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Bastei Lübbe AG

Annual / Quarterly Financial Statement Feb 8, 2024

46_10-q_2024-02-08_48223391-a8fa-41bc-8369-f1b96e26e3db.pdf

Annual / Quarterly Financial Statement

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AT A GLANCE

Financial indicators (IFRS) in € millions 1 April - 31
December
2023
1 April - 31
December
2022
Change
Revenues 84.4 73.2 15.3%
EBIT 11.7 4.8 143.6%
EBIT margin (%) 13.9% 6.6% 7.3 Pp
Consolidated earnings 9.5 2.6 269.6%
Earnings per share (€) 0.72 0.19 27.,9%
1 October -
31 December
1 October -
31 December
2023 2022 Change
Revenues 33.4 29.1 14.8%
EBIT 5.6 3.9 45.3%
EBIT margin (%) 16.9% 13.3% 3.5 Pp
Consolidated earnings 5.7 2.5 127.6%
Earnings per share (€) 0.43 0.19 126.3%
31 December
2023
31 March
2023
Change
Total assets 112.9 107.9 4.6%
Equity* 62.3 55.0 13.3%
Equity ratio (%) 55.2% 51.0% 4.2 pp
Net financial assets 17.7 16.7 5.8%

* Including non-controlling interests

ECONOMIC REPORT

UNDERLYING CONDITIONS

Economic conditions in Germany are currently characterized by uncertainty. While other nations are reporting positive growth rates again after the setbacks caused by the pandemic and Russia's subsequent attack on Ukraine, Germany is the only leading economy to remain in a state of stagnation characterised by negative or declining economic growth and high, albeit decreasing, inflation rates. The economy is suffering from the aftermath of earlier crises, especially the significant loss of purchasing power caused by the massive increase in energy and food prices, muted global economic conditions, geopolitical crises and monetary tightening.

Accordingly, the fourth quarter of 2023 saw only a muted end to the year. At the end of January, the Federal Statistical Office reported that the German economy had contracted by 0.3% in the period from October to December 2023, after flatlining in the third quarter. This translates into a decline of around 0.3% in GDP in 2023 as a whole.1 This was also materially attributable to consumer spending, which fell by 0.8%.

Revenues in the retail sector relevant to Bastei Lübbe (excluding motor vehicles) fell by 1.7% in real terms in December 2023 compared to December 2022. Nominal revenues, on the other hand, rose by 0.8%. Compared to November 2023, revenues declined by 1.6% in real terms and by 1.2% in nominal terms, adjusted for calendar and seasonal effects.2

The average inflation rate in 2023 was 5.9%, down from 6.9% in the same period of the previous year.

INDUSTRY ENVIRONMENT IN THE BASTEI LÜBBE BUSINESS SEGMENTS

Despite traditionally strong Christmas trading, revenues from book retailing did not rise. Subdued consumer sentiment also took its toll on the book market. This was exacerbated by calendar effects in that two selling days were missing compared to December of the previous year, with Christmas Eve coinciding with 4th Advent, resulting in a very short Christmas trading period. Consequently, sales and revenues in December fell short of the previous year's month. However, full year revenues were up on the previous year in 2023, reflecting an increase in the average price paid per book – a trend that had already emerged over the course of the year.

December revenues in the distribution channels book stores, e-commerce, railway station book stores, department stores, consumer electronics stores and pharmacies, fell by 0.9% compared to the previous year, with volume sales dropping by 5.3%, while prices increased by 4.7%.4However, the higher prices, which are passed on to customers to cover increased production costs, are not sufficient to fully compensate for the softer demand. Revenues were up 1.8% in November and up 4.0% in October year on year. 5

Revenues in book stores, which are the largest distribution channel, fell by 2.2% year on year in December on a 7.0% decline in volume sales and an average increase of 5.1% in prices. In November, revenues declined by 2.4%, after increasing by 2.5% in October. 6

In terms of format, only hardcover and softcover editions reported growth in December (0.4%). All other forms sustained declines ranging from 1.7% (cards) to 27.6% (physical audiobooks).There is currently no specific information available on the performance of digital audiobook products.2

1 https://www.destatis.de/DE/Themen/Wirtschaft/Volkswirtschaftliche-Gesamtrechnungen-Inlandsprodukt/_inhalt.html#sprg230114 2 https://www.destatis.de/EN/Press/PressReleases/2024/01/PD24_041_45212.html

3 https://www.destatis.de/EN/Press/PressReleases/2024/01/PD24_020_611.html

4 Industry Monitor BOOK January 2024

5 Industry Monitor BOOK January 2024

6 Industry Monitor BOOK January 2024

2 Industry Monitor BOOK January 2024

BUSINESS PERFORMANCE

GROUP RESULTS OF OPERATIONS

Bastei Lübbe AG generated Group revenues of €84.4 million in the period from April to December of the 2023/2024 financial year, up from €73.2 million in the same period of the previous year. This translates into an increase of 15.3% on the previous year. The favourable performance emerging in the first half of the financial year thus continued and the Executive Board is pleased with the Group's successful Christmas business.

Financial indicators (IFRS) in € millions 1 April - 31
December
2023
1 April - 31
December
2022
Change
Revenues 84.4 73.2 15.3%
EBIT 11.7 4.8 >100%
EBIT margin (%) 13.9% 6.6% 7.3 Pp
Consolidated earnings 9.5 2.6 >100%
Earnings per share (€) 0.72 0.19 >100%

Group EBIT increased significantly to €11.7 million, compared to €4.8 million in the same period of the previous year. The main reasons for this are the significantly higher revenues compared to the previous year and extraordinary effects on the part of the Group's investments Räder GmbH and Business Hub Berlin UG ("smarticular"). In the period under review, Räder GmbH distributed a dividend of €1.2 million to Bastei Lübbe (previous year €0 million). At smarticular, impairments of €1.0 million were recognized on intangible assets (compared with €2.0 million on goodwill and other intangible assets in the previous year). Adjusted for these extraordinary effects, EBIT would have reached €11.5 million in the first nine months of the current financial year and €6.7 million in the same period of the previous year, equalling a change of 72%.

Changes in inventories of finished goods and work in progress came to €0.1 million, i.e. €0.1 million up on the previous year (€0.0 million). At €0.4 million, other operating income was up on the previous year (previous year: €0.2 million).

The cost of materials came to a total of €41.0 million in the period under review, thus rising by 15% compared to the previous year (€35.6 million) and at a similar rate as revenues. There were no significant shifts between manufacturing costs and licensing fees.

Personnel expenses rose from €15 million in the previous year to €15.7 million. In addition to scheduled salary adjustments, this is also due to the higher number of employees as a result of vacant positions being filled at Bastei Lübbe AG.

Other operating expenses climbed from €13.9 million in the previous year to €14.9 million. The main reasons for this are higher advertising costs as well as increased IT expenses in connection with the planned modernization of the IT infrastructure.

The impairments of non-current intangible assets (€1.0 million) attributable to smarticular are included in amortization and depreciation (previous year impairments of goodwill (€1.7 million) and non-current intangible assets (€0.3 million)). Depreciation of right-of-use assets under leases amounted to €1 million (previous year: €1 million).

Group earnings before interest and taxes (EBIT) came to €11.7 million in the period from April to December (previous year: €4.8 million). The EBIT margin reached 13.9%, up from 6.6% in the same period of the previous year. Adjusted for the extraordinary effects at Räder and smarticular, the EBIT margin stands at 13.6% (previous year 9.9%).

Net finance expense came to €0.5 million, compared with €0.2 million in the previous year. This reflected the increased interest rates. Interest expenses on lease liabilities amounted to €0.2 million (previous year: €0.2 million).

Earnings before taxes (EBT) reached €11.2 million (previous year: €4.6 million).

The tax expense of €1.6 million, which results in a substantially higher tax rate, reflects the fact that the impairments of intangible assets in connection with the acquisition of smarticular were not deductible under tax law and that there were no deferred taxes.

Net profit for the period amounted to €9.5 million (previous year: €2.6 million). The portion of this attributable to Bastei Lübbe AG's equity holders amounts to €9.5 million (previous year: €2.5 million). Earnings per share amounted to €0.72, up from €0.19 in the previous year. This is based on 13,200,100 shares outstanding in the period under review (unchanged over the previous year).

BUSINESS PERFORMANCE BY SEGMENT

In the "Book" segment, revenues climbed from €67.9 million to €78.7 million in the period under review. One significant reason for this are blockbuster titles by Ken Follett, Dirk Rossmann, Ralf Hoppe and Jeff Kinney. Furthermore, LYX (up 21.2%) and Audio (up 10.8%) continued to grow at a very swift pace compared to the previous year. New releases by Mona Kasten ("Fallen Princess") and Hannah Grace ("Icebreaker") were particular highlights at LYX. Segment EBIT rose significantly to € million in the period under review compared to the same period of the previous year (€4.6 million). This is primarily due to the factors mentioned above.

The "Novel Booklets" segment generated revenues of €5.6 million in the first nine months of the 2023/2024 financial year, surpassing the previous year's figure of €5.3 million. The lower volume sales in wholesale press business were offset by price increases and the expansion of subscription and digital business. Segment EBIT stood at €0.7 million in the period under review, up from €0.2 million in the previous year. This is particularly due to the recovery in paper, printing and delivery costs in the "Novel Booklets" segment.

NET ASSETS

Total Group assets rose by €5.0 million from €107.9 million (31 March 2023) to €112.9 million as of 31 December 2023.

Non-current assets were valued at €49.2 million, compared with €56.1 million as of 31 March 2023. The decline in intangible assets from €8.2 million as of 31 March 2023 to €7.0 million is due to the impairment of intangible assets of €1.0 million in connection with the acquisition of smarticular. Author advances decreased by €4.7 million to €19.3 million. Right-of-use assets under leases amounted to €6.0 million (31 March 2023: €6.6 million).

Current assets rose from €51.8 million as of 31 March 2023 to €63.7 million as of 31 December 2023. This is mainly due to the higher trade receivables from Christmas business.

The share of equity attributable to the equity holders of the Parent Company stood at €62.1 million, up €7.3 million on 31 March 2023 (€54.8 million). The net profit for the period of €9.5 million is offset by the dividend payment of €2.1 million for the 2022/2023 financial year.

Non-current liabilities were valued at €7.4 million, compared with €8.8 million as of 31 March 2023. This decline is primarily due to the scheduled repayment of an acquisition loan of €0.8 million as well as the decline in non-current lease liabilities to €5.2 million (31 March 2023: €5.8 million).

Current liabilities amounted to €43.2 million as of 31 December 2023, compared with €44.2 million as of 31 March 2023. Higher liabilities to authors were accompanied by reduced income tax liabilities after tax payments. Current lease liabilities amounted to €1.1 million (31 March 2023: €1.1 million).

Net financial assets stood at €17.7 million as of 31 December 2023, up €1 million on 31 March 2023 (€16.7 million). This is particularly influenced by tax and dividend payments of €2.1 million in September 2023.

MATERIAL EVENTS OCCURRING AFTER THE REPORTING DATE

No events of particular significance for the assessment of the Bastei Lübbe AG Group's net assets, financial position and results of operations occurred after the reporting period.

OPPORTUNITY AND RISK REPORT

There has been no fundamental change in Bastei Lübbe AG's risk situation and opportunities compared to the presentation in the 2022/2023 annual report.

OUTLOOK

There have been no changes in the Executive Board's forecast for the 2023/2024 financial year since the revised forecast issued on 8 January 2024.

Accordingly, Group revenues of between €109 and 111 million (previous year: €100.0 million) and EBIT in a range of € 12.5 to 13.5 million (previous year: €7.2 million) are expected for the 2023/2024 financial year.

Cologne, 8 February 2023

Bastei Lübbe AG

Soheil Dastyari Chairman of the Executive Board

Mathis Gerkensmeyer Chief Financial Officer

Sandra Dittert Member of the Executive Board Chief Marketing and Sales Officer

Simon Decot Chief Programme Officer

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2023

€k 31 December
2023
31 March
2023
Intangible assets 7,008 8,204
Author advances 19,259 23,931
Property, plant and equipment (including right-of-use assets) 6,493 7,307
Financial assets 15,293 15,338
Deferred tax assets 1,118 1,285
Non-current assets 49,172 56,066
Inventories 13,546 13,001
Trade receivables 27,943 16,114
Financial assets 42 135
Income tax refund claims 304 203
Other receivables and assets 2,189 2,912
Cash and cash equivalents 19,707 19,482
Current assets 63,731 51,848
Total assets 112,902 107,914
Subscribed capital 13,200 13,200
Share premium 9,045 9,045
Unappropriated surplus/accumulated deficit 24,682 17,314
Other comprehensive income 15,199 15,219
Equity attributable to Bastei Lübbe AG shareholders 62,125 54,778
Shares held by non-controlling shareholders 203 215
Equity 62,328 54,993
Provisions 419 318
Deferred tax liabilities 633 705
Financial liabilities 6,211 7,593
Trade payables 149 149
Non-current liabilities 7,412 8,766
Financial liabilities 3,804 4,273
Trade payables 25,745 21,838
Income tax liabilities 3,446 8,010
Provisions 7,966 8,014
Other liabilities 2,200 2,021
Current liabilities 43,162 44,156
Total liabilities 50,574 52,921
Total equity and liabilities 112,902 107,914

CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 DECEMBER 2023

€k 1 April - 31
December
2023
1 April - 31
December
2022
Revenues 84,393 73,221
Changes in inventories of finished goods and work in progress 61 -40
Other operating income 369 193
Cost of materials -40,954 -35,558
Personnel expenses -15,725 -15,017
Other operating expenses -14,868 -13,914
Share of profit of associates 1,200
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 14,476 8,884
Amortisation and depreciation -2,775 -4,081
Earnings before interest and income taxes (EBIT) 11,701 4,803
Net finance income/expenses -527 -178
Earnings before taxes (EBT) 11,174 4,625
Income taxes -1,648 -2,048
Consolidated net profit for the period 9,526 2,577
Of which attributable to:
Equity holders of Bastei Lübbe AG 9,480 2,543
Shares held by non-controlling shareholders -46 34
Earnings per share in euros (basic = diluted) (based on the net profit for the period
attributable to the equity holders of Bastei Lübbe AG)
0.72 0.19

CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM 1 OCTOBER 2023 TO 31 DECEMBER 2023

1 October -
31 December
1 October -
31 December
€k 2023 2022
Revenues 33,386 29,081
Changes in inventories of finished goods and work in progress 323 24
Other operating income 67 91
Cost of materials -16,433 -13,980
Personnel expenses -5,254 -4,907
Other operating expenses -6,034 -5,726
Share of profit of associates 1,200
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 7,255 4,584
Amortisation and depreciation -1,620 -708
Earnings before interest and income taxes (EBIT) 5,635 3,877
Net finance income/expenses -198 -151
Earnings before taxes (EBT) 5,437 3.726
Income taxes 214 -1,243
Consolidated net profit for the period 5,651 2,483
Of which attributable to:
Equity holders of Bastei Lübbe AG 5,636 2,474
Shares held by non-controlling shareholders -15 9
Earnings per share in euros (basic = diluted) (based on the net profit for the period
attributable to the equity holders of Bastei Lübbe AG)
0.43 0.19

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM 1 APRIL 2023 TO 31 DECEMBER 2023

€k 1 April - 31
December
2023
1 April - 31
December
2022
Consolidated net profit for the period 9,526 2,577
Amounts that cannot be recycled to profit and loss in the future
Changes in the fair value of equity instruments
Amounts that can be recycled to profit and loss in the future -23 22
Foreign currency translation differences -23 22
Other comprehensive income -23 22
Consolidated comprehensive income 9,503 2,599
Of which attributable to:
Equity holders of Bastei Lübbe AG 9,459 2,563
Shares held by non-controlling shareholders 44 37

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM 1 OCTOBER 2023 TO 31 DECEMBER 2023

€k 1 October -
31 December
2023
1 October -
31 December
2022
Consolidated net profit for the period 5,651 2,483
Amounts that can be recycled to profit and loss in the future -48 14
Foreign currency translation differences -48 14
Other comprehensive income -48 14
Consolidated comprehensive income 5,603 2,496
Of which attributable to:
Equity holders of Bastei Lübbe AG 5,593 2,487
Shares held by non-controlling shareholders 10 10
Book
Novel booklets
Group
€k Apr. -
Dec. 2023
Apr. -
Dec. 2022
Apr. -
Dec. 2023
Apr. -
Dec. 2022
Apr. -
Dec. 2023
Apr. -
Dec. 2022
Segment revenues 79,092 68,159 5,649 5,285 84,741 73,444
Internal revenues -348 -223 -348 -223
External revenues 78,744 67,936 5,649 5,285 84,393 73,221
EBITDA 12,425 8,557 851 327 13,276 8,884
Amortisation and depreciation -2,660 -3,952 -114 -129 -2,774 -4,081
EBIT 9,765 4,605 737 198 10,502 4,803

SEGMENT REPORT FOR THE PERIOD FROM 1 APRIL 2023 TO 31 DECEMBER 2023

SEGMENT REPORT FOR THE PERIOD FROM 1 OCTOBER 2023 TO 31 DECEMBER2023

Book Novel booklets Group
€k Oct. -
Dec. 2023
Oct. -
Dec. 2022
Oct. -
Dec. 2023
Oct. -
Dec. 2022
Oct. -
Dec. 2023
Oct. -
Dec. 2022
Segment revenues 31,624 27,339 1,879 1,821 33,503 29,160
Internal revenues -117 -79 -117 -79
External revenues 31,507 27,260 1,879 1,821 33,386 29,081
EBITDA 5,678 4,377 376 208 6,054 4,584
Amortisation and depreciation -1,584 -669 -35 -38 -1,619 -708
EBIT 4,094 3,708 341 169 4,435 3,877

FINANCIAL CALENDAR 2024/2025

DATE EVENT
16 July 2024 Annual press conference
8 August 2024 Quarterly statement (Q1)
11 September 2024 Annual general meeting
7 November 2024 Financial report for the first half of the year (HY1)
6 February 2025 Quarterly statement (Q3)

LEGAL NOTICE

We have very largely avoided references to individual genders in the interests of readability. All professional and personal designations apply equally to all genders.

Bastei Lübbe AG's quarterly statement as of 31 December 2023 is available as a PDF file on the Internet at www.luebbe.com. Further information on the Company can also be found on the Internet at www.luebbe.de.

PUBLISHED BY:

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]

PHOTO CREDITS:

Title: ddp images

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