Facts and Figures
Overview of 2009 Business Development
Verlagsgruppe Georg von Holtzbrinck focused on four core business fields in 2009, a year characterized by economic crisis. In this constellation, the group recorded a considerable increase in profit compared with 2008 thanks to organic growth and better cost efficiency.
Consolidated revenue of the group amounted to EUR 2,357.6m in the fiscal year 2009 (2008: EUR 2,588.9m). Adjusted for portfolio and currency effects, however, the group’s revenue was up by 4.6% in contrast to the general trend in the industry. The main contributors to this organic growth included the fiction and non-fiction, education and science and digital media business fields, which recorded significant success on the market in the face of adverse conditions. The disposals transacted in the course of fiscal 2009 – in particular the Handelsblatt, Wirtschaftswoche and Tagesspiegel titles and the equity investment in the Dutch online retailer bol.com – as well as closures of individual entities led to a drop of EUR 299.1m in revenue compared with 2008 for reasons linked to the portfolio. This portfolio effect and the negative year-on-year exchange rate effects amounting to EUR 46.6m cancelled out the group’s organic growth, leading to a decline in consolidated revenue of EUR 231.3m compared with 2008.
In light of the lasting difficult conditions on its core markets, Verlagsgruppe Georg von Holtzbrinck implemented extensive measures in fiscal 2009 to raise cost efficiency without endangering the long-term development in the value of its entities and the quality of its products. Together with the organic growth, the success of these measures resulted in a rise in operating EbITDA (earnings before interest, taxes, depreciation and amortization as well as special effects) of 14.1% to EUR 188.7m. The group responded to the continued difficult economic environment and the resulting risks by continuing its high level of impairments and provisions on account of the crisis. Earnings before taxes of the group amounting to EUR 162.9m contain both positive non-recurring effects from the sale of entities and equity investments as well as non-recurring costs incurred in 2009 for reorganization and efforts to secure earnings.
The group reduced its net liabilities considerably as of 31 December 2009 thanks to the disposals transacted in the past fiscal year and the improved cash flow from operating activities. As a result, the leverage ratio (ratio of net liabilities to operating EBITDA), a key performance indicator, improved on the prior-year figure. With a leverage ratio of 2.7x at the end of 2009, Verlagsgruppe Georg von Holtzbrinck has fully achieved its financing objectives geared to long-term stability.
In fiscal 2009, the share of German revenue of Verlagsgruppe Georg von Holtzbrinck decreased substantially compared to the prior year, due to changes in the company portfolio and the consolidated group in particular.
The fiction and non-fiction business field accounted for a significant share of the organic revenue and earnings growth of the group in the fiscal year 2009. Thanks to major market success of individual bestsellers and successful publishing programs, the German and international publishing houses recorded a very satisfactory result, with growth above the respective industry average. The turnaround at Pan Macmillan UK, already initiated in 2008 by means of corresponding measures, was particularly pleasing. Organic growth in the fiction and non-fiction business field amounted to 7.4% in total in 2009. The development on the market for electronic books picked up pace in the past fiscal year due to the availability of adequate reading devices in the US in particular. The publishing houses of the fiction and non-fiction business field have reacted to this development on the product side with an extensive range of e-books and on the sales side by creating the technical infrastructure as well as by creating sales partnerships.
With its strong focus on international activities, the education and science business field was largely unaffected by the financial and economic crisis again in 2009. With an organic revenue increase of 6.8% after eliminating exchange and portfolio effects (unadjusted: decrease of 0.6%), the business field accounted for the largest share in revenue of the group portfolio for the first time in 2009. On the basis of its organic revenue growth, the education and science business field also further improved its profitability by raising cost efficiency in 2009. The increasing momentum on the market for electronic books as well as the increasing market success of multimedia teaching offerings result in high technological and didactic requirements of the publishing houses’ product range. The education and science business field thus used the largest share of the group-wide development cost budget to develop corresponding offers again in the fiscal year 2009.
Totaling 27.6% of the group’s consolidated revenue in 2009, the revenue volume of the newspapers and magazines business field dropped considerably by approximately EUR 347m over the period of an entire year compared with fiscal 2008 due to the sale as of 1 June 2009 of a significant portion of Verlagsgruppe Handelsblatt (in particular the main items Handelsblatt and Wirtschaftswoche, Fachverlag der Verlagsgruppe Handelsblatt as well as iq media marketing GmbH) and the Tagesspiegel Group. The effect of these portfolio changes on the group’s consolidated revenue amounted to approximately EUR 239m in 2009. The regional newspapers fully consolidated in fiscal 2009 and the ZEIT Group sustained negative organic growth in revenue of 4.1%, which stemmed first and foremost from a decline in the advertising business. However, the newspapers and magazines business field recorded marginal growth in revenue from sales, even recording substantial growth in the logistics business of the regional newspapers due to portfolio effects. With significant cost savings, the newspapers and magazines business field made a further major contribution to a satisfactory result in the year 2009, which was marked by economic crisis.
With organic growth of 27.2%, digital media accounted for a major portion of the group’s organic growth again in 2009. Because of the sale as of 1 July 2009 of the equity investment in the Dutch online retailer bol.com, the revenue of the digital media business field fell considerably by approximately EUR 113m over the period of an entire year compared with fiscal 2008, amounting to 7.4% of the group’s consolidated revenue in 2009. With noticeable progress in marketing, range development and the product range as well as with a more efficient cost structure, digital media combined growth with a marked improvement in the operating result in the past fiscal year. The e-commerce platforms and social networks were the main contributory factors. Marketing, range extension, product development and cost management will remain key factors for further success in 2010.
