Last Wednesday, Axel Springer announced their 2011 results. Quite impressive, especially in the digital sector: 

- a 16.2% EBITDA growth, to reach €593.4 million. 

- the EBIDTA margin improves to 18.6%. 

- revenues grow by 10.1%.

Just one day before, Axel Springer had announced a strategic partnership (here) with General Atlantic for Axel Springer Digital Classified (Immonet, Seloger and Stepstone).

 

What could explain this success? Why a partnership between Axel Springer and General Atlantic? What are the relations between Axel Springer's great results and their partnership with General Atlantic?

 

Well, the first thing to notice is that Axel Springer's great results come from the digital branch.

Axel Springer suffered a decline in revenues in its core German newspaper and magazine divisions. As regards printed newspaper in Germany, revenues have dropped by 2% and EBITDA by 4%. Same trend for printed magazines in Germany: revenues have dropped by 4%.

 

On the contrary, in the digital media field, revenues rose by 35% and EBITDA by 84%. And digital advertising revenues nearly caught up with the advertising revenues of German and international print media for the full year 2011.

 

In previous years, Axel Springer had made a lot of acquisitions in the internet sector: aufeminin, netmum, seloger, zanox, M4N, etc. Axel Springer has thus acquired all the technological know-how of a digital affiliate network giant, and lots of digital content and classifieds coherent with its audience and its brands. So the group is now in a leading position in the digital world in the 3 classical segments of a press editor: classifieds, advertising and content.

 

As Axel Springer's CEO points out in the annual report: "Based on revenues, Axel Springer AG is now the second-ranked European stock listed Internet company. With a reach of 63.7 million unique visitors, Axel Springer AG is the leading online operator among traditional European media companies. Among the most popular European websites, Axel Springer ranks 16th."

 

The aim of the partnership with General Atlantic is quite clear: Axel Springer sold 30% of its share for more than €200 million. This "fresh" money will enable the media giant to continue its acquisitions. The financial support of General Atlantic will also help Axel Springer classifieds to expand abroad.