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Société Générale Conference –The Premium Review Paris, December 4, 2008
Dr. Andreas Wiele Board Member, President BILD Division and Magazines
December 4, 2008 Société Générale Conference - The Premium Review2
Vision: Axel Springer becomes the
best integrated European
multimedia company
2
Excellent online presence with morethan 50 assets – 10.0% of revenue digital1), 7 of 10 biggest online assets profitable2)
1 Revenues of €2,577.9m and EBITDA of €470.0m in fiscal year 2007
3
Exceptional print franchise: market leader-ship with 170 newspapers and magazines
Axel Springer is the only German multimedia stock
1) Based on pro-forma digital media revenues Q1-3/2008.2) Based on Q1-3/2008.
December 4, 2008 Société Générale Conference - The Premium Review3
Clear strategy with traceable success
Strategy
Market leadership in German-language
core business
Creativity
Internationalization Digitization
Entrepreneurship Integrity
Corporate values
Profitable Growth
December 4, 2008 Société Générale Conference - The Premium Review4
EBITDA on record high
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070
100
200
300
400
500
600
700
800
Revenues (left-hand scale)1)
EBITDA (right-hand scale)1)
1) 1991 – 2002 HGB, 2003 – 2007 IFRS.
(in €m)
470434414
433
290226
191
357
December 4, 2008 Société Générale Conference - The Premium Review5
1,290.3363.928.2
587.873.912.6
408.310.62.6
208.136.7
17.6 1)
83.4-15.1
-
New segment reporting introduced in Q1/08reflects strategy and increases transparency
1,493.1338.422.7
Newspapers
814.188.910.9
Magazines
152.347.231.0
Digital Media
45.023.351.8
Printing
73.3-27.8
-
Logistics/Services/Holding
reported 07Revenue (€ m)EBITDA (€ m)Margin (in %)
Newspapers National
Magazines National
PrintInternational Digital Media Services/Holding
restated 07Revenue (€ m)EBITDA (€ m)Margin (in %)
International print business
Brand-relatedonline assets
Combining twosegments
OLD
NEW
Change
Newspapers Magazines Printing Services/Holding
FAKT
welt.de, Bild.de
computerbild.de
1) Margin ex investment income -0.5%.
December 4, 2008 Société Générale Conference - The Premium Review6
Competitive advantages of Axel Springer
Positioningis paying off in
difficult markets2.
1. Less exposure to advertising and classifieds
Strong media brands
3. Consistent digitization strategy
December 4, 2008 Société Générale Conference - The Premium Review7
German newspaper advertising revenues havebeen stable since 2003
UK(1998=100) GermanyUSA
60
80
100
120
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: USA NAA; UK NMA; Germany Nielsen and ZMG; Revenue Growth of Q1-Q2/2008 taken for full year
8287
December 4, 2008 Société Générale Conference - The Premium Review8
Axel Springer is less dependent on advertisingand classifieds than its competitors
Advertising revenuesas % of total revenues
1) In 2004, Source: Newspaper Association of America. 2) In 2006, Source: Zenith, Advertising Association Yearbook.3) In 2007, Source: BDZV.
Classified revenuesas % of total advertising revenues
4) JP Morgan estimates, company data.5) In BDZV, local and regional subscription papers (69% of circulation in Q2/2008).6) Q1-3/2008.
USA GermanyUK Axel Springer
80%1)
57%2)54%3)
45%6)
19%6)
USA GermanyUK Axel Springer
36%4)
52%4) 56%5)
December 4, 2008 Société Générale Conference - The Premium Review9
Real estate classifieds revenues: Online overcompensates print
+2%
2006 2008e2007
+8%Revenues in real estate ads(illustrative)
+84% +81%
-10% -12%1)
1) Based on Jan-Aug 08 figures.
December 4, 2008 Société Générale Conference - The Premium Review10
Competitive advantages of Axel Springer
Positioningis paying off in
difficult markets2.
1. Less exposure to advertising and classifieds
Strong media brands
3. Consistent digitization strategy
December 4, 2008 Société Générale Conference - The Premium Review11
Axel Springer is Germany’s leading print marketer and publisher
1) Source: AC Nielsen; gross adspend, excluding classified ads, supplements and media advertising, Q1-3/2008.2) Source: Company estimates based on IVW Q1-3/2008, paid circulation; weighted market share taking into account different title frequencies.3) Source: ma 2008 Pressemedien II; combined reach among German 14+ year-olds of all covered Axel Springer AG newspapers, magazines and 100% owned subsidiaries.
Market share by adspend1)
Newspapers Magazines
Market share by circulation2)
With 21% market share, Axel Springer reaches
56% of the German population3) daily
17%
9%8%
5% 4% 4%
AxelSpringer
G+J Burda Holtz-brinck
Bauer WAZ
Newspapers Magazines
21%
7% 6%5% 5%
3% 3%
AxelSpringer
Bauer WAZ SWMH Burda Holtz-brinck
G+J
December 4, 2008 Société Générale Conference - The Premium Review12
69%
12
Newsstand papers
German newspaper market1) Core newspaper segments Market share2)
No. 1 81%
No. 1 70%
No. 3 17%
59%
No. 13) 25%
Sunday newspapers
Regional subscription papers
Nationalqualitypapers
1) Except weekly newspaper based on BDZV/IVW Q1-3/2008.2) Based on paid circulation Q1-3/2008.3) Source: Hügel Statistik. Based on gross advertising volumes among all regional newspapers in Hamburg/Berlin, Q1-3/2008.
Dominant market position in German newspaper market yields >25% EBITDA margin in largest business segment
No. 13)
21%
7% 3%
Regional subscription papersNewsstand papersNational quality papersSunday newspapers
December 4, 2008 Société Générale Conference - The Premium Review13
Unique expansion path: example BILD
December 4, 2008 Société Générale Conference - The Premium Review14
The Sun
9.8
BILD
11.1
Le monde
6.7
11.6
8.0
11.7
USA Today
3.6
2.0
Only BILD reaches more people than biggest TV program
The X Factor
Source: U.K.: average Aug/Sep of The X Factor, NRS (National Readership Survey), BARB (BroadcastersAudience Research Board): MRI (Mediamark Research and Intelligence), Nielsen Media Research, September 2008; France: average of Koh Lanta, EPIQ-Studie, Mediametrie; Germany: average of Wetten, dass…? 2007, Viewers aged 14+, GFK/TV Panel 2007.
America’s Got TalentWetten,
dass…?
KohLanta
(reach in m)
December 4, 2008 Société Générale Conference - The Premium Review15
1) Nielsen; Reading example: €1 spent in BILD advertising is 8.9x as efficient as €1 invested in TV advertising measured in sales of the product
An advertising campaign in BILD sells more products than a similar campaign in TV
TVBILD, BamS
x 1.64062100GranufinkProsta2005
x 3.23198100L‘Oréal2007
x 3.739145100Senseo2004
x 3.269220100Maggi2007
x 8.91)
to Benchmark
No trackable success!TV-Benchmark= 45
400BILD-NRW100Intersnack
2007
BILD/BamSvs. TV
Output € viaInput €in ad campaignProduct
December 4, 2008 Société Générale Conference - The Premium Review16
CarsTV listingsweekly biweekly
ComputerPC Games AVF
Womenweekly3) monthly Youth/Music Finance
Sports
No. 1 No. 12) No. 1 No. 1 No. 1 No. 1 No. 1
No. 1 No. 4 No. 1 No. 2 No. 3 No. 3 No. 31) Paid circulation, IVW data, Q1-3/2008, weekly weighted.2) For digital TV.3) Without Yellow press.
Leading market position in seven core segments in Germany1)
December 4, 2008 Société Générale Conference - The Premium Review17
A strong international presence
Poland Hungary Switzerland Spain
Prin
tD
igita
l med
ia
France: 4 magazines + AUTO PLUS (50%).
Czech Republic:6 magazinesRomania (40%): 12 magazines
€304.3 m
Internat.revenues,
(Segment Print
Internat.) €440.3m
Internat. Revenues
22.1%of total
revenues€81.7mInternat. revenues
(Part of segment Digital Media)
Czech Republic: Leading car portal,auto.cz;Turkey: Dogan TV (25%)
10 magazines;4 newspapers
Market share 44,6%(circulation national daily newspapers)
News portals:dziennik.pleFakt.plnewsweek.pl
Others:students.plsports.plpopcorn.plauto-swiat.pl
30 magazines; 10 newspapers
Market share19%, largest publisher(based on advertisingrevenues)
Regional newsnetwork in 8 countriesWomen portalnana.huEconomicalnewsportal vg.hu
1 newspaper;13 magazines (biggest consumer magazine);
Market leader TV listings, business/financial
handelszeitung.chstudents.chbilanz.chpartyguide.chusgang.chstudents.chstocks.chbeobachter.chtele.chtvstar.ch
13 magazines
Market leader videogames magazines, computer magazines
computerhoy.esautobild.eshobbyconsolas.esmicromania.es
otherRussia
4 magazines
Market leader weekly people magazines
ok-magazine.rucomputerbild.rurunewsweek.ru
Germany, France, Italy, UK, Spain, Belgium, Switzerland, Canada, Morocco
Germany, France, Italy, UK, Spain, Benelux, Switzerland, US, China, Sweden, Poland
Q1-3/2008€43.5m
(Segment Newsp.+ Mag. National)
December 4, 2008 Société Générale Conference - The Premium Review18
Positioningis paying off in
difficult markets2.
1. Less exposure to advertising and classifieds
Strong media brands
3. Consistent digitization strategy
Competitive advantages of Axel Springer
December 4, 2008 Société Générale Conference - The Premium Review19
Q1-3/08: pro forma digital revenues 10.0% of total revenues.
Successful digitization ahead of market
1. Content/brands
3. Classifieds/ marketplaces
2. Ad sales/marketing
Core competencies
Q1-3/07 Q1-3/08
19.0 1)
Development unique visitors(m) in Germany
16.0 Market Growth: + 5.9%1)
+ 18.7%
1) Source: comScore (development unique visitors), gross reach.
December 4, 2008 Société Générale Conference - The Premium Review20
Digital landscape: Occupying core segments
Content/brandsClassifieds/
market placesAd sales/ marketing
Infotainment News
Regional
WomenTV
Sport
Finance
Auto
Ad Sales/Marketing
JobsReal estate
MarketPlaces
ConsumerElectronics
Ad sales/marketing
(reach and performance based)
Jobs
Youth/Music
December 4, 2008 Société Générale Conference - The Premium Review21
Digitization through acquisitions & organic growthOrganic
2006 2007 2008
582
3327
Total
011Disinvestments17347Total
11193Organic6165Acquisitions
200820072006
Acquisitions
December 4, 2008 Société Générale Conference - The Premium Review22
Mobile Online Video
web-to-print workflows create content for all channels and media
Single Newsroom
Articles and photos are distributedonline first and across several channels
Online-first strategyfor three national and a regional newspaper seven days a week
Quality journalism
Case study: WELT-Group – successful transitionfrom newspaper to multimedia brand
December 4, 2008 Société Générale Conference - The Premium Review23
Transformation of WELT brand into digital multi-media family increases both, print and online reach
2006 2008
3.1m1)
WELT Group: Total reach (gross) across all media
+74%
Reach: 0.73m contacts
+ 4% since 2006
WELT/WELT KOMPAKT
Source: Print: AWA 2006, 2008; Online: AGOF 2006-I, 2008-I (NpM), Addition of Contacts
5.4m1)
Reach: 1.285m contacts
+ 19% since 2006
WELT am SONNTAG
Reach: 3.37m contacts
+ 155% since 2006
WELT ONLINE
December 4, 2008 Société Générale Conference - The Premium Review24
Source: AWA 2005 to 2008; 1) since 2006 DIE WELT / WELT Kompakt
2005 2006 2007 2008
1.83
1.26
2.04
1.84
1.36
2.07
1.82
1.54
2.07
1.92
1.35
2.01
WELT1)/WamS FAZ/FAS SZ
(in m)
Total reach (gross) of WELT / WELT am SONNTAG grows while competitors decline
December 4, 2008 Société Générale Conference - The Premium Review25
EBITA2007
Merchandising and otherrevenues
EBITA2004
Circulationrevenues
Costreduction
Advertisingrevenues
Profit improvements by integrated editorialworkflow and innovative advertising solutions
December 4, 2008 Société Générale Conference - The Premium Review26
Total reach growth driven by online activities
In total
81.4m(+5.2%)
contacts
1) Source: ma Pressemedien II 2008 vs. ma Pressemedien I 2008; AWA July/2008 vs. Jan/20082) Source: comScore, unique visitors, Q1-3/2008 vs. Q1-3/2007.
Newspapers26.8m contacts
(+2.0%)1)
Magazines35.6m contacts
(+1.1%)1)
Online19.0m contacts
(+18.7%)2)
Highlights Q1-3/2008
December 4, 2008 Société Générale Conference - The Premium Review28
883.1
818.4
124.5
1826.0
Q1-3/07
897.4
803.8
154.1
1855.4
Q1-3/08
892.9
825.9
126.1
1,844.9
Q1-3/07
911.6
897.7
184.9
1,994.1
Q1-3/08
+8.1%
8% top line growth in nine months includingacquisitions, organic growth of 2.4% in Q3
Revenues ex consolidation effectsTotal revenues
Advertising revenues Other revenuesCirculation revenues
(in €m)
+8.7%
+2.1%
+46.6%
307.8
283.145.5
636.4
Q3/07
313.8
275.2
651.0
Q3/08
+2.3%
-2.8%
+2.0%
+36.4%
304.3
280.745.4
630.5
Q3/07
311.4
274.160.3
645.9
Q3/08
+1.6%
-1.8%
+1.6%
+23.8%
+2.4%
-2.4%
+2.3%
+32.8%62.0
December 4, 2008 Société Générale Conference - The Premium Review29
Q1-3 revenue growth driven by Print International and Digital Media
Circulationrevenues (€m)
Advertisingrevenues (€m)
Otherrevenues (€m)
Total segmentrevenues (€m)
NewspapersNational
MagazinesNational
Digital Media
PrintInternational
Q1-3/07 % % % %
5.6-2.43.8
8.3-5.6-6.2
33.6 1.3 -39.3
-
>100
>100
Pro forma digital media revenues (€m)1)
(% of total revenues)
451.8
480.2
14.9
946.9
286.3
137.6
10.2
434.1
154.9
118.4
20.9
294.1
450.2
468.9
20.0
939.0
128.2
163.5
12.7
304.3
-
22.3
112.0
-
68.2
257.5-0.8 -3.3 3.5 >100
159.78.7
1) Including 60% of zanox according to target structure.
Q1-3/08
Q1-3/07
129.9
279.3
10.3
419.5
Q1-3/08
Q1-3/07
Q1-3/08
Q1-3/07
Q1-3/08
89.8 189.3
199.410.0
24.9
December 4, 2008 Société Générale Conference - The Premium Review30
EBITDA slightly up in nine months
EBITDA, EBITDA-margin
(in €m)
+4.1%
Q1-3/07 Q1-3/08
95.01)
Q3/07
92.7
Q3/08
-2.4%
14.9%1) 14.2%
16.0%1)15.4%
306.6
294.41)
1) Adjusted for ProSiebenSat.1 dividend (€23.1m).
317.5
118.1
December 4, 2008 Société Générale Conference - The Premium Review31
Outlook 2008
Group
EBITDA/EBITA > 20071)
Revenues > 2007
Net debt < 2007
Launch costs < 2007
Segments
eps < 20072)
1) Adjusted for ProSiebenSat.1 dividend and Kirch-payments.2) Excluding ProSiebenSat.1 proceeds. Including proceeds, eps will be significantly higher than previous year.
Management confirms full year revenues and EBITDA guidance for the group
Print International
Newspapers National
Revenues: < 2007EBITDA: < 2007
Magazines National
Revenues: > 2007EBITDA: > 2007
Digital Media
Revenues: > 2007EBITDA: > 2007
Revenues: > 2007EBITDA1): > 2007
Services/ Holding
Revenues: = 2007EBITDA1): < 2007
December 4, 2008 Société Générale Conference - The Premium Review32
Paradigm shift: online first
Acquisition of new businesses according to core competences
Transformation of existing business into digital multimedia brands
Integrated content producer
Centralized multimedia sales
Aggressive attacker instead of depressed defender
Seven reasons why Axel Springer is bestpositioned for monetization of media convergence
Ownership of digitization – everybody is responsible
BACKUP
December 4, 2008 Société Générale Conference - The Premium Review34
Summary Q1-3/2008
Top line growth driven by international and digital8.1% growth in group revenues due to major digital acquisitions and international businessOrganic growth (ex consolidation effects) of 1.6% in difficult market environmentSuccessful price increase of key titles: circulation revenues up 2.0% in Q3 and 2.1% in Q1-322.1% of total revenues now international and 10.0% digital
Strong and secure financial basisNet debt including pensions down to €757m from €1,091m (year end 2007)Comfortable headroom through credit line of €1.5bnShare buyback of 917,341 shares at €80 completed in July
Strong operating incomeEBITDA up 4.1%1) in Q1-3 to €306.6m in difficult market environmentEBITDA margin at 15.4% (Q1-3/07: 16.0%)1)
Main drivers: acquisitions, reduced launch costs, price increases and cost discipline
Management confirms group guidance 20081) Compared to EBITDA Q1-3/2007, adjusted for ProSiebenSat.1 dividend.
December 4, 2008 Société Générale Conference - The Premium Review35
Newspapers/Magazines National: operational excellence in deteriorating environment
BILD copy price increase from €0.50 to €0.60 in old West German statesFurther copy price increases: BILD am SONNTAG, HAMBURGER ABENDBLATT, BERLINER MORGENPOST, DIE WELTCirculation of daily newspaperDIE WELT/WELT KOMPAKT on all-time high in first nine months
High margin in difficult marketTV DIGITAL boosts circulation+10.5% in Q1-3 to over 2m copiesVarious BILD magazines and TV DIGITAL with market share gains in circulation over prior year‘s period
Newspapers National Magazines National
Re-organization of print advertising sales force to create one multimedia sales unit for thenational Axel Springer print and online portfolio
December 4, 2008 Société Générale Conference - The Premium Review36
Key developments Print International
Switzerland Integration of Jean Frey and subscription base of CASH magazinesuccessfully accomplishedSynergies achieved: Profit margins of all acquired businessestoday higher than before integration
Poland FAKT: strong growth, high profitability, start of publication in Great Britain and IrelandTotal market share of 44,6% (circulation of national daily newspapers)
RussiaCOMPUTERBILD: circulation up 24% despite copy price increaseFORBES: strong growth in ad revenues
India June 2008, foundation of joint venture in India with India TodayGroupFirst title: Indian edition of AUTO BILD
December 4, 2008 Société Générale Conference - The Premium Review37
Key developments Digital Media
Closing of sale of stake in ProSiebenSat.1 Media AG at €19.40 per share in Q1/08Closing of acquisition of outstanding Bild.de shares in Q1/08
Successful transfer of content from print to online: WELT ONLINE and computerbild.de – fastest growing news and computer portals in Germany
Extension of strategic partnership with Dogan groupAcquisition of ~10% stake in the major Turkish media group Dogan Yayin HoldingNo further cash investment: use of higher and secured valuation of stake in Dogan TVValue securing mechanism for remaining direct stake in Dogan TV of €298m extended until 2015Axel Springer stake in Dogan TV (directly and indirectly) rises from 25% to 26.5%
Acquisition of transfermarkt.de, partyguide.ch, usgang.ch and increase of stake in gamigo.de to majority
auFeminin.com: revenues stable in France, growth in internationalAcquisition of Onmeda, the leading premium health portal in Germany
zanox.de: international expansion, further product developments
December 4, 2008 Société Générale Conference - The Premium Review38
147.41)
128.41)
53.91)44.91)
36.31)21.82)
0
100
200
300
+86.9%
Sports digital: Market leadership
Source: Average monthly page impressions, IVW Q1-3/2008.1) Editorial content „Sport“.2) Measurement from June 2008.
301.5
161.3150.8
133.8
30.5 20.31)
PIs(in m)
December 4, 2008 Société Générale Conference - The Premium Review39
Investor Relations contacts
Claudia Thomé
Head of Investor Relations
Phone: +49 (0)30 2591 77421
Mobile: +49 (0)160 90445035
claudia.thome@axelspringer.de
Axel Springer AG
Axel-Springer-Str. 65
10888 Berlin / Germany
Fax: +49 (0)30 2591 77422
Daniel Fard-Yazdani
Investor Relations Manager
Phone: +49 (0)30 2591 77425
Mobile: +49 (0)151 52844459
daniel.fard-yazdani@axelspringer.de