H1/2018 Results Investor/Analyst Conference Callˆsentation... · Successful H1/18 –Group...

Berlin, July 27, 2018

H1/2018 Results

Investor/Analyst Conference Call

Dr Mathias Döpfner, Chairman & CEO

Dr Julian Deutz, CFO

Disclaimer

July 27, 2018 H1/2018 - Investor/Analyst Conference Call2

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 shares in the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any

contract or investment decision in relation thereto.

Successful H1/18 – Group guidance confirmed,

guidance for classifieds revenues increased


adj. EBITDA €354.5m (+11.7% reported, +3.7% organically)

Revenues €1,560.9m (+5.9% reported, +4.3% organically)

adj. eps €1.36 (-2.1% reported, -0.7% organically)

Portfolio management: Sale of final stake in Dogan TV closed at end of

May (proceeds of €160m)

80% of adj. EBITDA from digital activities – digital

revenues with organic growth of 9.4% in H1/18


digital

Revenues Advertising Revenues adj. EBITDA

digital digital

69% 85% 80%

Continued strong growth in Classifieds – Further

improvements in digital content

5

Classifieds

▪ Continued strong organic revenue growth, driven by jobs vertical

▪ Margin in H1/18 impacted by strong investments in marketing and product as well as newly

consolidated businesses – margin gap to prior year to narrow in H2/18

▪ Revenue guidance increased to low double-digit growth

(before: high single-digit to low double-digit growth)

Digital content

▪ Business Insider: Strong top line growth and significantly improved bottom line

▪ Encouraging development in News Media National regarding both reach (485k digital

subscriptions) and revenue growth

July 27, 2018 H1/2018 - Investor/Analyst Conference Call

What to expect in 2018? We will continue to deliver.

July 27, 20186

➢ 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

H1/2018 - Investor/Analyst Conference Call

Financials H1/2018

Successful first half of the year – adj. EBITDA up

11.7%, organic increase of 3.7%


▪ 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

Comments

in €m H1/18 yoy org.1 Q2/18 yoy org.1

Revenues 1,560.9 5.9% 4.3% 787.4 4.9% 3.9%

Advertising 1,058.8 9.5% 7.0% 534.8 7.8% 6.3%

Circulation 294.7 -6.4% -4.8% 147.3 -5.7% -4.2%

Other 207.4 7.7% 5.8% 105.4 7.1% 5.1%

adj. EBITDA 354.5 11.7% 3.7% 183.3 7.8% 1.1%

Margin 22.7% 1.2pp 23.3% 0.6pp

1) Adjusted for consolidation and FX effects, as well

as IFRS 16 effects for adj. EBITDA.


Classifieds Media continues with low double-digit

organic revenue growth in H1/18

▪ Revenue increase due to continued strong organic growth (11.3%) as well as consolidation effects

▪ Adj. EBITDA increase of 11.7% due to organic increase of 4.9% as well as effects from IFRS 16 and

consolidation effects

▪ Margin below the prior-year level due to planned investments into marketing and product for future

growth as well as lower margins of newly consolidated companies

Comments


as IFRS 16 effects for adj. EBITDA. in €m H1/18 yoy org.1 Q2/18 yoy org.

1

Revenues 585.2 19.2% 11.3% 295.0 22.3% 11.2%

Advertising 567.8 17.7% 11.7% 282.6 19.4% 11.7%

Other 17.4 >100 % -12.3% 12.4 >100 % -17.4%

adj. EBITDA 223.3 11.7% 4.9% 110.7 12.1% 4.0%

Margin 38.2% -2.5pp 37.5% -3.4pp

Jobs classifieds with continued excellent organic

growth of 18.0% in H1/18

10 July 27, 2018 H1/2018 - Investor/Analyst Conference Call10

34%

▪ Reported revenue increase of 20.9% mainly driven by strong organic growth of 18.0%

▪ Continental European operations again the main driver for organic revenue growth (organic increase

of 24.6%)

▪ Adj. EBITDA up 9.1% (2.1% organically)

▪ Margin down 3.8pp due to planned investments for future growth (marketing and product)

Comments

1) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for adj. EBITDA. 2) Total adj. EBITDA of Classifieds Media subsegments does not equal Classifieds Media segment

adj. EBITDA which includes costs of €5.6m in H1/18 and €4.3m in H1/17 (thereof business development, M&A and other), not allocated to the three subsegments.

Jobs


Revenues 278.1 20.9% 18.0% 143.2 23.0% 17.2%

adj. EBITDA2 98.6 9.1% 2.1% 51.9 9.1% 1.0%

Margin 35.5% -3.8pp 36.2% -4.6pp

Real Estate classifieds with consolidation effects

from Logic-Immo


▪ Reported revenue growth of 28.2% driven by consolidation effects from Logic-Immo

(organic revenue increase 6.2%)

▪ Adj. EBITDA up 19.2% (+11.1% organically)

▪ Decline of reported margin due to integration of Logic-Immo (lower margin business)

Comments

Real Estate


Revenues 183.7 28.2% 6.2% 96.8 33.0% 6.0%

adj. EBITDA2 85.9 19.2% 11.1% 44.1 19.5% 9.6%

Margin 46.7% -3.5pp 45.6% -5.2pp



General/Other with slight improvement in organic

growth in Q2/18


▪ Revenue increase of 4.9% (4.2% organic growth)

▪ Slow start to the year at Yad2 and @Leisure

▪ Meinestadt.de reallocated to Jobs classifieds (prior year numbers restated)

▪ Adj. EBITDA up 6.4% (+3.3% organically)

Comments

General/Other

in €m H1/18 yoy org.1 Q2/18 yoy org.

1

Revenues 123.4 4.9% 4.2% 55.1 5.6% 5.1%

adj. EBITDA2 44.5 6.4% 3.3% 17.7 7.0% 4.3%

Margin 36.1% 0.5pp 32.1% 0.4pp



News Media: Good first half for advertising both in

National and International



as IFRS 16 effects for adj. EBITDA.

▪ Revenues up 0.9%, only minor effects from consolidation and FX

▪ 36.3% of revenues from digital activities

▪ Advertising revenue development strong in Q2/18 – German print ad revenues underlying almost stable yoy

▪ Adj. EBITDA up 2.3% reported, driven mainly by effects from IFRS 16 (organically down 6.6%)

Comments


1

Revenues 732.0 0.9% 1.2% 380.5 0.2% 0.9%

thereof digital 266.0 12.5% 12.5% 137.8 11.2% 12.2%

digital share of revenues 36.3% 36.2%

Advertising 330.4 4.9% 4.1% 177.7 2.3% 2.3%

Circulation 295.0 -6.3% -4.7% 147.5 -5.6% -4.1%

Other 106.6 11.3% 11.3% 55.4 11.2% 11.7%

adj. EBITDA 113.4 2.3% -6.6% 64.0 -3.5% -10.0%

Margin 15.5% 0.2pp 16.8% -0.7pp

▪ Revenues down yoy due to deconsolidation of aufeminin. Organic revenues up 1.6% in H1/18 yoy:

Reach-based marketing slightly below H1/17 (-0.5%) due to US exit of Bonial in Q4/17, Performance

Marketing with organic increase of 5.3%

▪ Adj. EBITDA up 15.7% (+9.5% organically). Reach Based Marketing EBITDA with strong organic

increase of 20.5%, Performance Marketing with decline of 16.3%

Comments

Marketing Media with significant margin increase


1) Adjusted for consolidation and FX effects, as well as

IFRS 16 effects for adj. EBITDA.in €m H1/18 yoy org.1 Q2/18 yoy org.1

Revenues 217.8 -4.0% 1.6% 99.7 -12.9% 1.2%

Advertising 160.5 -5.4% -1.6% 74.5 -13.2% -2.0%

Other 57.3 -0.1% 11.4% 25.2 -12.0% 11.8%

adj. EBITDA 46.7 15.7% 9.5% 23.1 -8.4% -7.5%

Margin 21.4% 3.7pp 23.2% 1.2pp

Adj. eps affected by phasing – Guidance for FY 18

confirmed (mid to high single-digit % org. growth)


1) Based on weighted average number of shares outstanding in H1/18: 107.9m (H1/17: 107.9m).

in €m H1/18 H1/17 Q2/18 Q2/17

adj. EBITDA 354.5 317.2 183.3 170.1

yoy change

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. eps1 1.36 1.38 0.73 0.76

yoy change (reported / organic)

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

11.7%

-2.1% / -0.7%

7.8%

-4.4% / -3.2%

Net financial debt higher because of IFRS 16 –

increase in FCF in line with expectations


▪Net financial debt includes leasing liabilities of €359.3m (PY: €0.4m), thereof

€156.7m due to lease of Axel-Springer-Passage and high-rise headquarter in

Berlin since January 1, 2018

▪Net financial debt less effects from leasing liabilities €1,057.2m

Free cash flow (FCF) in €m Impact of leasing liabilities on net financial debt

1) Excl. pension liabilities. 2) Based on Bloomberg consensus for adj. EBITDA 2018.

Net financial debt of €1,416.5m1

in June 2018 (leverage 1.9x2)

133.9

163.2

134.8

171.1

H1/17 H1/17H1/18 H1/18

FCF FCF excl. effects from headquarter real estate transactions

▪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)

Positive effects on cash flow going forward

Outlook 2018 unchanged on group level


Reported Organic(adjusted for effects from the adoption of IFRS

16 as well as consolidation and FX effects)

Revenues Low to mid single-digit % growth1

Low to mid single-digit % growth1

adj. EBITDA Low double-digit % growth Mid to high single-digit % growth

adj. eps Low to mid single-digit % growth Mid to high single-digit % growth

Group

1) Revenue outlook based on 2017 revenues restated for negative effect of IFRS 15 adoption.

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

MediaRevenues Double-digit % growth Increased to: Low double-digit % growth1

adj. EBITDA Double-digit % growth High single-digit to low double-digit % growth

News

MediaRevenues Low to mid single-digit % decline Low single-digit % decline

adj. EBITDA Mid single-digit % growth Low to mid single-digit % decline

Marketing

MediaRevenues High single-digit % decline2 High single-digit % growth2

adj. EBITDA High single-digit % growth Low double-digit % growth

Services/

HoldingRevenues Mid single-digit % decline Mid single-digit % decline

adj. EBITDA Low to mid single-digit % growth3 Low to mid single-digit % growth3

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.

Appendix

Organic revenue development digital media


yoy H1/18 Q2/18 Q1/18 FY/17 FY16 FY15 FY14

Digital Media 9.4% 9.4% 9.5% 12.5% 10.7% 9.2% 7.6%

Classifieds Media 11.3% 11.2% 11.3% 12.7% 12.5% 12.9% 9.8%

Jobs 18.0% 17.2% 18.9% 17.0% 17.6% 21.2% 13.5%

Real Estate 6.2% 6.0% 6.4% 10.8% 6.3% 4.8% 6.0%

General/Other 4.2% 5.1% 3.4% 6.3% 9.7% 4.0% 9.8%

News Media 12.5% 12.2% 12.8% 12.0% 14.7% 3.2% 8.4%

National 8.4% 9.8% 6.9% 3.2% 17.4% 0.8% 11.5%

International 16.8% 14.7% 19.2% 25.1% 9.4% 8.2% 4.2%

Marketing Media 1.6% 1.2% 1.9% 12.4% 7.5% 9.2% 6.2%

Reach Based -0.5% 0.6% -1.4% 12.0% 15.6% 13.6% 7.8%

Performance Based 5.3% 2.1% 8.5% 12.7% 4.2% 7.7% 5.3%

Restructuring expenses


in €m H1/18 Q2/18 Q1/18 FY/17 Q4/17 Q3/17 Q2/17 Q1/17

Group 8.1 2.7 5.4 47.6 28.5 9.5 4.8 4.9

Classifieds Media 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

News Media 2.9 0.9 2.0 29.3 18.8 4.8 2.9 2.9

Marketing Media 0.3 0.1 0.2 0.5 0.1 0.2 0.0 0.2

Services/Holding 4.9 1.7 3.2 17.8 9.6 4.5 1.9 1.8

Overview News Media National and International


1) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for adj. EBITDA.


1 H1/18 yoy org.1 Q2/18 yoy org.

1

Revenues 524.4 -1.7% -2.4% 274.1 -1.4% -1.9% 207.7 8.2% 11.7% 106.4 4.7% 8.9%

thereof digital 135.5 11.6% 8.4% 70.3 12.1% 9.8% 130.5 13.4% 16.8% 67.5 10.4% 14.7%

digital share of revenues 25.8% 25.7% 62.8% 63.4%

Advertising 214.4 0.4% -1.7% 117.2 -0.6% -1.8% 116.1 14.4% 16.4% 60.5 8.4% 11.2%

Circulation 233.9 -6.1% -6.1% 117.2 -5.2% -5.2% 61.1 -6.9% 0.8% 30.3 -7.1% 0.2%

Other 76.1 7.3% 8.1% 39.8 8.7% 8.7% 30.4 22.6% 20.3% 15.6 17.9% 19.8%

adj. EBITDA 80.9 -8.6% -15.0% 45.0 -14.6% -19.3% 32.5 45.2% 27.2% 19.0 39.2% 26.7%

Margin 15.4% -1.2pp 16.4% -2.5pp 15.7% 4.0pp 17.9% 4.4pp

News Media National News Media International

Overview Marketing Media Subsegments


1) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for adj. EBITDA.2) Total adj. EBITDA includes costs of €4.2m in H1/18 and €4.3m in H1/17 (thereof business development, M&A and other), not allocated to the two pillars.


1 H1/18 yoy org.1 Q2/18 yoy org.

1

Revenues 129.6 -15.3% -0.5% 56.6 -26.8% 0.6% 88.2 19.2% 5.3% 43.1 15.8% 2.1%

Advertising 108.0 -15.9% -3.6% 49.0 -24.9% -3.2% 52.5 27.2% 4.0% 25.5 23.6% 0.9%

Other 21.6 -12.3% 19.6% 7.6 -37.0% 38.5% 35.7 9.1% 7.0% 17.6 6.1% 3.6%

adj. EBITDA2 34.9 11.8% 20.5% 17.3 -13.5% 1.5% 16.0 18.8% -16.3% 8.1 6.5% -24.2%

Margin 27.0% 6.5pp 30.6% 4.7pp 18.1% -0.1pp 18.9% -1.6pp

Reach Based Marketing Performance Marketing

StepStone: Continued high organic revenue growth

H1/18 Financials

▪ Swedish employer branding specialist Universum

acquired in Q2/18

▪ Candidate delivery ahead of competition in

nearly all areas

▪ ‘The Partnership’ (Totaljobs and Jobsite)

introduced in May 2018: Joint offerings incl.

cross-promotion of jobs

▪ Main market Continental Europe with customer

number up 9% yoy, retention rate remains on a

high level at 88% (-1pp yoy)

Operational update H1/18

24

1) Minor revenues recorded centrally and attributable to few operational entities (mainly Universum) are not presented

since those are not recorded in operational subgroups 2) Combined adj. EBITDA of subgroups does not equal sub-

segment as central costs (mainly non-licensed product development costs) and a few entities (mainly Universum) are

not recorded in operational subgroups. 3) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for

adj. EBITDA.

in €m H1/18 H1/17 yoy organic3)

Revenues1) 279.5 230.5 21.3% 18.4%

Continental 191.8 152.5 25.8% 24.6%

UK 61.8 58.9 5.0% 7.4%

SAON Group 20.2 18.8 7.2% 9.9%

EBITDA2) 98.6 90.3 9.1% 2.1%

Continental 92.0 83.7 9.8% 6.1%

UK 5.5 8.8 -37.3% -52.4%

SAON Group 5.7 5.8 -2.5% -4.0%

Margin 35.3% 39.2% -3.9pp

Continental 47.9% 54.9% -7.0pp

UK 8.9% 14.9% -6.0pp

SAON Group 28.3% 31.1% -2.8pp


SeLoger margin decline due to consolidation of

Logic-Immo

H1/18 Financials

▪ Closing of Logic-Immo acquisition in Q1/18

▪ ARPA (incl. verticals) increases by 6% yoy to

€758

▪ # of professional listings1) on Seloger.com: 984k

(Logic-Immo: 708k, pre deduplication)

▪ Unique users2) of seloger.com up 2% to 5.9m,

unique user of logic-immo +3% to 3.1m


July 27, 201825

3) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for adj. EBITDA

1) Source: autobiz; monthly listings, Jan-May/18 average2) Source: Médiametrie (Jan-May/18 vs Jan-May/17)


in €m H1/18 H1/17 yoy org.3)

Revenues 103.9 69.5 49.5% 4.3%

EBITDA 48.9 40.4 21.1% 6.9%

Margin 47.1% 58.2% -11.1pp

Immowelt: Margin significantly up at 40%

H1/18 Financials

▪ ARPU increases by 11% yoy to €317

▪ 21.2k DUO customers

▪ Visits1) at 43.9m (+1% yoy)

▪ # of residential listings1) at 175k (-9%) yoy


26

2) Adjusted for consolidation and FX effects, as well as IFRS 16 effects for adj. EBITDA1) Source: company information; monthly visits/listings, H1 average

in €m H1/18 H1/17 yoy org.2)

Revenues 58.2 54.3 7.3% 7.3%

EBITDA 23.3 18.3 27.7% 23.7%

Margin 40.1% 33.7% 6.4pp


Immoweb with strong revenue growth and high

margin

H1/18 Financials

▪ ARPA increases by 6% yoy to €544

▪ # of listings1) up by 5% yoy to 151k

▪ Real visitors2) slightly down by 1% with a monthly

average of 1.6m 2018


July 27, 201827

1) Source: company information2) Source: CIM


in €m H1/18 H1/17 yoy org.3)

Revenues 21.8 20.0 9.2% 8.9%

EBITDA 14.1 13.1 8.0% 8.0%

Margin 64.8% 65.5% -0.7pp


@Leisure with slow start to the year

H1/18 Financials

▪ Full service (Belvilla, Land & Leisure):

pro forma booking value1) down by 10% yoy to

€155m

▪ Self service (Traum-Ferienwohnungen):

total listings2) in Europe up 13% yoy to 83k


July 27, 201828

1) Source: company information, H1/18 vs H1/172) Source: company information, 06/17 vs. 06/18


in €m H1/18 H1/17 yoy org.3)

Revenues 73.2 69.1 6.0% 2.7%

EBITDA 17.1 14.9 14.5% 3.4%

Margin 23.3% 21.6% 1.7pp


Yad2 with headwind from FX and slower organic

growth due to difficult real estate market

H1/18 Financials

▪ # of listings: 412.3k (-4% yoy)

▪ Unique visitors slightly up by 12% to 2.4m

(H1/17: 2.7m)

▪ Visits down by 7% to 11.3m (H1/17: 12.1m)

Operational update H1/18 1)

July 27, 201829

1) Source: company information; monthly listings/UVs/visits


in €m H1/18 H1/17 yoy org.2)

Revenues 18.9 20.1 -6.0% 1.1%

3) Adjusted for consolidation and FX effects

Car&Boat Media: Organic growth driven by ARPU

increase

H1/18 Financials

▪ ARPU up by 10% yoy to €447

▪ # of professional customers1) slightly (-1%) below

prior year at 8.5k

▪ # of professional listings1) down by 2% yoy to

270k

▪ Unique visitors2) up by 25% to 4.9m


July 27, 201830

1) Source: company information; monthly, H1/18 average2) Source: Mediametrie (Jan-May/18 vs Jan-May/17); Limited comparability of Jan-May/18

figures to prior-year period due to new methodology regarding the measurement of mobile

traffic introduced by Mediametrie in H1/18


in €m H1/18 H1/17 yoy org.3)

Revenues 31.3 29.5 6.2% 6.2%

EBITDA 15.2 13.7 10.4% 7.2%

Margin 48.4% 46.5% 1.8pp


Investor Relations contacts


Claudia Thomé

Co-Head of Investor Relations

Phone: +49 30 2591 77421

Mobile: +49 160 90445035

[email protected]

Axel Springer SE: Axel-Springer-Str. 65, 10888 Berlin, Germany, Fax: +49 30 2591 77422

Daniel Fard-Yazdani

Co-Head of Investor Relations

Phone: +49 30 2591 77425

Mobile: +49 151 52844459

[email protected]

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