Bastei Lübbe AG publishes 2015/2016 annual report after change in scope of consolidation

Bastei Lübbe AG publishes 2015/2016 annual report after change in scope of consolidation

Cologne, 19 October 2016. Bastei Lübbe AG (ISIN DE000A1X3YY0), which is listed in the Prime Standard of the Frankfurt Stock Exchange, today published its 2015/2016 annual report containing the restated results for the 2015/2016 financial year.

As announced in the ad hoc notification on 23 August 2016, Bastei Lübbe AG found itself compelled to amend the 2015/2016 consolidated financial statements that had already been audited and published on 29 June 2016 to reflect a change in assessment by the audit firm KPMG. The British company Blue Sky Tech Ventures, in which Bastei Lübbe AG holds no shares, and hence also oolipo AG and Daedalic Entertainment GmbH were required to be retrospectively included in the scope of consolidation and measured using the historical cost principle.

Slight downturn in revenue, earnings and margins
Consolidated revenue amounted to EUR 104.9 million in the 2015/2016 financial year after EUR 110.2 million in the previous year. Bastei Lübbe AG contributed EUR 94.7 million (previous year: EUR 102.8 million) to consolidated revenue, while its subsidiaries Daedalic
Entertainment GmbH contributed EUR 7.8 million (previous year: EUR 6.0 million), oolipo AG contributed EUR 0.3 million (previous year: EUR 0.2 million), BookRix GmbH & Co. KG contributed EUR 2.4 million (previous year: EUR 1.2 million) and BEAM Shop GmbH, which was formed 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); "Non-Book": EUR 17.0 million (previous year: EUR 14.5 million), "Novel Booklets and Puzzle Magazines": EUR 9.8 million (previous year: EUR 10.5 million), and "Digital": EUR 29.7 million (previous year: EUR 28.8 million). "The revenue growth throughout the 'Digital' segment clearly demonstrates the success of our digital strategy. At the end of the 2015/2016 financial year, digital products and content already accounted for 28.3% of revenue after 26.1% in the previous year," commented Thomas Schierack, CEO of Bastei Lübbe AG.

Due to the loss of profit from the transitional consolidation and re-evaluation conducted in the course of the retroactive amendment to the group of consolidated companies and consolidated annual financial statement, the consolidated profit reduced: Consolidated earnings before interest, taxes, depreciation and amortisation (Group EBITDA) amounted to
EUR 6.7 million in the 2015/2016 financial year compared with EUR 10.4 million in the previous year. The adjustment meant that Group earnings in the 2014/2015 and 2015/2016 financial years was EUR 7.2 million and EUR 7.9 million lower respectively. All profit figures of the Bastei Lübbe Group are influenced by unplanned expenditure - beyond the corrections to the participation evaluation. This includes the loss on the deconsolidation of PRÄSENTA PROMOTION INTERNATIONAL GmbH, additional costs associated with the consolidation of Blue Sky Tech Ventures and expenses for the severance payment etc. for the departed Management Board members totalling around EUR 3.1 million. Following the change in measurement, the net profit of the Bastei Lübbe Group for the 2015/2016 financial year amounted to EUR -0.3 million after EUR 3.0 million in the previous year.

Growth with investments in digital companies

The activities of the Bastei Lübbe Group in the past financial year focused on digital content, and especially the investments initiated in this context. Positive performance was recorded in particular by the investment in the self-publishing platform BookRix, which doubled its revenue and is already profitable. BookRix gives Bastei Lübbe rapid access to proven digital content from established successful authors. "One example is Poppy Anderson, an extremely successful self-published digital author with whom we are pleased to now also be developing physical products," noted Schierack.

Germany's leading digital games developer, Daedalic Entertainment, also demonstrated how well its strategic positioning in the adventure games segment fits the portfolio and successful content of Bastei Lübbe AG. In the next four years, Daedalic is planning a considerable expansion of its activities in the development and sale of adventure games across all major games markets.

One important element of the path towards becoming an international digital media company is based, among other things, on the success of the serial and streaming platform oolipo, which is perfectly complemented by the distribution channel beam-ebooks.de, an online store that was acquired in the previous year. The beta version of the oolipo app has been available from the Apple Store since August 2016. Bastei Lübbe is reflecting the high standards and changed reading habits of its customers with short serial content.

A forward-looking company with strong traditional roots
"As one of Germany's largest trade publishers with a long history, we not only address future topics such as digitalisation, but are also committed to the printed word. The further development of the value chain in publishing would be inconceivable without bricks-and-mortar retail," explained Thomas Schierack. With the majority interest in BuchPartner, Bastei Lübbe has secured another option for generating sustainable growth in this area in future.

Balance sheet
As of 31 March 2016, total assets amounted to EUR 111.8 million after EUR 117.2 million as of 31 March 2015. The share of equity attributable to the shareholders of the parent company decreased to EUR 46.6 million at the end of the reporting period in 2016 (31 March 2015: EUR 50.8 million). Including own capital contributions of minority shareholders, the equity ratio amounted to 44.4% as of 31 March 2016 after 45.6% 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 0.6 million after EUR 13.7 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 in a position to meet its payment obligations at all times.

Dividend proposal for the 2015/2016 financial year
The goal of Bastei Lübbe AG is to maintain the continuity of its dividend policy despite the temporary downturn in earnings. As planned, 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 30 November 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 2.51 million. The remainder of EUR 1.19 million is to be carried forward to new account.

Outlook
The 2016/2017 financial year will again be strongly characterised by the transition to an international media company. The digital share of revenue will be driven in particular by the
significant expansion of the business area of Daedalic Entertainment GmbH and the launch of the streaming platform oolipo.

The Management Board expects consolidated revenue to increase significantly to EUR 150-160 million in the 2016/2017 financial year before continuing on this growth path to around EUR 190-200 million over the next two financial years. This is due to the consolidation of BuchPartner GmbH, as well as revenue growth at Bastei Lübbe AG resulting from the publication of various blockbusters in the 2017/2018 financial year. EBITDA in the 2016/2017 financial year is expected to increase substantially compared with the past financial year to EUR 13-15 million. Overall, the Management Board is anticipating positive performance in the current financial year and especially in subsequent financial years.

The full annual report for the 2015/2016 financial year is available on Bastei Lübbe AG's website 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 413 employees and an annual turnover of roughly EUR 104.9 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