Springer Nature: Why a specialist publisher is going public

As of: October 4th, 2024 3:48 p.m

Whether “Nature” or the “Ärztezeitung” – Springer Nature’s publications are one of the largest scientific publishers in the world. The company is now on the stock exchange. What does it want there?

By Alina Leimbach, ARD financial editorial team

Springer Nature has a long and successful history. The publishing house was founded in 1842. The company, headquartered in Berlin and employing more than 9,000 people, has now become one of the world’s largest publishers of scientific publications. It includes the renowned scientific newspaper “Nature”, the “Ärztezeitung” and “Palgrave MacMillan” – no student can pass by the publisher either.

The company has now launched its IPO on the Frankfurt trading floor. And according to initial assessments, it was very successful. The number 24 euros appeared in large letters on the display board on the Frankfurt package this morning as the first rate – well above the issue price of 22.50 euros.

Issue price exceeded

Some observers even spoke of a “brilliant IPO”. In general, the issue price was already rather high for a German company, analysts emphasized.

But what does the specialist publisher want on the stock market? Alexandra Dambeck, Chief Financial Officer at Germany’s largest scientific publisher Springer Nature, sees good growth opportunities: “Over the past 20 years, the market in which we operate has grown continuously.” Dambeck also believes: “More and more is being invested in research and development. And if there are more scientists, then there will also be greater demand for scientific publishers.”

More than 500 million euros in profit in 2023

In fact, Springer Nature was able to present decent figures. The company achieved sales of 1.85 billion euros in 2023 – an increase of 5.2 percent. The adjusted profit was more than 500 million euros.

But unlike other IPOs, Springer Nature is not about expansion or new fields to be developed, says capital market strategist Stefan Riße from Acatis Investment. “The company wants to reduce its debt because it is perceived as too high.”

IPO also because of private equity company

According to Riße, Springer Nature’s debt level before the IPO was 2.7 times adjusted earnings. The mountain of debt is now expected to be reduced to 2.4 times as a result of the IPO. But there is another reason: “One of the owners, the private equity firm BC Partners, wants to get rid of its shares,” says Riße.

Accordingly, Riße does not expect a particularly large price rally, as has recently been seen in many tech stocks: “This is scientific publishing, there is no huge growth there.” At the same time, he thinks: “It’s a solid business model that isn’t driven so much by the spirit of the times.” Many people will reach a point in their professional lives where TikTok and Wikipedia are no longer enough and they then need a specialist newspaper or a book to get ahead.

By the way: The company does not belong to Axel Springer Verlag, or no longer belongs to it, even if the name suggests so.

Up to 9,500 euros for a quick publication

However, the IPO is unlikely to receive undivided praise. The major scientific publishers are criticized for increasing their margins at the expense of science and the public sector.

They sometimes charge a lot of money from authors so that they can publish their articles with them. For a quick open access publication in the renowned newspaper “Nature” or 32 other specialist magazines, the company Springer Nature 2021 charged up to 9,500 euros.

Open Access texts are accessible without a subscription. Instead of collecting money from universities or research institutions for access, they are financed through fees for the authors – or their institutes. Scientists rely on publications in specialist newspapers. The more and the more prestigious the journal, the better for your career.

Publishing is necessary for a career

However, experts do not believe that the prices charged are nearly justified by the actual costs – for example for the peer review process, marketing, layout or administration, which is in most cases already voluntary. The criticism is that younger scientists in particular have no chance of keeping up.

The pressure on Springer Nature to continue making profits will not have diminished with the IPO: “As a company, I have a completely different level of public attention. Suddenly there are shareholders, small shareholders, institutional investors. They want to know what’s going on with my company,” says Stefan Riße from Acatis.

Alina Leimbach, HR, tagesschau, October 4th, 2024 3:27 p.m