German media group Axel Springer has cut its full-year revenue and earnings forecasts while also announcing plans to restructure its news media division.
The publisher of Die Welt and Bild said that its 2019 revenues would now decline by “low to mid” single digits from the previous year, while adjusted earnings before interest and tax (Ebit) would be “significantly below the prior year level.”
Axel Springer’s management team, led by chief executive Mathias Dopfner, had previously expected its revenues and Ebit to fall in 2019, but not by as much.
The warning follows US buyout house KKR becoming Axel Springer’s largest shareholder last month. KKR, which has bought 44 per cent of the publisher’s shares, aims to take the group private as part of a deal that was announced in June.
Axel Springer cut its forecasts while also announcing “extensive restructuring measures” for its News Media International division, which comprises the Bild and Welt titles.
“Continuously declining business areas will face cost savings and a reduction of staff numbers,” Axel Springer said, while it would make “early retirement arrangements” and “individually designed qualification opportunities” to make the process easier for affected employees.
The editorial offices of Bild and its Sunday title Bild am Sonntag will be merged, Axel Springer said, in a move that echoes similar restructurings at UK newspaper groups. But the German publisher also pleged more than 100m euros of investment in its news media unit, with funds going into video, sport and content that is paid for by advertisers.