitalised royalties, all necessary steps have now been taken and their
effects have been incorporated in the balance sheet. At the same time, the
rigorously continued and implemented efficiency programme is likely to have
a positive effect.
The Management Board sees the bottom reached. In the current financial year
2018/2019, the company expects to return to positive figures with
consolidated EBIT in the amount of between EUR 0.5 and 2 million despite
expenses for the efficiency programm in the amount of EUR 2 million and the
adjustment of the investment portfolio from EUR 0.5 million. Revenues are
expected at around EUR 95 million in 2018/2019. In the upcoming financial
year 2019/2020 and in the years beyond, the usual earnings capacity with an
EBIT-margin of 6 to 8 percent should be achieved again with smaller revenue
increases.
About Bastei Lübbe AG:
Bastei Lübbe AG is a media group with headquarters in Cologne. Its business
activities primarily focus on the development and licencing of contents
which are sold in physical and digital formats. The core business of the
company in the book segment covers classic publishing and periodically
published puzzle magazines and novels. With its total of twelve publishing
houses and imprints, the company group currently offers around 3,600 titles
in the areas of fiction, non-fiction as well as books for children and young
adults. In the growing segment of hardcover fiction books, the company has
been one of the market leader in Germany for many years. At the same time,
Bastei Lübbe is an engine for innovation in the area of digital media and
distribution channels, among other things by the production of thousands of
audio and eBooks. This includes the stake in the renowned game publisher
"Daedalic Entertainment".
With annual sales of approx. 146 million euros (financial year 2016/2017),
Bastei Lübbe AG is one the largest medium-sized publishing companies in
Germany. The shares of the company have been listed in the Prime Standard
segment on the Frankfurt stock exchange (GSIN A1X3YY, ISIN DE000A1X3YY0)
since 2013. Further information is available at www.luebbe.de.
Contact Bastei Lübbe AG:
Barbara Fischer
Head of Press and Public Relations
Tel.: 0221 / 82 00 28 50
E-Mail: [email protected]
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14.06.2018 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: Bastei Lübbe AG
Schanzenstraße 6 - 20
51063 Köln
Germany
Phone: 02 21 / 82 00 - 0
Fax: 02 21 / 82 00 - 1900
E-mail: [email protected]
Internet: www.luebbe.de
ISIN: DE000A1X3YY0, DE000A1K0169
WKN: A1X3YY, A1K016
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Stuttgart, Tradegate Exchange
End of News DGAP News Service
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