Cheuvreux German Corporate Conference 2009

Transcription

1 Cheuvreux German Corporate Conference 2009 Frankfurt, January, 2009 Dr. Mathias Döpfner, Chairman and CEO

2 Overview Axel Springer

3 Axel Springer is the only German multimedia stock Revenues of 2,577.9m and EBITDA of 470.0m in fiscal year 2007 Exceptional print franchise: market leadership with 170 newspapers and magazines Excellent online presence with more than 50 assets 10.0% of revenue digital 1), 7 of 10 biggest online assets profitable 2) Vision: Axel Springer becomes the best integrated European multimedia company 1) Based on pro-forma digital media revenues Q1-3/ ) Based on Q1-3/

4 EBITDA on record high (in m) 3,500 3,000 2,500 2,000 1,500 1, Revenues (left-hand scale) 1) EBITDA (right-hand scale) 1) ) HGB, IFRS. 4

5 Clear strategy with traceable success Strategy Market leadership in German-language core business Creativity Internationalization Profitable Growth Entrepreneurship Digitization Integrity Corporate values 5

6 New segment reporting introduced in Q1/08 reflects strategy and increases transparency OLD reported 07 Revenue ( m) EBITDA ( m) Margin (in %) Newspapers Magazines Printing Services/Holding 1, Newspapers Magazines Digital Media Printing Logistics/ Services/Holding FAKT computerbild.de Change International print business welt.de, Bild.de Brand-related online assets Combining two segments NEW restated 07 Revenue ( m) EBITDA ( m) Margin (in %) Newspapers National 1, Magazines National Print International Digital Media ) Services/Holding ) Margin ex investment income -0.5%. 6

7 Competitive advantages of Axel Springer 1. Less exposure to advertising and classifieds 2. Strong media brands Positioning is paying off in difficult markets 3. Consistent digitization strategy 7

8 Axel Springer is Germany s leading print marketer and publisher Market share by adspend 1) Market share by circulation 2) 17% 21% With 21% market share, Axel Springer reaches 56% of the German population 3) daily 9% 8% 5% 4% 4% 7% 6% 5% 5% 3% 3% Axel Springer G+J Burda Holtzbrinck Bauer WAZ Axel Springer Bauer WAZ SWMH Burda Holtzbrinck G+J Newspapers Magazines Newspapers Magazines 1) Source: AC Nielsen; gross adspend, excluding classified ads, supplements and media advertising, Q1-3/ ) Source: Company estimates based on IVW Q1-3/2008, paid circulation; weighted market share taking into account different title frequencies. 3) Source: ma 2008 Pressemedien II; combined reach among German 14+ year-olds of all covered Axel Springer AG newspapers, magazines and 100% owned subsidiaries. 8

9 Axel Springer is less dependent on advertising and classifieds than its competitors Advertising revenues as % of total revenues Classified revenues as % of total advertising revenues 80% 1) 57% 2) 54% 3) 45% 6) 52% 4) 56% 5) 36% 4) 19% 6) USA UK Germany Axel Springer USA UK Germany Axel Springer 1) In 2004, Source: Newspaper Association of America. 2) In 2006, Source: Zenith, Advertising Association Yearbook. 3) In 2007, Source: BDZV. 4) JP Morgan estimates, company data. 5) In BDZV, local and regional subscription papers (69% of circulation in Q2/2008). 6) Q1-3/

10 Classified revenues benefiting from online contribution (Revenues in m, illustrative) Online classified revenues (real estate / jobs) from national brands (Immonet, Stepstone [50%]) Print classified revenues (strong regional focus on Hamburg and Berlin) 10

11 Dominant market position in German newspaper market yields >25% EBITDA margin in largest business segment German newspaper market 1) Core newspaper segments Market share 2) 7% 3% Newsstand papers No. 1 81% 21% Sunday newspapers No. 1 70% 69% Regional subscription papers Newsstand papers National quality papers Sunday newspapers National quality papers Regional subscription papers No. 3 17% No. 1 3) 59% No. 1 3) 25% 1) Except weekly newspaper based on BDZV/IVW Q1-3/ ) Based on paid circulation Q1-3/ ) Source: Hügel Statistik. Based on gross advertising volumes among all regional newspapers in Hamburg/Berlin, Q1-3/

12 Only BILD reaches more people than biggest TV program (reach in m) Wetten, dass? 11.7 America s Got Talent 9.8 The X Factor 6.7 Koh Lanta BILD Le monde USA Today The Sun Source: U.K.: average Aug/Sep of The X Factor, NRS (National Readership Survey), BARB (BroadcastersAudience Research Board): MRI (Mediamark Research and Intelligence), Nielsen Media Research, September 2008; France: average of Koh Lanta, EPIQ-Studie, Mediametrie; Germany: average of Wetten, dass? 2007, Viewers aged 14+, GFK/TV Panel

13 Leading market position in seven core segments in Germany 1) TV listings weekly biweekly Computer PC Games AVF Cars Sports No. 1 No. 1 2) No. 1 No. 1 No. 1 No. 1 No. 1 Women weekly 3) monthly Youth/Music Finance No. 1 No. 4 No. 1 No. 2 No. 3 No. 3 No. 3 1) Paid circulation, IVW data, Q1-3/2008, weekly weighted. 2) For digital TV. 3) Without Yellow press. 13

14 A strong international presence Poland Hungary Russia Switzerland Spain other 43.5m (Segment Newsp. + Mag. National) Q1-3/2008 Print 10 magazines; 4 newspapers Market share 44,6% (circulation national daily newspapers) 30 magazines; 10 newspapers Market share 19%, largest publisher (based on advertising revenues) 4 magazines Market leader weekly people magazines 1 newspaper; 13 magazines (biggest consumer magazine); Market leader TV listings, business/ financial 13 magazines Market leader videogames magazines, computer magazines France: 4 magazines + AUTO PLUS (50%). Czech Republic: 6 magazines Romania (40%): 12 magazines m Internat. revenues, (Segment Print Internat.) 440.3m Digital media News portals: dziennik.pl efakt.pl newsweek.pl Others: students.pl sports.pl popcorn.pl auto-swiat.pl Regional news network in 8 countries Women portal nana.hu Economical newsportal vg.hu ok-magazine.ru computerbild.ru runewsweek.ru handelszeitung.ch students.ch bilanz.ch partyguide.ch usgang.ch students.ch stocks.ch beobachter.ch tele.ch tvstar.ch computerhoy.es autobild.es hobbyconsolas.es micromania.es Czech Republic: Leading car portal, auto.cz; Turkey: Dogan TV (25%) 81.7m Internat. revenues Internat. Revenues 22.1% of total revenues Germany, France, Italy, UK, Spain, Belgium, Switzerland, Canada, Morocco (Part of segment Digital Media) Germany, France, Italy, UK, Spain, Benelux, Switzerland, US, China, Sweden, Poland 14

15 Unique expansion path: example BILD 15

16 Successful digitization ahead of market Core competencies 1. Content/brands 2. Ad sales/marketing 3. Classifieds/ marketplaces Development unique visitors (m) in Germany % 16.0 Market Growth: + 5.9% 1) ) Q1-3/08: pro forma digital revenues 10.0% of total revenues. Q1-3/07 Q1-3/08 1) Source: comscore (development unique visitors), gross reach. 16

17 Digital landscape: Occupying core segments Content/brands Classifieds/ market places Ad sales/ marketing Infotainment News Finance Real estate Ad Jobs sales/ marketing (reach and performance based) Regional Auto Consumer Electronics Market Places Ad Sales/ Marketing Youth/Music Women Sport TV Jobs 17

18 Digitization through acquisitions & organic growth Acquisitions Organic Disinvestments Total Total Organic Acquisitions 18

19 Real estate classifieds revenues: Online overcompensates print Revenues in real estate ads (illustrative) +2% +8% +84% +81% -10% -12% 1) e 1) Based on Jan-Aug 08 figures. 19

20 Case study: WELT-Group successful transition from newspaper to multimedia brand Single Newsroom web-to-print workflows create content for all channels and media Mobile Online Video Online-first strategy Articles and photos are distributed online first and across several channels 20 Quality journalism for three national and a regional newspaper seven days a week

21 Transformation of WELT brand into digital multimedia family increases both, print and online reach WELT Group: Total reach (gross) across all media 3.1m 1) +74% 5.4m 1) WELT/WELT KOMPAKT Reach: 0.73m contacts + 4% since 2006 WELT am SONNTAG Reach: 1.285m contacts + 19% since WELT ONLINE Reach: 3.37m contacts + 155% since 2006 Source: Print: AWA 2006, 2008; Online: AGOF 2006-I, 2008-I (NpM), Addition of Contacts 21

22 Total reach (gross) of WELT / WELT am SONNTAG grows while competitors decline (in m) WELT 1) /WamS FAZ/FAS SZ Source: AWA 2005 to 2008; 1) since 2006 DIE WELT / WELT Kompakt 22

23 Profit improvements by integrated editorial workflow and innovative advertising solutions EBITA 2004 Circulation revenues Advertising revenues Merchandising and other revenues Cost reduction EBITA

24 Total reach growth driven by online activities In total Newspapers 26.8m contacts (+2.0%) 1) 81.4m (+5.2%) contacts Magazines 35.6m contacts (+1.1%) 1) Online 19.0m contacts (+18.7%) 2) 1) Source: ma Pressemedien II 2008 vs. ma Pressemedien I 2008; AWA July/2008 vs. Jan/2008 2) Source: comscore, unique visitors, Q1-3/2008 vs. Q1-3/

25 Investment highlights Only German multimedia stock Leading market positions and brands Unique track record in digitization Strong operating profitability despite current media market trend Proven track record of cost discipline after rigorous restructuring Highly incentivized management team 25

26 Highlights 2008

27 Summary Q1-3/2008 Strong operating income EBITDA up 4.1% 1) in Q1-3 to 306.6m in difficult market environment EBITDA margin at 15.4% (Q1-3/07: 16.0%) 1) Main drivers: acquisitions, reduced launch costs, price increases and cost discipline Top line growth driven by international and digital 8.1% growth in group revenues due to major digital acquisitions and international business Organic growth (ex consolidation effects) of 1.6% in difficult market environment Successful price increase of key titles: circulation revenues up 2.0% in Q3 and 2.1% in Q % of total revenues now international and 10.0% digital Strong and secure financial basis Net debt including pensions down to 757m from 1,091m (year end 2007) Comfortable headroom through credit line of 1.5bn Share buyback of 917,341 shares at 80 completed in July 1) Compared to EBITDA Q1-3/2007, adjusted for ProSiebenSat.1 dividend. 27

28 Newspapers/Magazines National: operational excellence in deteriorating environment Newspapers National BILD copy price increase from 0.50 to 0.60 in old West German states Further copy price increases: BILD am SONNTAG, HAMBURGER ABENDBLATT, BERLINER MORGENPOST, DIE WELT Circulation of daily newspaper DIE WELT/WELT KOMPAKT on alltime high in first nine months Magazines National High margin in difficult market TV DIGITAL boosts circulation +10.5% in Q1-3 to over 2m copies Various BILD magazines and TV DIGITAL with market share gains in circulation over prior year s period Re-organization of print advertising sales force to create one multimedia sales unit for the national Axel Springer print and online portfolio 28

29 Key developments Print International Poland Switzerland Russia FAKT: strong growth, high profitability, start of publication in Great Britain and Ireland Total market share of 44,6% (circulation of national daily newspapers) Integration of Jean Frey and subscription base of CASH magazine successfully accomplished Synergies achieved: Profit margins of all acquired businesses today higher than before integration COMPUTERBILD: circulation up 24% despite copy price increase FORBES: strong growth in ad revenues India June 2008, foundation of joint venture in India with India Today Group First title: Indian edition of AUTO BILD 29

30 Key developments Digital Media Acquisition of transfermarkt.de, partyguide.ch, usgang.ch, Onmeda and increase of stake in gamigo.de to majority aufeminin.com: revenues stable in France, growth in international zanox.de: international expansion, further product developments WELT online: fastest growing news portal (+191% growth in unique visitors) computerbild.de: fastest growing computer portal in Germany Closing of sale of stake in ProSiebenSat.1 Media AG at per share in Q1/08 Closing of acquisition of outstanding Bild.de shares in Q1/08 30

31 Extension of strategic partnership with Dogan Acquisition of ~10% stake in the major Turkish media group Dogan Yayin Holding No further cash investment: use of higher and secured valuation of stake in Dogan TV Value securing mechanism for remaining direct stake in Dogan TV of 298m extended until 2015 Axel Springer stake in Dogan TV (directly and indirectly) rises from 25% to 26.5% 31

32 Increase of exposure to online jobs sector Acquisition of 33% stake in Stepstone ASA, a leading international provider of human capital management software and services Axel Springer already owns 49.9% stake in German subsidiary Stepstone Germany Transaction gives access to fast growing market of online human capital management solutions and jobs classifieds 32

33 Reach growth across digital activities Development of digital reach 19.0 Top growth portals WELT Online + 191% at 3.15m % Computerbild Online + 154% at 1.51m transfermarkt.de + 64% at 1.02m Q1-3/07 Q1-3/08 Bild.de + 11% at 3.52m 1) Source: comscore, gross reach, total unique visitors, Axel Springer majority shareholdings, Q1-3/08 yoy. 33

34 Financials Q1-3/2008

35 Consumer sentiment and gross advertising expenditures Consumer sentiment Germany 1) Gross advertising expenditures 2) (in m) Q1-3/07 Q1-3/08 % yoy 10.0 Newspapers 2,674 2, % Magazines 2,221 2, % Online Radio TV , , % -2.9% +4.8% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Outdoor % ) Source: GFK Konsumklimaindex. 2) Source: Nielsen Media Research (excluding classified ads, supplements and media advertising). 35

36 8% top line growth in nine months including acquisitions, organic growth of 2.4% in Q3 (in m) Total revenues Revenues ex consolidation effects 1, % 1, % % % % % % % % % % % % % % % Q3/07 Q3/08 Q1-3/07 Q1-3/08 Q3/07 Q3/08 Q1-3/07 Q1-3/08 Circulation revenues Advertising revenues Other revenues 36

37 Difficult advertising environment in German core market, solid growth in digital Newspapers National Magazines National Print International Digital Media Q3/07 Q3/08 % Q3/07 Q3/08 % Q3/07 Q3/08 % Q3/07 Q3/08 % Circulation revenues ( m) Advertising revenues ( m) Other revenues ( m) >100 Total segment revenues ( m) Pro forma digital media revenues ( m) 1) (% of total revenues) ) Including 60% of zanox according to target structure. 37

38 Q1-3 revenue growth driven by Print International and Digital Media Circulation revenues ( m) Advertising revenues ( m) Other revenues ( m) Newspapers National Q1-3/ Q1-3/ 08 Magazines National Print International Digital Media Q1-3/ Q1-3/ Q1-3/ Q1-3/ Q1-3/ Q1-3/ 07 % % % % >100 >100 Total segment revenues ( m) >100 Pro forma digital media revenues ( m) 1) (% of total revenues) ) Including 60% of zanox according to target structure. 38

39 EBITDA slightly up in nine months (in m) EBITDA, EBITDA-margin ) +4.1% % 1) 15.4% ) -2.4% % 1) 14.2% Q3/07 Q3/08 Q1-3/07 Q1-3/08 1) Adjusted for ProSiebenSat.1 dividend ( 23.1m). 39

40 Q1-3: Excellent margins in newspapers and magazines, swing in international and digital Newspapers National Q1-3/ 2007 Q1-3/ 2008 Magazines Print Digital % National % International % Media % Q1-3/ 2007 Q1-3/ 2008 Q1-3/ 2007 Q1-3/ 2008 Q1-3/ 2007 EBITDA ( m) Margin (in %) Margin ex inv. income (in %) 1) Q1-3/ Q3/07 Q3/08 Q3/07 Q3/08 Q3/07 Q3/08 Q3/07 Q3/08 EBITDA ( m) Margin (in %) Margin ex inv. income (in %) 1) ) EBITDA margin excluding income from investments (Dogan, radio participations ). 40

41 Print International and Magazines National margins benefit from significant launch cost reduction in line with guidance (in m) Launch costs Digital Media Print International Magazines National Newspapers National m in Q2 mainly due to discontinuation of newspaper launch in France and magazines launch costs in Q2/ Q1/ Q2/07 Q3/07 Q4/07 Q1/ Q2/ Q3/08 41

42 Operating cash flow/net debt (in m) Operating cash flow Net debt (including pensions) Change in net income tax position 1) (- 32.6m) 12/31/07 09/30/ Reduction of inflow from Kirch insolvency (- 20.6m) -757 Pension liabilities Q1-3/07 Q1-3/08-1,091 12/31/07 09/30/08-348m - 352m Credit line of 1.5bn secured until ) Due to tax payments relating to prior years and higher prepayments. 42

43 Strong financial basis (in m) Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Net debt (incl. pensions) - - 1,092 1, EBITDA 1) Leverage Equity ratio (in %) Operating cash flow 1) ) Last twelve months. 43

44 Net income/eps Net income (in m) Earnings per share (diluted, in ) sale of P7S1 stake sale of P7S1 stake one-off tax effect 1) 1.48 one-off tax effect 1) ) ) ) ) 1.11 Q3/07 Q3/08 Q1-3/07 Q1-3/08 Earnings per share Q3/07 Q3/08 Q1-3/07 Q1-3/08 Undiluted Diluted ) Adjusted for one-off tax effect due to 2008 Corporate Income Tax Reform Act ( 45.9m net income, 1.48 eps). 44

45 Seven reasons why Axel Springer is best positioned for monetization of media convergence Paradigm shift: online first Aggressive attacker instead of depressed defender Transformation of existing business into digital multimedia brands Acquisition of new businesses according to core competences Integrated content producer Centralized multimedia sales Ownership of digitization everybody is responsible 45

46 Investor Relations contacts Claudia Thomé Head of Investor Relations Phone: +49 (0) Mobile: +49 (0) Daniel Fard-Yazdani Investor Relations Manager Phone: +49 (0) Mobile: +49 (0) Axel Springer AG Axel-Springer-Str Berlin / Germany Fax: +49 (0)