Company presentation August 2018 Dr Julian Deutz, CFO xxx
Disclaimer This document, which has been issued by Axel Springer SE (the "Company"), comprises the written materials/slides for a presentation of the management. Whilst all reasonable care has been taken to ensure that the information and facts stated herein are accurate and that the opinions and expectations contained herein are fair and reasonable no representation or warranty, express or implied, is given by or on behalf of the Company, any of its directors, or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability is accepted for any such information or opinions. This document contains forward looking statements which involves risks and uncertainties. These forward looking statements speak only as of the date of this document and are based on numerous assumptions which may or may not prove to be correct. The actual performance and results of the business of the Company could differ materially from the performance and results discussed in this document. The Company undertakes no obligation to publicly update or revise any forward looking statements or other information contained herein whether as a result of new information, future events or otherwise. This document does not constitute or form any part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in any jurisdiction, nor shall they or any part of them nor the fact of their distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. 2 August 2018 Company presentation
Axel Springer at a glance Highlights Adj. EBITDA by segment 1,2 Revenues by segment 1 2% ▪ Leading digital classifieds 12% operator 14% 37% ▪ Leading digital publisher in Classifieds Media 58% 30% Europe with unique media brands News Media Marketing Media 47% ▪ Successful transformation with Services / Holding 80% 1 of adj. EBITDA from digital Financials activities Outlook 2018 (organic 3 ) 2017 Outlook 2018 (reported) ▪ Organic growth supported by Revenues in €m 3,562.7 Low to mid single-digit % growth Low to mid single-digit % growth targeted M&A with strong track EBITDA (adj.) in €m 645.8 Low double-digit % growth Mid to high single-digit % growth record EBITDA margin (adj.) 18.1% EPS (adj.) in € ▪ Strong FCF, high dividend yield 2.60 Low to mid single-digit % growth Mid to high single-digit % growth DPS (FY 2017) in € and payout ratio (2017: 77%) 2.00 1) Based on H1/18 figures. 2) Negative EBITDA S/H allocated proportionally to operative segments. 3) Adj. for effects from IFRS 16, consolidation and FX effects. 3 August 2018 Company presentation
80% of adj. EBITDA from digital activities – digital revenues with organic growth of 9.4% in H1/18 Revenues Advertising Revenues adj. EBITDA 69% 85% 80% digital digital digital 4 August 2018 Company presentation
Key messages 2017 – strong execution 1 2 More disclosure on classifieds Stable adj. EBITDA in News Media ▪ Strong organic revenue growth of 12.7% in FY/17, ▪ Mid-term guidance given: adj. EBITDA to be stable in a range between € 225m and € 245m for 2017-2019 1 driven especially by jobs ✓ ✓ ▪ Positive response to new single-asset disclosure and ▪ News Media adj. EBITDA 2017 : € 218.8m dedicated CMDs in London and New York in June´17 ▪ Advertising revenues in German market up 1.7% in ▪ Increased disclosure and better visibility as basis for FY/17 re-evaluation of assets (especially of jobs classifieds) ▪ Reorganization of German publishing units 3 4 Strict M&A discipline in content Leading digital publisher ▪ Guidance given: No loss-making content acquisitions ▪ Focus on classifieds and content before existing digital content businesses have ▪ Active portfolio management: proven profitability ✓ ✓ - Acquisition of Logic-Immo in France ▪ Strong progress at Business Insider with organic - Acquisition of minority stake in Purplebricks in UK revenue growth of 46% in FY/17 - Acquisition of Universum (employer branding) - Sale of aufeminin; early sale of Doğan stake ▪ Break-even for Business Insider envisaged for H2/18 - Merger of Awin and affilinet with IPO as exit option 1) Includes changes from the adoption of IFRS 16 and corresponds to previous range of €205m - €225m. 5 August 2018 Company presentation
What to expect in 2018? We will continue to deliver. ➢ Further growth in classifieds ➢ Deliver on mid-term stable EBITDA guidance for News Media ➢ Break-even at Business Insider in H2/18 ➢ Explore further potential from technology and data 6 August 2018 Company presentation
Successful first half of the year – adj. EBITDA up 11.7%, organic increase of 3.7% org. 1 org. 1 in €m H1/18 yoy Q2/18 yoy 1) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for adj. EBITDA. Revenues 1,560.9 5.9% 4.3% 787.4 4.9% 3.9% 1,058.8 9.5% 7.0% 534.8 7.8% 6.3% Advertising 294.7 -6.4% -4.8% 147.3 -5.7% -4.2% Circulation 207.4 7.7% 5.8% 105.4 7.1% 5.1% Other adj. EBITDA 354.5 11.7% 3.7% 183.3 7.8% 1.1% 22.7% 1.2pp 23.3% 0.6pp Margin Comments ▪ Organic revenue increase of 4.3% and adj. EBITDA up by 3.7% organically ▪ Consolidation effects mainly from Logic-Immo and affilinet, deconsolidation of aufeminin 7 August 2018 Company presentation
Adj. eps affected by phasing – Guidance for FY 18 confirmed (mid to high single-digit % org. growth) in €m H1/18 H1/17 Q2/18 Q2/17 adj. EBITDA 354.5 317.2 183.3 170.1 yoy change 11.7% 7.8% Depreciation / amortization (excl. PPA) -101.1 -65.9 -51.7 -33.6 adj. EBIT 253.4 251.3 131.5 136.5 Financial result -9.5 -1.7 -4.8 -2.0 Taxes -74.6 -80.1 -38.3 -43.0 adj. net income 169.3 169.5 88.4 91.5 thereof attributable to non-controlling interests 23.0 20.1 9.9 9.4 adj. eps 1 1.36 1.38 0.73 0.76 yoy change (reported / organic) -2.1% / -0.7% -4.4% / -3.2% Non-recurring effects 59.7 -17.2 34.4 -5.4 Depreciation / amortization, and impairments of PPA -47.1 -52.6 -29.1 -21.3 Taxes attributable to these effects 3.7 17.3 7.3 5.0 Net income 185.6 116.9 100.9 69.6 1) Based on weighted average number of shares outstanding in H1/18: 107.9m (H1/17: 107.9m). 8 August 2018 Company presentation
Net financial debt higher because of IFRS 16 – increase in FCF in line with expectations 1 in June 2018 (leverage 1.9x 2 ) Net financial debt of € 1,416.5m Free cash flow (FCF) in €m Impact of leasing liabilities on net financial debt ▪ Net financial debt includes leasing liabilities of €359.3m (PY: €0.4m), thereof 171.1 €156.7m due to lease of Axel-Springer-Passage and high-rise headquarter in 163.2 Berlin since January 1, 2018 134.8 133.9 ▪ Net financial debt less effects from leasing liabilities €1,057.2m Positive effects on cash flow going forward ▪ Net positive cash inflow of ~€ 165m until 2020 from sale of new Berlin building (purchase price of € 425m and tax payments of ~€ 30m expected in Q4/19 and capex and sale related costs of ~€ 230m in 2018-2020) H1/17 H1/18 H1/17 H1/18 FCF FCF excl. effects from headquarter real estate transactions 1) Excl. pension liabilities. 2) Based on Bloomberg consensus for adj. EBITDA 2018. 9 August 2018 Company presentation
Outlook 2018 unchanged on group level Reported Organic (adjusted for effects from the adoption of IFRS 16 as well as consolidation and FX effects) Low to mid single-digit % growth 1 Low to mid single-digit % growth 1 Revenues Group Low double-digit % growth Mid to high single-digit % growth adj. EBITDA Low to mid single-digit % growth Mid to high single-digit % growth adj. eps 1) Revenue outlook based on 2017 revenues restated for negative effect of IFRS 15 adoption. 10 August 2018 Company presentation
Segment outlook 2018: Increase of organic revenue guidance for classifieds media Reported Organic (adjusted for effects from the adoption of IFRS 16 as well as consolidation and FX effects) Classifieds Revenues Double-digit % growth Increased to: Low double-digit % growth 1 Media adj. EBITDA Double-digit % growth High single-digit to low double-digit % growth News Revenues Low to mid single-digit % decline Low single-digit % decline Media adj. EBITDA Mid single-digit % growth Low to mid single-digit % decline Marketing Revenues High single-digit % decline 2 High single-digit % growth 2 Media adj. EBITDA High single-digit % growth Low double-digit % growth Services/ Revenues Mid single-digit % decline Mid single-digit % decline Holding adj. EBITDA Low to mid single-digit % growth 3 Low to mid single-digit % growth 3 1) Previously: High single-digit to low double-digit % growth. 2) Revenue outlook based on 2017 revenues restated for negative effect of IFRS 15 adoption. 3) Improvement/smaller negative EBITDA. 11 August 2018 Company presentation
Classifieds Media
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