Last year was not a good one for Axel Springer AG, one of Europe’s biggest publishers. The biggest failure was the attempt to get into the mail-delivery business. Springer had to give up when the German government decided on a minimum wages for the postal industry. Then, for Springer, the mail sector no longer appeared viable. (That’s the beauty of this mail-delivery job: as long as you are forbidden to have legion of “working poor” in your plants, it is not worth it). This lead to a massive write-off and Springer lost E288m last year.
Quoted by Bloomberg, CEO Mathias Doepfner said Springer will focus on businesses that don’t depend on political decisions; he mentioned Internet and foreign businesses as expansion areas. Problem is: these two segments didn’t perform well last year either for Springer. In France, the group lost E40-50m in a failed venture to launch an ambitious daily. (As usual, French publishers applied pressure on the government. This turned to pressure on Springer, which gave up. It worked). And on the Internet front, Springer acquired 68% of, Europe biggest women’s site, for 32 euros per share. Unfortunately, Q1 results for yielded a 29% drop in profit. The share tumbled to less than 20 euros, close to its 2000 IPO level. A tougher competitive environment is cited as the cause.
Springer’s stock is now trading at 72 euros, a 50% drop from its all time high in February 2007.
Axel Springer AG controls 170 newspapers and websites and magazines in 33 countries.