Bastei Lübbe AG undertakes unscheduled write-downs and adjusts earnings forecast

Ad hoc disclosure in accordance with section 17 MAR

Bastei Lübbe AG undertakes unscheduled write-downs and adjusts earnings forecast

Cologne, February 1, 2018. Bastei Lübbe AG will undertake unscheduled write-downs totaling approximately EUR 7 million retroactively to the third quarter of the current financial year 2017/2018. This step is subject to an impairment test carried out due to the current business developments and further expectations of unscheduled write-downs at the associated company BuchPartner GmbH and its subsidiaries Bastei Media, BookRix and BEAM Shop.

The non-cash write-downs on the investments mentioned above will extraordinarily impact the EBIT in the third quarter of the current financial year. Furthermore, the Management Board considers it necessary to reassess the impairment of capitalized author fees as part of the adjustment of balance sheet risks in the current financial year. This will presumably also result in an additional write-down of around EUR 4 - 5 million in the third quarter of the current financial year 2017/2018. In total, the non-cash effects mentioned above will lead to an additional impact of earnings of around EUR 11 - 12 million in the financial year 2017/2018.

According to preliminary calculations, consolidated revenues in the period from April 1 to December 31, 2017, at around EUR 113 million, were down on the previous year's figure of EUR 116.02 million. In addition to a general weakness in sales in the field of fiction, the revenues clearly below expectations result in particular from significant declines in sales at BuchPartner GmbH and too ambitious planning. Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) according to initial calculations amounted to around EUR 5 million in the period under review, compared with EUR 9.3 million in the previous year. Consolidated earnings before interest and taxes (EBIT) declined to around EUR -9 million after EUR 5.7 million in the previous year as a result of the additional impairment losses.

Taking into account the non-scheduled write-downs including impairment losses in the area of capitalized royalties for authors and on the basis of the 9-month figures, being below expectations particularly in the Retail segment, the Management Board assumes that the originally envisaged revenue and earnings targets for the 2017/2018 financial year cannot be achieved. Based on the current state of knowledge, the Management Board now expects revenues of around EUR 140 million (previously: around EUR 160 million), EBITDA of around EUR 5 million (previously: at least EUR 14 million) and negative EBIT of around EUR 11 million for the current financial year.

In order to sustainably increase the core business, the Management Board launched a comprehensive efficiency enhancement program at the end of January. In the next nine months, the publishing programs, marketing, sales, and processes will be comprehensively reviewed. The full interim announcement for the third quarter of 2017/2018 will be available on February 21, 2018, at https://www.luebbe.com/en/investor-relations/financial-reports.

Contact Bastei Lübbe AG:
Barbara Fischer
Head of Press and Public Relations
Tel.: 0221 / 82 00 28 50
E-Mail: barbara.fischer@luebbe.de