Full video here: http://www.catchtalk.tv/events/digitalmediastrategies?video=developing-a-digital-portfolio-through-acquisitions-and-entrepreneurial-ventures-ulrich-schmitz-cto-axel-springer
Picking investments which compliment and boost your core business. Discovering effective new business models in third party ventures. Fostering innovation and entrepreneurship within the business. When to integrate, when to keep seperate and when to sell on.
John Mitchell, Virginia Polytechnic and State University
Developing a digital portfolio through acquisitions and entrepreneurial ventures.
1. Developing a digital portfolio through
acquisitions and entrepreneurial ventures
Ulrich Schmitz, Electronic Media Division, Axel Springer SE
London, March 2014
2. 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
22
3. „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
3
4. 4
“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
“44
Axel Springer about a decade ago
4
8. … and since then occupying core segments
888
Content portals
Performance
marketing
Classifieds /
marketplaces
9. Acquisitions and organic investments
99
organic
by acquisition
2007 2008 20102009 2011 201320122006
Note: Selection; cumulated figures
by acquisition > 80
organic > 110
Σ > 190
10. Strategic fitü
Scalable business modelü
Profitabilityü
Experienced managementü
Reasonable valuationü
Added value through Axel Springer networkü
Investment criteria
10
12. 12
Strong post-acquisition development
12
+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
13. Digital Media: top-line / bottom-line
1313
Revenue in €m EBITDA in €m
Consolidated figures, 2006-2012 based on Annual Reports, 9M 2012-2013 based on Q3 Reports
24
208
378
470
712
962
1,174
823
960
20062007200820092010 2011 2012 2012
9M
2013
9M
1
14 21
43
86
158
243
166
197
20062007200820092010 2011 2012 2012
9M
2013
9M
13
9M 9M
14. Digital reach in Europe today
European media peers (in Mio. Unique Visitors)
1414
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%
16. Kicking off early stage
16
Youtube „Axel Springer Media Entrepreneurs“
http://www.youtube.com/watch?v=vlVDUrcqSIU&list=PLy0931-AnAUbjRlkY-aj2eKqJnjq00m78
18. 18
BILDplus
Premium content
Building new business models
Examples
A
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
19. Acquiring early stage (example Runtastic)
19
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)
B
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
20. Partnering with company builder / Otto Group
E-Commerce Ad Tech Mobile Web Security
20
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
22. 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
22
24. 24
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
25. Our principles as digital shareholder
25
§ Holding structure
§ Operational independency
§ Retaining founders / management
§ Maintaining growth momentum
§ Realistic view on synergy potential
§ No colonial masters
§ No cultural clash
§ Partnership
25