Business News

Gruner + Jahr invests in digital future

Monday 03. September 2012 - G+J presents half-yearly results: Stable Group revenues despite slight decline in global demand for advertising / High investment in digital transformation

Gruner + Jahr, Europe’s leading magazine publisher, kept revenues at the relatively stable level of 1,111 million Euro (2011: 1,113 million Euro) during the reporting period. Operating EBIT declined slightly year-on-year from 124 million Euro to 85 million Euro. This can be put down to a high investment in the digital transformation of the company’s content as well as its marketing services and the global digital research and development project known as “House of Content”. Furthermore, advertising markets for consumer magazines saw a significant year-on-year decline in both Germany and most other European markets.
Due to this massive investment and the sluggish advertising business, G+J generated a return on investment of 7.7 percent in the first half of 2012, down from 11.1 percent in the same period in 2011.
Sales revenues remained stable on account of the successful introduction of new publications and line extensions, amounting to 387 million Euro following the 390 million Euro recorded in the year-ago period. Advertising revenues developed differently in different countries and achieved a total of 375 million Euro, down year-on-year from 383 million Euro.
In its strategic area of growth “Digital Marketing”, G+J was extremely successful thanks mainly to the continued internationalisation of EMS subsidiaries Ligatus and Adyard. As a result, G+J EMS, Ligatus and Adyard were able to increase both national and international revenues by over 20 percent and therefore remained ahead of the general market trend by a considerable margin. This result also lead to a further increase in the share of digital revenues in the company’s marketing business. In the first half of 2012, G+J also invested in its digital marketing business in India with the acquisition of a majority holding in Networkplay India Ltd. Thereby, G+J in now present in one of Asia’s strongest growth markets alongside China.
International business again continued to develop differently from market to market. France, Spain and Austria were not able to hold revenues and operating results at the same levels as the previous year due to weak advertising markets. By contrast, business in the Netherlands saw significant growth and Chinese and Indian businesses continued to grow healthily.
The printing business at Brown Printing saw a slight upward trend in terms of revenues and operating result during the reporting period. Dresdner Druck- und Verlagshaus was able to exceed the previous year’s extremely positive performance in terms of revenues and maintain its operating result at a high level.
Gruner + Jahr’s adjusted EBIT reaches 85 million Euro in the first half of 2012 (previous year: 122 million Euro).
Gruner + Jahr is investing a great deal in the digital transformation of its core competencies in order to be able to provide readers and users with access to its content on all digital channels. Focal point of these activities is the international digitalisation project called “House of Content” (HoC) and the new business unit G+J Digital GmbH, which pools the company’s digital activities in Germany and will commence operations on 1 September 2012. These two areas, coupled with the continued expansion of digital marketing with a high level of investment in Germany and on an international scale and other, country-specific digital projects will accelerate the digital transformation of Gruner + Jahr.
HoC is the research centre of G+J. It provides advice to G+J employees around the world in the task of working with the publishing and editorial teams to successfully transfer the quality content of G+J magazine brands into the digital world. HoC supports a wide variety of transformation projects managed by national and international G+J editorial teams through providing significant investment volume. The HoC-developed system allows G+J to produce editorial content for many different platforms, devices and business models more quickly and to a greater extent than before thanks to simplified processes.
With G+J Digital GmbH, G+J Germany is pooling its digital activities in order to keep pace with the rapid development of the IT sector and offer suitable technical frameworks for all of the publishing group’s digital offerings. Working closely with “House of Content”, G+J Digital is developing multi-market digital media formats, integrated web technology and digital business models for the websites of G+J Germany brands. By pooling its activities and focussing its resources, Gruner + Jahr will benefit in the long run and gain a significant amount of momentum.