Bastei Lübbe AG falls short of earnings expectations according to provisional calculations in the 2016/2017 financial year

DGAP-News: Bastei Lübbe AG / Key word(s): Profit Warning

23.06.2017 / 15:30
The issuer is solely responsible for the content of this announcement.

Bastei Lübbe AG falls short of earnings expectations according to
provisional calculations in the 2016/2017 financial year

Cologne, 23 June 2017 - Bastei Lübbe AG (ISIN DE000A1X3YY0), which is listed in the Prime Standard of the Frankfurt Stock Exchange, is set to close the 2016/2017 financial year with lower-than-expected earnings (EBITDA). While preparing the consolidated financial statements, the company came to EBITDA of approx. EUR 5 million according to provisional calculations. The Group earnings are thus considerably below the expected EUR 13 to 15 million. There are several reasons for this decline, particularly one-time items. Besides a weaker fourth quarter (January to March 2017), the final purchase price allocation for the majority in Buchpartner GmbH acquired in spring 2016 had a higher than expected negative effect. Finally, the Management Board assesses the value of capitalized royalties newly, which has led to an extraordinary reduction in value. "The latter two points are classic one-time items. Neither of them affects cash flow, but they severely diminish our earnings in the IFRS statement of financial position," explains Thomas Schierack, CEO of Bastei Lübbe AG.

Alone the earnings effect in relation to royalties burden the EBITDA with EUR 4.1 million. In a nutshell, it relates to the assessment of the future usability of these rights. The Management Board has decided to write off faster in the future so that the first year has an extraordinary effect.

The measurement of the acquisition of Buchpartner GmbH also results in a significant change: In consultation with the Group auditors, the provisional purchase price allocation was revaluated as part of the annual financial statements. As a result, there was a EUR 0.5 million higher material expense resulting from the uncovered reserves in the acquired inventories. In the consolidated financial statements, this leads to a one-time effect on EBITDA of EUR -1.5 million, which does not affect cash flow.

There was also an unexpectedly weaker fourth quarter in the "Book" and "Retail" segments with a negative EBITDA effect of around EUR 3 million. "Brick-and-mortar bookselling had been fighting a decline in footfall. This especially affected the major branch book trade with a drop of up to 10%," explains Chief Programme and Sales Executive Board Member Klaus Kluge. For the retail segment, this decline entailed rising return rates both in retail bookselling and especially in the secondary market (food retailing). Both external factors have since been largely resolved.

In addition, in the book segment the lack of sales success for three highly esteemed top titles in hardcover/paperback reduced the success in the final quarter in the financial year.

Consolidated revenue amounted to around EUR 146 million in the 2016/2017 financial year according to provisional calculations.

The consolidated financial statements for the 2016/2017 financial year, including an outlook for 2017/2018, will be published on 31 July 2017 as a result of a significant increase of work in this year's annual audit. The publication of the financial statements was originally planned for 29 June 2017.

The Management Board of Bastei Lübbe AG continues to view the prospects for the current 2017/2018 financial year as positive. This assessment is supported by the already higher than expected preorders from the book trade of Ken Follett's "The Foundations of Eternity and of "Origin" by Dan Brown", which will be released in the autumn. Both blockbusters will provide massive stimulus for sales and earnings in the coming months, flanked by other set top sellers such as 12th volume of the children's book series "Diary of a wimpy kid" by Jeff Kinney and the adventure game "The Pillars of the Earth" based on Ken Folletts world success.

BuchPartner GmbH expanded its share of the sales floor by around 20% as a result of the increase in the number of branch offices in the food retailing.

About Bastei Lübbe AG:

Bastei Lübbe AG is an internationally active media group with headquarters in Cologne. Its business activities primarily focus on the development and licencing of contents which are sold worldwide in physical and digital formats. The core business of the company in the book segment covers classic publishing and periodically published puzzle magazines and novels. With its total of twelve publishing houses and imprints, the company group currently offers around 3,600 titles in the areas of fiction, non-fiction as well as books for children and young adults. In the growing segment of hardcover fiction books, the company has been the market leader in Germany for many years. At the same time, Bastei Lübbe is an engine for innovation in the area of digital media. Apart from the production of thousands of audio and ebooks, the "digital" business unit also maintains participations in the self-publishing platform "BookRix" and the renowned game publisher "Daedalic Entertainment". The digital value-added chain of Bastei Lübbe AG is rounded off through its participation in the online shop "beam-ebooks.de" as well as the new and unique international entertainment platform "oolipo". Since January 2016, the participations in Daedalic Entertainment, BookRix, oolipo, Beam Shop, JV USA and Bastei Media have been bundled in Bastei Ventures GmbH.

Bastei Lübbe AG is the largest medium-sized family-run publishing business in Germany. The shares of the company have been listed in the Prime Standard segment on the Frankfurt stock exchange (WKN A1X3YY, ISIN DE000A1X3YY0) since 2013. Further information is available at www.luebbe.de.

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

23.06.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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