Hubert Burda Media: Back on the Growth Path

MUNICH, June 10, 2011 /PRNewswire/ --

- All Divisions Profitable

- Accelerated Growth Thanks to Efficient Structures, Strong Brands and Leading Market Positions

Hubert Burda Media recorded a noticeable recovery of group sales in the fiscal year 2010. Consolidated group turnover (external sales) increased by 8.4 per cent to EUR 1,720.6m (2009: EUR 1,587.1m). The operating performance increased by 5.8 per cent to EUR 2,199.4m (2009: EUR 2,078.2m). The growth in the divisions Foreign Publishing and Digital were the main drivers behind the growth in turnover. Every division achieved positive results due to the positive development of sales as well as the timely and comprehensive adjustment of the cost structures to the overall economic development. The group result was satisfactory and above the level before the global financial crisis. Burda CEO Dr Paul-Bernhard Kallen: "We are back on the growth path and have established an economic foundation that will allow us to grow more rapidly in the coming years." Hubert Burda Media expects a continuation of growth in the current fiscal year and an increase in sales to over two billion Euros. In 2010, the consolidated sales of the business divisions developed as follows:

The Four Pillar Strategy comprising the divisions Domestic Publishing, Foreign Publishing, Digital and Printing is one of the group's strengths and a guarantee for stable development. The division Domestic Publishing generated 34.1 per cent (2009: 38.2 %) of the external sales, the division Foreign Publishing 23.1 per cent (2009: 21.6 %). Digital increased significantly to 35.1 per cent (2009: 32.0 %). The business division Direct Marketing, shown separately as a fifth division in previous years, generated 7.5 per cent (2009: 8.1 %). Due to its focus on digital activities, as of the fiscal year 2010, it has been integrated into the division Digital. The former core division Digital stood at 27.6 per cent (2009: 23.9 %). The division Printing generated 7.4 per cent (2009: 7.8 %) and the other divisions 0.3 per cent (2009: 0.4 %) of external sales. In 2010, the group invested again in the expansion of all business divisions.

Digital

Publisher Dr Hubert Burda was early to recognize the changes brought about by the digital revolution. Today, the corporation is successfully established in the digital world. The implementation of a profit center structure in the mid 1990s laid the cornerstone for the growth driver Burda Digital GmbH, which is now one of the leading digital media companies in Europe. Its six business fields comprise more than 50 shareholdings:

- Consumer electronics: "CHIP", "Cyberport", etc.

- E-papers: "Tomorrow Focus AG", "Holiday Check", "Elite Partner", etc.

- Conferencing / Innovation platform: "DLD", internationally leading digital conference

- Business community: "XING", etc.

- Venture portfolio: "suite101", "Game:Duell", "Glam", "edelight", etc.

- Direct marketing: "Burda Direkt Services", etc.

Over the course of only a few years, Digital has become one of the main pillars for Hubert Burda Media and today makes up 35.1 per cent of total turnover. The digital business activities grew considerably to EUR 603.6m (2009: EUR 507.3m). The merger of the Burda Direct Group, one of the largest direct marketing groups in the German-speaking world, and the consulting and technology service provider Burda Digital Systems at the end of 2010 created Burda Direkt Services, a powerful service provider for customer management, direct marketing and technology services with a clear focus on growth in the digital sector and a stable turnover in the amount of EUR 129.5m (+1.3 %).

Domestic Publishing

In 2010, Hubert Burda Media sold around 350 million magazines in Germany. 80.4 per cent of all Germans aged 14 and older read one of the 77 (2009: 77) titles. External sales of German publishing houses of Hubert Burda Media declined by 3.3 per cent to EUR 586.6m (2009: EUR 606.6m). Although the downward trend of the distribution market continued, the group increased sales in the distribution channel Grosso, maintained a nearly stable turnover across all divisions and significantly improved its market position in distribution through its investment in the company Moderner Zeitschriften Vertrieb GmbH & Co. KG (MZV). The group held its position as market leader in advertising. The central advertising sales organization, Burda Community Network GmbH (BCN), was able to maintain its lead in the competitive environment of the relevant German top publishing houses and kept its market share almost stable at 22.5 per cent (excluding media advertising) in comparison to the previous year (2009: 22.9 per cent). Hubert Burda Media was also able to defend its strong market position thanks to new titles such as "Mein schones Land", "Freundin Donna" or "Instyle Men". So all in all, magazines remained a very profitable business. Since 2008, Domestic Publishing has been reorganized: The consolidation program CHANGE, successfully concluded in May 2011, is followed up with a comprehensive, two-year program launched to strengthen profitability (S.P.E.E.D.).

Foreign Publishing

Hubert Burda Media and its partners published 226 titles (2009: 191 titles) abroad in 2010. At 179 titles (2009: 143 titles), activities primarily focused on Eastern Europe, followed by Asia and Turkey (a total of 24 titles) and smaller-scale activities in France (8 titles) and the UK (5 titles). In 2010, sales in the division Foreign Publishing increased by 15.6 per cent to EUR 396.9m (2009: EUR 343.2m). The group has continued its internationalization efforts and will expand especially in Eastern Europe and Asia.

Printing

Burda Druck is among Europe's largest printing companies. In 2010, printing sales increased by 3.7 per cent to EUR 127.5m (2009: EUR 123.0m). HT Burda Media Ltd., the joint venture of Burda Druck and the Indian daily newspaper publisher Hindustan Times, opened for business in 2010 as India's first illustration gravure printing plant for media products. For 2011, Burda Druck is not expecting any deterioration with regard to use of capacity and orders in comparison to 2010. All reasonable and possible measures to strengthen the division's competitiveness will be implemented. These measures also include the acquisition of rotogravure printing company u.e. sebald, Nuremberg, from the insolvent Schlott group during the current fiscal year.

Employees

At the end of 2010, Hubert Burda Media employed a workforce of 7,637 people (2009: 7,118), thereof 2,642 or 34.6 per cent in the booming digital sector (2009: 34.4 per cent). Hubert Burda Media has been investing sustainably in the education and further training of existing and new employees for years. The scope of the training measures offered increased again significantly. The Work-Life Balance Initiative promotes the compatibility of career and family, exercise, health and relaxation. The two largest German sites in Munich and Offenburg were certified as family-friendly companies. More than half of the workforce and around one third of the specialists and managers at Hubert Burda Media are women. The percentage of female executives among the editorial staff is even higher: One out of two Burda publications are headed by female Editors-in-Chief.

Environment and Corporate Social Responsibility

Environmental protection retains its high importance for Hubert Burda Media and is an inherent part of corporate policy. Through the optimization of the production processes in printing, the company has been able to reduce the specific amount of energy used per production unit by 16 per cent in comparison to 2000. Modern machines and new concepts enabled the company to reduce the amount of energy used - and therefore also the carbon dioxide emissions - by nearly half in the new printing plant in Offenburg. In order to anchor these developments and to champion further improvements, environmental management now includes an energy management unit. Furthermore, the group supports several foundations, such as the TRIBUTE TO BAMBI Foundation, which helps children in need in Germany and the affiliated Christian Liebig Foundation, which supports people in developing countries, as well as first and foremost the Hubert Burda Foundation, active in the fields of science and culture. This foundation also includes the Felix Burda Foundation, which successfully educates the public about colon cancer prevention.

Outlook

As an international media corporation, Hubert Burda Media continues to work on taking a leading role in its business areas. The Internet is becoming ever more important as an advertising and sales channel. Consequently, the division Digital is growing in importance as well and is expected to make up the largest share of the total turnover in 2011 - even excluding the direct marketing business. The division Foreign Publishing remains a growth driver as well. The domestic distribution and advertising sales will benefit from the continued economic recovery. Due to efficient structures, strong brands and leading market positions, the group expects growth to pick up. The number of employees will increase to 8,000 for the first time during the current fiscal year.

    For additional information please refer to http://www.burda-news.de

    Contact:

    Nikolaus von der Decken
    Director Corporate Communications
    Hubert Burda Media
    Phone: +49(0)89-92-50-3422
    Email: [email protected]

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SOURCE Hubert Burda Media