Interim Report 1999
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INTERIM REPORT 1999 1st January, 1999 until 30th June, 1999 GROUP KEY DATA INTERIM REPORT GROUP AND AXEL SPRINGER VERLAG AG 1st half 1st half Axel Springer Verlag can look back on a successful half-year to 30th June DM million 1999 1998 1999. Despite persistently difficult trading conditions in the retail market Sales 2,496 2,311 and increased expenditure on the titles of the company, the consolidated Change (%) 8.0 4.0 operating profit increased to DM 232 million. On the basis of current Results estimates the Board of Management expects this trend to continue during Net profit 144 129 Return on sales 5.8 5.6 the second half of the year. Consolidated operating profit 232 227 of total advertising expenditure went to Balance sheet television, which accounted for DM 6.6 Balance sheet total 3,112 2,884 billion (5.8 percent up on the previous Fixed assets 1,451 1,319 year). Print media advertising (excluding Fixed asset cover (%) 70.2 65.7 classified ads) grew by 5.2 percent to Liquid assets 762 759 DM 7.5 billion. Newspapers increased Shareholders' equity BUSINESS ENVIRONMENT their advertising revenues by 7.3 percent. (excl. retained profits) 1,019 866 As a percentage of total assets 32.7 30.0 In the first half of 1999 the German Sales of classified advertising also showed Long-term liabilities 186 224 economy showed modest growth, with encouraging growth. This was mainly an increase of 1.1 percent in GDP. The due to the higher volume of advertise- Capital expenditure 133 122 growth in private consumption during ments for jobs and motor vehicles and in- Depreciation 84 106 this period was minimal. However, rising creased placements by national advertisers. disposable incomes are expected to gen- Share erate an increase in private consumption The gross advertising revenues of consum- Share price on 30th June (Euro) 970 680 during the second half of the year. For er magazines increased by 4.1 percent compared with the first half of the pre- Average no. of employees 12,382 12,024 the year as a whole GDP is expected to grow by 1.3 percent. vious year. The principal beneficiaries were titles aimed at devotees of the arts, The business trend in the German ad- nature and science (+14.5 percent), with vertising industry in the first six months computer and online magazines showing of 1999 was encouraging. The main- the highest increase overall. Business stream advertising media recorded a year- magazines and women's magazines also on-year increase in gross sales revenue recorded a gratifying growth in advertis- of DM 820 million to DM 15.4 billion ing sales (+13.6 percent and +7.3 percent (+ 5.6 percent). A substantial proportion respectively). 1 By contrast, demand in the retail sector THE COMPANY In the German newspaper market BILD Net paid circulation, was restrained. Compared with the first was able to maintain its strong market IVW, six-monthly average 1999 Axel Springer Verlag continued to per- half of 1998 sales of newspapers and position. Merchandising activities with ILD form successfully during the first half B 4,448,723 magazines declined in volume by some music CDs, consumer advice books and BILD AM SONNTAG 2,537,123 of 1999. Sales revenues rose noticeably. 2 percent, while sales revenues stagnated. video games were further expanded. COMPUTER BILD 1,114,593 The rise in costs was kept within mod- BILDWOCHE 550,978 Circulation of IVW-registered daily and A series of special features recalling erate limits. Sunday newspapers declined by 1.4 per- the history of East and West Germany, DIE WELT 228,821 cent. This was mainly due to the down- The position of existing titles was consol- published to mark the 50th anniversary WELT AM SONNTAG 424,209 ward trend in news-stand sales (–2.7 per- idated and/or improved through targeted of the German Federal Republic, was FINANZEN 83,588 cent). In the general-interest magazine investments in marketing activities and carried in a 4-page pull-out supplement EURO AM SONNTAG 83,404 segment the established TV guides were editorial measures. In order to develop that appeared twice a week. The series HAMBURGER ABENDBLATT 308,646 hard hit by the launch of two budget- a basis for long-term growth the Group's was accompanied by a travelling exhibi- price newcomers. However, the computer leading position in the German print tion in a number of major German cities, BERLINER MORGENPOST 175,140 magazine and business press segments market was strengthened and its activities which attracted more than 77,000 visitors BZ 278,381 defied the general trend and showed in the business field Electronic Media in Hamburg alone when it was shown in BZ AM SONNTAG 152,467 continuing growth. and in foreign media markets were sys- the AXEL SPRINGER PASSAGE. HÖRZU 2,178,507 tematically expanded. FUNK UHR 1,253,890 BILD AM SONNTAG also retained its TV NEU 700,621 The establishment of two new companies leading position as Germany's favourite based in London – Axel Springer Pub- Sunday newspaper. Since mid-March AUTO BILD 824,646 lishing International Ltd. and Axel BILD AM SONNTAG has also been printed SPORT BILD 559,088 Springer TV International Ltd. – was de- on Gran Canaria, which now joins BILD DER FRAU 1,868,765 signed to focus and coordinate the Group's Mallorca as the second major holiday JOURNAL FÜR DIE FRAU 452,022 strategic and operational activities for resort frequented by large numbers of ALLEGRA 222,964 expansion into international markets. Germans where the title is published locally. Early publication and the inclu- FAMILIE & CO 236,834 sion of the latest German football results RUTE & ROLLE 80,451 have further enhanced the appeal of RALLYE RACING 77,620 ILD AM ONNTAG B S for holiday-makers. FOTOMAGAZIN 75,090 TENNIS MAGAZIN 71,707 FLIEGERMAGAZIN 42,735 SAVOIR VIVRE 33,024 AERO INTERNATIONAL 31,606 GOLF SPORT 29,634 FLY AND GLIDE 22,161 2 3 COMPUTER BILD has established itself as In the fiercely competitive Berlin news- The book-publishing houses owned by The growing importance of the electronic the third profitable title within the BILD paper market Axel Springer Verlag suc- Axel Springer Verlag were reorganized. media for Axel Springer Verlag was group. With an average circulation of ceeded in strengthening its position. New So as to survive in a difficult and highly reflected in the appointment of a new 1.1 million copies, COMPUTER BILD now pricing policies, new deals for advertis- competitive market they were grouped member of the Board of Management. ranks as the leading computer magazine ers placing small ads for property and together under the imprint Econ, Ull- in Europe. motor vehicles and the launch of local stein, List in Berlin/Munich and placed To increase its stake in the television production sector Axel Springer Verlag neighbourhood editions of the BERLINER under unified management. In order to DIE WELT has been developed as a acquired in July a 25% interest (with MORGENPOST have already produced acknowledge the historic association of modern, high-quality national news- positive results. Ullstein with Berlin a new publishing retrospective effect from 1st January paper. Following the new editorial unit was formed in the city from an 1999) in Studio Hamburg Produktion concept introduced in November 1998 The HAMBURGER ABENDBLATT developed amalgamation of the imprints Ullstein für Film und Fernsehen GmbH, one of the paper's circulation increased notice- its classified advertising business and Berlin, Propyläen and Quadriga. Germany's foremost TV and film pro- ably during the first half of 1999. The increased its market leadership overall. duction companies. A joint venture agree- high degree of acceptance among new The successful development of the ment was also signed between Studio readers is reflected in the record number In the magazine sector FUNK UHR was Group's international print activities in Hamburg GmbH and the newly founded of visits to the DIE WELT ONLINE website. improved in quality. The main feature of countries such as Spain, Poland and Metropol Film und Fernseh GmbH in the new-look FUNK UHR is an extended Hungary was continued. A majority share- Berlin. In April of this year the first and improved TV and radio section. holding was acquired in the business current affairs magazine program produced publication specialist Handelszeitung by Axel Springer Verlag was launched on SPORT BILD was also overhauled in the EWSMAKER. In spring. From a topical Wednesday maga- und Finanzrundschau AG, Zurich, with SAT 1 under the title N the same month the Group acquired a zine it was transformed into a modern retrospective effect from 1st January majority shareholding in the US pro- sports magazine containing a great deal 1999. Since the beginning of the year duction company GRB Entertainment of background information and a preview Axel Springer Verlag has also owned Inc., the international market leader in of the weekend's sport. a majority share in the Rumanian maga- zine publishing house Axel Springer the production of TV documentaries. FAMILIE & CO defied the general down- Editura SRL, which currently publishes ward market trend and increased its cir- seven women's and general-interest culation. The online edition of FAMILIE titles for the Rumanian market. & CO also received a face-lift to mark its third anniversary. 4 5 Booxtra GmbH & Co. KG was set up Results Despite the high level of capital spend- The following corporate data include for the electronic commerce sector with ing, liquid assets as of 30th June 1999 figures relating to the new activities Despite substantial market investments a 25% investment by Axel Springer stood at DM 762 million, virtually un- initiated during the last twelve months.