Axel Springer revenue, profits fall in second quarter as weaker economy weighs
|08/14/2019 | 02:37am|
FRANKFURT (Reuters) - German publisher Axel Springer reported a decline in second-quarter earnings as a weakening economy hit its jobs classifieds business and it invested more in long-term growth projects.
Springer, being taken private in an agreed deal with KKR, confirmed guidance that was lowered when it announced in June that the U.S. private equity house would tender to buy out minority investors.
That deal, at 63 euros a share, won the necessary acceptances earlier this month and is expected to close towards the end of this year or in early 2020.
"We are focusing on long-term growth," said CEO Mathias Doepfner, emphasising the five-year alliance with KKR. "That's why we're investing - in a difficult economic environment - in people, products and technology where we see growth potential."
KKR has received acceptances for 27.8% of Springer shares, while Friede Springer - widow of the company's founder - and Doepfner between them hold 45.4%, securing joint control over the business.
Second-quarter revenue fell by 3.6% to 759 million euros (£703 million) while adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) fell by 3% to 178 million euros.
Revenue growth in classifieds media, which includes jobs portal Stepstone, slowed to 1.3%, reflecting a weakening economic environment.
That's a concern because Springer's traditional news media, led by newspapers Bild and Welt, is experiencing double-digit declines in advertising revenue that can't be offset by digital subscriptions.
Stepstone has come under pressure of late from Google Jobs, whose launch has triggered an antitrust complaint from two dozen job sites in Europe who complain the Alphabet unit is unfairly prioritising its own search results.
(Reporting by Douglas Busvine; Editing by Riham Alkousaa and David Holmes)
By Douglas Busvine