German Media Giant Axel Springer Reports Strong Digital Revenue
CEO expects 2010 operating profit will match 2008’s high water mark
COLOGNE, Germany - European publishing giant Axel Springer is showing the online business doesn’t have to be an old media killer, with strong results for the first nine months of the year thanks in large part to booming Internet revenues.
Sales from digital media shot up 62.6% to €504.3 million ($696 million) for the year so far and now account for nearly a quarter of Springer’s overall revenue. Within the online business, the revenue split was about three to one - with Internet advertising accounting for €388 million ($536 million) and other online revenue amounting to €116 million ($160 million). In addition to online versions of its print titles, such as German tabloid Bild, Springer has acquired service sites, including British online marketing network buy.at and German job site Step Stone.
Springer also saw strong growth outside its core market in German-speaking Europe, thanks to a joint venture with Swiss media group Ringier, which expands Springer’s penetration in Eastern European markets. Sales for print titles outside Germany increased 48% to €559.2 million ($772 million).
The only shadow was Springer’s print business at home, which remains strongly profitable, but saw revenue slip 2% to 874.3 million ($1.2 billion), due to a fall in subscription sales.
But that hasn’t dimmed the optimism of Axel Springer CEO Mathias Dopfner, who is predicting his company will finish 2010 with a record result and operating profits matching 2008’s high water mark of €486 million ($671 million).