Developing a digital portfolio through acquisitions and entrepreneurial ventures
Ulrich Schmitz, Electronic Media Division, Axel Springer SE
London, March 2014
Axel Springer SE at a glance
§ Founded in 1946 by Axel C. Springer
§ Headquartered in Berlin
§ Listed since 1985
§ Shareholders: family 60%, free float 40%
§ Active in 44 countries
§ Revenues 2012: 3.3€bn
§ About 13.650 employees
§ >230 newspapers and magazines
§ >160 online offerings
§ >120 apps
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„I will not tire in claiming our share in all existing electronic media and even more in all information systems yet to come.“ Axel Springer, October 1978
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“With regard to electronic media, Springer is completely underdeveloped.”
“... the chaotic web-sandbox of Springer...”
“Europe‘s largest press conglomerate – a mere internet midget. At least they have a strategy now.“
May 1999 May 2000 October 2000
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Axel Springer about a decade ago
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Digitization anchored within the corporate strategy since 2001
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The essentials of the digitization strategy
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Content portals Performance
marketing
Development of a digital map in 2004…
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Classifieds / marketplaces
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… and since then occupying core segments
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Content portals Performance
marketing Classifieds /
marketplaces
Acquisitions and organic investments
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organic
by acquisition
2007 2008 2010 2009 2011 2013 2012 2006
Note: Selection; cumulated figures
by acquisition > 80 organic > 110 Σ > 190
Strategic fit ü Scalable business model ü Profitability ü Experienced management ü Reasonable valuation ü Added value through Axel Springer network ü
Investment criteria
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Financial web applications Finance portal
Infotainment portal Women portal
Product comparison
Performance marketing
Job portal
Portfolio of majority owned market leaders
Real-estate portal
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Recruitment portal Real-estate marketplace Content / classifieds portal Job portal for hospitality
Online brochures
Soccer community
Price comparison
Job portal
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Strong post-acquisition development
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+14% Market CAGR since 2006
Revenues Ø CAGR since acquisition date +22%
+33% EBITDA Ø CAGR since acquisition date
Top 10 digital acquisitions 2006-2012, based on revenues
Market growth: Weighted market CAGR 2006-2013 based on ZenithOptimedia, PwC and HDE; Revenues and EBITDA growth: CAGR since acquisition date based on FC 2013 incl. fully operationally integrated add-on acquisitions on a pro-forma basis
Digital Media: top-line / bottom-line
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Revenue in €m EBITDA in €m
Consolidated figures, 2006-2012 based on Annual Reports, 9M 2012-2013 based on Q3 Reports
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208
378 470
712
962
1,174
823 960
2006 2007 2008 2009 2010 2011 2012 2012 9M
2013 9M
1 14 21 43
86
158
243
166 197
2006 2007 2008 2009 2010 2011 2012 2012 9M
2013 9M
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9M 9M
Digital reach in Europe today
European media peers (in Mio. Unique Visitors)
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Source: comScore, Nov. 2013
18.5
18.8
22.6
25.4
25.8
29.4
35.9
48.9
98.0
Growth YoY
21%
5%
1%
-4%
-6%
10%
0%
-22%
8%
Expansion of strategy
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Building on Leadership
„Early Stage“ “Later Stage”
Broadening the Scope
Kicking off early stage
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Youtube „Axel Springer Media Entrepreneurs“ http://www.youtube.com/watch?v=vlVDUrcqSIU&list=PLy0931-AnAUbjRlkY-aj2eKqJnjq00m78
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Expansion of strategy
Build
Acquire
Partner
A
B
C
Broadening the Scope Building on Leadership
“Later Stage”
Early stage initiatives since 2012
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BILDplus Premium content
Building new business models Examples
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German Bundesliga
Shopping app for high street
User generated photo & advertising app
Marketplace for interiors & design
Second screen Social TV platform
online travel guide in cooperation with
Acquiring early stage (example Runtastic)
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Each app available as free and pro version. Cumulated total number of downloads Appstore ranking: category “Health & Fitness”, source appannie.com, average ranking 1.9.2013 - 1.12.2013; (by grossing, Runtastic pro)
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Portfolio of >30 mobile apps
Tracking running, cycling, winter sports etc.
Fitness tripmeter, push-ups, sit-ups etc.
Others pulse meters, timer etc. Apple AppStore
>3,000x distance
earth to moon tracked
>50m App
downloads
Partnering with company builder / Otto Group
E-Commerce Ad Tech Mobile Web Security
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C
App index Browser security Facebook ad management Targeting as SaaS model
Online shop software Car parts price comparison B2B meta yellow pages Realtime advertising
Online shop tires Dietary supplements Art trading platform Club for wine shopping
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Partnering with Silicon Valley Accelerator
Batch II Batch I
Pages live on
Earnings Conversions
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Axel Springer Plug & Play Accelerator Overview
Pan-European start-up accelerator, founded 02/2013
50:50 Joint Ventre with Plug and Play Tech Center (Silicon Valley)
Three-monthly programme in Berlin, individual follow ups in the Silicon Valley
Substantial programme sequences: assets (25k €), office space, support, coaching, workshops, networking, access to VCs for follow-up financing
Two program cycles per year, each ending with a demo day
Planned to do about 20 Seed Investments (5% share) per year
Third program will start in March 2014
Key facts
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Early stage coverage
Business stage
Size
0
Development
Growth
Team-up
Strategic Product Development
Electronic Media
Scaling
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Early stage coverage
Business stage
Size
0
Development
Growth
Team-up
Strategic Product Development
Electronic Media
Scaling
March, 22-23: next hackathon on mobile media
www.mediahackday.com
Our principles as digital shareholder
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§ Holding structure
§ Operational independency
§ Retaining founders / management
§ Maintaining growth momentum
§ Realistic view on synergy potential
§ No colonial masters
§ No cultural clash
§ Partnership
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Corporate strategy since 2013
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