Bastei Lübbe AG publishes 2015/2016 annual report: Transition to a digital media company makes good progress

Bastei Lübbe AG publishes 2015/2016 annual report:
Transition to a digital media company makes good progress

Cologne, 29 June 2016. Bastei Lübbe AG (ISIN DE000A1X3YY0), which is listed in the Prime Standard of the Frankfurt Stock Exchange, has published its 2015/2016 annual report today. The Management Board considers the past financial year a successful intermediate step on the path towards becoming an international digital media company. "As expected, a transitional financial year with solid results is now behind us. At the same time, we have made great strategic progress within this period," said Thomas Schierack, CEO of Bastei Lübbe AG.

This applies in particular to the company's transition to a digital media company, which was initiated a long time ago: "As one of the largest German trade publishers with a long history, we are aware of our roots. But we are also openly looking ahead for new things and consistently implementing opportunities. Our digital strategy has a strong basis. We have laid the foundations by taking over Daedalic Entertainment and BookRix. We successfully developed our acquisitions in the year under review and we are now in the position to increasingly use our publishing content across various media in the sense of a 360-degree exploitation strategy," said Thomas Schierack. The investment in the self-publishing platform BookRix, which doubled its revenue in the year under review and is already profitable, developed positively. In addition, Bastei Lübbe secured further options with the streaming platform oolipo and the majority investment in BuchPartner to ensure sustainable growth in future.

Revenue performance
Group revenue amounted to EUR 102.5 million in the financial year after EUR 110.2 million in the previous year. Bastei Lübbe AG contributed EUR 96.7 million (previous year: EUR 102.7 million) to consolidated revenue, while its subsidiaries Daedalic Entertainment GmbH contributed EUR 3.3 million (after EUR 6.0 million in the previous year) until its withdrawal from the group of fully consolidated companies, BookRix GmbH & Co. KG contributed EUR 2.4 million (EUR 1.2 million in the previous year) and BEAM Shop GmbH, which was founded in September 2015, contributed EUR 0.1 million. At segment level, revenue developed as follows: "Book": EUR 48.3 million (previous year: EUR 56.5 million); "Digital": EUR 26.4 million (previous year: EUR 28.8 million), "Non-Book": EUR 17.0 million (previous year: EUR 14.5 million), "Novel Booklets and Puzzle Magazines": EUR 10.8 million (previous year: EUR 10.5 million). The decline in revenue in the "Book" segment is due mainly to the overall decrease in physical revenue across Germany in addition to the fact that in the 2014/2015 financial year, higher revenue was generated in the Christmas business compared to the 2015/2016 financial year, especially in the hardcover area and as a result of Ken Follett's bestseller "Edge of Eternity", among other things. The jump in revenue in the "Non-Book" segment is primarily the result of positive performance in the area of the gift item company Räder. Bastei Lübbe launched a new segment at the start of the past financial year to accommodate the growing significance of the digital business. In addition to Bastei Lübbe AG's digital revenue (e-books and audio), the "Digital" segment comprises the investment in Daedalic Entertainment GmbH up to 17 September 2015 and the majority investments in BookRix GmbH & Co. KG and BEAM Shop GmbH. The drop in revenue in the "Digital" segment is also due to the fact that Daedalic's revenue was consolidated in this segment only for the months of April to mid-September 2015.

Earnings performance
In the 2015/2016 financial year, Group EBITDA developed according to plan and amounted to EUR 14.9 million after EUR 17.7 million in the previous year. The "Book" segment contributed EUR 2.1 million to this amount (previous year: EUR 5.4 million), with the "Digital" segment contributing EUR 8.7 million (previous year: EUR 8.4 million), the "Non-Book" segment contributing EUR 1.4 million (previous year: EUR 1.9 million) and the "Novel Booklets and Puzzle Magazines" segment contributing EUR 2.7 million (previous year: EUR 1.9 million) to this amount. "In the year under review, our task was to further develop the "Digital" growth area. In this respect, we consider the rise in profits and margins in this segment as evidence of our digital strategy's success. In particular, the share of revenue with digital products and content amounted to 25.7% at the end of the 2015/2016 financial year," said Schierack. Overall, Bastei Lübbe generated consolidated net profit for the period of EUR 7.9 million in the 2015/2016 financial year after EUR 10.2 million in the previous year. Bastei Lübbe shareholders accounted for EUR 7.9 million after EUR 10.6 million in the previous year. On this basis, earnings per share amounted to EUR 0.60 in the year under review as against EUR 0.80 in the 2014/2015 financial year.

Balance sheet
As of 31 March 2016, total assets amounted to EUR 117.8 million after EUR 124.3 million as of 31 March 2015. The share of equity attributable to the shareholders of the parent company increased to EUR 62.0 million at the end of the reporting period in 2016 (31 March 2015: EUR 58.0 million). Including non-controlling interests, the equity ratio amounted to 52.6% as of 31 March 2016 after 48.8% as of 31 March 2015. Due to a high level of funds allocated to working capital, further high investments, particularly in intangible assets, and the dividend payment to shareholders, cash and cash equivalents significantly decreased in the 2015/2016 financial year. As of 31 March 2016, cash and cash equivalents amounted to EUR 0.3 million after EUR 13.6 million in the previous year. As a result of the acquisition of BuchPartner GmbH and LYX, the loan portfolio at Bastei Lübbe AG's disposal rose to EUR 53 million after the end of the reporting period within the context of a syndicated loan with a term of six years. The Bastei Lübbe Group therefore continues to have a stable financial and liquidity structure and is always in a position to meet its payment obligations.

Dividend proposal for the 2015/2016 financial year
This year, Bastei Lübbe AG would again like its shareholders to participate in the positive business performance of the past financial year. The Management Board and the Supervisory Board will propose the payment of a dividend of EUR 0.10 per share at the Annual General Meeting on 15 September 2016. Taking into account the treasury shares that are not entitled to the dividend, this corresponds to a distribution of EUR 1.32 million. The 2015/2016 annual financial statements of Bastei Lübbe AG prepared in accordance with German commercial law, on which the resolution on the dividend to be distributed is based, report net retained profits of EUR 7.93 million. The remainder of EUR 6.61 million is to be carried forward to new account.

With this temporarily reduced dividend compared to the previous year, the company is taking two things into account at the same time: firstly, the strategic aspiration to continuously and appropriately involve shareholders in the company's success as a value-oriented company, and secondly, the objective of kick-starting and initiating the Group's major promising projects using targeted investments. The goal of Bastei Lübbe AG is still a shareholder-friendly dividend policy geared to continuity that makes provisions for paying out an appropriate proportion of the eligible net income for the year to its shareholders. A requirement for this is that such dividend payments are compatible with long-term and sustainable business performance.

Outlook
The 2016/2017 financial year will also be strongly characterised by the transition to an international media company. The digital share of revenue will be driven by the significant expansion of the business area of Daedalic Entertainment GmbH and the launch of the streaming platform oolipo AG in the autumn of this year, which are both key steps in the future for the digital area. The series platform oolipo for streaming content is developing according to plan. The first beta version is expected in the next few weeks. As planned, the launch will take place in the autumn of 2016. In the new financial year, Daedalic Entertainment GmbH will be fully consolidated again from 1 April 2016 since Bastei Lübbe AG has concluded a voting agreement with the shareholders of Daedalic Entertainment GmbH and the company Blue Sky Tech Ventures Limited that hold an interest of 3% or more. In addition, the majority investment in BuchPartner GmbH will also be fully consolidated from 1 April 2016.

Taking into account new acquisitions and the full consolidation of investments in BuchPartner GmbH, BookRix GmbH & Co. KG, Daedalic Entertainment GmbH and BEAM Shop GmbH, the Management Board anticipates a rise in consolidated revenue between EUR 160 million and EUR 165 million for the 2016/2017 financial year. In the next two financial years, revenue is set to increase to around EUR 200 million. This is also due to higher digital revenue, particularly from Daedalic Entertainment GmbH, and a strong rise in revenue at Bastei Lübbe AG as a result of the publication of various blockbusters in the 2017/2018 financial year. In the 2016/2017 financial year, EBITDA is expected to move slightly below EBITDA of the past financial year, firstly as a result of expected losses due to the launch of oolipo AG and secondly as a result of further necessary investments in the digital area. From today's perspective, the forecast rise in revenue will go hand-in-hand with an anticipated rise in EBITDA by more than 50% in the 2017/2018 financial year as against the 2016/2017 financial year. This is attributable primarily to blockbusters in the "Book" segment and the expected increase in the investments' operating earnings. Overall, the Management Board anticipates positive performance in the current financial year and in subsequent financial years in particular.

The full annual report is available online at https://www.luebbe.com/en/investor-relations/financial-reports.

About Bastei Lübbe AG:
Bastei Lübbe AG is an international media group based in Cologne. Its business operations focus on developing and licensing content distributed worldwide physically and digitally. The company's core business includes the traditional publishing business and the periodical puzzle magazines and novel booklets in the "Book" segment. With its twelve publishers and imprints, the group of companies currently offers approximately 3,600 titles in fiction, non-fiction and books for children and young adults. In the growing segment of hardcover fiction, the company has been the market leader in Germany for many years. At the same time, Bastei Lübbe is driving innovation in the field of digital media. As well as the production of thousands of audio and e-books, the "Digital" segment also includes holdings in the self-publishing platform "BookRix" and the renowned games publisher "Daedalic Entertainment". Bastei Lübbe AG's value chain is completed by the investment in the online shop "beam-ebooks.de" and the new and internationally unique streaming platform "oolipo".
With currently 334 employees and an annual turnover of roughly EUR 102.5 million (financial year 2015/2016), Bastei Lübbe AG is the largest medium-sized family company in the German publishing industry. Since 2013, the company's shares have been listed in the Prime Standard of the Frankfurt Stock Exchange (WKN A1X3YY, ISIN DE000A1X3YY0). Further information is available at www.luebbe.de.

Contact Bastei Lübbe AG:
Barbara Fischer
Director / Vice President
Public Relations
Tel.: +49 (0) 221 / 82 00 28 50
E-mail: barbara.fischer@luebbe.de