Axel Springer lifts forecast as digital media pays off

German media giant Axel Springer reported growing revenues and net profit yesterday, lifting its full-year forecast as more customers turned to its paid-for offerings in print, television and online. Adjusted net profit increased 13 percent to 91.5 million euros ($108.2 million) between April and June, mainly driven by strong growth in earnings from its digital media products.

Operating or underlying profits increased 15.7 percent to 170.1 million euros, on the back of revenues up 7.1 percent at 858.8 million euros, both beating analysts’ forecasts. “We’re happy with these results that have beaten our expectations. Our investments, especially in online media, have paid off,” chief executive Matthias Doepfner said at a press conference.

Digital media now account for around 74 percent of the group’s operating profit, he added. Axel Springer’s stable of online titles includes English-language site Business Insider as well as the digital versions of German newspapers like Bild or Die Welt, while it also operates a slew of European classified advertising sites. Doepfner pointed to an “international improvement in the online advertising sector, especially affiliation,” when high-traffic sites receive a cut of sales from online shops they link to.

The group also reported growth in its paid-for online media that offset falling revenue from its print products. Nevertheless, print enjoyed strong sales in the first half, especially thanks to a one-off special edition of Bild celebrating the German parliament’s June vote to legalize same-sex marriages that sold 41 million copies. Looking to the full year, Springer expects a “high single-digit percentage” increase in operating profits and adjusted profits per share compared with 2016’s result, on the back of a “mid-single-digit percentage” increase in revenues.

Founded shortly after World War II by journalist Axel Springer, the publishing group was an early convert to digital media, setting up online subscriptions for its newspapers, selling off print publications and investing in up-and-coming sites like Business Insider.