Quarterly Report • Aug 13, 2020
Quarterly Report
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BASTEI LÜBBE AG GROUP QUARTERLY STATEMENT 1 APRIL - 30 JUNE 2020
Michaela Grünig PALAIS HEILIGENDAMM
| 01/04/2020- 30/06/2020 |
01/04/2019- 30/06/2019 |
Change | |
|---|---|---|---|
| Key financial figures (IFRS) in EUR million | |||
| Group sales | 18.5 | 18.9 | -2.0 % |
| EBIT | 1.6 | 1.4 | 16.6 % |
| EBIT margin in % | 8.5 % | 7.2 % | 1.3 Pp |
| Results for the period from continuing operations | 1.0 | 0.7 | 36.7 % |
| Results for the period from discontinued operations | 0.6 | 0.0 | ─ |
| Group result | 1.6 | 0.8 | 113.7 % |
| Earnings per share in EUR | 0.09 | 0.06 | 65.8 % |
| 30/06/2020 | 31/03/2020 | ||
| Balance sheet total | 68.3 | 68.6 | -0.1 % |
| Equity* | 29.5 | 27.4 | 8.0 % |
| Equity ratio in % | 43.3 % | 39.9 % | 3.3 Pp |
| Net debt | -3.0 | 0.6 | ─ |
* incl. equity capital shares of non-controlling shareholders
In its summer forecast, the EU Commission assumes that the economy in the Eurozone will decline by 8.7 % in 2020 and grow by 6.1 % in 2021.1 A similar picture is emerging for Germany. The experts from the Institute for Economic Research expect the German economy to decline by 6.7 %. For 2021, they forecast growth of 6.4 %.2 The number of unemployed will also increase from 2.3 million to 2.7 million in the current year, i.e. from 5.0 % to 5.9 %. For the coming year 2021, however, the unemployment rate will fall back to 5.6 %. Private consumption in 2020 will fall by 6.4 % compared to the previous year. German exports will fall by 13.3 % and German imports by 7.7 %.3
In book retailing, sales in the sales channels retail bookselling, e-commerce, railway station bookselling, department store, electrical goods and drugstore combined from January to June 2020 were significantly below the level of the previous year's period with a minus of 8.3 %. This is primarily due to the closures of the bookstores during the several-week lockdown due to the COVID-19-pandemic. While the number of copies sold fell by 9.6 %, 1.5 % higher book prices at least compensated somewhat for the drop in sales according to the German Publishers & Booksellers Association.4
E-books emerged as one of the winners from the COVID-19-pandemic. Due to the lockdown and the associated closures of bookstores, sales (price from EUR 3 upwards) of e-books in the first six months of 2020 increased by 15 % compared to the previous year. During the same period, the numbers of copies sold increased by 12 % compared to 2019. The average price of an e-book fell by 3 % compared to the first half of 2019, although the price of an e-book is still over EUR 9 on average (due to the exclusion of low-price titles).5
Sales of physical audio books/audio books recorded a significant decrease of 20.6 % in the first six months of 2020 compared to the same period last year.6 No data is yet available for digital formats for the calendar year 2020. However, it can be assumed that the sales share of storage-friendly audio streaming in the audio book market will continue to rise.
1 https://ec.europa.eu/commission/presscorner/detail/de/ip_20_1269
2 https://www.ifo.de/node/56484
3 https://www.ifo.de/node/56484
4 https://www.boersenverein.de/tx_boev_newsletter_view?tx_boev_pi14[uid]=1560&tx_boev_pi14[backend_layout]=pagets__newsletter
5 https://www.buchreport.de/news/effekt-der-e-reading-erfahrung/?utm_source=buchreport&utm_medium=link&utm_campaign=plus-
gesehen&utm_content=Auch+nach+dem+Lockdown+w%C3%A4chst+das+E-Book
Following the resolution of the Management Board and Supervisory Board in the previous year to divest the subsidiary Daedalic Entertainment GmbH, Daedalic was classified as a discontinued operation. Daedalic was sold with financial effect as of 31 May 2020 in a management buy-out. In the following explanations we refer to the continuing operations. The previous year's figures in the income statement were adjusted accordingly.
The first quarter of fiscal 2020/2021 continued to be affected by the COVID-19-pandemic. However, Bastei Lübbe AG was able to develop above average in this difficult market environment and generated consolidated sales of EUR 18.5 million in the period from April to June of the 2020/2021 financial year, compared with EUR 18.9 million in the previous year. Sales were thus 2.0 % below the previous year. EBIT improved to EUR 1.6 million in the first quarter of 2019 compared to EUR 1.4 million in the same period of the previous year. The previous year included income of EUR 0.4 million from the sale of the puzzle business.
While bookselling sales were down on the previous year, Bastei Lübbe AG was able to match the previous year's sales revenue in the "Books" segment. In this respect, it should be noted that the sales revenue in the prior-year quarter included the first volume of Jeff Kinney's comic novel "Diary of an Awesome Friendly Kid: Rowley Jefferson's Journal". The second volume "Rowley Jefferson's Awesome Friendly Adventure" was postponed to August 2020 and therefore is not included in the sales revenue in the first quarter of the actual fiscal year. The fact that previous year's sales revenues were achieved is on the one hand due to the high demand for books from LYX and books for children and young adults. On the other hand, sales of digital products (e-books and audio files) are around 25 % higher than in the previous year. The segment EBIT improved from EUR 0.6 million in the previous year to EUR 1.3 million in the current financial year.
There were also no negative effects from the COVID-19-pandemic in the first quarter for the "Novel Booklets" segment. The "Novel Booklets" segment achieved sales of EUR 1.8 million in the first quarter compared to EUR 2.2 million in the previous year. The sales revenues of the current fiscal year can only be compared with those of the previous year to a limited extent, as the previous year's figure includes EUR 0.4 million from the disposal of the puzzle division, which was sold with effect as of 31 May 2019. Segment EBIT fell from EUR 0.8 million to EUR 0.3 million in the current fiscal year. The previous year's figure includes the proceeds of EUR 0.4 million from the sale of the puzzle magazines division.
At EUR -29k, the change in inventories of finished goods and work in progress was EUR 1.4 million higher than in the previous year (EUR -1.4 million). In the previous year, the measures for low-margin sale of excess inventory were intensified.
At EUR 8.9 million in the period under review, the material expenses was above the previous year's level (EUR 8.4 million). This is mainly due to higher printing costs resulting from a changed product mix.
Personnel expenses rose from EUR 3.8 million in the previous year to EUR 4.0 million.
Other operating expenses fell from EUR 3.9 million in the previous year to EUR 3.5 million. This is mainly due to lower legal and consulting costs.
Earnings before interest and taxes (EBIT) amounted to EUR 1.6 million in the period April to June (previous year: EUR 1.4 million). The EBIT margin was 8.5 % after 7.2 % in the same period of the previous year. The result from atequity valued investments amounted to EUR 0.1 million (previous year: EUR 0.1 million).
Amortisation of rights of use under leases amounted to EUR 0.3 million (previous year: EUR 0.3 million)
The financial result totaled EUR -0.2 million (previous year: EUR -0.3 million). Earnings before taxes (EBT) amounted to EUR 1.4 million (previous year: EUR 1.2 million). Interest expenses from leasing liabilities amounted to EUR -0.1 million (previous year: EUR -0.1 million)
The results for the period from continuing operations amounted to EUR 1.0 million (previous year: EUR 0.7 million). The results for the period of the discontinued business units amounts to EUR 0.6 million (previous year: KEUR 32). This includes expenses from the deconsolidation of Daedalic amounting to EUR -0.2 million. The group results for the period amounts to EUR 1.6 million (previous year: EUR 0.8 million). The results for the period attributable to the shareholders of Bastei Lübbe AG amounted to EUR 1.2 million (previous year: EUR 0.7 million). Earnings per share amounted to EUR 0.09 after EUR 0.06 in the previous year. This was based on a number of 13,200,100 shares in circulation in the reporting period (unchanged from the previous year).
The consolidated balance sheet total fell by EUR 0.3 million from EUR 68.6 million to EUR 68.3 million.
Non-current assets amounted to EUR 39.4 million, compared with EUR 32.6 million as of 31 March 2020. The level of prepaid royalties increased by EUR 7.5 million. This includes advance payments to two world bestselling authors. Rights of use under leasing agreements amount to EUR 6.7 million (31 March 2020: EUR 6.9 million).
Current assets decreased from EUR 36.0 million as of 31 March 2020 to EUR 28.9 million as of 30 June 2020 due to the deconsolidation of Daedalic. Daedalic's assets of EUR 9.5 million were reported as assets held for sale under current assets.
The share of equity attributable to shareholders of the parent company was EUR 29.4 million as of 31 March 2020 (EUR 28.3 million). The increase results from the positive net income of EUR 1.6 million for the period (of which EUR 1.2 million is attributable to the shareholders of Bastei Lübbe AG).
Non-current liabilities amount to EUR 8.0 million compared to EUR 7.3 million as of 31 March 2020. the increase is mainly due to the reclassification of loan liabilities from current liabilities to non-current liabilities in the amount of EUR 0.8 million. Leasing liabilities within non-current liabilities amount to EUR 5.8 million (31 March 2020: EUR 6.0 million).
Current liabilities amounted to EUR 30.8 as of 30 June 2020 compared with EUR 33.9 as of 31 March 2020, primarily as a result of two opposing effects. On the one hand, current liabilities are reduced by the disposal of liabilities in connection with assets held for sale in the amount of EUR 10.3 million as part of the deconsolidation of Daedalic. On the other hand, trade payables increase from EUR 10.3 million as of 31 March 2020 to EUR 19.2 million as of 30 June 2020 due to the recognition of additional liabilities to authors in the amount of EUR 7.7 million. Leasing liabilities within non-current liabilities amount to EUR 1.1 million (31 March 2020: EUR 1.2 million).
At EUR 3.0 million, net financial assets as of 30 June 2020 are EUR 3.6 million higher than as of 31 March 2020 (net financial debt: EUR 0.6 million).
With effect from 31 July 2020, factoring of receivables from the "digital" book business was terminated. In agreement with Bastei Lübbe AG, the factor made use of his short-term right of termination. No refinancing is necessary due to the group's positive business development.
Subject to the approval of the Annual General Meeting on 15 September 2020, Bastei Lübbe will conclude a settlement with former board members regarding all claims asserted to date. Accordingly, the defendants will pay EUR 1.27 million to the publisher. Should the public prosecutor's investigations result in further claims, these can be asserted independently of this. For this reason, no discharge of the former board members for the respective financial year 2016/2017 is planned.
Sandra Dittert (Director of Marketing/Sales) and Joachim Herbst (CFO) joined Bastei Lübbe on 1 August 2020 and the new Management Board has now fully taken up its work together with Simon Decot (Director of Programme). Following the departure of Carel Halff (CEO) at the Annual General Meeting on 15 September 2020, Joachim Herbst will also take over the spokesman function.
No other events of particular significance for the assessment of the net assets, financial position, and results of operations of the Bastei Lübbe AG Group occurred after the reporting period.
The risk situation of Bastei Lübbe AG and its opportunities have not fundamentally changed since the presentation in the Annual Report 2019/2020.
Compared with the presentation in the 2019/2020 Annual Report, the Management Board's forecast for the 2020/2021 financial year has not changed.
In the current fiscal year 2020/2021, Group sales are expected to be between EUR 85 and 90 million (previous year: EUR 81 million). Positive EBIT in a range between EUR 5 and 6 million (previous year: EUR 4.1 million) is still expected.
Due to the termination of the factoring of receivables from "digital" sales revenues, the financial planning of the Bastei Lübbe Group now assumes that a free cash flow at the lower end of the range of EUR 5 to 8 million (previous year: EUR 10.4 million) can be achieved in the current financial year.
Effects due to a renewed tightening of measures to contain the COVID-19-pandemic, which could lead to a reduction of the forecast, are still subject to considerable uncertainty in the view of the Management Board, as new information is emerging worldwide on a daily basis. In future quarterly reports and the half-year report, the Management Board will again communicate its expectations and the outlook for the future as usual on the basis of current developments.
Cologne, 13 August 2020 Bastei Lübbe AG
Carel Halff Joachim Herbst Sandra Dittert Simon Decot Chief Executive Officer Chief Financial Officer Director Director
Sales and Marketing Programme
| 30/06/2020 | 31/03/2020 | |
|---|---|---|
| Long-term assets | KEUR | KEUR |
| Intangible assets | 1,100 | 1,130 |
| Inventory of pre-paid royalties | 22,843 | 15,347 |
| Tangible assets (incl. rights of use) | 8,049 | 8,415 |
| Investments accounted for under the equity method | 1,054 | 999 |
| Financial investments | 3,394 | 3,276 |
| Trade receivables | 368 | 420 |
| Deferred tax claims | 2,614 | 3,043 |
| 39,422 | 32,629 | |
| Short-term assets | ||
| Inventories | 11,981 | 11,959 |
| Trade receivables | 8,480 | 8,482 |
| Financial assets | 667 | 1,053 |
| Income tax receivables | 126 | 374 |
| Other receivables and assets | 1,761 | 1,815 |
| Cash and cash equivalents | 5,877 | 2,765 |
| Assets held for sale | ─ | 9,501 |
| 28,892 | 35,950 | |
| Total assets | 68,314 | 68,579 |
| Equity | ||
| Share of equity attributable to parent company shareholders | ||
| Subscribed capital | 13,200 | 13,200 |
| Capital reserves | 9,045 | 9,045 |
| Net profit/loss | 5,268 | 4,055 |
| Accumulated other income | 1,886 | 1,995 |
| 29,398 | 28,295 | |
| Equity capital shares of non-controlling shareholders | 149 | -940 |
| Total equity | 29,548 | 27,354 |
| Long-term liabilities | ||
| Accruals | 86 | 86 |
| Financial liabilities | 7,146 | 6,448 |
| Trade payables | 748 | 768 |
| 7,980 | 7,302 | |
| Short-term liabilities | ||
| Financial liabilities | 4,102 | 5,581 |
| Trade payables | 19,215 | 10,338 |
| Income tax liabilities | 254 | 266 |
| Accruals | 5,676 | 5,748 |
| Other liabilities | 1,540 | 1,668 |
| Liabilities in connection with assets classified as held for sale | ─ | 10,321 |
| 30,786 | 33,922 | |
| Total debt | 38,767 | 41,225 |
| Total liabilities | 68,314 | 68,579 |
| 01/04/ – 30/06/20 |
01/04/ – 30/06/19 |
|
|---|---|---|
| KEUR | KEUR | |
| Continuing operations | ||
| Sales revenue | 18.493 | 18.877 |
| Change in inventories of finished goods and work in progress | -29 | -1.432 |
| Other operating income | 55 | 446 |
| Material expenses | -8.935 | -8.432 |
| Personnel expenses | -4.009 | -3.753 |
| Other operating expenses | -3.501 | -3.874 |
| Income from investments | 9 | 33 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | 2.082 | 1.864 |
| Amortisation of intangible assets and fixed assets | -506 | -513 |
| Earnings before interests and taxes (EBIT) | 1.576 | 1.351 |
| Result from at-equity valued investments | 54 | 111 |
| Financial result | -203 | -302 |
| Earnings before taxes (EBT) from continuing operations | 1.427 | 1.161 |
| Taxes on income and earnings | -441 | -440 |
| Results for the period from continuing operations | 986 | 721 |
| Results for the period from discontinued operations | 624 | 32 |
| Group results | 1.610 | 753 |
| Of which is attributable to: | ||
| Shareholders of Bastei Lübbe AG | ||
| Results from continued operations | 972 | 709 |
| Results from discontinued operations | 242 | 23 |
| 1.214 | 732 | |
| Equity shares of non-controlling shareholders | ||
| Results from continued operations | 14 | 12 |
| Results from discontinued operations | 382 | 9 |
| 396 | 21 | |
| Profit per share (undiluted = diluted) (with reference to the net period earnings attributable to shareholders of Bastei Lübbe AG) |
0,09 | 0,06 |
| 01/04/ – 30/06/20 |
01/04/ – 30/06/19 |
|
|---|---|---|
| KEUR | KEUR | |
| Group results | 1.610 | 753 |
| Amounts that cannot be reclassified to the income statement in the future | ─ | ─ |
| Changes in fair value of available-for-sale financial assets | ─ | ─ |
| Amounts that can be reclassified to the income statement in the future | -103 | 16 |
| Currency differences | -103 | 16 |
| Other comprehensive income | -103 | 16 |
| Consolidated comprehensive income | 1.507 | 769 |
| Of which is attributable to: | ||
| Shareholders of Bastei Lübbe AG | 1.099 | 748 |
| Equity capital shares of non-controlling shareholders | 408 | 21 |
| Book | Novel Booklets | Games (discontinued) |
Total | |||||
|---|---|---|---|---|---|---|---|---|
| 04-06/ 2020 |
04-06/ 2019 |
04-06/ 2020 |
04-06/ 2019 |
04-06/ 2020 |
04-06/ 2019 |
04-06/ 2020 |
04-06/ 2019 |
|
| KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | |
| Segment sales | 16,727 | 16,696 | 1,771 | 2,181 | 2,358 | 2,349 | 20,857 | 21,226 |
| Internal sales | 6 | 0 | 0 | 0 | 0 | 0 | 6 | 0 |
| External sales | 16,722 | 16,696 | 1,771 | 2,181 | 2,358 | 2,349 | 20,851 | 21,226 |
| EBITDA | 1,748 | 1,033 | 334 | 831 | 878 | 909 | 2,960 | 2,773 |
| Depreciation | -456 | -452 | -50 | -61 | 0 | -769 | -506 | -1,282 |
| EBIT | 1,292 | 582 | 284 | 770 | 878 | 139 | 2,454 | 1,491 |
| Group Total | Continuing operations |
Discontinued operations |
||||
|---|---|---|---|---|---|---|
| 04-06/ 2020 |
04-06/ 2019 |
04-06/ 2020 |
04-06/ 2019 |
04-06/ 2020 |
04-06/ 2019 |
|
| KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | |
| Segment sales | 20,857 | 21,226 | 18,499 | 18,877 | 2,358 | 2,349 |
| Internal sales | 6 | 0 | 6 | 0 | 0 | 0 |
| External sales | 20,851 | 21,226 | 18,493 | 18,877 | 2,358 | 2,349 |
| EBITDA | 2,960 | 2,773 | 2,082 | 1,864 | 878 | 909 |
| Depreciation | -506 | -1,282 | -506 | -513 | 0 | -769 |
| EBIT | 2,454 | 1,491 | 1,576 | 1,351 | 878 | 139 |
| Result from at-equity valued investments |
54 | 111 | 54 | 111 | ─ | ─ |
| Financial result | -321 | -384 | -203 | -302 | -117 | -83 |
| Income before income taxes | 2,188 | 1,218 | 1,427 | 1,161 | 761 | 57 |
| Taxes on income and earnings | -578 | -464 | -441 | -440 | -137 | -24 |
| Result for the period | 1,610 | 753 | 986 | 721 | 624 | 32 |
| Date | Event |
|---|---|
| 15 September 2020 | Annual General Meeting |
| 12 November 2020 | Semi-annual report as of 30 September 2020 (HY1) |
| 11 February 2021 | Quarterly Statement (Q3) |
For reasons of better readability, the simultaneous use of the language forms male, female and diverse (m/f/d) is largely omitted. All job and personal designations apply equally to all genders.
Bastei Lübbe AG Schanzenstraße 6-20 51063 Cologne, Germany Tel: +49 (0)221 82 00 22 88 Fax: +49 (0)221 82 00 12 12 E-Mail: [email protected]
The Q1/2020 Group statement of Bastei Lübbe AG can be downloaded as a PDF file at www.luebbe.com/en. You can also find further corporate information at www.luebbe.com/en.
The illustrated book cover on the title page is from the Bastei Lübbe collection.
www.luebbe.com
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