Bastei Lübbe AG: Bastei Lübbe makes impairment losses on the 51 percent financial investment Daedalic Entertainment and plans restructuring

Bastei Lübbe makes impairment losses on the 51 percent financial investment Daedalic Entertainment and plans restructuring

• Weak 3rd quarter requires impairments on subsidiary Daedalic Entertainment
• Business model of the investee company proves to be unsustainable
• Adjustment of the Group forecast
• No effect on the core operating business and liquidity of Bastei Lübbe

Cologne, 06 February 2020 - The listed company Bastei Lübbe AG has to carry out impairment losses on its investment in Daedalic Entertainment in the amount of EUR 12 - 14 million, of which EUR 5 million is attributable to goodwill. Bastei Lübbe's share in the subsidiary amounts to 51 percent. Due to the weak business development in the Games segment, the Group is reducing its forecast for the year. The Management Board is therefore examining options for restructuring and realigning the business model in the Games segment, the smallest segment of the Group. The background to these measures is the business development in the third quarter of the 2019/2020 financial year and high investments in a new proprietary development of Daedalic Entertainment, which was not accepted by the market. Thus, the previous business model is proving to be unsustainable.

"The business model of our 51 percent financial participation is proving to be unsustainable. Together with the minority shareholder, we will therefore now examine all options for a repositioning of Daedalic Entertainment and its business model", Carel Halff, CEO of Bastei Lübbe AG, explains the measures introduced. "In contrast, we are very much at peace with the development of our core business, books, audio books and novels," Halff continues.

No effect on Bastei Lübbe's core operating business and financial position
Daedalic Entertainment develops and distributes computer games. The business development puts a strain on the financial situation of the games expert and leads to the fact that the available borrowed capital for further investments is almost exhausted. In addition, impairment losses must be recognised on the games portfolio. As a result of the reduced business expectations, Bastei Lübbe must also carry out impairment losses in the context of goodwill impairment. Accordingly, the Group is reducing its outlook for the current fiscal year.

According to current estimates, the Management Board of Bastei Lübbe AG currently expects a significant decline in Group EBIT for the current financial year 2019/2020 compared to the previous forecast, which is now expected to be between EUR -10.5 million and EUR -6.7 million (previously: EUR 3.5 - 5.3 million).

The aforementioned reduced forecast for Bastei Lübbe AG's consolidated EBIT for the current 2019/2020 financial year will continue to be reviewed by the Management Board on an ongoing basis, in particular also taking into account the examination of options for restructuring and realignment of the business model in the Games segment, and will be adjusted and published again if necessary. The impairment losses on intangible assets required in this respect - both internally generated computer games and the goodwill of Daedalic Entertainment GmbH recognised in the balance sheet - have no effect on the core business with books, audio books and novels or on the liquidity of Bastei Lübbe.

The figures for the 3rd quarter will be published on 13 February 2020.
 

About Bastei Lübbe AG:

Bastei Lübbe AG is a German publishing house with headquarters in Cologne specialised in the publication of books, audio books and e-books with fiction and popular science content. The company's core business also includes the periodically published puzzle magazines and novel magazines. With its total of twelve publishing houses and imprints, the Bastei Lübbe group of companies 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 one of the market leaders in Germany for many years. At the same time, Bastei Lübbe is an engine for innovation in the area of digital media and distribution channels, among other things by the production of thousands of audio and eBooks. This includes the stake in the game publisher "Daedalic Entertainment".
With annual sales of approx. EUR 95 million (financial year 2018/2019), Bastei Lübbe AG is one of the largest medium-sized publishing companies in Germany. The shares of the company have been listed in the Prime Standard segment on the Frankfurt stock exchange (GSIN A1X3YY, ISIN DE000A1X3YY0) since 2013. Further information is available at www.luebbe.com.


Contact Bastei Lübbe AG:
Barbara Fischer
Head of Press and Public Relations
Tel.: +49 221 / 82 00 28 50
E-Mail: barbara.fischer@luebbe.de