Bastei Lübbe sees growth strategy confirmed and expands in a challenging market environment with digital products and community models – increase in revenues to EUR 100 million

Bastei Lübbe sees growth strategy confirmed and expands in a challenging market environment with digital products and community models – increase in revenues to EUR 100 million
 

• Revenues and earnings forecast exceeded in the 2022/2023 financial year
• 5.8 percent increase in Group revenues to EUR 100.0 million
• Decline in Group EBIT to EUR 7.2 million due to one-off impairments and higher costs
• Operating earnings margin before non-recurring effects at 9.9 percent
• Dividend of 16 cents per share proposed
• Favourable outlook: further growth with improved profitability expected for the 2023/2024 financial year

 
Cologne, 11 July 2023. Bastei Lübbe AG, a company listed in the Prime Standard of the Frankfurt Stock Exchange, published its audited figures for its 2022/2023 financial year today. Despite a challenging macroeconomic environment characterised by high inflation, mounting consumer restraint and the impact of the Russian attack on Ukraine, it succeeded in boosting its revenues by EUR 5.5 million to EUR 100.0 million euros (previous year: EUR 94.5 million). As a result, Bastei Lübbe exceeded the forecast of EUR 90 to 95 million that it had adjusted in the autumn. The main growth drivers were the community-driven imprint LYX and the audio book label Lübbe Audio.

Group EBIT also developed better than recently expected, reaching EUR 7.2 million (previous year: EUR 14.7 million) particularly as a result of the impairment of EUR 2.7 million recognised on the subsidiary smarticular as well as higher material and personnel costs. This translates into an EBIT margin of 7.2 percent (previous year: 15.5 percent). The forecast, which had been revised in November 2022 and confirmed in February 2023, provided for Group EBIT in a range of EUR 6.0 to 7.0 million. Adjusted for the non-recurring effects, the operating earnings margin would have stood at 9.9 percent.

“Despite the very challenging environment, we were able to increase our revenues and achieve very good operating earnings. In particular, our digital products and community-driven business were able to more than make up for various negative effects. This confirms our growth strategy, encouraging us to seize new business options progressively and with a sense of curiosity in addition to our extremely attractive publishing programme and to warmly embrace the new digital technologies of the future again and again,” says Soheil Dastyari, CEO of Bastei Lübbe AG, commenting on the Company’s performance last financial year.

Digital products spurring growth

At EUR 92.8 million, marking an increase of 6.2 percent over the previous year, the Book segment again made the greatest contribution to Group revenues. In particular, the LYX publishing brand, which addresses the New Adults reader group with its programme, recorded growth of 63 percent, while revenues in the audiobook segment were up 16 percent, underpinned by the strong demand for streamed products. The share of digital business, which was disproportionately large by industry standards, held steady at well over 30 per cent on revenues of EUR 31.7 million (previous year: EUR 29.9 million). The portion of revenues attributable to the community-driven business models widened significantly from 24 percent in the previous year to 33 percent. Reflecting the impairment recognised on smarticular as well as higher material, printing and personnel costs, the EBIT of EUR 7.0 million in the Book segment was significantly below the previous year’s figure of EUR 13.9 million, which had been inflated by exceptional effects of EUR 2.6 million.

Revenues in the Novel Booklets segment remained stable, coming to EUR 7.2 million (previous year: EUR 7.1 million). However, EBIT declined to EUR 0.2 million (previous year: EUR 0.8 million) due to disproportionately sharp increases in printing and paper costs.

Profitability dragged down by impairments and higher costs

In particular, the Group revenues of EUR 100.0 million were accompanied by an increase in the cost of materials to EUR 50.8 million (EUR 47.1 million) as well as a planned rise in personnel expenses from EUR 18.7 million to EUR 20.2 million. Other operating expenses climbed in the year under review by EUR 2.1 million to EUR 18.6 million, primarily as a result of higher marketing and advertising costs. Amortisation and depreciation rose from EUR 2.7 million in the previous year to EUR 5.4 million in the year under review due to the impairments of EUR 2.7 million recognised in connection with smarticular.

Group operating earnings (EBIT) thus fell to EUR 7.2 million in the 2022/2023 financial year, down from EUR 14.7 million in the previous year. Group earnings before taxes came to EUR 6.8 million in the year under review (previous year: EUR 14.8 million). After income taxes of EUR 2.8 million (previous year: EUR 3.8 million), Group net profit for the period reached EUR 4.0 million (previous year: EUR 11.0 million). Of this, EUR 3.9 million (previous year: EUR 11.0 million) is attributable to the equity holders of Bastei Lübbe AG. This translates into earnings per share of EUR 0.30, compared with EUR 0.83 in the previous year.

Cash flow from operating activities dropped from EUR 12.8 million in the previous year to EUR 10.4 million in the year under review. At EUR 9.7 million, free cash flow (cash flow from operating activities plus cash flow from investing activities) fell slightly short of the previous year (EUR 10.1 million) but was well above the forecast of EUR 4 to 5 million.

There were hardly any changes in the Group’s net assets in the year under review. At EUR 56.1 million, non-current assets were virtually unchanged, compared with EUR 56.6 million as of 31 March 2022. Impairments of EUR 2.7 million were recognised on assets attributable to smarticular, while author advances increased from EUR 20.1 million to EUR 23.9 million. Total assets stood at EUR 77.5 million at the end of the 2022/2023 financial year (previous year: EUR 73.3 million). At EUR 54.8 million (previous year: EUR 56.1 million), the proportion of equity attributable to the equity holders of the parent company resulted in an equity ratio of 51.0 percent (previous year: EUR 54.0 percent).

“The Bastei Lübbe Group is financially very well positioned for further growth. The impairment recognised on smarticular and the comprehensive measures to reposition this imprint will help us to restore our profitability. The encouraging free cash flow in the past financial year testifies to the resilience of the Group’s business,” adds Joachim Herbst, CFO of Bastei Lübbe. Joachim Herbst will be leaving the Company this month. Mathis Gerkensmeyer has been appointed as his successor with effect from 1 September 2023.

Dividend of 16 cents proposed

The Executive Board and the Supervisory Board will be asking the shareholders to approve the distribution of a dividend of 16 cents per share for the past financial year, equivalent to 48% of the distributable profit and thus at the top end of the guidance issued (40 to 50 percent).

Further growth planned with increased profitability

Bastei Lübbe is very confident about the 2023/2024 financial year. It will be publishing new books by several SPIEGEL top-selling authors in the autumn, including the new novel by Ken Follett and another thriller by the successful duo Dirk Rossmann and Ralf Hoppe. In the children’s and young people segment, top-selling US author Jeff Kinney will be releasing the 18th volume of his internationally successful “Diaries of a Wimpy Kid” series. At LYX, number 1 bestselling authors Mona Kasten, Laura Kneidl, Ava Reed, Sarah Sprinz and Lena Kiefer will be publishing new titles. Among other things, Community Editions has announced new publications by Paluten, Arazhul and Viktoria Sarina. In the audiobook sector, growth is to be spurred with the addition of further production capacities.

“The Bastei Lübbe Group is synonymous with core publishing competences and operates in a consistently attractive entertainment market. Under our strategy, we will be expanding our digital publishing skills in a targeted manner and continuously optimising the technology underlying our processes and workflows. The Group already boasts what by industry standards is a disproportionately large share of digital business and a steadily widening proportion of community-driven business models,” continues Dastyari. “With popular ideas and products that are as personal as possible, we want to address readers of all target groups and arouse their interest in our imprints and their content. In this way, we will continue our Company’s success story.”

The Executive Board projects revenues of between EUR 100 and 105 million for the 2023/2024 financial year. Of this, the Book segment should account for revenues of between EUR 93 and 98 million (year under review: EUR 92.8 million) and the Novel Booklets segment roughly EUR 7.0 million (year under review: EUR 7.2 million). Group EBIT in the 2023/2024 financial year is expected in a range of EUR 9.0 to 10.0 million despite investments in further digital tools and processes, which would correspond to an EBIT margin of between 9 percent and 10 percent. The target EBIT for the Book segment is between EUR 8.6 and 9.6 million (year under review: EUR 7.0 million), translating into an EBIT margin of 9 to 10 percent. EBIT in the Novel Booklets segment should come in at around EUR 0.4 million (year under review: EUR 0.2 million).

Bastei Lübbe AG’s annual report for the 2022/2023 financial year is available at www.bastei-luebbe.de.

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 e-books 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 e-books among other things.

With annual revenues of around EUR 100 million (2022/2023 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.bastei-luebbe.de.

Contact Bastei Lübbe AG:

Barbara Fischer
Head of Press and Public Relations
Phone: +49 (0)221 8200 2850
E-Mail:barbara.fischer@luebbe.de