Axel Springer sees weaker profits in 2019

FRANKFURT AM MAIN (AFP) – German news publisher Axel Springer said yesterday it faced a squeeze on profits in 2019, but remained confident thanks to an on-target performance last year and a strong foundation on classified ads.

The house behind big-selling German newspapers Bild and Welt and digital outlets Business Insider and Politico Europe expects “low single-digit percentage” declines in both operating, or underlying, profit and earnings per share despite slightly higher revenues.

Chief Executive Mathias Doepfner said it would be a year to “invest in growth” after Springer “achieved all our targets in 2018 and even exceeded some of them”.

Adjusted net profits at the Berlin-based group rose 2.5 per cent last year, to 335.7 million euros (USD379.6 million).

But in non-adjusted terms, the bottom line plummeted 44.9 per cent, to 208.4 million. Meanwhile adjusted operating profit grew 4.7 per cent, to 527.9 million euros, on the back of revenues that were up 4.1 per cent at almost 3.2 billion.

All of the increase in revenues and profits resulted from stronger performance in the group’s powerhouse classified media division, which operates sites advertising jobs, cars and property around Europe.

Meanwhile, revenues and profits fell at both its news and marketing media units.

That pattern is set to repeat this year, the group said, with rising revenues but flat operating profit in classifieds, while the indicators at both news and marketing continue to shrink.

The group slumped 6.8 per cent to 46.64 euros in early morning trading, putting it at the bottom of Frankfurt’s mid-size MDAX, itself down 0.55 per cent.