Business News

Gruner + Jahr Grows Its Revenues, Achieves Significant Profit Leap

Thursday 31. March 2011 - G+J significantly improves its operating result in 2010 to above pre-crisis levels

Employees worldwide participate in G+J’s business success
Thanks to slight organic growth, G+J generated increased revenues and achieved an excellent operating result, above pre-crisis levels, in fiscal 2010. Following the global economic and financial crisis and successfully implemented structural measures as well as investments in new businesses, brands and titles, the company was able to strengthen its market position, especially in Germany, and grew its operating result significantly.
In the 2010 business year, G+J achieved slight but wide-ranging organic growth in its revenues, which increased by 1.6 percent to €2,549 million (2009: €2,508 million). At €287 million, the operating result before special items was well above the previous year’s €203 million, and also above the levels seen in the years prior to the crisis. Return on sales (ROS) surged to 11.2 percent (2009: 8.1 percent). This very gratifying business performance was achieved thanks to a slight increase in ad sales income, in combination with the enduring impact of the structural and cost-cutting measures taken earlier.
In the brand business, ad sales grew – especially in Germany and China – by 3.0 percent to €731 million in an improved economic environment. Distribution revenues declined by -5.0 percent to €705 million. In all, the brand business generated revenues of €1.785 billion, an operating result before special items of €215 million, and is extremely profitable with ROS at 12.1 percent.
At €269 million, Operating EBIT after special items significantly exceeded the previous year’s €56 million (which included unscheduled amortization in the print sector and in Spain as well as expenditure on restructuring). EBIT for the year amounted to €262 million; in 2009, EBIT was €33 million and included among other things amortization of goodwill in Spain. G+J generated a net annual profit of €166 million in 2010 (following a net loss of €-18 million in 2009). The Group remains free of financial debt, has a comfortable cash position and is therefore financially in excellent health and fully ready to invest.
Dr. Bernd Buchholz, Chairman & CEO of Gruner + Jahr AG, said: “2010 was a very good year for Gruner + Jahr. We are successful because we systematically changed ourselves in many areas and questioned the status quo. The results show that our restructuring measures have a lasting impact and that the investments in our brands, further developing our digital activities and in our defined growth areas of Corporate Publishing, direct marketing and internationalization are bearing fruit!”
Gruner + Jahr CFO Achim Twardy said: “We’ve proven that G+J is capable of responding swiftly, effectively and sustainably to changing conditions. Our exceedingly good results enable us to invest in our core as well as new lines of business. This allows us to safeguard the viability of our businesses and makes us optimistic for the current business year.”
Employees around the world will share in the successful business performance of 2010. G+J will pay out a total of over €20 million in profit participation to local employees in various countries, including Germany, France, the U.S. and Austria, for the 2010 fiscal year. At December 31, 2010, the Group had 13,337 employees worldwide – a slight year-on-year decline (year-end 2009: 13,571) – and 222 apprentices in Germany.