German multimedia giant Axel Springer announced today that it predicts lower profits in 2013 due to increased expenditures to expand its digital media business, which is expected to drive the company’s growth.
While several print segments declined in 2012, Axel Springer’s digital media activities generated more revenues than any other operating segment – overtaking the Group’s national newspapers for the first time ever.
“We generated revenues of more than €1bn on our digital media activities. Furthermore, this growth is profitable, with higher EBITDA margins than before. From this strong position, we will pursue the digitization of our business with even more speed and vigor,” said Dr Mathias Döpfner, CEO of Axel Springer AG.
The increase in revenues from the digital media segment were attributed to the consolidation of newly-acquired companies and reportedly double-digit organic growth.
“We want to become the leading digital media group”
Axel Springer’s digital media segment is made up of three pillars. The Content Portals & Other Digital Media pillar comprises of past acquisitions of online businesses, such as price comparison site idealo and mobile coupons startup kaufDA, and portals like Bild.de and Die Welt Online. The company’s latest acquisition of social TV startup TunedIn likely falls into this category as well.
For 2013, the Berlin-based media group projects “a low single-digit percentage” increase in profits and expects international print media to decline further. To combat the trajectory of the print business, Axel Springer will focus on restructuring and continue investing in its digital media strategies.
Axel Springer building: flickr user CAMPUS OF EXCELLENCE
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