Bastei Lübbe AG: Bastei Lübbe increases profitability in core business and completes repositioning

DGAP-News: Bastei Lübbe AG / Key word(s): Annual Results
14.07.2020 / 07:30
The issuer is solely responsible for the content of this announcement.

Bastei Lübbe increases profitability in core business and completes repositioning
  • Group sales exceed forecast
  • Another positive consolidated result - EBIT rises 78 percent to EUR 4.1 million
  • Sale of majority stake in Daedalic Entertainment
  • Outlook: Growth in sales and profitability

Cologne, July 14, 2020 - The publisher Bastei Lübbe AG (ISIN DE000A1X3YY0) today releases its audited annual financial statements for the 2019/2020 fiscal year, which was characterized by a positive development in the core business of Books and Novel Booklets and the sale of the investment Daedalic Entertainment GmbH.

In the past financial year (1 April 2019 to 31 March 2020), consolidated sales for the continuing operations of the Books and Novel Booklets business unit amounted to 81.5 million Euro after 86.6 million Euro in the previous year (adjusted) and exceeded the forecast of 74 to 75 million Euro (adjusted by the discontinued operations). The decline in sales is mainly due to the sale of the puzzle division and program related fluctuations in the "Book" segment.

Compared to the previous year (adjusted), EBIT rose by EUR 1.8 million to EUR 4.1 million. The EBIT margin was also increased from 2.7% in the previous year (adjusted) to 5.1% for the 2019/2020 financial year.

"Bastei Lübbe's concentration on the profitable core business with Books and Novel Booklets and the measures introduced to increase efficiency are already reflected in the pleasing development of profitability. We are also satisfied with the development of sales, taking into account the program related fluctuations and the sale of a division," comments Carel Halff, CEO of Bastei Lübbe AG, on the past fiscal year.

High one-off effect from sale of the gaming subsidiary

At the beginning of the new financial year 2020/2021, Bastei Lübbe sold a 41 percent share in the game developer Daedalic Entertainment to the co-partner and the management in the context of a management buy-out. A minority interest of 10 percent remains within the Group. For Bastei Lübbe, the extensive sale of its stake represents a further step in its concentration on the successful and profitable publishing business.

After interest and income taxes, the Bastei Lübbe Group's net profit for the period from continuing operations amounted to EUR 1.9 million, compared with EUR 0.7 million in the previous year. The result for the period from discontinued operations, i.e. including the sold gaming subsidiary Daedalic Entertainment, amounts to Euro -11.0 million (previous year: Euro 0.1 million). The overall result for the period for the past financial year is therefore Euro -9.1 million (previous year: Euro 0.9 million).

Of this amount (continued operations), EUR 1.9 million is attributable to the shareholders of Bastei Lübbe AG, compared with EUR 0.6 million in the previous year. Including depreciation and amortisation on discontinued operations, the total result attributable to the shareholders of Bastei Lübbe AG is EUR -6.1 million (previous year: EUR 0.7 million). This results in earnings per share of EUR -0.46 in the reporting year 2019/2020 compared to EUR 0.05 in the financial year 2018/2019.

"With the loss-making sale of Daedalic Entertainment, we are finally putting an end to the failed strategy of the past. The announced repositioning of the publishing group with a focus on the core business of Books and Novel Booklets has been completed. We are now pursuing a clear growth strategy for the future, which we will implement organically and inorganically. With an efficient organization and structured multi-year planning for all program segments and genres, we have created a solid basis for the future management board of Bastei Lübbe," Halff continued.

Revenue in both segments on target - Significant reduction in net debt

Sales in the "Books" segment amounted to 73.8 million Euro in the past fiscal year (forecast 67 to 68 million Euro) and were thus 2.5 % below the previous year's figure of 75.8 million Euro. The "Book" segment contributed EBIT of 3.3 million Euro (previous year: 2.0 million Euro).

The "Novel Booklets" segment achieved sales revenues of EUR 7.7 million (previous year: EUR 10.0 million), which was around EUR 0.7 million above the forecast. EBIT in the segment amounted to EUR 1.5 million (previous year: EUR 0.8 million). Comparability with the sales figures from the 2018/2019 financial year is only possible to a limited extent due to the sale of the puzzle business as of May 31, 2019.

Net debt was reduced again in the past financial year and amounted to only EUR 0.6 million as of 31 March 2020 (previous year without Daedalic: EUR 11.9 million), which is mainly due to the positive business development.

The company's equity ratio decreased slightly compared to the previous year from 42.0% to 39.9% and remains at a solid level.

Significant growth with attractive titles planned

The COVID 19 pandemic has also affected the book industry. Bookstores had to close temporarily. Due to the initial restrictions, however, there was an overall increase in demand for books and novel books. With a strategy that differed significantly from that of the competition and a convincing program offering, Bastei Lübbe was able to avoid declining sales in the lockdown months of March and April and the following months.

Without short-time work and program postponements, as well as active support for retailers and targeted digital marketing measures, Bastei Lübbe was economically successful and received high recognition. As a low-cost alternative, "Books" and "Novel Booklets" will tend to benefit from the tourism and cultural restrictions in the coming months.

The long list of promising books in the current fiscal year 2020/2021, which covers all genres of the readership, also contributes to the growth. Three international bestselling authors are publishing new books this fall: Bookstores are eagerly awaiting an outstanding book event with Ken Follett's historical novel "The Evening and the Morning", Dan Brown's first children's book "Wild Symphony" and two new children's books by Jeff Kinney, "Rowley Jefferson's Awesome Friendly Adventure" and Volume 15 of the series "Diary of a Wimpy Kid", by bestselling author Jeff Kinney, are examples for a number of promising publications for the Bastei Lübbe publishing year. The aim is to continue to expand the publishing programmes of all genres on an ongoing basis and thus to generate sustained profitable organic growth.

For the 2020/2021 financial year, the Management Board therefore expects consolidated sales of between EUR 85 and 90 million and EBIT of between EUR 5 and 6 million.

In the medium term, the company is aiming for sales of around EUR 100 million with a stable EBIT margin of 6 to 8 %. This growth is also to take place inorganically. Possible acquisitions must fit the company strategically and financially and strengthen the core business.

The complete annual report 2019/2020 of Bastei Lübbe AG is available on the Internet at https://www.luebbe.com/en/investor-relations/financial-reports.

About Bastei Lübbe AG:

Bastei Lübbe AG is a German public publishing house based in Cologne, specializing in the publication of books, audio books and eBooks with fiction and popular science content. The company's core business also includes periodically published novel booklets. With a total of twelve publishing houses and imprints, the group of companies currently has around 3,600 titles from the fiction, non-fiction, children's and youth book sectors on offer. 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 an innovation driver in the field of digital media and exploitation channels, among other things through the production of thousands of audio and eBooks.

With an annual turnover of around 82 million euros (financial year 2019/2020), Bastei Lübbe AG is one of the largest medium-sized publishing companies in Germany. Since 2013 the company's shares have been listed in the Prime Standard of the Frankfurt Stock Exchange (WKN A1X3YY, ISIN DE000A1X3YY0). Further information can be found at www.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

14.07.2020 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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