Bastei Lübbe AG Releases 2014/2015 Annual Report: Digital Growth Accelerating

Bastei Lübbe AG Releases 2014/2015 Annual Report:
Digital Growth Accelerating

- 2014/15 group revenues rose by 2.5% to 110.2 mn euro (YP: 107.5 mn euro)

- 2014/15 group EBITDA rose by 9.3 % to 17.7 mn euro (YP: 16.2 mn euro)

- Revenue from digital products increased by 21.1% (YP: 14.4%)

- Outlook: consistent expansion of digitalisation - 50% overall share of revenue from digital products forecast by 2018/19

Cologne, 30 June 2015. Bastei Lübbe AG (Frankfurt Stock Exchange/Prime Standard listing code ISIN DE000A1X3YY0) is releasing its 2014/15 Annual Report today. Covering the reporting period from 1 April 2015 to 31 March 2015, the Cologne-based media group is reporting 110.2 mn euro in revenues across its subsidiaries, up from 107.5 mn euro in the year prior. This represents an increase of 2.5% (2.7 mn euro).

Revenues from digital products continued to be a bright spot, rising by 50.3% during the fiscal year to 23.3 mn euro, compared with 15.5 mn euro a year earlier. The positive development underscores Bastei Lübbe's successful strategy of consistent attention to the rapidly expanding digital market. The focus will remain in this area in upcoming years. The share for digital products within Bastei Lübbe's overall revenues has risen significantly in recent years. When digital audio revenues and revenues from the Daedalic Entertainment, BEAM and BookRix subsidiaries are factored in, the figure stands at 21.1% for the 2014/15 fiscal year (YP: 14.4%).

The individual business units delivered the following revenues during the 2014/15 business year: The "Book" unit totalled 79.2 mn euro, below the prior year's level of 85.8 mn euro. This can be attributed to special circumstances from the 2013/14 reporting year, which saw the publication of Dan Brown's best-seller "Inferno". The German-language edition alone has reached in the meantime a circulation of 1.85 million. Sales in the "Non-Book" segment rose significantly during the reporting period to 20.5 mn euro (YP: 11.5 mn euro). The rise in revenue from this unit can be primarily attributed to positive trends from the Räder subsidiary and the first-time consolidation of the Daedalic Entertainment GmbH subsidiary of 6.0 mn euro. Revenues in the "Serialised novels and puzzle magazine" segment rose slightly to 10.5 mn euro (YP: 10.2 mn euro).

The group's Earnings before Interest, Taxes, Depreciation and Amortisation (Group EBITDA) exceeded forecasts, rising by a disproportionate 9.3% to 17.7 mn euro (YP: 16.2 mn euro). Profits during the 2014/15 business year were shaped by both unscheduled earnings and unscheduled expenses, both related to digitalisation and internationalisation. Unscheduled earnings from the sale of a 55% share in BEAM, including a write-up to the shares remaining with Bastei Lübbe (45%) was almost completely offset by significant unexpected expenses such as start-up costs for the integration of new investments, unplanned write-offs, expenses for Artists' Social Welfare Fund, etc.

Group Earnings before Interest and Taxis (Group EBIT) were positive, rising slightly better than forecast to 14.5 mn euro, unchanged year-on-year. All business units contributed to this positive result. As expected, EBIT for the "Book" unit suffered from the Dan Brown effect, falling to 11.7 mn euro (YP: 14.6 mn euro); EBIT for "Non-Book" rose significantly to 1.1 mn euro after losing 1.2 mn euro during the previous period; EBIT for the "Serialised novels and puzzle magazines" climbed by 1.8 mn euro (YP: 1.1 mn euro). Group profits outpaced expectations somewhat during the reporting year, finishing at 10.2 mn euro compared with 8.6 mn euro a year ago. Bastei Lübbe AG shareholder profits for the period rose from 8.6 to 10.6 mn euro. As such, share prices rose to 0.80 euro (YP: 0.75 euro).

The balance sheet totalled 124.3 mn euro on the closing date of 31 March 2015, compared with 107.6 mn euros on 31 March 2014. This roughly 16.8 mn euro rise came primarily through the acquisition and consolidation of the Daedalic Entertainment GmbH and BookRix GmbH & Co. KG subsidiaries and the founding of BEAM GmbH. As at 31 March 2015, shareholder's equity in the parent company attributable to the company's partners had increased to 58.0 mn euro (as at 31 March 2014: 51.5 mn euro). When including equity capital from external shareholders, overall equity capital rose to 48.8% (as at 31 March 2015) from 47.9% on the same day a year earlier. Operative cash flow totalled 6.1 mn euro on the closing date of 31 March 2015, compared with 12.7 mn euros on 31 March 2014. Cash and cash equivalents stood at 13.6 mn euro on the closing date for 2014/15, compared with 22.2 mn euro for the year prior.

Outlook

Thomas Schierack, CEO of Bastei Lübbe AG, notes: "We used all means at our disposal during this fiscal year to expand the digitalisation of our company significantly, both on the national and international level. Although as previously announced the 2014/15 business year was expected to be a bridge and rebuilding year, we nevertheless were able to further accelerate the rate of digital growth and produce positive numbers. We'll continue to invest in the digital area during the ongoing fiscal year as well. This holds true especially for the expansion of our BEAM platform, which specialises in international streaming of short-format and serial content, and in the expansion of the product portfolio at game publisher Daedalic Entertainment GmbH. Our forecasts call for digital content to grow to at least 50% of our overall revenues by the 2018/19 fiscal year."

The Management Board is forecasting a growth of group revenues to almost 115 mn euro for the ongoing 2015/16 fiscal year. Current plans call for increases of at least 10% in the two years thereafter. These prognoses are based primarily on the higher expected revenues from the new "Digital" segment. "By consistently applying our digitalisation strategy, Bastei Lübbe is establishing itself as an international rights holder, rights manager (publisher) and distributor. This kind of cross-market positioning is one of Bastei Lübbe's most effect selling points. No other book publisher is pursuing this as consistently and vigorously at present," Thomas Schierack notes.

This expansion is expected to shift the source of revenues between the various business segments at Bastei Lübbe. From the 2015/16 reporting year, digital books sales, digital audio sales and sales from BookRix and Daedalic will be gathered into a new "Digital" unit. The management team is forecasting that EBITDA during the current reporting period will fall slightly on a year-on-year basis due to continuing necessary investments in BEAM, Daedalic and in the company's own in-house international digital unit.

The full Annual Report can be found online at http://www.luebbe.de/Investor-Relations/_investor_finanzberichte_de.

About Bastei Lübbe AG:
Bastei Lübbe AG is a media company organised around its publishing venture. The Cologne-based company currently has around 335 employees. It publishes books, audio books, ebooks and digital products in both the literary and popular science genres, as well as serialised novels and puzzle magazines. Bastei Lübbe is also actively involved in brand licensing and the development, production and distribution of gift, decoration and merchandising articles. Bastei Lübbe has for many years enjoyed an almost unbroken streak as the market leader in the growing segment of hard-cover literature and since 2013 comes in first or second place in the area of e-books. 2013 saw the company's 60th anniversary celebration and its launch as a publicly traded company. Shares of Bastei Lübbe AG are listed in the Prime Standard segment of the Frankfurt Stock Exchange (WKN A1X3YY, ISIN DE000A1X3YY0).

Contact for Bastei Lübbe AG:
Barbara Fischer
Director of PR and
Event Marketing
Tel.: +49 (0) 221 / 82 00 28 50
Email: barbara.fischer@luebbe.de