BtoB

Financial reports show b-to-b media on the rebound

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BY SEAN CALLAHAN

It’s taken nearly four years, but the b-to-b media industry is displaying signs of strength. The positive results reported by public companies with b-to-b units for the full year 2004 are a clear sign of the market’s vigor.

Most public companies in the business media sector showed top-line growth last year. They also tended to post improved EBITDA (earnings before interest, taxes, depreciation, and amortization) results—and for the first time in several years, the pure b-to-b segments of these businesses made positive contributions.

Primedia's 2004 earnings report, released last week, was typical of public companies with a b-to-b media unit. The company's revenue increased 1.9% to $1.307 billion, from $1.283 billion in 2003. Its EBITDA increased 3.3% to $260.0 million, from $251.6 million.

Primedia’s results looked a little less rosy when factoring out About.com, which the company has agreed to sell to the New York Times Co. to reduce its debt load. Excluding About.com’s results, Primedia's revenue climbed 0.2% last year, to $1.271 billion, and total EBITDA declined 2.6%.

A drag on results for most of the past four years, Primedia’s business information unit was a positive contributor in 2004. Its revenue for the full year reached $224.8 million, up 1.6% from $221.4 million. The unit also increased EBITDA 6.6% for the year.

Also last week, Ziff Davis Holdings, parent company of Ziff Davis Media, reported improved earnings bolstered by renewed strength in its enterprise unit. Overall, Ziff Davis generated $204.5 million in revenue in 2004, a 5% gain over the $194.1 million it produced in 2003. The company’s EBITDA also improved slightly in 2004, to $34.9 million from $34.5 million. Ziff Davis, however, posted an $85.2 million net loss in 2004 due in large part to $91.8 million in interest payments for the year.

Ziff Davis’ net loss notwithstanding, most b-to-b media companies that have already posted 2004 results turned in improved performances:

  • McGraw-Hill Cos. reported its revenue for the year increased to $5.3 billion, a 7.4% gain over 2003. The company generated net income of $755.8 million, a 9.9% increase over 2003. Revenue for the company’s b-to-b group, which includes BusinessWeek, increased 2.4% to $685.7 million compared with 2003.
  • Dow Jones & Co., publisher of The Wall Street Journal, reported its revenue increased 7.7% to $1.67 billion, from $1.55 billion in 2003. Net income, excluding special items, increased 27.4% to $99.9 million, from $78.4 million in 2003. Revenues from the company’s electronic publishing unit helped offset continued softness at the Journal, which posted a full year decline in ad linage of 0.5%.
  • Bolstered mainly by its online business, CNET Networks posted revenue of $291.2 million for 2004, an 18% increase over $246.2 million in 2003. Additionally, the company reported net income of $11.7 million for the year compared with a net loss of $26.3 million in 2003.
  • Driven by both acquisitions and organic growth, Jupitermedia Corp. posted 2004 revenue of $71.9 million, an increase of 53% compared with $47.0 million in 2003. The company reported net income of $15.7 million, compared with $1.4 million in 2003.
  • United Business Media, parent company of CMP Media, posted revenue of $1.55 billion (excluding joint ventures and associates), up 8.4% over 2003. The company said its underlying revenue, adjusted for acquisitions, foreign exchange, SARS and biennial events, was up 3.2%. Additionally, UBM said operating profit (before amortization of good will, intangible assets and exceptional items) was up 33.1% to $252.7 million. The company reported a $212.6 million profit for 2004, which was helped by a $231.1 million reduction in tax liabilities.
  • Reed Elsevier posted a slight decline in revenue, dipping to $9.35 billion from $9.43 billion in 2003. The decline was due in part to the weakness of the U.S. dollar, and Reed Elsevier said its revenue climbed 5% in "constant currencies." The company’s reported its profit before taxation increased to $1.09 billion in 2004, up from $992.6 million in 2003. In constant currencies that was a gain of 12%. Internationally, Reed Business Information, in constant currencies posted its "first reported underlying growth in four years."

VNU posts its results on Wednesday, Advanstar Communications on Thursday and Penton Media on March 31.

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