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DGAP-News: Bastei Lübbe AG / Key word(s): Annual Results/Annual Report
Bastei Lübbe with significantly higher earnings in the 2021/2022 financial and a sharp increase in its dividend proposal
Cologne, 12 July 2022 – Cologne-based general-interest publisher Bastei Lübbe AG (ISIN DE000A1X3YY0) today announced the figures for its 2021/2022 financial year. Despite the challenging market environment caused by the pandemic and, more recently, inflation and the war in Ukraine, the Group was able to increase its revenues by 1.8 million euros to 94.5 million euros. This marks an increase of 2.0 percent over the previous year’s figure of 92.7 million euros. The successful performance was driven by the attractive publishing programme, the continued high proportion of digital products in total revenues (32 percent) and a further acquisition to expand business with digital communities. Thanks to exceptional effects, Group EBIT grew at a disproportionately strong rate by 3.8 million euros to 14.7 million euros, resulting in an EBIT margin of 15.5 percent, up from 11.7 percent in the previous year. Adjusted for the exceptional effects, operating EBIT rose to EUR 12.1 million, corresponding to a margin of 12.8 percent. However, growing signs of customer restraint started to emerge in the final quarter of the financial year.
“Our performance and encouraging earnings last financial year testify to Bastei Lübbe’s very good position in the German publishing industry. This means that the company is superbly poised for future growth. Together with its successful core business, this growth will increasingly be generated in the digital sector via community-driven business models, ebooks and streaming,” said Soheil Dastyari, CEO of Bastei Lübbe AG, commenting on the past financial year.
Growth achieved in the “Book” segment in particular
The “Book” segment, including CE Community Editions GmbH, which was fully consolidated for the first time, contributing 5.7 million euros to Group revenues, was responsible for the increase in revenues last financial year. The bestsellers “Never” by Ken Follett and “Der Zorn des Oktopus” by Dirk Rossmann and Ralf Hoppe, which were published last financial year, accounted for an appreciable part of this. As expected, Bastei Lübbe AG’s revenues were slightly down on the previous year, one reason for this being the fact that, despite reaching the top of the bestseller lists, the two books did not quite match the extraordinary sales success of the previous year’s best sellers. In the audio sector, the material decline in revenues from physical audio recordings was again made up for by growth in the digital exploitation channels. Cross-segment revenues from ebooks, which had particularly benefited from pandemic-related increases in the previous year, were slightly down for the Bastei Lübbe Group. EBIT in the “Book” segment rose to 13.9 million euros (previous year: 9.7 million euros) and includes the dividend of 1.2 million euros distributed by Räder GmbH and the effects recognised through profit and loss of the repayment of an impaired loan of 1.4 million euros that had been granted to former associate Daedalic Entertainment GmbH (“Daedalic”).
The revenues of 7.1 million euros recorded in the “Novel Booklets” segment came close to the previous year’s figure of 7.2 million euros despite the persistent pandemic-related obstacles. Segment earnings reached 0.8 million euros (previous year: 1.2 million euros).
Encouraging key financial indicators
The Group EBIT of 14.7 million euros is the result of the continued successful focus on publishing content in all playout channels and was up 3.8 million euros or 34.8 percent on the previous year. In the year under review, it included exceptional income of 2.6 million euros, although the equivalent figure for the previous year had also included exceptional income of 1.1 million euros from the settlement with former members of the governance bodies. The EBIT margin rose to 15.5 percent before adjustments for exceptional income. After adjustment, Group EBIT totalled 12.1 million euros, translating into an adjusted EBIT margin of 12.8 percent, well above the medium-term forecast.
The Group’s continued favourable business performance is also reflected in the still stable cash flow of 12.8 million euros from operating activities. As a result, net financial assets (cash and cash equivalents less liabilities to banks) widened from 9.7 million euros to 14.2 million euros as of 31 March 2022 despite the distribution of a dividend and the internally financed acquisition of the 60% interest in CE Community Editions GmbH in the year under review.
At 46.7 million euros, the cost of materials was 2.0 million euros up on the previous year ( 44.6 million euros), mainly as a result of increased printing costs.
Personnel expenses climbed from 17.1 million euros to 18.8 million euros. This is primarily due to the higher number of employees as a result of the full consolidation of CE, higher salaries at Bastei Lübbe AG and the increase in performance-tied salary components and the payment of a “pandemic bonus” at Bastei Lübbe AG.
Group earnings before taxes reached 14.8 million euros in the year under review, exceeding the previous year’s figure of 10.7 million euros by EUR 4.1 million. This translates into earnings per share of 0.83 euros, up from 0.57 euros in the previous year.
The performance of the 20 percent investment in Räder GmbH was also very gratifying as of 31 March 2022. The fair value of this investment increased by 6.3 million euros to 15.1 million euros due to the growth achieved by the Essen-based company for gifts and home accessories. The resultant fair-value remeasurement gains were duly recognised through other comprehensive income within equity.
The share of equity attributable to the shareholders of the parent company increased significantly from 42.5 million euros to 56.1 million euros. As a result, the equity ratio came to 54.0 percent, up 6.7 percentage points on the previous year.
“Last financial year confirmed the Bastei Lübbe Group’s financial strength. Despite the acquisition of the two publishers smarticular and CE Community Editions in the last 18 months, the Group is solid and financially sound. In addition to our strategy for organic growth, we are also able to continue engaging in targeted acquisitions to implement our growth strategy and to expand our community business,” adds Joachim Herbst, Chief Financial Officer of Bastei Lübbe AG.
Dividend of 40 euro-cents proposed
The Executive Board and the Supervisory Board have decided that the shareholders will again participate in the company’s success this year in accordance with its dividend policy. Accordingly, the annual general meeting will be asked to approve a dividend of 40 euro-cents per share, equivalent to an increase of 60 percent over the previous year’s operating dividend of 25 euro-cents per share. Including a bonus dividend, a total of 29 euro-cents per share had been distributed in the previous year. The proposed dividend translates into a payout ratio of 47 percent.
“We are pleased to be able to allow our shareholders to participate in our company’s business success again by offering them an attractive dividend. The increase in the dividend reflects our economic success as well as our position as a dividend-paying stock and our confidence in our growth strategy,” said Dastyari.
Further growth with a digital focus
Bastei Lübbe plans to continue on its present course in the 2022/2023 financial year. However, the macroeconomic environment will have a key bearing on its business. Protracted uncertainty over future pandemic policies and, in particular, the effects of the war of aggression in Ukraine on the economy and energy supplies as well as inflation are already leaving deep traces on consumer confidence.
Bastei Lübbe will continue to rely on attractive content. “Lonely Heart”, the new novel by the best-selling author Mona Kasten, was published under the LYX label in April 2022, encountering great interest in the target group. The accompanying second volume “Fragile Heart” will be published later this year in time for Christmas trading. As well as this, the successful LYX label is offering an attractive programme this year with numerous publications by established popular authors. For September 2022, Lübbe has announced the publication of “Drachenbanner”, the 7th volume of the extremely successful "Waringham Saga" by Rebecca Gablé, by another star author. In the Christmas season, volume 17 of the "Greg's Diary" series by the world's bestselling author Jeff Kinney is expected to be published by Baumhaus.
In the non-fiction sector, the new book by Nobel Peace Prize winner Maria Ressa will be released in November 2022. In April 2022, CE Community Editions GmbH published new titles by the two very successful authors Paluten and Arazhul, both of which shot to the top of the SPIEGEL bestseller lists in their respective categories. The next works by the two authors will be published in November 2022. Lübbe Audio is also expected to continue on its successful trajectory of the past few years.
Looking forward, community publishers will remain an important source of growth, with their share of revenues already reaching 27 percent last financial year. Readers’ close identification with these publishers and their books, combined with direct access to readers, makes it possible to leverage the advantages of digitisation to a greater extent in publishing business. The books and products can be specifically targeted at the readers and marketed digitally. At the same time, direct feedback is often generated within the communities, linking readers, authors and the publisher. For this reason, Bastei Lübbe will be stepping up direct, digital communications with young readers in its publishers’ communities to boost identification with the products and brands as a means of spurring demand. These community models are particularly targeted at young readers but also address theme-based communities that share common interests.
Turning to the current 2022/2023 financial year, the Bastei Lübbe Group is targeting revenues of between EUR 90 and 95 million. This is the same as in the previous year and lower than the original target of 100 million euros due to the muted outlook. Of this, the “Book” segment will contribute 83 - 88 million euros and the “Novel Booklets” segment 7 million euros.
In view of the aforementioned macroeconomic risks, EBIT in the 2022/2023 financial year should reach a figure between 9.5 and 10.5 million euros (year under review: 14.7 million euros; adjusted for exceptional effects: 12.1 million euros). Of this, the “Book” segment will contribute 9.0 to 10.0 million euros and the “Novel Booklets” segment EUR 0.8 million, i.e. unchanged over the previous year. This will translated into a consistently attractive EBIT margin of between 10 and 11 percent, thus confirming Bastei Lübbe’s medium-term forecast. The Executive Board is observing ongoing market trends very closely with regard to inflation, supply chains and other economic and political developments and will update its forecast if necessary.
Bastei Lübbe AG’s full annual report for the 2021/2022 financial year is available on the Internet at https://www.luebbe.com/de/investor-relations/finanzberichte.
About Bastei Lübbe AG:
Bastei Lübbe AG is a German general-interest publisher based in Cologne, specialising in the publication of books, audio books and ebooks featuring fiction and popular science content. The company’s core business also includes the periodically published novel booklets. With a total of fifteen imprints, the group currently offers several thousand titles in the fields of fiction, non-fiction and children’s and young people’s books. In the growing segment of hardcover fiction, the company has been one of the market leaders in Germany for many years. At the same time, Bastei Lübbe is a driver of innovation in digital media and exploitation channels through the production of thousands of audio and ebooks among other things.
With annual revenues of around 95 million euros (2021/2022 financial year), Bastei Lübbe AG is one of the largest medium-sized companies in the German publishing industry. Its shares have been listed in the Prime Standard of the Frankfurt Stock Exchange (WKN A1X3YY, ISIN DE000A1X3YY0) since 2013. Further information can be found at www.luebbe.de.
Contact Bastei Lübbe AG:
12.07.2022 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
Bastei Lübbe AG
Schanzenstraße 6 – 20
02 21 / 82 00 - 0
02 21 / 82 00 - 1900
Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
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