SpringerSBM Annual Report 2008 - Springer - International … · 2021. 1. 31. · Springer...

ABCE Springer Science+Business Media

Annual Report 2008

2008ANNUAL

REPORT

springer.com 2

Springer Science+Business Media – Annual Report 2008

Table of Contents

Part I

Company profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Company values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Overview of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Performance highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

CEO’s statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Business review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Our strategy, aims and objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Our performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Corporate responsibility (CR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Our People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Our Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Corporate governance report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Part II

Report of the Réviseur d’Entreprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Consolidated Financial Statements According IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

– Management Report for the Period Ending on December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

– Consolidated Income Statement IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

– Consolidated Balance Sheet IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

– Consolidated Cash Flow Statement IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

– Consolidated Statement of Changes in Equity IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

– Notes to Consolidated Financial Statements IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

– 34 Significant Subsidiaries and Participations as per December 31, 2008 / 2007 . . . . . . . . . . . . . . . . 72

Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Springer Science+Business Media – Annual Report 2008

springer.comSpringer Science+Business Media – Annual Report 2008 – Part I 3

Company profileThe two main companies that form Springer Science+Business Media (Springer) today, Springer Verlag and Kluwer Academic Publishers (KAP) were founded in the 19th Century and saw their first significant international expansion in the 1960s. Since the acquisition of Springer Verlag and KAP by Cinven and Candover in 2003, the company has gone through an intense and successful integration process which was completed in 2006. The investment in products and acquisitions has increased significantly in this time, and Springer has seen the birth of formidable new ideas and developments. Today, Springer Science+Business Media is a respected, innovative and cre-ative leader in the market.

Springer is one of the world’s leading suppliers of scientific and professional information. It is the second-largest publisher of journals in the science, technology, and medicine (STM) sector, the largest publisher of STM books and a significant publisher of information for professionals, especially in Germany and the Netherlands. The group publishes around 2,000 journals and more than 6,500 new books a year, and offers the largest STM eBook Collection worldwide.

Springer has operations in about 20 countries in Europe, the USA, and Asia, and some 5,000 employees. In 2008, it generated annual sales of around € 892m.

CandoverSince Candover’s first deal in 1980, private equity has transformed from a niche investment to a mainstream asset class, and Candover has been at the centre of that transformation.

Over nearly 28 years, Candover has raised nine funds with total capital commitments of more than € 8.7 billion and has approximately 100 investors from across the world. The 2005 Fund attracted 24 percent of its funds from Europe, 25 percent from the UK, 45 percent from the US and 6 percent from Rest of World investors. These include pension funds, endowments, banks, insurance groups, family offices and government funds, many of them repeat investors. The 2005 Fund, which closed at € 3.5 billion in November 2005, is actively seeking opportunities across Europe and has so far made ten investments.

Candover has offices in London, Madrid, Milan and Paris.

CinvenCinven is a leading European buyout firm that acquires companies that require an equity investment of €100 million or more. Cinven was founded in 1977 and has been responsible for many buyout industry ‘firsts’, including the first €1 billion – plus buyouts in France, the Netherlands, Spain and the UK.

Cinven focuses on six sectors across Europe: business services; consumer; financial ser-vices; healthcare; industrials; and TMT (technology, media and telecoms) and has offices in London, Paris, Frankfurt, Milan and Hong Kong.

Cinven acquires successful, high-quality companies, working closely with them to help them grow and develop. Typically, Cinven holds its investments for between three and five years and it takes a responsible approach towards its portfolio companies, their employees, suppliers and local communities, the environment and society as a whole.

Company profile

Candover

Cinven


Brief overview of the company strategy

Springer’s strategy is to continue to build a global, market-leading STM publishing house and to operate as a leading player in professional publishing markets, primarily in Germany and the Netherlands. We are continuing to build the company’s market share through the launch of new products and by leveraging technological developments, thus providing a broader and deeper service to our customers. Springer is also further penetrating existing and new markets through enhanced sales and marketing, geographic expansion and add-on acquisitions. Finally, the com-pany is continuing to upgrade systems and processes in order to operate a market-leading pub-lishing platform in terms of quality and efficiency for our customers while simultaneously mini-mizing costs.

Company values Springer’s values are mirrored in its Mission Statement:

7 Our business is publishing. Throughout the world, we provide scientific and professional com-munities with superior specialist information – produced by authors and colleagues across cultures in a nurtured collegial atmosphere of which we are justifiably proud.

7 We foster communication among our customers – researchers, students and professionals – enabling them to work more efficiently, thereby advancing knowledge and learning. Our dynamic growth allows us to invest continually all over the world.

7 We think ahead, move fast and promote change: creative business models, inventive products, and mutually beneficial international partnerships have established us as a trusted supplier and pioneer in the information age.

Overview of the year

Acquisitions and disposals

The most important acquisition in 2008 was the acquisition of BioMed Central, a leading open access publisher for the life sciences and biomedicine, based in London and Liverpool, UK. Not only did this acquisition make Springer the largest open access publisher in the world, it also enhanced Springer’s existing offering in the life sciences and biomedicine.

In January 2008, Springer sold its Austrian business-to-business publishing unit, Springer Busi-ness Media Austria, to the WEKA Group. In May of the same year, Minerva Wissenschaftli-che Buchhandlung, a library services provider for Central Europe based in Austria was sold to EBSCO. In December 2008, FORUM Institut für Management, a German conference and semi-nar business, was sold to Ernst Klett Verlag.

New products

In January 2008, a new e-product, Springer Protocols, was launched. Protocols is a database of more than 18,000 searchable online protocols in life sciences and biomedicine and is geared for researchers working in the lab.

MyCopy was launched as a pilot project in October 2008. MyCopy allows students, researchers, faculty and staff of institutions that have purchased Springer eBooks to order a print-on-demand softcover hard copies of eBooks at an attractive price, thereby bringing the print-to-electronic cycle back full circle. MyCopy will be rolled out to all global Springer eBook Collection customers in late 2009.

Furthermore, a number of additional new electronic products will be rolled out in 2009.

Brief overview

of the company strategy

Company values

Overview of the year


Cooperation agreements

Cooperation agreements have been signed with a number of leading scientific and research insti-tutions across the world. In February 2008, an agreement was signed with the Max Planck Society (MPG). This agreement includes provisions for researchers associated with MPG which allows them to publish their articles in Springer journals using the Springer Open Choice open access publishing model.

An agreement signed with the China National Knowledge Infrastructure (CNKI) in May 2008 allows researchers attached to CNKI’s 6,000 customer institutions to access Springer content. Furthermore, using CNKI’s automatic translation mechanism, researchers will be able to search all content on SpringerLink, Springer’s electronic journal and book platform, by using keywords in Chinese.

Furthermore, a number of publishing agreements with learned societies and institutions, among them the Indian Institute of Technology Madras, the Indian Association for the Cultivation of Science and the Metrology Society of India, the American Society for Reproductive Medicine and FIZ Karlsruhe in Germany.

Performance highlightsSpringer achieved sales of € 892m in fiscal year (FY) 2008 which is 5 percent growth from FY 2007. FY 2008 adjusted EBITDA is € 285m which is up approximately 5 percent from FY 2007. Performance in FY 2008 was strongly driven by Springer’s STM division with Springer’s Pro-fessional Publishing division performing well but starting to see some impact from the overall decline in the economic environment in Germany/Central Europe in the second half of FY 2008. Springer STM reached sales of € 655m in FY 2008 which is growth of around 7 percent over 2007. Adjusted EBITDA for FY 2008 was € 249m (growth of approximately 5 percent over 2007). Springer’s Professional division grew aggregate revenues only slightly to € 240m in FY 2008. This is growth of around 1.5 percent from FY 2007. FY 2008 divisional adjusted EBITDA was € 51m, which is on prior year (2007) levels.

CEO’s statementThis past year was a good year for Springer Science+Business Media. The company achieved sales of € 892m in FY 2008, which is 5 percent growth from FY 2007, and 1 percent over the industry average. The performance in FY 2008 was strongly driven by our STM division, with our Pro-fessional Publishing division performing well, but starting to see some impact from the over-all decline in the economic environment in Germany and Central Europe in the second half of FY 2008.

In January 2008, we launched Springer Protocols, a database of more than 18,000 search-able online protocols in life sciences and biomedicine. Our eBooks Collection, launched in the summer of 2006 with 10,000 titles, now contains more than 32,000 eBooks (beginning of Q2 2009), and continues to enjoy strong sales. In October 2008, we launched a pilot project, called MyCopy, which allows students, academics and staff at institutions that have purchased eBook Collections to order print-on-demand softcover hard copies of a large number of our eBooks at an attractive price. MyCopy will be rolled out to all eBook Collection customers globally in the latter part of 2009.

Springer has also been very successful in signing cooperation agreements with leading scientific institutions, such as the Max Planck Society in Germany, the University of California Digital Library in the USA, the China National Knowledge Infrastructure (CNKI), the Indian Institute of Technology Madras, the Indian Association for the Cultivation of Science, the Metrology Soci-ety of India and the FIZ Karlsruhe in Germany. Some of these cooperation agreements include open access publishing options which allow researchers at these institutions to publish using the Springer Open Choice model.

Performance highlights

CEO’s statement


In terms of acquisitions and disposals, activity has been quieter than in the past years, but none-theless significant. In October 2008, we announced the acquisition of BioMed Central, the lead-ing global open access publisher. The acquisition not only made Springer the largest open access publisher in the world, but also strengthened our existing life sciences and biomedicine publish-ing portfolio. In January 2008, we announced the sale of Springer Business Media Austria, our business-to-business publishing arm in Austria and in October 2008, in May 2008, we sold Min-erva Wissenschaftliche Buchhandlung, a library services provider for Central European libraries, located in Austria. We also announced the sale of FORUM Institut für Management, a German conference organizing unit.

Last, but not least, Springer has participated and joined a number of publishing industry ini-tiative, most notably the Shared E-Resource Understanding (SERU) Initiative, which provides a common description of the responsibilities of the publisher and user of online content and CLOCKSS, a community-governed archive cooperative that preserves digital content.

In Germany, Springer was also very active in the Year of Mathematics, a government-driven campaign to promote mathematics, for which we were present and active at a number of events, including a historical exhibition of Jewish mathematicians from German-speaking countries. We also launched an additional number of mathematics titles celebrating the Year, including a “best of ” mathematics books which served as a prize for the best students of mathematics and their schools across Germany. A similar presence is underway in conjunction with Darwin Year 2009 and the International Year of Planet Earth 2008/2009.

Business review

IntroductionWe operate in the global markets for the supply of academic and scientific information, and in some local markets for the supply of information to professionals, most notably in Germany and the Netherlands. Scientific, technical and medical, or STM, publications are the principal method of disseminating new research results and knowledge to the scientific community.

Our markets and business environment

Scientific, Technical and Medical (STM) publishing

STM academic and research publications provide specialized scientific, technical and medical information to a broad international readership. They are “must have” publications for academic and other institutional libraries, which means that the STM academic and research publications market has traditionally been characterized by stable, recurring demand that is less susceptible to fluctuations in the economic cycle.

STM academic and research publications can be divided primarily into two categories: STM journals and academic books.

STM journals

STM journals are publications, issued as a series, which address specialized scientific subjects and contain articles in which researchers present and discuss their latest findings. According to SIMBA, a market analyst, the market for STM journals is estimated at $5.5 billion. It is estimated that there are approx. 23,000 scholarly peer-reviewed journals, collectively publishing about 1.4 million articles a year. Looking at ISI data, Springer has a 9 percent market share by number of articles published.

STM journals differ significantly from magazines in that a journal’s content is supplied for free to the publisher, not commissioned by the journal, and advertising is not a significant source of its revenue. Most STM journals are reviewed by a voluntary editorial board of experts through a double-blind “peer-review” process, whereby a scientist’s results are subjected to the scrutiny

CEO’s statement

Business review

Introduction

Our markets and

business environment

Scientific, Technical

and Medical (STM) publishing

STM journals


of peers who review the research for quality and accuracy. The perceived quality of a journal’s content and the reputation of its editorial board are the main factors that influence purchasing decisions. The leading journal in a field is generally an indispensable tool for a researcher in that field and therefore an important addition to the library affiliated with that researcher.

There are three main types of organizations that publish STM journals: commercial publish-ers, academic society publishers and institutional publishers, such as universities and research centers. Journals published by commercial publishers are either owned by the publishing house, “proprietary journals,” or published in co-operation with academic societies. Where a journal is published in co-operation with an academic society, the relationship between the publisher and the society can have different forms, i.e. the journal may be owned by the publisher or by the society, and the publisher may share journal revenue with the society or it may be paid a royalty by the society.

Although new STM journals appear frequently, it is very difficult for a new STM journal to become established quickly due to the importance of having a long-standing track record and a reputation for quality. However, once an STM journal has become established, it usually only risks losing submissions and eventually subscriptions to a rival journal if it allows its quality to decline over time. STM journal publishers and libraries use “citation counts,” the number of references other journals make to a published work, and ISI “impact factors,” the number of citations the average article receives in a year, to compare the influence of journal titles. In order to maximize citation counts and impact factors, publishers compete to attract articles from leading scientists. Similarly, scientists compete to publish in leading journals. They must “publish or perish,” since publishing in a leading journal is often a deciding factor in securing funding for their research.

Academic books

Academic books, like STM journals, are primarily aimed at highly specialized academic research-ers within the scientific community. Springer is the largest STM book publisher (by title output), and has an unparalleled STM book program both by width and depth. Furthermore, Springer is the market leader in the ‘core’ STM book market, i.e. the market for research-level books which is aimed at academic, corporate and government research library markets, and is the market leader in German language STM books.

Unlike contributors to STM journals, whose primary aim is to influence current research, book authors focus primarily on consolidating knowledge on a specific research topic. In the hard sci-ences, such as biology, chemistry or physics, publishing a book reinforces an author’s reputation as an authority in that field, but is of lesser importance in winning the author.

Our strategy, aims and objectives

Key strategic objectives for Springer in FY 2009 include:7 Top line growth from larger product suites such as eBooks, databases other electronic prod-

ucts and open access publishing options (Springer Open Choice, BioMed Central) 7 Drive usage of Springer’s content through improved availability, enhanced online features and

focus on developing and selectively acquiring high quality and strongly used journal and book content

7 Margin growth from cost benefits arising from the ongoing migration online e.g. Printing-on-Demand (“PoD”) and Print-to-Order (“PTO”) which cut production, book handling and warehousing costs

7 To even further strengthen content sourcing base to allow for further gains in market share, particularly in the Asia-Pacific region and other emerging markets

7 Continue investment in the medical online agency business in Germany and other markets to compensate for the negative trends in traditional pharmaceutical marketing spending

Business review

Academic books

Our strategy,

aims and objectives


7 Further investment in sales forces to capitalize on new customer segments and markets with growth potential

7 Expand market share in the business / engineering segments by leveraging Springer’s existing strong and well established brands in these markets to enter new publishing segments and by creation of integrated electronic content offerings

7 Further penetration of existing and new markets through enhanced sales and marketing

7 Geographic expansion and add-on acquisitions

7 Continue the drive towards further improvements to maintain a market leading publishing platform in terms of quality and efficiency for customers

7 To continue to examine the possibilities of further outsourcing and off-shoring certain opera-tions, which, in the past, have helped to minimize Springer’s cost base

Our performance

Organic growth is measured by the growth of 1) the content base that we provide to our custom-ers, i.e. the number of journal articles and books that we publish, 2) by the growth of usage of our content (electronic downloads, etc), and 3) by the increase in market penetration.

Publishing quality is measured not only by manuscript flow (i.e. how many article and book man-uscripts that are submitted to us), but also by the number of citations that our published articles receive in other publications.

Profitability is measured by EBITDA growth and margin as well as cash generation levels.

Innovation is measured by how much market share our new products receive following their launch.

Risks relating to our industry and our businessSince we operate in a highly competitive environment that is subject to rapid change, we must continue to invest and adapt to remain competitive. If, for example, changes to the academic pub-lishing business model are widely adopted in that market, we could be exposed to risk.

Changes in government grants, private funding or tuition fees used to finance universities or aca-demic institutions may adversely affect demand for scientific publications, and the strengthened bargaining power of library consortia could limit our profitability and growth.

Furthermore publishing businesses could be adversely affected by general economic downturns or disruptions in industries to which we provide information and a continued demand for our products and services could be endangered.

Our intellectual property rights may not be adequately protected under current laws in some jurisdictions, which may adversely affect our results and our ability to grow and changes in the tax, legal or political environment of our business may adversely affect our profitability.

A significant portion of our revenue is derived from advertising, and spending by companies on advertising and other marketing activities has historically been cyclical.

Increased printing and paper prices may have a material adverse effect on our cost of printing ser-vices and profitability. Also, economic, political and other risks associated with the international nature of our operations could adversely affect our net sales and results of operations, and fluctua-tions in exchange rates may affect our reported results.

Our strategy,

aims and objectives

Our performance

Risks relating to our

industry and our business


Corporate responsibility (CR)IntroductionSpringer’s corporate responsibility (CR) activities take a two pronged-approach: 1) support to educational organizations, primarily in developing countries, and 2) the support of local chari-table organizations in the communities in which Springer employees live and work.

Our approachThe bulk of Springer’s CR activities are designed to provide support to educational organizations (in the widest sense of the word) that seek to promote access to and provide material or financial support for institutions, of learning.

The largest and most visible of these activities is Springer’s ongoing participation in a number of developing country initiatives, all of which seek to enable or facilitate access to the scientific infor-mation we publish. As a global scientific, technical and medical publisher, we are aware of the role we play in the distribution of scientific information and access to knowledge and research. We make a concerted effort to ensure that the knowledge we manage is also accessible in those parts of the world that are still developing. Springer participates, often in leading roles, many efforts and initiatives which facilitate access to scientific information, or to disseminate this information further and wider.

These initiatives, in partnership with other publishers, are designed to be “help for self-help” for developing countries.

The three main programs, referred to as the “Research4Life” programs, are:

HINARI

The Health InterNetwork Access to Research Initiative (HINARI) was developed within the framework of the Health InterNetwork, introduced by the UN Secretary General Kofi Annan at the Millennium Summit in 2000.

HINARI provides free or very low cost online access to major journals in biomedical and related social sciences to local, not-for-profit institutions in developing countries. HINARI was launched in January 2002, in conjunction with the World Health Organization (WHO) following the prin-ciples of a Statement of Intent signed by six major publishers, including Springer, which was a founding publishing partner. These publishers put a total of 1500 journals at the disposal of the program.

AGORA

The AGORA program, set up in October 2003 by the Food and Agriculture Organization of the UN (FAO) and major publishers, including Springer, enables developing countries to access an outstanding digital library collection in the fields of food, agriculture, environmental science and related social sciences. AGORA provides a collection of about 850 journals to almost 600 institu-tions in 69 countries and gives access to high-quality, relevant and timely agricultural informa-tion via the Internet to researchers, policy-makers, educators, students, technical workers and extension specialists.

The program’s ultimate goal is to improve food security by increasing the quality and effectiveness of agricultural research, education and training in low-income countries.

OARE

OARE (Online Access to Research in the Environment) is a digital library which enables devel-oping countries to build their own higher education programs in the environmental sciences, educate their own leaders, conduct their own research, publish their own scientific findings and disseminate information to policy makers and the public. Literature in environmental chemistry, economics, law and policy, and other environmental subjects such as botany, conservation biol-ogy, ecology and zoology will be available through a portal presented in several world languages, including Arabic, English, French, Portuguese and Spanish.

Corporate responsibility (CR)

Introduction

Our approach

H I N A R I

AG O R A

OA R E


The project developing OARE is a partnership between Yale University, the United Nations Envi-ronment Program (UNEP), the World Health Organization (WHO), the Food and Agriculture Organization (FAO), Cornell University, the International Association of Scientific, Technical and Medical Publishers (STM), and leading scientific publishers around the world.

In July 2007, Springer and other STM publishers announced the extension of their cooperation with the HINARI, AGORA and OARE programs until 2015. This brings Springer’s commitment into line with the United Nations’ Millennium Development Goals.

Springer is also involved in a number of other developing country programs. For further informa-tion, please visit Springer Developing Countries Initiatives.

In 2008, Springer also supported a variety of projects, including:

The Doorstep School – India

As part of Springer’s commitment to the communities in which our employees live and work, the company is funding the “School-on-Wheels” project of the Doorstep School, a non-governmental organization (NGO) in Pune, India. Pune is the home of Crest Premedia Solutions (Crest), a Springer Science+Business Media company. The School-on-Wheels is a classroom set up in a bus, providing children that live in slums, on the streets or on building sites with basic education and reading skills. Springer will be funding the entire School-on-Wheels activities, including the driver, the teachers, the school materials and the bus itself for the next three years (2008-2011).

In addition to the financial support for the Doorstep School, German and Dutch interns selected for Springer’s Cross Cultural Internship Program not only gain work experience at Crest Preme-dia Solutions, but also spends part of the internship working for the Doorstep School.

Heron Island Research Station – Australia

Heron Island Research Station is one of the foremost coral reef field research stations in the world and an important research and teaching outpost of the CMS at the University of Queen-sland in Brisbane, Australia. The station is located on an 8-hectare island 80 kilometers off Aus-tralia’s north-eastern coast and hosts in excess of 15,000 scientists, teachers and students annually who conduct research in the field of reef ecology and climate change. Following a massive fire in March 2007 which caused over AUD $ 12 million in damage and which destroyed 11 build-ings, including the newly built research complex, teaching facilities, several laboratories and the library, Springer donate a number of journals, books and reference works, including historical archives, to help rebuild the research station’s library.

Sichuan earthquake relief – China

Springer employees all over the world, but especially in Asia, were shocked by the destruction brought on by the earthquake in Sichuan China in May 2008. Our employees in China not only made generous individual donations to various organizations, but Springer made a corporate donation of approximately EUR 30,000 to the Red Cross Society through the HSBC Multiplier Program which resulted in EUR 60,000 being received by the Sichuan Earthquake Disaster Relief Fund.

Local initiativesIn our larger locations, we support local charities, selected by our employees once a year, with financial donations. This is a tradition begun by employees in using a flea market to sell items, the proceeds of which go to the charities. The monies collected are matched by the company, and are then again matched by the Springer Science+Business Media Hilfsfonds e.V. (an inde-pendent charity set up by the company that supports employees and their dependents who are in need).

In 2008, several charities were supported, including an assisted living center for disabled people and a food bank.

Corporate responsibility (CR)

The Doorstep School

India

Heron Island Research Station

Australia

Sichuan earthquake relief

China

Local initiatives


Our PeopleAs a key partner to the international science community, the dissemination of information and the freedom of thought in the widest sense are of great importance to us. Since we essentially bring people closer together through the exchange of ideas in the form of research, we aim to have the broadest possible view and the widest possible inclusion of ideas from all over the world. We also apply this to our own employees. This means that, naturally, we do not discriminate on the basis of race/ethnic origin, gender, religious/humanistic beliefs, disability/handicap, age or sexual orientation, or any other group protected by any national laws. We are committed to achieving the most appropriate level of diversity.

As mentioned in our Mission Statement, Springer is justifiably proud of the collegial atmosphere that is nurtured at our locations. This has also been reflected in the results of our last worldwide employee survey (February 2006), which was sent to all employees, and in which 74 percent par-ticipated. Ninety percent of respondents said that they liked working with their colleagues, 78 percent were satisfied with their job, 85 percent were happy to tell people that they worked for the company, 80 percent were convinced that Springer was highly regarded and 78 percent were happy with their direct supervisor.

Since we face the challenge of dynamic global markets on a daily basis we invest considerable energies in developing high quality products to meet the needs of the scientific research com-munity and our professional customers. To achieve this, we strive to attract and retain the best talent.

The working environment at Springer allows our employees to apply their talents and skills and contribute directly to the success of the company. We offer challenging opportunities for people who are prepared to make a commitment to excellence.

We have a strong belief in our leadership philosophy:

7 Management is a creative and not an administrative process

7 The acceptance of continual change and organizational flexibility is key in a rapidly changing environment

7 Entrepreneurial spirit should be fostered

7 Good managers are results-driven and focused

7 Character and team spirit are important elements in management teams

7 Managers at all levels should treat their staff the way they would like to be treated

We also actively promote training and career advancement at Springer, and are successful in fill-ing the large majority of open positions with internal candidates. In 2007, we launched an internal human resources development e-learning platform, Sproodle, which offers all employees online courses using Web 2.0 technology which are taught by in-house professionals in a wide variety of areas.

We have developed several traineeship programs at Springer which are a potential source of com-petent, motivated internally-trained and talented employees.

Our two-year International STM Trainee Program seeks to attract the most talented graduates with an international background in order to develop them for successful mid-level-management roles at Springer. In 2007, over 400 high-profile graduates applied for four open positions. The trainees are assigned to members of the Senior Management Team and receive specific training and are highly project-oriented.

Our Cross-Cultural Internship Program at our subsidiary Crest Premedia Services in Pune, India offers eight to twelve trainees the opportunity to gain work experience in premedia services. The trainees are selected from German and Dutch-speaking applicants who then spend on aver-age six months in India. The program not only offers foreign work experience, but also provides insights into Indian society and has a charitable element in which the trainees assist the Doorstep

Our people


School, a charity that educates the children of day laborers using a converted bus functioning as a mobile school, which Springer sponsors.

Our General Intern Program allows potential future employees the opportunity to gain expe-rience in various areas (publishing, corporate communications, finance, controlling, human resources, production, etc) for six to twelve months. Over the past three years (in Germany) Springer has hired an average of 84 percent of its former trainees as permanent employees.

Our employees are dedicated to developing and providing the best products and services regard-less of whether they are publishers, journalists, sales or marketing professionals or part of our corporate services team.

Our Board Supervisory Board

Chairman

Dr. Arno MahlertChairman of the Supervisory Board, GfK SE

Arno studied economics at the University of Münster and the University of the Saar in Germany. In 1970, he became an assistant lecturer at the University of the Saar and in 1974 he joined Saba GmbH as the head of the corporate strategy and budget department. In 1978, he joined Bertels-mann AG, and spent ten years with the firm, most recently as CFO for the Electronic Media Divi-sion. In 1988, he joined the Georg von Holtzbrinck Media Group as a Director and CFO. In 2003, he became Chairman of the Supervisory Board of Springer Science+Business Media. In 2004 he joined the Management Board of Tchibo Holding AG (now maxingvest ag) as CFO and was CEO from 2007 to 2009. In 2008, he became Chairman of the Supervisory Board of GfK SE, a leading international market research company.

Vice Chairman

Caf van KempenManaging Director, Know Limits

After obtaining his law degree from the University of Utrecht in the Netherlands, Caf joined Wolters Kluwer as a project manager for its legal database project. In 1976, he became managing director of the company’s legal an tax business in Germany, and then returned to the Netherlands as the managing director of Wolters Kluwer’s las and tax division in 1980. Caf then spent three years on an acquisition integration in Italy, and upon his return, was appointed to the Executive Board in 1993, becoming CEO of Wolters Kluwer in 1999.

In 2000, Caf became a business consultant in the media sector, and since 2003, he has been the Vice Chairman of Springer Science+Business Media. Caf is also a non-executive director of sev-eral media companies.

Board Members

Derk HaankCEO, Springer Science+Business Media

After obtaining a degree in economics and business administration and spending a few years as a researcher at the Vrije Universiteit Amsterdam, Derk began his career in publishing in 1986 at Elsevier Science, where he held various management positions, spending part of this time based in the UK. He was appointed CEO of Misset, Elsevier‘s B-to-B division, in 1991. From 1998 to 2004, Derk was CEO of Elsevier Science and was also an Executive Board member at Reed Elsevier. Since 2004, he has been CEO of Springer Science+Business Media.

Our people

Our Board

Supervisory Board

Board Members


Martin MosCOO, Springer Science+Business Media

Martin received his MA in Economics and Accounting from the University of Groningen in the Netherlands. He began his career in 1986 at Ernst & Young as part of the auditing department. In 1989 he joined the internal auditing department of Elsevier International and, in 1992, moved to Elsevier Business Information, where he held various management positions. In 1999, he was appointed CFO of Elsevier Science, and in 2004, he became COO of Springer Science+Business Media.

Dr. Ulrich VestCFO, Springer Science+Business Media

Ulrich has a degree in business administration and engineering and studied in Darmstadt, Ger-many and Lyon, France. He began his career at Proctor & Gamble in 1990 as Controlling Man-ager. In 1991, he returned to academia and completed his PhD in Finance in 1996, when he joined Bertelsmann AG’s central controlling/reporting department. He remained at Bertelsmann until 2003 in various management functions, the last position being CFO of BertelsmannSpringer. In 2004 he became CFO of Springer Science+Business Media.

Nils BennemannInvestment Manager, Candover

Nils joined Candover in 2006 having worked in the leveraged finance group of CIBC World Mar-kets. Before that he worked at Lehman Brothers, where he focused on M&A and capital raising for companies in the media and communications industry.

Nils is a German national and holds a degree in Philosophy and Economics from the London School of Economics and an MBA from Harvard Business School.

Simon LeefeManaging Director, Candover

Simon Leefe joined Candover in 1992. He is a managing director and a member of Candover’s executive committee. Simon qualified with Arthur Andersen, where he gained experience in a number of areas including corporate recovery.

He has worked on the buyouts of Druid Group, Detica, Regional Independent Media, Acertec and Earls Court & Olympia. Simon was responsible for the two acquisitions that created Springer. Most recently he led the buyout of ALcontrol.

Eric-Joost ErnstDirector, Candover

Eric-Joost Ernst joined Candover in 2000 after three years with Arthur D. Little in Rotterdam working as a business analyst in the corporate finance practice. He is a Dutch national and holds a Masters degree from Delft Technical University and an MBA with distinction from INSEAD.

He worked on Springer and the buyouts of Thule, ALcontrol and Hilding Anders and most recently, he led Candover‘s delisting of Stork. He has country responsibility for Benelux and the Nordic region.

Our Board

Board Members


Gérard BecquerPartner, Alter Domus

Gérard Becquer has been a partner of Alter Domus, a specialized domiciliation and payroll ser-vice provider in Luxembourg since 2001. From 1998 to 2001, he was a partner at Pricewater-houseCoopers Experts Comptables et Fiscaux in Luxembourg. From 1980 to 1998, he held several positions at Coopers & Lybrand, having been appointed director of the business services depart-ment there in 1988.

Brian LindenPartner, Cinven

Brian joined Cinven in 1985. Transactions he has been involved in include Truvo, Springer, Aprovia, MediMedia, Dynacast, IPC, Gardner Merchant and Ziggo. He is a member of the TMT sector team. Before joining Cinven, Brian worked at Deloitte & Touche. Brian is a Business Finance graduate.

Pascal HeberlingPartner, Cinven

Pascal joined Cinven in 2001 and has since worked on a variety of transactions including Spire Healthcare, Frans Bonhomme, Numericable/Completel, Springer, NCP, Aprovia and MediMe-dia. He is a member of the Healthcare and Business Services sector teams.

Previously he worked at Merrill Lynch in London, where he advised companies primarily in Germany, France and the UK. Prior to this he worked in private equity at TD Capital Group in Toronto.

Pascal is a graduate of the Institut d’Études Politiques de Paris and holds an MA and MBA from the University of Toronto.

Marc AppelhoffPrincipal, Cinven

Marc joined Cinven in 2006 and has since worked on a number of transactions including Springer, Maxeda and Klöckner Pentaplast. He is a member of the Consumer sector team.

Previously he was at The Boston Consulting Group for 3 years, based in Munich advising clients on automotive and consumer goods industries.

Marc studied in Germany and France and graduated from the WHU in Koblenz with a Diploma in Business Administration.

Our Board

Board Members


Corporate governance reportSpringer’s supervisory board meets monthly for half- to full day meetings. The agenda includes the operating and financial performance of the group, forecasts of operating and financial perfor-mance and investment decisions as standing items of reporting and discussion.

Springer’s board has formed an audit committee and a compensation committee which meet at least two times a year. The audit committee discusses and agrees guidelines, focus, scope and results of the work of Springer’s internal and external auditors.

Springer’s external auditor regularly present to the audit committee - particularly in the context of approving Springer’s annual financial statements. Springer’s internal audit team reports directly to the Chairman of the Supervisory Board.

The main tasks of Springer’s internal audit function are operational on-site business audits, the maintenance and updating of Springer’s corporate guidelines as well as internal risk and anti-fraud management.

Corporate

governance report

Part II

Report of the Réviseur d’Entreprises

Consolidated Financial Statements According IFRS

springer.comSpringer Science+Business Media – Annual Report 2008 – Part II 16

Springer Science+Business Media S.A., Luxembourg

Consolidated Financial Statements According IFRS

January 1, 2008 to December 31, 2008

Rue Thomas Edison 1A | L-1445 Strassen | Luxembourg


Management Report

for the Period Ending on

December 31, 2008

Key Group Financial Data

Management Report for the Period Ending on December 31, 2008 This management report relates to Springer Science+Business Media S.A. which is referred to as SSBM S.A. or the company in this document. In the text it is made reference to “Springer” or the “Group” when considering the entire group of companies and subsidiaries directly and indirectly held by SSBM S.A. “STM” and “Professional” refer to the group’s two main publishing divisions, “Science, Technical and Medical” and “Professional”, respectively. These divisions are reported as segments in the group’s IFRS Financial Statements, consistent with previous year’s segment financials.

Key Group Financial Data Pro Forma Group Sales / EBITDA development

Springer Group Key Financials 2008 2007*

in € million 1 USD =

0 .680 EUR

1 USD =

0 .730 EUR

Revenues STM 655 639

Professional 240 243

Corporate/Other 0 0

Consolidation -3 -4

Continuing Operations 892 878

Discontinued Operation - 29

Total Group 892 907

EBITDA excl. Capital Gains/Losses

STM 238 237

Professional 43 43

Corporate/Other -20 -23

Discontinued Operation - 2

Consolidation 0 0

Total Group 261 259

Exceptional Expense/ Income incl. in EBITDA

STM -8 -8

Professional -8 -6


Discontinued Operation - -

Total Group -20 -21

Currency Gains/Losses incl. in EBITDA

STM -3 0

Professional 0 0


Total Group -4 -2

Adjusted EBITDA Total Group 285 282

OperatingDepreciation

STM -46 -43

Professional -4 -5


Discontinued Operation - -

Total Group -51 -49

* Restated, please refer to page 39 and page 45


The above table presents Sales and EBITDA performance of SSBM and its segments. These key financials have been derived from SSBM S.A.’s consolidated Financial Statements 2008 as pre-pared in compliance with IFRS. These financials are presented at actual currency exchange rates. As approx. 30 % of Springer’s revenues and approx. 40 % of the cash flows are denominated in US dollar, the US dollar / EURO exchange rate is the most relevant for Springer. In FY 2008, the aver-age EURO / US dollar exchange rate was 0.68 whereas this rate was 0.73 in FY 2007. Included in FY 2008 financials is the contribution from acquired businesses (BioMed Central, UK) for the part of FY 2008 in which Springer had already gained control of the business. Discontinued operations reflect the sale of Springer’s Professional Construction business in the course of FY 2007. Other disposed businesses which do not qualify as discontinued operations under IFRS are, therefore, still included in the other segment’s numbers. The table also represents exceptional income and expense items included in EBITDA. These items are considered to have been incurred outside the normal course of business and therefore to be of non-recurring nature. Management considers “adjusted EBITDA” which excludes such exceptional or non-recurring income/expense items a suitable measure when analysing the development of Springer’s financial performance over time or when comparing Springer’s financial results to those of Springer’s peers. Growth rates as stated in the report below relate to year-on-year underlying (organic) growth. This is calculated elimi-nating the impact from the change in underlying currency exchange rates, the impact from acqui-sitions/divestments and from exceptional/non-recurring expense in the respective periods. For the below discussion and the purpose of the IFRS disclosures, Springer’s segments are defined differently as STM and Professional publishing. Different from Springer’s internal reporting, the STM segment for IFRS disclosure also comprises the German language Medical publishing seg-ment.


Management review of the development and position of undertakings included in the consolidated accounts

Operating financial performance: Sales, EBITDA and Cash Flow 2008 Springer achieved sales of € 892m in FY 2008 which is 5 % growth from FY 2007. FY 2008 adjusted EBITDA is € 285m which is up approx. 5 % from FY 2007. FY 2008 performance was strongly driven by Springer’s STM division with Springer’s Professional Publishing segments performing well but starting to see some impact from the overall decline in the economic environment in Germany/Central Europe in the second half of FY 2008.

Springer STM reached sales of € 655m in FY 2008 which is growth of around 7 % over 2007. FY 2008 adjusted EBITDA was € 249m (growth of approx. 5 % over 2007). Main developments in the STM division in FY 2008 were:

7 STM Global Journals realised revenues grew by more than 5 % driven by strong migration from print to online subscriptions with increased journal package sales and again very strong sales of online journal archives (“backfiles”).

7 STM Global Books achieved growth of more than 10 % related to the very strong increase in revenues from Springer’s e-book packages. At the end of FY 2008, the installed customer base for this product has grown by more than 50 % when compared to the end of FY 2007. Print books only achieved minor growth in FY 2008. This growth was solely related to the full year FY 2008 impact of the acquisition of Spektrum Verlag completed in H2/2007. Particularly in the US territories and in the bulk/corporate segment print book sales declined somewhat from FY 2007. Consolidation among US wholesalers and declining sales through trade and direct channels in the US in Q4/2008 were the key causes for this development.

7 Local language programmes showed weaker results as a consequence of journal sales migrat-ing into journal packages sold through the STM global division and as a result of trade sales in some subject and corporate being impacted by the deteriorating trading environment. The STM businesses in the Asia/Pacific territories developed strongly driven by the expansion of Springer’s sales force in this area. Both local sales and sales of English language journal/book programmes achieved growth rates of around 20 %. Springer’s pharmaceutical business had a difficult FY 2008 with management changes in the US and pressure on demand and pricing resulting from the very weak economic development in Springer’s key markets. US textbook publisher Key Curriculum and computer/software publisher Apress both saw slightly declin-ing revenues due to the recessionary environment impacting the second half of FY 2008. The German Medicine segment showed mixed developments in FY 2008. With new drug releases continuing on historical lows and further legislation to limit healthcare expense total infor-mation/marketing spending in this segment declined further in FY 2008. However, driven by product relaunches and line extensions Springer’s German language professional books and general practitioner/specialist magazines grew revenues in FY 2008. Other products, in particular the online/agency business, faced substantially reduced order volumes from phar-maceutical companies in the second half of FY 2008 leading to overall FY 2008 results slightly below FY 2007.

7 The Indian typesetting businesses (SPS and the non-English language business CREST which was launched in 2007) grew revenues and operating profits in FY 2008.

Springer’s Professional divisions grew aggregate revenues only slightly to € 240m in FY 2008. This is growth of around 1.5 % from FY 2007. FY 2008 divisional adjusted EBITDA was € 51m which is on prior year 2007 levels. Main developments in 2008 in Springer’s Professional divisions were:

7 The Business/Technology activities continued their solid development in FY 2008 achieving year-on-year sales and EBITDA growth. Main factors were the expansion into new publishing segments (environmental technologies, international automotive technology), cross-selling initiatives and in general closer integration of information product lines.

Management review

of the development and position

of undertakings included in the

consolidated accounts

Operating financial

performance:

Sales, EBITDA and

Cash Flow 2008


Exceptional items

and Currency Effects

7 The Professional Road Safety division achieved strong sales and EBITDA growth in FY 2008. Key drivers were positive demographics, the impact from product innovations in e-products as well as product updates following changes in the regulation of driving education in Ger-many. The Professional Transport Trade Magazine segment was impacted by the economic downturn in H2/2008 leading to flat financial results in FY 2008.

7 In FY 2008, the Professional publishing activities in the Netherlands slightly improved oper-ating results on overall divisional revenues that were flat from FY 2007. Key factors behind this development were the diveSTMent of non-core and low margin publications of medical publisher BSL and the finalisation of the restructuring and integration plan that followed the acquisition of BSL in mid-2007. While the market environment for advertising revenues in the medical segment continued to be difficult in FY 2008, book sales and special publishing projects in this area achieved slight growth. The Rendement business continued to expand its subscription revenues in FY 2008 with operating profit also slightly improved from FY 2007.

Springer corporate and overhead expenses in FY 2008 were € 15.5m with the increase from FY 2007 mainly owed to changes in the recharging policies and the completion of the staffing of some corporate functions (Internal Audit, Legal).

Springer’s operating cash flow FY 2008 was € 288m which was substantially improved from FY 2007 (€ 227m). Key drivers of this development were:

7 Reduction in exceptional/restructuring cash expense

7 A substantial share of 2008 subscription proceeds scheduled for reception in December 2007 was actually received between January and March 2008

7 Overall improvement of inflows from Accounts Receivables as a result of the expansion of the factoring programme and successful renegotiations of renewal procedures and timing with key agents/trade partners thereby accelerating cash flows relating to 2009 renewals in Q4/2008

7 Increased corporate income tax payments mainly as a result from delayed assessments relating to prior fiscal years but received and settled in FY 2008.

Springer’s investment cash flows increased in FY 2008 with capital expenditures only slightly up from FY 2007 and a larger increase related to programme investments (content co-publishing fees and investments in e-book/e-journal databases). Cash flow from investment/divestment activities included the divestment of the Austrian trade magazine business (proceeds of € 3m), divestment of the Austrian trade agency business Minerva (proceeds of € 5m) and the divestment of the German Forum conference business (proceeds of € 25m) as well as the acquisition of UK-based open access publisher BioMed Central (consideration paid in FY 2008 was € 32m).

Key items within Springer’s financing cash flows were the inflow from the PIK facility arranged to fund the acquisition of BioMed Central in October 2008 and a term loan prepayment of € 30m executed in December 2008. Springer’s drawing under the Revolving Credit Facility was € 56m at year end FY 2008 (down from € 70m at the end of 2007). Springer’s net debt was € 1,942m at year end FY 2008.

Exceptional items and Currency Effects In FY 2008 Springer’s adjusted EBITDA result of € 285m includes a total of € -20m non-recurring losses/gains and currency exchange rate losses of € 4m:

7 € 6m restructuring expense incurred in relation with Management restructurings mainly in Springer’s professional publishing unit (approx. € 2m of this relate to provisions for 2009 restructurings)

7 € 4m expenses relating to the restructuring of the Group’s legal/equity structure and incurred in relation to the various diveSTMents processes carried out in the course of FY 2008

7 € 2m restructuring/redundancy expense provisioned for with respect to the closure of some US locations which will be executed in early 2009


7 € 3m relating to the post acquisition redundancy/offshoring programme at BSL (Professional Netherlands)

7 € 5m expense relating to the integration of workflow and fulfilment systems (of which € 3m relate to technical inventory write-offs following the integration of BSL on Springer’s IT platforms).

Springer considers these items as exceptional and non-recurring in the normal course of business.

Future development of undertakings included in consolidated accounts Springer is active in global STM (academic) publishing and in professional/trade publishing areas mainly in Germany and the Netherlands. Springer’s STM business predominantly consists of English language academic content which is sourced and sold globally. Fundamental drivers of this segment such as global research funding, article publication volumes, number of profession-als/students in research and educational institutions, content usage etc. have shown stable growth in the past and are not expected to reverse in the mid or long term. Supported by these develop-ments the global STM market has realised approx. 4.5 % compound annual growth over the last three to five years. Historically, the STM market has proven to be less correlated to the general economic cycle as any other publishing or media segments. As a result of the current weak global economic outlook, Springer therefore expects mid-term growth rates in the STM market seg-ment relevant to Springer to reduce only moderately to around 3 % compound annual growth over the next three to five years. Based on its excellent position in this STM market Springer expects to continue to outperform market growth by around 1 % p.a. over the next years. Springer’s position in STM is characterised as:

7 Global number two in the STM journals market

7 Global number one in the STM book market

7 Successful product innovator (open choice, most recently e-books)

7 Publisher with high reputation and very close links to the author and library communities

7 Publisher with acknowledged openness towards innovative publishing solutions as demon-strated by the acquisition of open access publisher BioMed Central in Q4/2008.

Springer’s group sales growth in FY 2009 will be largely driven by the STM division. In line with prior years, in FY 2009 Springer will continue to execute on its key strategic objectives for its STM business:

7 Achieve organic revenue growth by:

– Increased volume in content output (titles, issues, articles) while not compromising on the quality of Springer’s content

– Continued expansion of product range through own product innovation and content/product acquisition

– Further penetration of e-book market through database/package sales to institutional customers and corporates

– Maintaining a strong focus on a proactive, highly qualified and efficient global sales organisation

– Continued expansion of sales force and general presence in the Asian/Pacific regions as well as in other growth regions such as Middle East and Spanish speaking countries

7 Drive usage of Springer’s content and platforms through improved availability, further enhanced online features, development of user generated/developed content features

7 Focus on developing and selectively acquiring highly used journal, book and database content

7 Improve efficiency of journal and book production and distribution workflows

7 Improve profitability of total STM segment by integrating Springer’s local academic publishing units and imprints (Austria, Switzerland, Italy, France and others) into the global STM organi-sation

7 Reassess/restructure non-core publishing segments and non-English language programmes

Future development

of undertakings included in

consolidated accounts


Springer’s core English language business (STM Global) targets 5 % sales growth in FY 2009. Key assumptions are:

7 STM global journal segment:

– Springer has increased regular journal subscription prices in line with previous years; approx. 75 % of Springer’s journal subscription revenues will be locked in multi-year consortia contracts; contract renewal levels (of print and online journal revenues) in line with prior years will lead to organic growth of approx. 4 % in STM journal subscription income

– Journal non-subscription sales (Springer’s online journal archive/backfile sales, pay per view sales and open choice publishing fees) will come down slightly from 2008 as the one-off sales of backfiles decline and pay per view/open choice revenues only partly compensate for this development

– In 2009, Springer will add approx. 20 academic journals thereby growing the total list of academic journal titles to approx. 1,500.

– Further migration to online access will not have a material impact on direct journal cost as the majority of sales to institutions is already covered by respective consortia/licensing agreements granting e-access. Most of these customers have by now already reduced/cancelled their ordering of print copies leaving only limited potential for further cost savings from migration of print to electronic in journal products.

7 STM global book segment:

– STM global book sales are expected to grow by above 6 % in 2009. The key driver will be the continued increase in e-book package sales to institutional and corporate customers. Springer targets an expansion of the installed base of e-book package customers driven by contract renewal of existing customers and a strong pipeline of potential new customers for this product line.

– Growth in e-book sales will compensate the forecasted decline in global STM print book sales in 2009. This decline is the result of further consolidation in the STM book wholesale segment in North America as well as a consequence of the overall very weak economic environment for corporate and individual print book sales. Springer does not expect this situation to improve in the course of 2009.

– Springer’s STM book frontlist output will continue to grow in 2009. Within the 2009 frontlist, the share of manuals/reference works and handbooks will increase in line with Springer’s strategy to expand this segment of its book programme across all subject areas.

– Material/production expense in the STM global book segment will not increase between 2008 and 2009. Lower print book sales volume, reductions in supplier pricing and flat developments in prepress costs resulting from the move to more integrated workflows in global book production will be key factors in this development. In addition, Springer

expects benefits of the increased share in e-book sales and print-to-order sales in 2009. The share of e-revenues within total STM global book sales will increase from 22 % in 2008 to 27 % in FY 2009 while the share of print-to-order produced book sales within total STM print book sales will increase from 24 % in 2008 to above 30 % in 2009.

BioMed Central’s sales growth will be driven by article processing charges (up 21 % from 2008) partially related to price increases (mainly already executed in H2/2008) but mainly driven by article volume increase. The target volume increase is supported by the planned launch of 25 new open access or hybrid journals in FY 2009 (bringing BioMed Central’s total journal portfolio to above 250 journals).

In FY 2009 Sales growth in the non-English STM segment will be depressed by the migration of journal subscription revenues that migrate to electronic package sales realised through Springer’s STM global division. FY 2009 book sales will benefit from slippage of title releases from Q4/2008 into 2009 and from price increases on large parts of the Architectural book programme (AUT, CH). Advertising revenues, corporate publishing sales and bulk sales are expected to remain flat


in FY 2009 as a consequence of the difficult economic environment in key industries (construc-tion/architecture, pharmaceutical). Springer’s Asian sales and publishing activities will continue to grow their contribution to Springer STM global sales. Total sales growth in these territories is expected to be above 20 % in 2009. This will be achieved by making full use of the recently expanded local sales organisations and by bringing new territories into the focus of sales activities (i.e. South Korea). The US textbook and computer book segments are expected to withstand the recessionary trends due to a much stronger programme/title release schedule in FY 2009. Despite the challenging environment sales in the Pharmaceutical communication business (mainly in the UK, the US, Spain, Italy) are expected to grow somewhat as the built up of this organisation is close to completion. In the US, the closer integration with Springer’s STM Global sales organi-sation should allow to better leverage the journal and book content created in these businesses. A further decline in total advertising / promotional spending by pharmaceutical companies is expected to impact revenues in the German language Medicine publishing segment in FY 2009. Compensation will be achieved by the continued strong push of integrated ad / promotion pack-ages across Springer’s medical business units, the continued expansion of the specialist maga-zine portfolio and the growth of the recently launched new publishing subsegments focussing on pharmacies/patients and dental medicine.

Sales growth at SPS will decrease in FY 2009 as offshoring activities of SPS’s key customers mature and pressure on pricing in the BPO segment increases. FY 2009 volume growth will, therefore, not be fully sufficient to compensate pressure on operating margins created by agreed customer price reductions and the impact of continuously high inflationary growth of the cost base in India. The non-English language typesetting business launched in 2007 (CREST) is fully operational and targets solid revenue growth and break-even results in 2009.


Springer Professional Springer Business Media is focussed on information products for key professional / business seg-ments in Germany (Engineering / Technology, Automotive, Transport / Logistics, Business), on media products to support traffic education/road safety education in Germany, France, Spain, Austria and Switzerland and on general business and healthcare segment in the Netherlands. In total these businesses provide for a very balanced mix of trade sales, advertising sales and sub-scription income. However, the very weak overall economic situation and outlook across almost all industry segments will inevitably impact marketing and promotional activity of Springer’s cus-tomers thereby creating substantial risks for Springer’s advertising, promotional and corporate publishing activities in this segment. These core advertising revenues accounted for approx. 35 % of total Springer Business Media revenues in FY 2008 and the related risks have been reflected in Springer Business Media’s expectations for FY 2009. The main assumptions for FY 2009 develop-ments – which were based on the market situation in early December 2008 – are:

7 The Professional Business / Technology segment accounts for less than 5 % of Springer´s group EBITDA. In FY 2009, flat advertising and financial newsletter revenues will be compensated by an expanded book program, the launch of products in new publishing subsegments (envi-ronmental engineering, international automotive engineering) and a more efficient sales organisation in the area of rights and licenses.

7 The development of the Professional Road Safety / Automotive segment (approx. 4 % of group EBITDA) in FY 2009 will be linked to the negative demographic trend in Germany where the number of individuals reaching the legal age for the standard driving license will come down by 9 % between 2009 and 2008. In addition there are no changes in legislation relat-ing to road safety / traffic education scheduled or expected in Germany, France or Spain in 2009. The trade magazine business within this segment is likely to be impacted by the overall decline in B2B / Professional marketing spending. With the automotive industry (including dealers / garages) and global transport business in deep recession, this division faces a serious risk of declining revenues and results in 2009.

7 Professional Netherlands accounts for approx. 6 % of Springer group EBITDA. In FY 2009, revenues from an expanded seminar programme and from a newly launched magazine in the area of General Healthcare Management as well as the impact of the 2008 reorganisation of advertising sales should allow medical publisher BSL to create revenue growth and gain mar-ket share. The Rendement business unit (info magazines for business / admin professionals) expects to grow revenues strongly driven by the launch of a new professional magazine in the area of general finance/tax which is offered to all subscribers as a newly priced package deal together with their existing individual title subscriptions.

Events after the balance sheet date Since the end of FY 2008 the global economic environment has deteriorated further. Springer does not expect this to substantially impact the financial performance of its core STM segment in FY 2009. However, due to the devaluation of local currencies in some Eastern European countries as well as in some emerging markets projected growth in these territories may be endangered as Springer sells on a EURO or US Dollar basis in these markets. In addition, Springer’s trade book sales and Springer’s advertising related sales are exposed to the economic cycle and may therefore be affected by the current recessionary trends.

Research and development Relying on the identification, acquisition and edition, production and dissemination of intellec-tual properties and content as its dominant source for income, Springer is not active in areas of proprietary research that would be comparable to industrial companies. However, as a response to the steep growth in online usage and demand for electronically supported publishing products, SSBM is continuing to expand and refine its offerings in these areas. The Springer e-book pack-age and licensing product as well as the continued addition of key features to the SpringerLink website again in FY 2008 resulted in a strong growth in online usage of Springer’s content in

Springer Professional

Events after the

balance sheet date

Research and development


FY 2008. In FY 2008, Springer continued the migration in book production workflows to support digital, print-to-order production / fulfilment processes. Springer targets to be able to prduce 50 % of its book frontlist title output as print-to-order by the end of FY 2009. In addition, Springer is enhancing the quality of its digital databases by moving to XML standards across all major cat-egories of content. Springer participates in CrossRef and many other initiatives in this area.

Luxembourg, March 27, 2009

For the Board of Springer Science+Business Media S.A. For the Board of Springer Science+Business Media S.A.


Consolidated Income Statement IFRS

in € thousand

Notes

01.01.2008 – 31.12.2008

Continuing Operations

Discontinued Operation*

Group

Revenues 1 892,046 - 892,046

+ Other operating income 2 30,148 - 30,148

+/-Change in inventories / internal costs capitalised 1,825 - 1,825

-Cost of materials 3 -202,840 - -202,840

-Royalty and license fees -33,174 - -33,174

-Personnel costs 4 -231,524 - -231,524

-Other operating expenses 6 -195,816 - -195,816

+/-Income from other investments 7 651 - 651

+/-Capital gains/losses from disposed entities 14,334 - 14,334

Earnings before Interest, Taxes, Depreciation 275,650 - 275,650

and Amortization (EBITDA)

-Amortization and impairment of intangible assets 5 -101,761 - -101,761

-Depreciation of property, plant and equipment 5 -7,042 - -7,042

Result from Operations 166,847 - 166,847

+ Interest income 8 13,257 - 13,257

-Interest expenses 8 -178,242 - -178,242

+/-Other financial expenses and income 9 -71,777 - -71,777

Financial Result -236,762 - -236,762

-Income taxes (incl . deferred taxes) 10 30,382 - 30,382

Net Result -39,533 - -39,533

Attributable to:

Equity holders of the parent -39,981 - -39,981

Minority interests 448 - 448

Net result for the period -39,533 - -39,533

Consolidated Income

Statement IFRS


in € thousand

Notes

01.01.2007 – 31.12.2007

Continuing Operations**

Discontinued Operation*

Group**

Revenues 1 878,069 29,165 907,234

+ Other operating income 2 28,870 695 29,565

+/-Change in inventories / internal costs capitalised 6,593 44 6,637

-Cost of materials 3 -209,595 -6,206 -215,801

-Royalty and license fees -31,739 -210 -31,949

-Personnel costs 4 -230,539 -14,064 -244,603

-Other operating expenses 6 -185,547 -7,143 -192,690

+/-Income from other investments 7 520 - 520

+/-Capital gains/losses from disposed entities 49,679 - 49,679

Earnings before Interest, Taxes, Depreciation 306,311 2,281 308,592

and Amortization (EBITDA)

-Amortization of intangible assets 5 -97,220 - -97,220

-Depreciation of property, plant and equipment 5 -7,469 - -7,469

Result from Operations 201,622 2,281 203,903

+ Interest income 8 10,259 22 10,281

-Interest expenses 8 -179,049 -9 -179,058

+/-Other financial expenses and income 9 -25,023 -185 -25,208

Financial Result -193,813 -172 -193,985

-Income taxes (incl . deferred taxes) 10 20,579 229 20,808

Net Result 28,388 2,338 30,726

Attributable to:

Equity holders of the parent 27,563 2,338 29,901

Minority interests 825 - 825

Net result for the period 28,388 2,338 30,726

* Please refer to note 28 ** Restated, please refer to page 39 and page 45


Consolidated Balance Sheet IFRS

ASSETS (in € thousand) Notes 31.12.2008 31.12.2007*

Non-Current Assets 11

Goodwill 12 1,003,128 1,021,388

Other intangible assets 13 1,001,703 1,006,352

Property, plant and equipment 14 46,237 42,707

Financial assets 15 29,243 28,065

Deferred tax assets 10 86,018 46,029

2,166,329 2,144,541

Current Assets

Inventories 16 55,841 55,488

Trade receivables 17 179,491 173,480

Income tax receivables 17 3,339 4,406

Other assets 17 21,357 37,193

Cash and cash equivalents 18 49,836 57,528

Prepaid expenses 5,201 3,805

Assets classified as held for sale 28 - 23,969

315,065 355,869

Total Assets 2,481,394 2,500,410

EQUITY AND LIABILITIES (in € thousand) Notes 31.12.2008 31.12.2007*

Equity 19

Issued capital 302 302

Treasury Shares -93 -

Reserves 18,193 10,258

Retained earnings/Other accumulated equity -417,915 -421,225

Net profit/loss -39,981 29,901

Shareholders‘ Equity -439,494 -380,764

Minority interests 20 1,800 2,014

-437,694 -378,750

Non-Current Liabilities

Subordinated shareholders‘ loans 22 - 10,451

Provisions for pensions and similar obligations 21 128,702 130,087

Financial liabilities 22 1,864,072 1,896,661

Finance lease 23 10,174 3,374

Other non-current provisions and liabilities 24 98,472 93,037

Deferred tax liabilities 10 192,968 205,530

2,294,388 2,339,140

Current Liabilities

Current financial liabilities 22 136,430 134,113

Current finance lease 23 1,260 941

Current provisions 24 16,005 17,597

Trade payables 25 68,856 63,924

Income tax payables 25 26,876 33,070

Other liabilities 25 167,297 108,137

Deferred income 207,976 165,008

Liabilities classified as held for sale 28 - 17,230

624,700 540,020

Total Equity and Liabilities 2,481,394 2,500,410

* Restated, please refer to page 39

Consolidated Balance

Sheet IFRS


Consolidated Cash Flow Statement IFRS

in € thousand 01.01.2008 – 31.10.2008

01.01.2007 – 31.12.2007*

Result from Operations 166,847 203,903

- Amortisation of intangible assets 101,761 97,220

- Depreciation of property, plant and equipment 7,042 7,469

Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)

275,650 308,592

Gains / losses on disposals -14,449 -49,691

Other non-cash expense and income 3,016 -1,480

Change in non-current provisions -8,610 -8,624

Change in net working capital 55,138 -13,254

Income tax payments -23,144 -8,266

Net Cash from Operating Activities 287,601 227,277

Capital expenditure (CAPEX) -23,500 -21,351

- intangible assets -18,409 -15,877

- property, plant and equipment -5,091 -5,474

Investments -9 -10,021

Purchase price for acquired entities -37,137 -135,308

(less cash and cash equivalents acquired)

Proceeds from divestiture of consolidated entities 36,205 80,410

Investment in Programme -47,471 -42,864

Proceeds from disposals of non-current assets 224 470

Net Cash from Investing Activities -71,688 -128,664

Interest payments -141,466 -148,256

- Interests paid -143,314 -150,023

- Interests received 1,848 1,767

Financial liability re-payments -178,609 -189,887

Financial liability inflow 97,556 252,285

Change in shareholders’ equity - -

Dividends and minority interests -639 -975

Finance lease payments -1,222 -1,237

Net Cash from Financing Activities -224,380 -88,070

Change in Cash and Cash Equivalents -8,467 10,543

Exchange rate movements and other changes in cash -231 -506

Cash and Cash Equivalents at the Beginning of the period 58,534 48,497

Cash and Cash Equivalents at the End of the period 49,836 58,534

*Restated, please refer to page 39 und 45

The cash flow statement relates to the Group rather than to the continuing operations only and includes, therefore, in 2007 the cash flow from the discontinued operation, as well (please refer to note 28 and note 29).

Consolidated Cash Flow

Statement IFRS


Consolidated Statement of Changes in Equity IFRS

in € thousand

01.01.2007 Change recognized in income

Other comprehensive income recognized in

equity**

Consolidated Comprehensive

income

Change in shareholders'

equity

31.12.2007*

Transfer

to ret .

earnings

Net

income

after min .

Currency

translation

Other

changes

Dividends Capital

Increase

Subscribed Capital 302 0 302

Reserves** 10,258 0 0 10,258

Retained Earnings/Deficit -482,384 -86,434 -885 119 -766 0 -569,584

Currency translation differences 69,554 78,805 78,805 148,359

Available-for-sale securities 0 0 0

Derivative financial instruments 0 0 0

Other accumulated equity 69,554 0 0 78,805 0 78,805 0 0 148,359

Net Income After Minorities -86,434 86,434 29,901 29,901 29,901

Shareholders' Equity -488,704 0 29,901 77,920 119 107,940 0 0 -380,764

Minority Interests 2,232 825 -13 -39 773 -991 2,014

Total -486,472 0 30,726 77,907 80 108,713 -991 0 -378,750

in € thousand

01.01.2008 Change recognized in income

Other comprehensive income recognized in

equity **

Consolidated Comprehensive

income

Change in shareholders’

equity

31.12.2008

Transfer

to ret .

earnings

Net

income

after min .

Currency

translation

Other

changes

Dividends Capital

Increase/

decrease

Subscribed Capital 302 0 302

Treasury Shares - -93 -93

Reserves** 10,258 -10,258 -10,258 0 18,193 18,193

Retained Earnings/Deficit -569,584 29,901 -1,903 3,754 1,851 0 -30 -537,862

Currency translation differences 148,359 -28,412 -28,412 119,947

Available-for-sale securities 0 0 0

Derivative financial instruments 0 0 0

Other accumulated equity 148,359 0 0 -28,412 0 -28,412 0 0 119,947

Net Income After Minorities 29,901 -29,901 -39,981 -39,981 -39,981

Shareholders' Equity -380,764 0 -39,981 -30,315 -6,504 -76,800 0 18,070 -439,494

Minority Interests 2,014 448 -227 204 425 -639 1,800

Total -378,750 0 -39,533 -30,542 -6,300 -76,375 -639 18,070 -437,694

* Restated, please refer to page 39 ** Net of taxes


Notes to Consolidated Financial Statements IFRS

1 General Principles

The consolidated financial statements of Springer Science+Business Media S.A. (“Springer Group financial statements” or “Group financial statements”) have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, includ-ing all currently mandatory standards and interpretations issued by the International Accounting Standards Board (IASB).

The financial year is the same as the calendar year, i.e. from January 1 to December 31, 2008. As required, the consolidated financial statements and notes show comparative figures for the p

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