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WWW.GUJ.DE | GRUNER + JAHR AG & Co KG

ANNUAL REPORT 2005

MEDIA PEOPLE JAHR AG & Co KG

+ BRANDS GRUNER | ANNUAL REPORT 2005 ANNUAL REPORT 002_GJ_GB_Impressum_engl.qxd 05.04.2006 15:50 Uhr Seite 2

Production Credits ANNUAL REPORT 2005

Publisher: Gruner + Jahr AG & Co. KG Corporate Communications + Public Affairs Am Baumwall 11 D-20459 Hamburg Germany [email protected]

Responsible: Dr. Andreas Knaut Editors: Alexander Adler, Kurt Otto Photography: Sebastian Vollmert, Hamburg Design: Claim GmbH, Hamburg Realization: G+J Corporate Media GmbH Friesenweg 2 a-c, 22763 Hamburg Prepress: 4MAT Media, Hamburg Print: MOHN Media, Mohndruck GmbH, 33311 Gütersloh Translation: Larissa Stillman Wagner, Cremlingen Other photo credits: Reto Klar (pp. 6, 8), PR/BRIGITTE (pp. 4, 13, 14), Dirk Stewen (p. 31, pp. 62-63), Michael Sazel (p. 32, 35 b.), Corbis (p. 39 l. b.), laif (p. 39 r. b.), Focus/Everke (p. 40 l. b.) PR/PRINOVIS (pp. 49-50), Jan Northoff (p. 51), STERN/Walter Scheels (p. 58 r.), Bertram Solcher (pp. 59, 73 r.) Jürgen Joost/STERN (p. 61), Karin Rocholl/STERN (p. 61 m.), Klaus Knuffmann (p. 5, pp. 63 r.-65, p. 70 r. t., b.), Stiftung Jugend forscht e. V. (pp. 68, 69 b.), Cornelia Fuchs/Stiftung STERN (p. 69 t.), PR/Du bist Deutschland (p. 70 l. t.) Markus Krüger (pp. 72-73), Hardy Müller (p. 74)

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WWW.GUJ.DE | GRUNER+JAHR AG & Co KG CONTENT

10 16 62 76

06 BRAND DEVELOPMENT AND INNOVATION INTERNATIONALIZATION INNOVATION MANAGEMENT 66 EMBRACING RESPONSIBILITY – ENDORSING TALENT Foreword by Dr. Bernd Kundrun, CEO Corporate Citizenship is part of G+J’s identity 26 WE’VE ONLY JUST BEGUN 52 THE INNOVATION COUNCIL An interview with G+J Executive Board Member Dr. Torsten-Jörn Klein An Interview with G+J Executive Board Member 72 ENVIRONMENTAL REPORT BRAND MANAGEMENT Angelika Jahr 32 SEVEN AT ONE STROKE 76 YOUNG COSMOPOLITANS FROM MOSCOW 10 STRONG BRANDS, STRONG VOICES, GEO International: Set for Expansion STRONG WOMEN TO MADRID QUALITY JOURNALISM International HR Development BRIGITTE on its way to becoming Germany’s leading 36 ONCE MORE, FROM THE TOP women’s brand A Portrait of G+J Executive Board Member Axel Ganz 58 AN ORDER OF MERIT FOR GERMAN PRINT JOURNALISM FINANCIAL STATEMENTS 16 VIEW DIARY The Henri Nannen Awards A Magazine is Born 80 MANAGEMENT REPORT 42 UNDER A NEW UMBRELLA Chief Financial Officer Achim Twardy comments G+J Bundles Its German distribution activities CORPORATE SOCIAL RESPONSIBILITY on the business results 62 PREMIERES AT G+J 22 LONG LIVE SPORTS 48 WELL ON ITS WAY 86 FINANCIAL STATEMENTS Promoting Photography Motor Presse Stuttgart looks back on new launches PRINOVIS Performance Fiscal 2005 in Figures

94 CHRONICLE

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FOREWORD BY DR. BERND KUNDRUN, CEO 7

BRAND DEVELOPMENT AND INNOVATION Europe’s biggest magazine publisher is well on track for growth as it continues on its innovation path and builds long-term brand potential

Gruner + Jahr achieved a turning of the tide in 2005: its revenue by 7.6 percent to €2.6 billion in 2005. During the past business year, our publishing house Return on Sales rose to 9.5 percent. saw a significant rise in revenue and result, though As ever, our powerful media brands provide the the advertising market continued difficult and sales basis for our performance. Titles like STERN, markets remained stagnant. Even against this back- BRIGITTE, GEO, and the FINANCIAL TIMES drop, G+J remained on track: We remanded our DEUTSCHLAND have already become established expansionist course in 2005 with acquisitions in as trusted companions and advisors among their Germany and beyond, and brought many new mag- readership. We see great opportunities ahead here azines to market as part of our launch offensive. for G+J, and therefore plan to continue exploiting

We plan to continue exploiting our brand potential in 2006

On the costs front, we resolutely continued on the our brand potential in 2006 as we prepare for a fu- consolidation course pursued in recent years. ture that is digital and characterized by multimedia In other words, Europe’s biggest magazine pub- offerings. lisher is well equipped for the future. G+J increased The G+J quality creed remains the foundation of everything we do. All over the world, we stand for outstanding journalistic and professional quali- ty, for high editorial standards and independent cov- erage. During the past business year, we again lived up to this claim by making considerable investments in titles and editorial teams in Germany and beyond, enlarging and evolving them.

O G+J Chairman & CEO Dr. Bernd Kundrun

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8 FOREWORD BY DR. BERND KUNDRUN, CEO FOREWORD BY DR. BERND KUNDRUN, CEO 9

This attitude is also evident in the Henri Nannen At the same time, G+J further enhanced its lead- position in the foreseeable future with an appro- G+J will continue on its innovation path in 2006. Awards, Germany’s most important distinction for ing market position in Europe and tapped promis- priate degree of effort. At times, this can result in We intend to keep developing the potential of our journalists, which we introduced in 2005. ing new markets. Motor Presse Stuttgart (MPS) a decision to divest. Because these two conditions magazines. I firmly believe that the increasing di- Sixteen new G+J titles were launched in 2005, has been fully consolidated since July 1, 2005. The were not met, we withdrew from the U.S. market versity of media and an unmanageable wealth of bringing the total to 47 new launches since 2003, roughly 140 titles in MPS’ powerful portfolio are an in 2005 by selling our publishing activities there. It media offerings will soon have readers and users or roughly one-sixth of the 285 titles currently pub- ideal match for G+J and allow us to exploit impor- was not an easy decision, but unleashed consid- asking for more orientation, for a quality guaran- lished worldwide under the G+J umbrella. In Ger- tant synergies in Germany and beyond. Our col- erable forces in the end. We are glad to note that tee for content and form. We are ready to meet their many, we launched the very successful, one-of- laboration has been excellent from the start and is our new investments and the gratifying develop- demands. a-kind illustrated magazine VIEW, the new month- being extended systematically. We opened up an- ment of our core business have already more than In closing, a word of gratitude. In 2005, Axel ly HEALTHY LIVING, G+J’s contribution to the bur- other growth market by entering Greece, where compensated for the disposal of our U.S. maga- Ganz resigned from our Executive Board for age geoning health segment, and PARK AVENUE, a G+J acquired a 50 percent stake in Daphne Com- zine portfolio in terms of revenue and results. reasons. He is joining the G+J Supervisory Board new publication with insider, and feature articles munications, one of the country’s leading maga- in the society segment. Especially worth men- zine publishers. Once we receive the go-ahead from Gruner+ Jahr made great headway at the international level tioning in 2005 are the very positive performance the antitrust authorities, we will also be expanding of ESSEN&TRINKEN FÜR JEDEN TAG, G+J’s best- to the Adriatic countries of Croatia, Serbia and Slove- We are also very happy with the performance instead. In the three decades of his work for our seller on newsstands, and of NEON, the new nia, and acquire existing magazine operations there. of our newspaper unit. In its fifth year, the FI- house, Mr. Ganz embodied innovative publishing young magazine in the STERN family, which was One fundamental idea guides every strategic NANCIAL TIMES DEUTSCHLAND pushed its total spirit and business success like few others. I would enthusiastically received by the market. step we take: G+J will only enter a new market if circulation past 100,000, and continues to grow. like to take this opportunity to thank him once again G+J made great headway at the international it can command a leading market position in rele- The SÄCHSISCHE ZEITUNG and the MORGEN- for his incomparable achievements for our pub- level as well: In fall, GEO was launched simulta- vant segments, or can at least achieve a leading POST SACHSEN also continued to deliver a grati- lishing house. We welcome Fabrice Boé, who takes neously in five Eastern European countries and fyingly profitable performance. his place on the Executive Board and at the head Turkey, as well as in Italy, with locally adapted is- In the printing sector, G+J reinforced its lead- of our French subsidiary, Prisma Presse. sues for each country. GLAMOUR was very suc- ing market position. After the merger was approved, cessfully introduced in the Netherlands. In France, PRINOVIS, the new joint venture between G+J, The following pages present to you the highlights our subsidiary Prisma Presse significantly im- arvato and the Axel Springer publishing company, of the year 2005 at G+J. I wish you an informative proved its market position. Its very successful TV resolutely enhanced its position as a leading gravure and entertaining read! listings magazines TÉLÉ 2 SEMAINES and TV printer in a fiercely competitive market environ- GRANDES CHAÎNES grew both their circulation ment. A new gravure plant will take up operations and their profits. in Liverpool this year. Brown Printing, our printing subsidiary in the U.S., also had an exceedingly suc- cessful year.

Dr. Bernd Kundrun Chairman of the Executive Board, Gruner + Jahr

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10 BRAND MANAGEMENT | BRIGITTE

STRONG BRANDS, STRONG WOMEN, STRONG VOICES A magazine on its way to becoming Germany’s leading women’s brand

BRIGITTE has always set high standards for itself. From the beginning, its goals have been ambitious. The mag- azine is dynamic; its leitmotif is “Strength through Sub- stance“. And the BRIGITTE editorial and publishing team is fueled by a vision: to make BRIGITTE one of the ab- solute leading women’s brands, even outside the bi- weekly women’s magazines segment, where it has led the market for many decades.

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13

BRIGITTE “strong- woman” – and Colum- To bring this vision to life, it is not enough for Initially published just four times a year, the maga- Another success story in the BRIGITTE brand fam- nist Elke Heidenreich was that an audiobook was a success if it sold BRIGITTE to present itself as a powerful and inno- zine defied all doomsayers and proved exceeding- ily is the BRIGITTE website, which has established reads from the roughly ten percent of the hardcover print run of vative force in the biweekly women’s magazines ly popular. BRIGITTE’s editorial team demonstrat- itself as Germany’s leading women’s website. It is BRIGITTE Edition to the book it was based on. segment, one that is willing to take risks. Instead, ed the right touch not just in picking topics, but al- not only the biggest but also one of the most ac- sold-out auditoriums Enter BRIGITTE: In February 2005, it launched it must strike new paths that may appear unusual so for striking the right language and look for this tive communities of its kind, and gives users a fo- its “Starke Stimmen” (“Strong Voices”) edition. for a magazine brand with an over 50-year history. Voice recognition exacting target group. BRIGITTE WOMAN is now rum that brings BRIGITTE’s set of values to the In- Twelve distinctive voices were recruited for the BRIGITTE builds on the solid foundation of its Readers for the 2005 Au- published six times a year, and sells roughly 280,000 ternet realm as well. project: leading German actresses and the popu- straightforward positioning, combined with a suc- diobook Edition included copies of each issue. The BRIGITTE brand has become so supple and lar author and literary critic Elke Heidenreich. cessful brand family that is unparalleled through- famous German actress- BYM, the second spin-off magazine, was launched successful that, in combination with all its line ex- BRIGITTE took the manageable little segment out the magazine market. es Iris Berben, Corinna in early 2006, taking the place of BRIGITTE YOUNG tensions, it sells over one million copies per pub- to an entirely new dimension by selling 1.5 million Launching the line extension BRIGITTE WOMAN Harfouch, Anna Thalbach MISS. Designed as a fresh, sophisticated magazine lishing cycle. All activities related to the BRIGITTE audiobooks in 2005. Audiobook market insiders five years ago was one such courageous project: and Heike Makatsch for young women between ages 19 to 26, BYM has brand systematically follow its leitmotif “Strength called it “the biggest success in the history of Ger- It marked the first time that a magazine in Germany an unmistakable look and through Substance.“ man audiobooks.” Not one of the BRIGITTE audio- catered specifically to women over the age of 40. an unusual editorial con- In 2005, this motto guided the editorial team and books sold fewer than 100,000 copies. Their buy- In the process, BRIGITTE created the first “best- cept that playfully links a publishers in developing a project that became a ers were mainly women who wanted to hear the ager” magazine long before the phrase became es- wide range of topics. triumph of brand management – and outside the “Strong Voices” of the narrators – women, two tablished. With newfound self-confidence, this mag- BYM is BRIGITTE’s voice conventional field of magazine line extensions, no thirds of whom had never before bought an au- azine’s target group stands up for its wishes and among young women. less: BRIGITTE continued its success story by tap- diobook. needs – which differ considerably from those of For its readers, the name ping new brand realms, this time in the audiobook New “Strong Voices” are already scheduled for young women – while at the same time refusing BRIGITTE serves as a market. In the past, audiobook titles in Germany 2006. One of them is Nina Hoss, Grimme Award to be defined by their age. Instead BRIGITTE guarantee for quality, a that sold about 5,000 units were already celebrat- winner and a star of new German cinema. The up- WOMAN readers are curious, adventurous and treat proven seal of trust, so ed as “bestsellers.” The industry rule of thumb coming edition will be downloadable to i-Pods – themselves to a singular luxury: living their dreams. to speak. “Strong Voices”: 1.5 million units sold – a mega-success

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14 BRAND MANAGEMENT | BRIGITTE BRIGITTE | BRAND MANAGEMENT 15

and the women behind the voices will be giving live but “should ideally enhance and revitalize the And so, selected Frosta products now bear the performances in some 35 German cities in 2006 BRIGITTE brand,“ as BRIGITTE’s Executive Pub- BRIGITTE DIÄT label. MEDIA BRAND FAMILIES AND as well. BRIGITTE offers its readers a cultural pack- lisher Julia Jäkel puts it. However, that doesn’t mean that you’ll be see- ACTIVITIES IN THE MAGAZINE age that is unique in the magazine landscape. The The “Strong Voices” audiobook edition is a per- ing BRIGITTE-branded bags or BRIGITTE ketchup DIVISION GERMANY new edition once again demonstrates what the fect example: not only was the project a great com- in the future. In creating innovative BRIGITTE prod- combination of quality, creativity and innovation mercial success, it also points up strategically in- ucts, the top priority is that every cooperation, every In Germany, Gruner + Jahr owns strong translates to in managing a powerful media brand: novative paths for BRIGITTE in the world of major line extension and every special project must meet core titles whose respective media brand new triumphs in the BRIGITTE brand realm. brand names. four requirements: families have been successfully augmented Another tale of success in 2005 involved a sim- To further strengthen the brand, new ways and with line extensions. 2005 saw the launch ilar step in the book market: On August 27, forms of collaboration with other brand names are p Each idea and each project must have an air of the visual magazine VIEW within the BRIGITTE launched its own branded edition of sought out by means of line extensions, books and of exclusivity. STERN group, the development of the books, a library of 26 volumes selected by Elke audiobooks. One example for this is the coopera- p The quality of the new product must be en- young women’s magazine BYM, and the Heidenreich. The combination of Elke Heiden- tion with Frosta, a leading manufacturer of frozen hanced thanks to BRIGITTE’s branding and audiobook edition “Strong Voices” in the reich’s credibility and expertise, and BRIGITTE’s foods. Here, BRIGITTE successfully built on its involvement. BRIGITTE family as outstanding examples clout and popularity made for a strong and unique core competence in nutrition and specifically the p Each new product must strengthen the ap- for a publishing strategy that sets G+J project. In all, 1.5 million books under the BRIGITTE BRIGITTE Fashion Show diet segment, to offer working women in particu- peal of the BRIGITTE brand and thereby pay apart from its competition. label were sold through the end of 2005. For years, women have lar a service that minimizes the kitchen time spent in to the core BRIGITTE brand. To live up to the ambitious goals on Gruner + trusted BRIGITTE for the on preparing the BRIGITTE DIÄT. Frosta is a part- p All ideas, concepts and projects in the new BERND BUCHHOLZ: “Well-developed, established magazine brands Jahr’s growth path, all new projects not only have perfect blend of wearable ner whose frozen products correspond to the qual- BRIGITTE brand realm must be a source of are G+J’s capital. Their ongoing cultivation and evolution secures our to be an excellent match for the BRIGITTE brand, contemporary fashions, ity standards and rules of the BRIGITTE DIÄT. inspiration and enthusiasm for the edito- competitive positions and market shares. Apart from this, we spark choice chic and matching rial and publishing team, for buyers and new growth by investing in new and innovative publications like line accessories readers, and should fire their imagination. extensions, new launches and concept transfers, all as part of our in- novation campaign. The "Strong Voices" are a perfect example for the The prerequisite to any successful line extension such as great creative potential inherent in all of G+J's dis- BRIGITTE WOMAN or GESUND LEBEN by STERN is a strong um- tinguished, quality-oriented brands. "If, that is, we brella brand that is capable of supporting new developments. This systematically set out to conquer new lines of busi- provides the necessary foundation for building a number of new ness outside the conventional print realm - boldly, publishing ideas that engender reader interest.” innovatively and with a wirde range of ideas, in or- der to achieve Gruner + Jahr's ambitious medium- “Spin-offs” in G+J’s families of media brands must anchor the basic term growth targets in Germany," says G+J Exec- conceptual elements of their parent publication while also strengthen- utive Board Member Dr. Bernd Buchholz. p ing the competency of the umbrella brand as they open up new lines of business. In general, line extensions must live up to the G+J quality claim. Titles like GEOLINO or BRIGITTE WOMAN are vivid examples of how to successfully cater to changing reader needs with innovative magazine concepts and contribute to the economic suc- cess of their respective media brand families. The GEO, NATIONAL GEOGRAPHIC and P.M. families are excellent proof of how G+J uses line extensions to build strong brand clusters.

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16 BRAND MANAGEMENT | VIEW A team with a VIEW: Tom Jacobi, Stephanie Kickel, Hans-Peter Junker and Brigitte Baumann

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VIEW | BRAND MANAGEMENT 19

O Tom Jacobi, Chief Editor of VIEW, looking through possible pictures

U Each day, 5,000 pictures are view’ed for the final selection

+++++SEPTEMBER 2004 Strategy meeting be- Brigitte Baumann. Meanwhile, finding a name is +++++DECEMBER 2004 Gradually, the self-imposed out to fascinate its readers, as well as give them tween STERN’s editors-in-chief and directors on proving not so easy. “Blick” is taken; STERN-Fo- pressure that always accompanies the first com- orientation by offering effective information and Sylt. Top item on the agenda: Innovations for the tografie is old hat. So the team convenes for an- prehensive presentation of a new title grows. There selected images that might have otherwise been publishing group. Tom Jacobi, Art Director and Olaf other brainstorming. Every German name pro- is agreement that the content of the new magazine drowned out by the daily deluge of pictures. The should be broken down into sections. The structure danger of cannibalizing STERN is perceived as low. VIEW is meant to fascinate as well as provide orientation takes shape swiftly. VIEW is broken down into “The The VIEW project’s path to the G+J Innovation World,” “Germany,” “Sports,” “Feature,” “Enter- Council (see p. 57) is clear. Conrad, Deputy Publishing Director, have an idea. posed is rejected. Either they’re already taken or tainment” and “Science + Miracles.” This gives the +++++FEBRUARY 2005 Our dummy sparks some Visuals are one of STERN’s core competencies. they don’t get the point across. VIEW is tossed magazine the feel of a journal that chronicles the lively discussions in the Innovation Council. The “Why not do more with them?” The idea came up onto the table along with “Look.” Unanimous ap- highlights of the previous month. cover is the most intensely debated item: Should once before, 20 years ago, but now the time seems proval for VIEW. The very first dummy bears this +++++25 JANUARY 2005 Time to present VIEW the layout be monothematic, or multiple pictures? right. Each day, the picture editors receive about name. Launched Oct 2005 to Bernd Buchholz, Executive Board Member: a The text-to-image ratio is reconsidered in light of 5,000 photos. Everyone in the group feels it’s a +++++NOVEMBER 2004 The development team Sold Circulation 164-page dummy, all in PDF. A complete issue new arguments. How to give stronger emphasis good idea. Let’s build a dummy when we’re back discusses how best to divide the space between 200,000 (premier issue) from first to last page. Buchholz is enthusiastic. to the “chronicle” feel, e.g.? The nicest approach in Hamburg. texts and images. The text lengths in particular are Published monthly And yet there are some concerns in the group: In would be to sum up the relevant events of the past +++++OCTOBER 2004 A development team has hotly debated. At first, none of the texts were to this age of Internet and of overabundant TV pro- month with the best photos. The matter of the per- been appointed: STERN News Desk Director be longer than a page. It was agreed – backed up gramming, will potential readers even feel that this fect text-to-image ratio is a recurring issue through- Hans-Peter Junker and STERN Art Director Tom through insights from market research – that longer kind of magazine is an innovation? Still – everyone out VIEW’s development. Jacobi are to develop the dummy alongside their texts would be inserted between the sections as a believes in print, especially at a time when we are +++++MARCH 2005 How annoying: Someone regular workload, assisted by Graphic Designer separating element. flooded with information and images. VIEW will set privy to the VIEW discussions seems to have

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20 BRAND MANAGEMENT | VIEW

leaked information. Speculations about VIEW have +++++AUGUST 2005 A big sigh of relief! The Ex- appeared in the trade press. The Magazine Division ecutive Board approves the proposal for the launch Germany responds immediately: Bernd Buchholz of VIEW. The development team is overflowing with decides to take the offensive and announce the ti- relief, joy and champagne. Now we can really start tle’s development and testing. The development planning the launch in detail. The first thing is to do team is worried: Hopefully no one will copy the some detailed calculation. What would be the right magazine idea and bring it out before VIEW! print run? What should the Internet homepage look +++++APRIL 2005 Our first concept presentation like? What would be an appropriate and realistic to select advertising customers and their ad agen- cover price? How can we set attractive advertising cies: Their enthusiasm exceeds our wildest ex- prices without selling genuine media effectiveness pectations. Advertisers see the magazine as a com- at dumping prices or under value? pelling innovation in the magazine market. Origi- +++++SEPTEMBER 2005 The first day of sale has nally, we limited the ad volume in our revenue plan- been fixed. VIEW will be published on the first Sat- ning: VIEW was seen more as a sales-oriented title. urday of each month! The response from our press But so much the better if response in the advertis- wholesalers is astonishingly positive. They quickly

VIEW: on its way to becoming a fixture in the STERN brand realm The finished layout I pages of an issue ing market is so encouraging. Several customers follow our line of argument: VIEW is the only mag- “A picture is worth not more and more than a a surprise: approx. 200,000 copies sold. That sends even intend to create special ad motifs for VIEW. azine to be published on a Saturday, and takes ad- thousand words, and sometimes it speaks but hopes soaring, but sales of the November issue +++++MAY 2005 The internal tension begins to re- vantage of consumers’ relaxed shopping and doesn’t say a thing or creates perfect confusion. get off to a slow start. The concept is gently fine- lax again. None of our competitors can surge ahead leisure mood. VIEW delivers leisure and entertain- ‘View’ very cleverly plays with this dilemma – and tuned. The multi-thematic cover doesn’t appear to of us in the market with a similar concept. A title ment - ideal for the weekend! to top it off, runs stories that ‘Stern’ itself wouldn’t get the message across well enough: Buyers like this is too complex and requires too much jour- +++++6 OCTOBER 2005 Press conference on do much differently.” aren’t quick enough to realize that a new issue of nalistic quality to allow a copy. Quality is the best the launch of VIEW at the G+J Pressehaus on +++++NOVEMBER 2005 VIEW stands for fasci- VIEW is out. Together with the distribution de- copy protection, as G+J’s motto goes. Baumwall. The response is considerable: Agencies, nating images on the Internet as well: On the first partment, the editorial team develops a fold-out +++++JUNE 2005 We’re still fine-tuning the ideal daily papers, trade press, TV, radio, i.e. the entire day of sales for the second issue on November 5, cover, to be used at irregular intervals in varying mix for the title. Thanks to the accompanying mar- media trade sits up and listens to hear what STERN 2005, the VIEW photo community opens on the In- colors. At the same time, the multi-picture title is ket research done by G+J, we now get a detailed has planned for the G+J innovation campaign. ternet. www.view-magazin.de gives ambitious am- modified, by making one of the pictures larger to idea of what readers’ expectations look like. A de- +++++10 OCTOBER 2005 The response by media ateur and professional photographers a possibility draw extra attention. The message is abundantly cision is made to clearly allude to STERN on the journalists is predominantly positive in their re- to publish a selection of their best photos. In oth- clear: Look over here, this is really new! cover. On the one hand, this constitutes an obliga- ports and editorials: “When images have an edi- er words, VIEW offers photographers and other Ove Saffe, Publishing Director STERN, takes tion for the VIEW team, and on the other, potential fying effect,” writes “Süddeutsche Zeitung,” or fans of photography a convenient and up-to-date stock of VIEW’s performance to date: “Its gratify- buyers have the security that they can expect as dpa puts it, “VIEW captures moments.” The forum. It serves as a platform for sharing helpful ing launch paves the way for the title’s future suc- STERN-level quality. review in the FAZ is particularly encouraging: hints, information and comments within a growing cess in the STERN brand realm. We are confident community of digital photography fans.The suc- of achieving a sustained target circulation of ap- cess of the premier issue (No. 10/2005) comes as prox. 150,000 sold copies.” p

Wigbert Löer, Editor, Torsten Terraschke, Documentation, and Tanja Koch, Layout U

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MOTOR PRESSE STUTTGART | SPORTS 23

LONG LIVE SPORTS The Motor Presse Stuttgart

portfolio goes well beyond car and Successful abroad The Russian licensed edition of AUTO MOTOR UND SPORT, motorcycle magazines. It also AUTO TURBO in France and Hungarian MAXI TUNING includes over a dozen sports and leisure titles, making this sector a promising growth market

Motor Presse Stuttgart is a fixture in the German pub- beyond PROMOBIL, which sells roughly 90,000 copies lishing landscape. For decades, its popular car and an issue, are MOUNTAIN BIKE, RUNNER’S WORLD motorcycle magazines have shaped these markets and OUTDOOR. In January 2005, the DSV AKTIV SKI- like no other publisher. However, most readers prob- UND SPORTMAGAZIN was added, the high-circula- ably don’t know that the Stuttgart-based publishing tion member magazine of the German Ski Associa- company also plays a leading role in sports and recre- tion, which goes out to ski enthusiasts in a print run ation magazines. As long ago as the late 1980s, Mo- of 200,000 copies. It is supported by a number of tor Presse realized the enormous potential inherent other ski-related printed and online products, such as in this thematic segment. the DSV SKI ATLAS, a bible for all ski aficionados. PROMOBIL – Europe’s largest mobile-home mag- Also in 2005, MPS acquired the successful azine – provided MPS with an easy entry into the Stuttgart-based publisher Scholten-Verlag, which field. After all, mobile homes are really just outsize added the equestrian magazines CAVALLO and cars with added functions. From there, it was just a PFERDEBÖRSE to its portfolio. CAVALLO is by far small step from mobile recreation to active outdoor the country’s most popular horse and rider magazine, recreation. “In Germany, we still have a few ideas with sold circulation of nearly 90,000 copies. and concepts up our sleeve in the sports and recre- Beyond having several projects under develop- ation segment. Here, we are pursuing a dual strate- ment in its core “automobile” segment, MPS also ac- gy of homegrown innovations and acquisitions,” as quired a new car title: In July, the VF Verlagsge- MPS CEO Friedrich Wehrle described the growth sellschaft, Mainz took over the off-road magazine market in an interview. No wonder – the outdoor in- 4WHEELFUN. Since then, the title has been pub- dustry alone posts total revenues of €5 billion, and lished by the same Berlin-based editorial team that growing. produces AUTOSTRASSENVERKEHR. The historic Reason enough for MPS to invest in this attrac- tive market. Today, its portfolio includes more than a dozen periodicals and special issues. Other flagships

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24 SPORTS | MOTOR PRESSE STUTTGART

PROMOBIL, MOUNTAINBIKE and DSV AKTIV SKI- AND SPORTMAGAZIN MOTOR PRESSE STUTTGART The flagships in sports and leisure Total revenues at Motor Presse Stuttgart Go OUTDOORs for the best pictures amounted to €362 million in 2005, of which €201 million were generated in Germany, and €161 million outside title MOT was given an overhaul. Starting with the Germany: international business accounts September issue, the title was renamed MOTORS, for 45 percent of total revenue. and its publication rhythm changed from biweekly to In Germany, MPS integrated seven new monthly. Back in spring, a team set to work devel- titles in its portfolio in 2005, bringing oping a magazine innovation in the core “automo- its total number of publications to 44 bile” segment. The result: AUTOMONAT, which made its newsstand debut in January 2006. magazines. Eighteen new magazines were 2005 was a year of continued expansion for MPS’ launched outside Germany, including ten international business. In Croatia, its newly estab- in Eastern Europe alone. lished subsidiary launched another edition of AUTO MOTOR UND SPORT and LASTAUTO OMNIBUS, a bimonthly issue of MAXI TUNING, and a motorcycle magazine. In addition, the international AUTO MOTOR AUTO TURBO, which was positioned as a general- UND SPORT brand family grew to 22 country edi- interest car magazine. Including the new title, Motor tions with the addition of two new editions pub- Presse publishes a total of five car magazines in lished under license in Russia and the Netherlands, France. MOTORRAD editors on the proving ground two key strategic markets. In fact, the Stuttgart- In a partnership with Gruner + Jahr, MPS launched based publisher introduced the first major interna- GEO magazine through four of its Eastern European A MOUNTAINBIKE editor checks a suspension fork for stiffness tional car magazine brand to the Russian magazine subsidiaries in October. The titles were simultane- and jounce travel on the hydraulic test bench market. The international family of tuning maga- ously brought to newsstands in the Czech Republic, zines was also expanded to include three new lo- Slovakia, Hungary and Romania. Just a few months cal editions of MAXI TUNING in Hungary, the Czech later, in December 2005, the publisher set up a joint Republic and Greece, bringing the international venture with the "manager magazin Verlagsge- total to 12. sellschaft" in Hungary, and added the magazines MAN- In France, MPS launched its first cross-media in- AGER MAGAZIN and HARVARD BUSINESS MAG- novation in collaboration with the French commer- AZINE to its Hungarian portfolio. These, along with cial TV channel "M6," a company associated with RTL AUTO MOTOR UND SPORT and MEN’S HEALTH, Group. In November, the successful TV show make MPS the leader among Hungary’s high-end TURBO was adapted for a magazine format entitled male target audiences. p

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T.-J. KLEIN | INTERNATIONALIZATION 27

p Two years ago, you took on the responsibil- ity for the International Magazine Division on the G+J Executive Board. Axel Ganz built G+J’s international business and has had an accord- ingly formative effect on it. Was that a difficult starting situation for you? TORSTEN-JÖRN KLEIN: Yes and No. Yes, be- cause it is absolutely impossible to really follow in the footsteps of someone like Axel Ganz. He is one of the most successful magazine makers any- where in the world. No one will ever be able to re- place him in the conventional sense of the word. Personally I see myself more as a sparring partner for our editors-in-chief than as a magazine maker. And no, because he prepared me for my new task with a great deal of dedication and commitment, and then introduced me to “his” international ex- ecutives and editors-in-chief. That made things a lot easier for me.

p What strategic approaches have you come up with in the past two years? KLEIN: Essentially, the strategy can be broken down into two basic thrusts: organic growth through new titles in our existing markets, and growth through acquisitions and joint ventures. In our existing markets, we launched a total of 29 new magazines, eleven of them in 2005. They in- cluded a number of smaller titles, as well as major projects like GEO International, GALA in Spain, and WE’VE ONLY JUST BEGUN GLAMOUR in the Netherlands. p So you’re resorting to “old reliables.” An interview with G+J Executive Board Member Dr. Torsten-Jörn Klein KLEIN: Naturally we exploit the international po- tential of our established and successful magazine brands. But we do try out new things, too – as line

On the road for GEO: Torsten-Jörn Klein on Zagreb’s King Tomislav Square

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28 INTERNATIONALIZATION | T.-J. KLEIN T.-J. KLEIN | INTERNATIONALIZATION 29

tablished a new segment with FENIKS, but also p Starting up your own international sub- enhanced our leading position in the overall sidiaries is not an option? women’s magazines segment. KLEIN: As a matter of principle, we always seek out local partners with an existing publishing struc- p All in all it was an entry at breakneck speed ture when entering new markets. Gruner + Jahr for you and your team. has done business abroad since 1978. In our ex- KLEIN: Right, but it was well worth it. As a result perience, local know-how is essential to producing of our efforts, the overwhelming majority of titles successful magazines. are outperforming their budget and some are ac- tually earning money already. That is a source of p As in the case of GEO International? great joy for us. KLEIN: Yes. GEO International is a perfect exam- ple of a project where we work with local partners, p What’s the second part of the strategy? first and foremost our subsidiary Motor Presse KLEIN: Acquisitions and joint ventures in 2005 Stuttgart. We benefit from their expertise in mag- gave us access to four new countries. In Greece, azine marketing and distribution. The partners in one of Europe’s biggest growth markets, we their turn profit from the economic success and bought up 50 percent of the magazine publisher journalistic charisma of the GEO brand. Apart from “LOCAL Daphne Communications. Antitrust proceedings this, we leverage GEO’s brand power for sec- are currently ongoing in Croatia, Serbia and Slove- ondary businesses in merchandising and the elec- KNOW-HOW nia, concerning our acquisition of Hubert Burda tronic media. From now on, we will think more in IS ESSENTIAL Media’s business, which we plan to integrate in a terms of brands and not solely in terms of maga- to producing joint venture with Sanoma Magazines International. zines. This would turn us into key players in these coun- successful magazines” tries in a single step. Apart from this, we will con- p Could you imagine applying this model to tinue to be on the lookout for possible takeover other G+J magazines as well? candidates and partnerships. Many markets are KLEIN: Certainly. Many of our magazines have de- currently in a consolidation stage – this breeds op- veloped into proper magazine brands over the portunities. years. The GEO model may well set a precedent.

p What brands are you thinking of in particular? KLEIN: There’s a whole slew of possible candi- extensions and as innovative proprietary develop- rary and historical public figures. This simply didn’t dates: GALA is already successful in five countries, ments. exist on the market before. GALA BIOGRAFIA has so why not in ten or even more countries? The p Could you please give us some examples? since become our bestselling title in Russia. same applies for LIVING AT HOME, CAPITAL, EL- KLEIN: FOCUS JUNIOR is Italy’s first popular- TERN, and the P.M./FOCUS concept. I believe science magazine for children, and has developed p Were there any proprietary developments? into a great success thanks in part to its unique sell- KLEIN: Apart from the aforementioned GALA BI- ing position. OGRAFIA, our niche publication FENIKS in Poland In Russia, we launched GALA BIOGRAFIA, a is a good example. A women’s magazine that deals Launched Nov 2004 Launched Jun 2005 people magazine featuring portraits of contempo- with spirituality and psychology. We not only es- Circulation 147,000 Circulation 40,000 Published monthly Published monthly

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30 INTERNATIONALIZATION | T.-J. KLEIN T.-J. KLEIN | INTERNATIONALIZATION 31

“We are KEEPING A VERY CLOSE EYE ON ALL EMERGING MARKETS Launched Dec 2005 Launched Sep 2005 Circulation 120,000 Circulation 160,000 around the world” Published monthly Published monthly

some G+J brands are only just starting out on their plan to step up our activities there in 2006. The market there. That may change in the medium international careers. same goes for Eastern Europe in general and for term. We are keeping a very close eye on all emerg- Greece. In established markets, we will boost prof- ing markets around the world. p All the magazine brands you mentioned – itability and ready our business for the future by except GALA – originated in Germany. How im- launching additional titles and pursuing new p You’ve had a presence in China for several portant is the Magazine Division Germany in sources of income. years now, with three titles. Is that the best you your internationalization strategy? can do or just a foot in the door? KLEIN: Many projects could never happen without p You just referred to Motor Presse Stuttgart. KLEIN: No, it’s a first step into an enormous emerg- the creative assistance of our employees in Ham- What part does Motor Presse play in your ing market. China is much further along in the de- burg and the personal support of my colleague on strategic plans? velopment of its media economy than India. But, the Executive Board in charge of the German mar- KLEIN: A large one. Motor Presse has given us ac- there, too, the boom phase in the magazine busi- ket. Here, too, GEO International is a good exam- cess to countries where Gruner + Jahr did not yet ness has not really set in yet. We have come to ple. The magazine was developed by Editor-in- have a business presence, e.g. Eastern Europe and know the market very well. And as soon as the Chief Christiane Breustedt and her team in Ham- South America. Together, we will grow significantly magazine economy gets going there, we will be on burg. Her colleagues in the German GEO family in the years ahead, especially in Eastern Europe. board this accelerating train. Quite possibly in one provided active support. The editors-in-chief and We plan to dovetail our activities with those of of the front cars. executive publishers of the international titles MPS more in Spain, France and Poland from now regularly share their experiences at best-practice on. In the medium term, this will have very posi- p You’ll have to invest heavily to do so. meetings, so that ultimately everyone involved tive implications for our business prospects. on my team. Our managing directors, executive KLEIN: As in every other country where we per- benefits from the internationality of their brand. publishers and editors-in-chief in the different coun- ceive a publishing opportunity. In the past two And perhaps one day we will even introduce to p Do you give the Managing Directors of your tries know best what’s right for their company and years, we have invested roughly €50 million in new Germany a successful magazine that was devel- local subsidiaries free rein in their business de- magazines. Nevertheless, I regularly visit and dis- titles and acquisitions. And we have the necessary oped in the International Magazine Division. cisions? cuss things with our people in Warsaw, Madrid, budgets for any other investment that makes KLEIN: Gruner + Jahr lives by the principle of de- Athens or Amsterdam. sense. After all, we’ve only just begun our interna- p Are there markets in your country portfolio centralism. I strongly believe that our business tionalization process. p that you focus on especially? would hardly be possible without strong, decisive p When will you be visiting colleagues in New KLEIN: Russia and China are the first that come to executives. As I see it, my task lies in providing Delhi or Mumbai? mind. Both have great growth potential, and we fundamental overall guidance for the operations, KLEIN: India is a very interesting magazine market as well as the occasional stimulus. from a European point of view. However, it is only I am in the very fortunate position of having only in the early stages of its development. At the pre- outstanding, entrepreneurially minded publishers sent time, we have no specific plans to enter the

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GEO | INTERNATIONALIZATION 33

The success story is one-of-a-kind and fascinating. It began nearly 30 years ago. In September 1976, a spin-off of the biggest German weekly magazine STERN first saw the light of day at Gruner + Jahr. The concept was as simple as it was convincing. Under the auspices of STERN’s senior picture ed- itor Rolf Gillhausen, the new magazine would con- vey to readers some of what they would other- wise be unlikely to ever see with their own eyes. Opulent photo spreads from far-away paradises and inaccessible, deserted wildernesses, com- pellingly written texts by the best feature journal- ists in Germany and beyond, and all of it combined with practical advice for anyone adventurous enough to set out for the destinations themselves. The magazine’s name was simple and encapsu- lated its content, and the ad for the premiere is- Croatia SEVEN AT ONE STROKE sue summed it up neatly: “Den GEO Lesern gehört Print run 40,000 die Welt - The world belongs to GEO readers.” To- In October 2005, G+J wrote a new chapter in the history of magazines day, the GEO family in Germany alone includes nine magazines. And over the decades, GEO has by simultaneously launching an international issue of GEO in six countries – demonstrated a great deal of potential for captur- followed up a couple of months later by GEO Italy in December ing reader sensibilities outside the German cultural region as well. The brand has continually and very successfully expanded to France, Spain and Rus- sia. In fall 2005, the magazine made ready for its great leap to “GEO-ize” the European magazine market. On October 27, G+J launched an interna- Slovakia tional issue of the popular-science and feature mag- Print run 22,000 azine in five Eastern European countries and Turkey. Since that day, GEO has been on newsstands in the Czech Republic, Slovakia, Hungary, Croatia and Romania. The simultaneous launch of a title in six countries, “is absolutely without precedent in the history of magazines,” says Torsten-Jörn Klein, G+J Executive Board member in charge of Inter- national Magazines. To top things off, on Decem- ber 9, Italian newspaper kiosks from Milan to Paler- mo began lighting up from an unmistakable GEO Czech Republic green of their own. Print run 52,000

Heading for Eastern Europe: GEO powers up its expansion engine

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34 INTERNATIONALIZATION | GEO

The advanced GEO International concept allows to further educate oneself and to be entertained the publishing company to penetrate a successful in a professional way,” as the editor-in-chief puts magazine brand even into smaller international mar- it. In other words, excellent conditions for an am- kets where building large editorial teams would bitious magazine like GEO. not be cost efficient – all while still upholding top Exciting texts and unusual visuals are GEO’s journalistic quality standards. trademarks, and they shape GEO International as The different GEO International issues are made well. Though the stories center primarily on peo- up mostly of shared identical content that is trans- ple, animals, technology and exotic places are al- lated into the respective national languages, then so fixtures in the magazine’s thematic repertoire. enriched with national content by local editorial Italian GEO benefits from the international “shell” teams. The various threads link together at the produced in Hamburg as well, but the editorial team Hamburg Chief Editorial Offices run by Christiane in Milan creates more own content than the teams “Absolutely without precedent in the history of magazines” Breustedt and her small team. Editor-in-Chief of its sister publications in Bratislava, Budapest Breustedt draws on the German titles in GEO’s and Istanbul. family of magazines for compiling the international The successful launch of GEO International issue. She sifts through existing feature articles would have been unthinkable without experienced Turkey and resolves any copyright issues – a crucial as- and proven publishing partners. In the Czech Re- Print run 50,000 pect. “This is a form of recycling, in the positive public, Slovakia, Hungary and Romania, Motor sense of the word,” says Breustedt. “What could Presse Stuttgart (majority owned by G+J since be better for us than to use GEO stories which 2005) makes available its publishing infrastructure, we’ve already created at great expense in other and organizes the magazine’s editorial editing, mar- countries?” keting and distribution. The partner in Turkey is the Christiane Breustedt has been part of the GEO Merkez media company; in Croatia, G+J formed a world since 1979. She was editor-in-chief of GEO joint venture with Austria’s Styria group. Howev- SAISON for 10 years, up until the preparations for er, editorial control and brand management remain the international issue began in 2004. For GEO In- with G+J. In all countries, the printed magazine is ternational, Breustedt relies first and foremost on only the first link in a long value creation chain. In Romania science topics. In her opinion as an experienced the GEO International countries, GEO TV shows and Print run 26,000 magazine professional, they create the broadest exhibitions, GEO books and calendars hit the mar- common denominator in the various countries. For ket at the same time as the magazine. GEO mer- instance, the cover story for the first issue was chandising websites even offer ringtones for mo- “Miracle of the Human Body.” All cultural differ- bile phones. ences aside, GEO’s new countries and the read- Now Torsten-Jörn Klein is planning interna- ers who live there do share one trait: everywhere, tionalization à la GEO for other G+J brands as well, there is “a pronounced urge to obtain information, so stay tuned for more success stories! p

Hungary Print run 62,000

Art Director Katja Wegener and Picture Editor Maike Köhler I GEO’s pacesetters: Christiane Breustedt and Torsten-Jörn Klein U

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A. GANZ | INTERNATIONALIZATION 37

It’s not like he needed to – after nearly 50 years in me- If there is one constant in the magazine execu- dia, during which he launched over 60 magazines in tive’s career, it’s an insatiable appetite for start- ten countries. After nearly 28 years at Gruner + Jahr, ing over again. That’s how it was back in 1955. 15 of which he spent on the Executive Board. After a Ganz had plans to go to the movies as a produc- fast-paced professional life that finally leads him to a er or director. But first, the 18-year-old would seat on the Supervisory Board of the publishing house squander his inheritance with friends – among on Hamburg’s Baumwall. But Axel Ganz is serious them the actor Jean-Louis Trintignant – at the about starting over: “I’m going to slave away,” he ‘Elephant Blanc,’ a nightclub in Paris. The young says. “I’m going right to the front line of duty.” Oth- German deliberately set out to start from scratch. ers in the industry know that he is still a force to be His father was killed at Stalingrad, his mother – reckoned with: the German trade magazine ‘Kontak- a woman from the Alsace – died when he was ter’ named Ganz its “Great White Hope 2006.” nine years old.

ONCE MORE, FROM THE TOP Last year, G+J Executive Board Member Axel Ganz reinvented himself in a small office on Avenue Montaigne in Paris. He founded the AG + J publishing company, where he and his seven employees are designing a women’s magazine

O Axel Ganz

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38 INTERNATIONALIZATION | A. GANZ A. GANZ | INTERNATIONALIZATION 39

After painting the town red, Ganz returned to his German was not always welcomed with open arms. home in Baden to work as a photographer. The Ganz failed to take over the historic women’s pub- idea was to get him one step closer to his goal, the lication ‘Modes et Travaux,‘ whose aged publisher movies. Instead, he ended up a trainee at the ‘Of- told him in no uncertain terms: “Young man, I fought fenburger Tageblatt.‘ The young journalist caught the Germans twice in two wars, and shall do so a the attention of the legendary senator Franz Bur- third time if the need arises!” Whereupon G+J’s da, who brought him on board first at ‘Bild + Funk‘ man in Paris decided to publish a women’s maga- and then at ‘Bunte.‘ “He taught me to tell stories zine of his own. in pictures,” says Ganz about his mentor. Many seriously doubted that the project would In 1965, the publisher made 28-year-old Ganz be a success, including at G+J’s headquarters in Editor-in-Chief of the women’s magazine ‘Freundin‘. Hamburg. The market was considered difficult: 40 The title was uneconomical, which annoyed Ganz percent of all French women never looked at a and prompted him to do something completely dif- women’s magazine. How did a German of all peo- ferent: In the late 1960s, the journalist went back ple intend to change this? to school to become a publishing executive. The Against the common trend in France at the time, Bauer publishing group was the first to hire him in Ganz relied not on gourmet cuisine and haute cou- this capacity. In 1970, he was named executive ture, but on wearable fashions and diets. His publisher of ‘Neue Mode‘ magazine. Later, he would women’s magazine PRIMA was a hit, and soon sold develop the women’s title ‘Bella‘ for the publisher; more copies than ‘Modes et Travaux.‘ it hit newsstands in 1978. And the rest is magazine history: PRIMA was By that time, the people at G+J had long since followed by FEMME ACTUELLE, TÉLÉ LOISIRS,

His recipe for success sounds very German: “Do everything thoroughly, as perfectly as possible.”

taken note of the gifted magazine maker, who al- VOICI, CAPITAL, GALA... Most recently, Ganz shook so happened to have spent the years between up the market in 2004 with the biweekly TV list- 1962 and 1965 in Paris as a correspondent for ings guides TÉLÉ 2 SEMAINES and TV GRANDES ‘Bunte.‘ The publishing company was looking to CHAÎNES. Prisma Presse, G+J’s subsidiary in Paris, expand to France and was seeking the right man is now France’s second-largest magazine publish- for the job. Ganz, intrigued by the project, was Mr. er. The French press respectfully calls the man at T The French press refers to him respectfully as “Citizen Ganz” and “Emperor Ganz” Right. And yet another new beginning loomed its helm “Citizen Ganz” and “Emperor Ganz.” ahead: portable typewriter and red Samsonite suit- case in tow, he set off for the Seine in 1978, moved into the archives chamber of STERN’s Paris offices and set to work on a French edition of GEO. After initial difficulties, the feature magazine was well received in France as well. But the young

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40 INTERNATIONALIZATION | A. GANZ A. GANZ | INTERNATIONALIZATION 41

His recipe for success sounds very German: “Do everything thoroughly, as perfectly as possible,” A BRAND PROFESSIONAL the magazine executive recommends. “If it’s 90 AND READING AFICIONADO percent right, you have to really push yourself for SUCCEEDS AXEL GANZ: the other ten percent.” And yet, 68-year-old Ganz, FABRICE BOÉ who speaks French perfectly, is a wine buff and a connoisseur, and sees himself as a “European in Fabrice Boé, born in Grenoble in 1962, has been France.” at the helm of Prisma Presse since July 2005, Thinking as a European comes naturally to Ganz. having already served as the company’s Publish- He exports his magazines ideas to countries in- ing Director Women’s Magazines since March cluding Italy, Poland and Russia – new beginnings 2004. In January 2006, Boé became the first all of them. In 1998, he even conquered far-off Chi- French member ever appointed to the G+J Exec- na for G+J. That was in his seventh year as Presi- utive Board. After earning his business degree dent of the International Magazine Division. Ganz from the HEC in Paris in 1984, Fabrice Boé spent had long resisted taking on the position, for fear of 16 years working for L'Oréal, most recently as not having enough time left over to make maga- Managing Director Worldwide for Helena Rubin- zines: “When push comes to shove, I’m a journal- stein, then for Lancôme, before leaving to join ist.” When he finally took a seat on the Executive Hermès International in the same capacity. In the Board, Paris remained his base. As long ago as process, he gained comprehensive, international 1982, Ganz had told a French newspaper he nev- er wished to leave France. I “You have to really push yourself for the other ten percent.” Axel Ganz fine-tuning the layout By the time he left the G+J Executive Board at the end of 2005, he had long since become a leg- end. Today, thanks to Ganz, who has chosen France as his permanent home, the publishing company generates the lion’s share of its revenues outside Germany. And he’s connected with G+J by more than a Supervisory Board seat. G+J also owns 75 percent of the shares in his AG + J publishing com- T The peripatetic publisher. Axel Ganz between New York and the Prisma Presse headquarter in Paris pany. It doesn’t look like this motorcycle enthusiast will Fabrice Boé have a lot of time to devote to hobbies – even though he had announced, upon leaving Prisma expertise in developing and coordinating high-end Presse in summer 2005, that he would learn to play brands and managing creative partners and em- the piano now. That would be yet another new be- ployees. As CEO of Prisma Presse, Boé is now in ginning. p a position to combine a defining personal passion with his professional ideas: reading. “My house is full of paper,” he says. Fabrice Boé is married and has two children.

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DPV | DISTRIBUTION 43

DISTRIBUTION POWER UNDER A NEW UMBRELLA Deutscher Presse Vertrieb bundles G+J’s distribution of operations as a uniform quality brand

In 2005, Gruner + Jahr’s distribution units were re- structured and reorganized under a new umbrella: “Deutscher Presse Vertrieb DPV”(“German Press Distribution”) provides a stronger and more effec- tive bundling of the various distribution services to reflect changing market demands. Magazines and newspapers need to reach their readers reliably and inexpensively, and on a wide range of different distribution paths. In today’s world, Hartmut Bühne that not only calls for logistics expertise and reli- “Modern press distribu- able EDP systems, but also and especially for first- tion is vibrant, active rate marketing. G+J’s new stand-alone subsidiary marketing, to keep buy- DPV Deutscher Presse Vertrieb seeks to meet these ers coming back to the requirements for titles published by G+J as well as magazines we service” by other publishers.

O The new domicile of all G+J’s distribution in Hamburg’s Neustadt district

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DPV | DISTRIBUTION 45

Moving moments DPV employees on their way from Pressehaus on Baumwall to their new offices at Stadthausbrücke. DPV Head Hartmut Bühne receives the symbolic key to the new DPV building (on right)

In April 2005, the decision was taken to combine of custom distribution strategies to internal and ex- “It may be assumed that total circulation sold will future growth in the subscription business is like- G+J’s distribution tasks, which had hitherto been ternal customers in all sub-segments of the dis- not rise considerably in the overall market for pop- ly to be above the market average. What it boils distributed to several locations and among vari- tribution market. ular magazines in Germany. However, it will be down to is that there is no significant market growth ous divisions and various subsidiaries, right in Ham- Nearly 400 employees will work at G+J’s new- spread out over more and more titles. This will ne- ahead in the next few years. burg. This will serve to give additional growth and ly established subsidiary DPV. They will generate cessitate even more sophisticated distribution work innovation impetus to the distribution department, half a billion euros in revenue and handle the dis- in the future. The smaller a title, the more versa- WHAT NEW OPPORTUNITIES AND CHAL- tile its distribution must be. LENGES DO THESE FUTURE MARKET CON- Deutscher Presse Vertrieb stands for quality and innovations on the path to buyers Newsstand sales of popular magazines will con- DITIONS OPEN UP FOR GRUNER + JAHR? tinue to decline and be spread to more titles as which has grown steadily over the years, and which tribution of nearly 2,000 press objects in Germany well. This trend toward fragmentation will inevitably If, given the long-term market trends outlined above, provides services to many friendly competitors and all over the world. DPV is striving for expansion affect Gruner + Jahr too, because developments distribution activities become more and more so- such as ZEIT, Spiegel and Egmont EHAPA as well. in the medium term, to further reinforce its market in the low-end markets indicate that even faster- phisticated and fragmented, then the distribution- The quality orientation of its domestic and inter- position as Germany’s largest provider of distribu- turnover titles with high initial print runs and low related cost per unit will tend to rise. This princi- national press distribution will also be built up tion services. cover prices will be thrown onto the market.” ple applies both for newsstand sales and for the further. What are the reasons for this comprehensive So G+J will hardly be able to grow the total subscription business. In other words, distribution New business concepts and strategies were restructuring of the distribution business at G+J? newsstand sales of its portfolio. However, G+J’s becomes more expensive for each copy sold. This drawn up and all activities were bundled under Hartmut Bühne, Head of DPV, sees fundamental applies without exception for every publishing com- the new name DPV. DPV sees itself and its au- changes ahead for the distribution market in pany, large or small. And G+J wants to be prepared tonomous units as a professional service provider Germany: for this development.

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46 DISTRIBUTION | DPV

Despite the strain of days and weeks of moving work for DPV’s distribu- tion customers begins immediately after the move-in to the new building

Domestic distribution (formerly IPV) Sales marketing for G+J and Motor Presse Stuttgart

Press distribution worldwide

Hartmut Bühne: “To do press distribution these p DPV Gruner + Jahr oversees and coordinates Commenting on the new company’s prospects,

days you don’t need 27 loading bays. What you all distribution activities for its clients at the Sales team, Hartmut Bühne says: “Our new DPV stands for need is vibrant, active marketing and a good team G+J, Motor Presse Stuttgart and FTD pub- Retail marketing, both quality and innovation. In a word, for a fresh Logistics, spirit, to ensure efficient distribution for titles of all lishing companies, and thus caters to the im- Subscription management, IT services new approach in distribution. We see ourselves Marketing genres and sizes. Distribution at the push of a but- prints and publishing groups in which the as a uniform quality brand in the distribution busi- ton, as seen in the days of open growth markets, Gruner + Jahr AG & Co KG publishing com- ness, both for Gruner + Jahr titles and for our ser- has long since become obsolete. To be well prepared pany owns a majority stake or over which it vice customers. We expect that the strict sepa- for the future – both for in-house and third-party has management control. was born of the IPV Inland Presse Vertrieb. ration into newsstand market and subscription magazines – we are now proactively changing the p DPV Direct provides professional direct-to- p DPV Worldwide manages and develops the market will become increasingly blurred. The two structures of all distribution activities before the customer marketing for titles published by international side of its publishing customers’ markets will converge, and so will their logistics. market forces us to do so at short notice.” G+J and by third-party publishing clients. This business, independently and tailored to their Likewise, marketing approaches that differed in All five G+J distribution units will feature “DPV” includes subscription marketing, database wishes. the past will converge. In short: the traditional as part of their name from now on, thus indicating marketing and customer service, all based on p DPV Services bundles central services for borders of today’s distribution branches will be- to the industry that they are all part of a cohesive a progressive, forward-looking Customer Re- all DPV units. It comprises the sales team come increasingly obscured. We want to grow, new distribution brand. DPV itself will do business lationship Management system (CRM). and newsstand marketing, as well as cen- become better, generate more quality. Maybe in as a stand-alone company with its own corporate p DPV Network oversees all of its publishing tral logistics, IT management and systems time, this will make us the best press distributor identity. clients’ distribution activities. DPV Network development. in Germany.” p

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48 GRAVURE | PRINOVIS

PRINOVIS WELL ON ITS WAY The PRINOVIS joint venture was established not even a year ago. Integration was the formative feature in its first few months

success is that the management respected and cul- tivated the autonomy of the individual plants in or- In May 2005, the three media companies Gruner ganizing the new company: all gravure plants that + Jahr, arvato and Axel Springer merged their Ger- became part of the merger are run as independent man gravure operations into PRINOVIS. The new profit centers. This allows for preserving the plants’ company is the leader in the European market for expertise, which in some cases reflects decades illustration printing and offers its gravure customers of experience. The holding itself consists of a man- innovative solutions as well as flexible, high-quali- agement team whose job is to assert an integrat- ty service throughout Europe. PRINOVIS is a de- ed market presence and establish the necessary centralized network of medium-size companies. It preconditions for a shared corporate culture. Early operates five plants in the German cities of Ahrens- on, sixteen “integration teams” were set up to fos- burg, Darmstadt, Dresden, Itzehoe and Nuremberg. ter specific collaboration. They work efficiently as Another printing plant is currently under construc- well as across plant and project borders to cover tion in Liverpool, England and will start up produc- all the relevant areas – which range from core func- tion in mid-2006. tions in the print industry like pre-press, rotation Merging a company like PRINOVIS is a great and finishing, to central functions such as com- challenge for the management team led by CEO munications, IT, finances and HR. By the end of Impressive Stephan Krauss and Vice President Volker Petersen. 2005, the integration teams had met more than State-of-the-art ma- The task at hand: to bring together five, soon to be 130 times to share and compile the knowledge and chines with web widths six, locations with over 4,300 employees under a expertise of all five plants. This allowed the teams exceeding four meters single shared business umbrella. Fortunately, Krauss to identify the best possible solutions and implement achieve average speeds was able to rely on a highly motivated staff. “From them throughout the company. They also compiled of over 50 km/h the beginning, that was a good foundation – and by no means a matter of course,” emphasizes the PRINOVIS CEO. A key factor in the integration’s

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PRINOVIS | GRAVURE 51

O Top-quality printed products are the result not only of state-of-the-art technology, but also of craftsman- ship – as seen here in cylinder correction, copy review and print finishing

benchmarks and best practices to point up specif- doing so, we immediately involve a vast number of Volker Petersen and Stephan Krauss focus on integration at PRINOVIS ic improvements. As Vice President Volker Petersen employees. The goal is to involve everyone, directly said, commenting on the integration efforts: “Our or indirectly.” To this end, the company cultivates motto is to learn from each other and put the best intense debate and open communications with its solution in each case into practice throughout all employees. A lot has already been achieved given operations. That’s how we maximize our compet- the short time, and the convergence of the three itive edge.” organizations is already tangible. Building an overarching corporate culture is a Apart from its integration efforts, the manage- top priority for PRINOVIS CEO Krauss. “A compa- ment also relies on expansion. PRINOVIS Liverpool ny as big as PRINOVIS can only develop in a posi- will open its gates before the year 2006 is out. The field construction, the training complexity is rela- tive way if there is mutual trust,” says the CEO. In company is on plan both with its construction and tively high. To minimize possible start-up problems addition to individual structures and modes of op- recruitment of employees. The new printing plant at the new printing plant, each employee is being eration, each printing plant also has a history of its is being built on a 200,000m2 plot of land near Liv- prepared for his future job by undergoing exten- own and, of course, its own corporate culture. The erpool’s John Lennon Airport, right on the banks of sive training in Germany. By now, many of the em- idea is to draw on these in building a shared cul- the River Mersey. Its rotation presses and finish- ployees from England who were trained on the ture. Krauss sees this as a longer-term process in- ing machines will be housed on 65,000m2 (16 acres) large 4.32m machines in Nuremberg are back in of floor space, and will process an estimated 160,000 Liverpool to help install the machines locally. Once The goal is to involve everyone, directly or indirectly tons of paper a year. Energy, heat and cooling will all the machines are up and running, roughly 400 be provided by the company’s own power plant, new jobs will be created at this plant. p volving all staff levels. The process is initiated and with two gas turbines. It goes without saying that supported with a number of practical measures. – like the entire printing plant – this power plant is For instance, the new company name was visible being designed and built to the highest environ- PRINOVIS 2005 AT A GLANCE: everywhere very quickly: outside on the building mental standards. h façade, and inside on the employees’ work clothes. The Liverpool plant has three state-of-the-art Gruner + Jahr AG & Co KG and arvato AG each own a 37.45-percent stake Of course all business stationery was immediate- 4.32m rotogravure presses and another press with in the company; Axel Springer AG owns 25.1 percent. Based in Hamburg, ly switched to the name PRINOVIS as well. These a web width of 2.75m. Add to that high-perfor- the company does business as a Ltd. & Co. KG measures, though initially only an outward mani- mance bundle feeders, gang-stitchers and single- h Five, soon to be six gravure plants | Revenue: festation, also serve to support identification with film-wrapping machines. As the plant is a green- €1 billion | 4,300 employees | > 1 million tons of printed paper the name and - especially importantly - with the h 38 rotogravure presses | Web widths to 4.32 meters | Up to 216 pages per whole company. Petersen stresses: “We launched single cylinder rotation | 42 gang-stitchers | Six adhesive binding and lettershop a number of measures to facilitate the process. In lines | 37 engraving facilities

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A. JAHR | INNOVATION MANAGEMENT 53

SECURING THE FUTURE THROUGH CREATIVE INNOVATION MANAGEMENT THE INNOVATION COUNCIL Angelika Jahr, Journalistic Member of the Executive Board, talks about pathways and instruments of innovation management at G+J

p The magazine market has seen a burgeon- ing tide of titles, and is increasingly splintering into topics and target groups. Where do you expect growth for new Gruner + Jahr maga- zines to come from in view of these conditions? ANGELIKA JAHR: From the place where Gruner + Jahr has its roots: our quality. Since its establish- ment, Gruner + Jahr has been synonymous with quality journalism. In light of markets that are full to the brim – and that includes the German maga- zine market – the quality of our magazines is a spe- cial priority for us: Therefore, we will concentrate even more on coming up with and pursuing new, editorially sophisticated titles, and to assert them against the competition according to the needs of potential readers. That is our growth path for de- veloping innovations in our Magazine Division Ger- many (MDG).

Angelika Jahr

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54 INNOVATION MANAGEMENT | A. JAHR A. JAHR | INNOVATION MANAGEMENT 55

“Forward-looking innovation management is all about linking relevant mega-trends with new magazine concepts. Publishing intuition, combined with the perspectives gained in trend research, can lead to very interesting magazine ideas“

p What will you be focusing on? p What has changed about the process of JAHR: We use both approaches, traditional and in- JAHR: In 2004, the MDG concentrated its new pro- creating new titles? tuitive. Traditional means you have a concept and jects more on premium titles again, i.e. on maga- JAHR: Something that has remained the same in ask the market researchers to determine the size zine concepts with outstanding content and an un- principle is that a good and original idea is the pre- of its target group and potential. mistakable look. The five publishing groups man- requisite for a new magazine concept. However, The new, more intuitive way is to systematical- aged by Dr. Bernd Buchholz successfully launched the process of technical presentation has changed ly analyze current trends in society and their impli- four such new titles in 2005 (also see box on the considerably, especially in the past ten years. cations for the interests and needs which are then Innovation Campaign in Germany 2005, p. 57). reflected in magazine content and concepts. Such Interchangeable magazines for the masses are p What counts more these days when plan- areas of research yield many interesting ideas and not the path Gruner + Jahr chooses to take for in- ning to launch a new magazine: publishers’ insights into social contexts. In providing forward- novation. Such titles are easy to copy and have lit- intuition or the systematic process of develop- looking innovation management, our job is to link tle to set them apart in the long term. Television ing a concept according to the readers’ needs? relevant mega-trends with new magazine con- and the Internet can cover any topic in a much What is given more weight at Gruner + Jahr? cepts, such as the launch of HEALTHY LIVING and shorter time than magazines can. JAHR: The two aspects are given equal weight. the line extensions STERN GESUND LEBEN and Intuition is still the number one requirement. BRIGITTE BALANCE to reflect the population’s p At the German Lead Awards 2004 ceremony, Building on this foundation, insights from market growing consciousness of wellness and health. Markus Peichl, Chairman of the Lead Academy, research now feed into the process to a greater Publishing intuition, combined with the perspec- criticized magazine publishers for not being in- extent than in the past. At Gruner + Jahr, the mar- tives gained in trend research, can lead to very in- novative enough. Does this critique apply to ket research done as part of our innovation man- teresting magazine ideas. Gruner + Jahr as well? agement is always a useful decision-making tool, JAHR: I would say it no longer applies to Gruner + but can never replace concepts and ideas. We see p Does Gruner + Jahr have a chief development Jahr at this point. In 2003 – “against the tide” of market research as a sounding board for readers’ editor who supervises all prospective new de- the economic downturn, so to speak – the Gruner interests, expectations and requirements when it velopments? + Jahr Executive Board switched back to a force- comes to new titles. It helps in making adjust- JAHR: No. In mid-2004, instead of giving the divi- ful innovation path, back when the conditions in the ments and corrections. But it can never replace sion a central editor-in-chief, Bernd Buchholz set up various markets still showed no signs of a macro- Launched Nov 2005 one’s own journalistic evaluation and assessment an Innovation Council for the MDG. The Innovation economic revival. It was the right course to take, Circ. approx. 250,000 of the project. Council meets regularly, and consists of five Gruner and has proven successful. We will continue on it. Published monthly + Jahr editors-in-chief, as well as an executive each p In researching their products, many brand- from the sales and advertising sectors. So the coun- name manufacturers use new “trend research” cil unites different temperaments, talents, experi- methods in addition to conventional market re- ences and skills. It provides comprehensive inno- search to scout out progressive product ideas. vation management consulting to the board mem- How does Gruner + Jahr go about finding out ber in charge of the division – from reviewing all rel- what tomorrow’s readers want to read? evant ideas and concepts for new magazines to

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56 INNOVATION MANAGEMENT | A. JAHR A. JAHR | INNOVATION MANAGEMENT 57

initial assessments of their potential, from devel- p How is the Innovation Council doing, after oping a pilot issue down to submitting an invest- one year? THE 2005 INNOVATION CAMPAIGN ment proposal to the Gruner + Jahr Executive JAHR: It works wonderfully well, as evidenced by IN THE MAGAZINE DIVISION GERMANY Board. our magazine launches in 2005, among other things (see box on p. 57). p How is the Innovation Council organized? The Magazine Division Germany, work- benefits. Published in a convenient JAHR: It lives by the diversity of its members’ ex- p And if you were to venture a look into the ing hand in hand with the new Innova- pocket format at a cover price of €2.20, periences and skills, be they journalists or publish- future? tion Council, developed and successfully the new magazine is a response to the ing experts. By extension, it lives by intense and JAHR: Quality journalism will always be an impor- launched four new magazines in 2005. mega-trend, health. At year-end 2005, its open discussions late into the night when it con- tant mainstay at Gruner + Jahr. But innovation is al- They include the popular success VIEW, circulation had reached 160,000 copies. venes about ten times a year. Its structure as a con- so very relevant, in light of the obvious and grow- the health magazine HEALTHY LIVING, HEALTHY LIVING caters to educated, sulting team is flexible, but at the same time en- ing influence of the new media – and especially for which enhances Gruner + Jahr’s position high-income women between the ages sures that no interesting journalistic idea “falls the younger generation. Accordingly, Gruner + Jahr in the burgeoning health segment, PARK of 30 and 49, who embrace a healthy, through the grate” without an initial plausibility re- will increasingly turn its attention to new markets, AVENUE as the latest addition to the lux- active lifestyle and have a strong sense view. In addition, there is constant ongoing analy- including in the online, mobile und digital TV realms. ury segment, and VIVA! in the food and of responsibility to their community. sis in a number of thematic fields, as to how read- Our strong brands help us by offering an excellent cooking segment. ers expect tomorrow’s magazines to provide prac- foundation for growth prospects, so that we can VIEW first appeared on newsstands on tical benefits. Its members also accompany the var- continue to develop our company in a forward- PARK AVENUE made its debut on June October 8, 2005. Subtitled “The Month ious teams that develop specific projects to market looking spirit. p 7, 2005 as a preview issue. Following a in Pictures,” VIEW is an innovative gen- journalistic revision, it began appearing eral-interest monthly in the STERN fami- “Quality journalism will always be a mainstay of Gruner+ Jahr’s business“ monthly in October, at a cover price of ly. At a cover price of €3, it now has a €6. Designed as a premium magazine for circulation of 150,000 copies. The maga- readiness, as mentors, comparable to “Elder a readership that unites top socio-eco- zine offers an entertaining and informa- Bernd Buchholz Statesmen.” This ensures the constructive in- nomic status with equally top-notch tive summary of the past month, large- volvement of the Innovation Council in all sorts of claims to quality and aesthetics, the mag- size, spectacular photos accompanied ways. azine concept combines investigative by compact texts, along with one longer quality journalism by distinguished writers feature article, portraits, reports, inter- BERND BUCHHOLZ ON THE p What criteria does the Innovation Council ap- with artistic layouts and high-quality pho- views and essays (also see the VIEW In- MANDATE OF THE INNOVATION ply when it evaluates and promotes new mag- to spreads by noted photographers. The novation Diary, p.16). COUNCIL HE INITIATED: azine ideas? new title sees itself as formative to opin- “The successful work done by the new JAHR: The journalistic quality is important, as is the ion and style, as well as investigative and VIVA! was launched on November 28, Innovation Council in 2005 shows that likelihood that a given concept will spark reader in- Launched Oct 2005 Launched Sep 2005 Launched Oct 2005 cosmopolitan. At year-end 2005, it had 2005 as a new food monthly in a handy there is no shortage of good ideas in terest. This yardstick is then selectively applied for Circ. approx. 50,000 Circ. approx. 160,000 Circ. approx. 150,000 circulation of approx. 50,000 copies. pocket size at a cover price of €2.50. Its our company. We relied on our journal- all other aspects, depending on the specifics of the Published monthly Published monthly Published monthly concept combines fresh and healthy ists’ creativity and powers of innova- respective project approach. Across-the-board cri- HEALTHY LIVING premiered on Sep- cuisine with quick recipe ideas: “Light tion in 2005. In the process, we man- teria are not very helpful; innovations can hardly be tember 28, 2005 as Germany’s first Cooking, Healthy Enjoyment” is its subtitle. aged to identify compelling new con- judged by universal standards. monthly full-service health companion The former food magazine SCHÖNER cepts for changing information and en- for women. It offers the latest informa- ESSEN was completely integrated into tertainment needs, and develop them tion on health, with high practical use the new concept. to market readiness.“ p

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THE HENRI NANNEN AWARDS | QUALITY JOURNALISM 59

AN ORDER OF MERIT FOR GERMAN PRINT JOURNALISM Tribute and incentive all in one: The Henri Nannen Awards, which made their debut in 2005, honor out- standing achievements in the print medium and represent the publish- ing company’s own claim to quality

On its 40th anniversary, Gruner + Jahr joined STERN in introducing the Henri Nannen Awards, which each year pay tribute to the top achieve- ments in print journalism of the previous year. By ringing out the award, G+J supports quality jour- nalism in the German-speaking countries while upholding the memory of STERN’s late founder and longtime Editor-in-Chief Henri Nannen, who died in 1996. The Henri Nannen Awards stand for G+J’s fun- damental claim to high quality in journalism. This journalism are “knighted” with a Henri Nannen claim transcends short-lived trends and fashions, it Award and €5,000 in prize money each: defies superficiality and arbitrariness in these times of information overload and myriad media. p best investigative report The Henri Nannen Awards include the Egon Er- p best photo report win Kisch Award, which has been posted by STERN p an especially clear and descriptive since 1977 for the year’s best feature article. Be- documentary about a complex topic, and yond this “ultimate” award, highlights in four oth- p an outstanding example of entertaining, er categories reflecting the diversity of modern print humorous coverage

A festive setting: The Deutsches Schauspielhaus in Hamburg I

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60 QUALITY JOURNALISM | THE HENRI NANNEN AWARDS Hermann Unterstöger is delighted UU to receive a Henri Nannen bust

An award is also presented for lifetime journalistic visualize ostensibly complex matters. It calls for achievement: the Franco-German journalist and au- curiosity, persistence, powers of observation, clar- thor Peter Scholl-Latour was its first recipient. ity of thinking, and a good deal more. In addition, the sponsors give out an award for The title “Knight of the Plume” is not given, courageous and outspoken commitment to free- but earned. “The best is the enemy of the good” dom of the press in Germany and beyond. One of would be a good motto for anyone seeking to mea- the basic prerequisites to good journalism is free- sure their work by outstanding achievements. But Quality journalism makes an important contribution to a vital democracy

dom of reporting, which unfortunately is far from there’s more to good print journalism than excel- a matter of course everywhere. This year, the award lent writing. Tenacious, accurate research, a sen- went to Irina Chalip, a journalist from Belarus. sitive approach to sensitive topics, and the intre- Of course, the awards in the various categories pid exposure of scheming and intrigues – all that, honor outstanding achievements and pay tribute too, goes into quality journalism. to the winning journalists. However, they are also designed as an incentive for all those who practice THIS AWARD IS A PREMIUM BRAND IN THE good journalism on a daily basis or strive to do so. BEST SENSE OF THE WORD The winners serve as examples for others to mod- And so the Henri Nannen Awards serve as a bench- el themselves on. G+J believes that the cultural mark in the best sense of the word. A premium importance of critical print journalism cannot be brand for quality and high standards which the ar- overestimated. ticles submitted must live up to. The award itself In sponsoring the Henri Nannen Awards, the is a powerful brand, head and shoulders above the publishing company demonstrates that it upholds bulk of journalist awards. G+J vouches for this, as the great tradition of journalistic independence and does the top-notch panel of 12 judges: distinguished applies the highest standards to its products. This journalists, authors, editors-in-chief and publish- publishing company will always be home to quali- ers, nearly all of them from Germany’s major pub- ty journalism, because the latter makes an impor- lishing companies. They ensure the independence tant contribution to a vital democracy – one might of this new award. And consequently, the winning even argue that it is the epitome of democracy and articles may be seen as absolute highlights of the social responsibility. Quality journalism can offer past year in print journalism. p guidance, educate, make events and developments real and tangible, provide food for thought, and Judges (from left): Peter Sandmeyer, Andreas I spark important debates. It can also provide excel- Petzold, Elke Heidenreich, Cordt Schnibben, lent entertainment, illuminate contexts or help to Giovanni di Lorenzo, Werner Kilz, Roger Köppel, Ute Mahler, Frank Schirrmacher, Michel Comte, Peter-Matthias Gaede, Helmut Markwort

Laureates Yang Yankang, Stefan Willeke U with STERN Editor-in-Chief Thomas Osterkorn

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CULTURE AND EXHIBITIONS | RESPONSIBILITY 63

On view each year at the Germany premiere in the G+J Foyer: the World Press Photo Awards pictures

Gruner + Jahr has a long history of commitment to cultural affairs, centering on exhibitions of its own, the promotion of cultural projects, and participation in cultural initiatives. The public at large, the pro- fessional public, and G+J employees all participate in the cultural offerings. In view of the great importance of photography to G+J magazines, the publisher’s exhibition activ- ities focus first and foremost on feature photogra- phy and up-and-coming photographers. Each year, over 60,000 visitors come to the Pressehaus on Baumwall to view a number of exhibitions, includ- ing the annual Germany premiere of the World Press Photo Awards. The G+J publishing company joined STERN and GEO in presenting the world’s most distinguished press photography award for the eleventh time. The “World Press Photo of the year 2004” was taken by the Indian photographer Arko Datta: a photograph of the tsunami disaster in South- east Asia. GEO magazine also sponsors the inter- Peter-Matthias Gaede, national photo competition “UNICEF Photo of the GEO Editor-in-Chief Year.” The award honors photos of high photo- (on right) in conversation journalistic merit that illustrate living conditions of with “World Press children all over the world. This year’s winning pic- Photo of the Year 2004” ture was taken by the British photographer David winner Arko Datta (top). Gillander and showed a street urchin in Odessa. Visitors discuss the A collaboration project between G+J, STERN, photos (bottom) NEON and the BFF, the German Association of Free- lance Photographers, is fully devoted to promoting young photographic talent. The first “ausgezeich- net” (“award winning”) exhibition at the G+J Presse- haus was also the finale to the “3rd Photography Triennial in Hamburg.” Each year, “ausgezeichnet” shows the student works that won that year’s BFF PREMIERES AT G+J Young Talent Award, Kodak Young Talent Award and Reinhart Wolf Award. In 2005, the publisher hosted numerous photo exhibitions, offering an attractive In 1998, the publishing company added a sep- platform especially for feature photography and young photographic talent. arate gallery, Galerie 11, to its exhibition space in Many of the works were shown for the first time in Germany the G+J foyer. As a platform for young photogra- phers, Galerie 11 quickly became one of Hamburg’s

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64 RESPONSIBILITY | CULTURE AND EXHIBITIONS

popular exhibition venues. Its exhibitions have been Photography Triennial in Hamburg.” Martin Munkácsi, accompanied by a series of publications since 2005. a native of Hungary, was one of the most impor- The highlight of the year was the group exhibition tant figures in 1930s photography and one of the “Eleven – the Best” organized for the “3rd Pho- founders of contemporary photojournalism. tography Triennial in Hamburg.” Many of the pho- Beyond inviting G+J employees to the Galerie tographers who found a stage for their freelance pro- 11 art opening, the publishing company also hosts jects in the Galerie 11 – such as Peter Granser, Ul- annual employee events with a special cultural rike Schamoni and Marcus Höhn – also work for theme. One of the year’s highlights was a guided G+J magazines like STERN, BRIGITTE and GEO or tour of the Munkácsi Retrospective led by Prof. F.C. have become established in the art scene as mul- Gundlach, Founding Director of the House of Pho- tiple-award-winning photographers, such as Jan tography. Wenzel and Katrin Günther. Commitment to young talent also involves a CULTURE EDUCATES OUR YOUTH portfolio viewing hosted twice a year by G+J in con- Cultural sponsoring is one important instrument in junction with the “Friends of Photography.” Ex- G+J’s efforts to promote culture. For instance, G+J perts from picture editing offices, agencies, acad- has sponsored the Hamburg State Opera since emy and the exhibition scene convene here to ad- 1995, and the Deutsche Stiftung Musikleben (Ger- vise budding photographers. man Foundation for Musical Life) since 1993. The children’s opera series “Opera piccola” at the State G+J PROMOTES CULTURAL INSTITUTIONS Opera reflects a new partnership between G+J and G+J is especially committed to promoting art and the Hamburg Opera House: G+J and the Nordmetall culture in its home town of Hamburg and seeks Foundation jointly secured the endangered future

to have a formative influence on the appeal of the of the children’s opera series and the new produc- “Monodie” by Alexander Dey (“award winning” exhibition) media city’s cultural diversity and vibrancy. The pub- tion “The Three Riddles” for the year ahead. The lishing company is especially concerned about pro- series familiarizes children with the opera by get- moting young talent – in art and classical music as ting them actively involved as actors and musicians. Eye-catchers: Works by up-and-coming photographers earned positive reviews from visitors well as in photography. For the second time in a row, Private view at These activities all underscore the publishing com- G+J participated in Hamburg’s Long Night of Mu- Galerie 11 pany’s mission of introducing children and teens to seums, inspiring more than 3,000 visitors with an Photographer Helge Ema- cultural content early on and promoting their cre- eventful program of exhibitions, guided tours and neel, ART Copy Chief Ralf ativity. p symposia in a single night. Its highlight was a pan- Schlüter and G+J press el discussion on the “Shelf Life of Information and officer Ulrike Klug deep in Journalistic Use of the Archives” featuring experts conversation from the media, art and academic communities. Also in its second year: the cooperation with the House of Photography in Hamburg. In 2005, G+J was the sole sponsor of the retrospective “Martin Munkácsi: Think while you shoot!” which “Ostfriesenabitur” by Ilona Habben, Galerie 11 U was on view at the Deichtorhallen parallel to the “Beauty” by Malin Schulz & Sina Preikschat opening of the House of Photography and the “3rd (“award winning” exhibition) UU

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SHOULDERING RESPONSIBILITY – PROMOTING YOUNG TALENT Corporate Social Responsibility is part of Gruner + Jahr’s identity

Gruner + Jahr stands for quality journalism, inde- burg Media School, the Journalism Academy and pendent information and freedom of opinion. Jour- the Jugendmedientage (Youth Media Days). nalists in over twenty countries research, write and Since 1990, the “G+J Auditorium” series of take pictures for their readers. This type of inde- events has provided a platform for discussing cur- pendent, high-quality journalism gives rise to an ex- rent social events with interesting personages in jour- ceptional responsibility to society that G+J em- nalism, politics, business and the cultural commu- braces as a company as well. G+J’s involvement nity. In 2005, the G+J Pressehaus hosted two in- is active and sustained, initiatory and innovative. ternational journalists: the legendary American re- G+J dynamically promotes and supports young jour- porter Seymour Hersh shared stories from 30 years nalistic talent and projects that promote media lit- of investigative journalism, from his revelation of the eracy and reading itself. G+J initiates numerous My Lai massacre during the Vietnam War to the long-running, social and environmental projects in exposure of the Abu Ghraib torture scandals. And such a way that employees, citizens and other com- the Russian journalist Anna Politkovskaja talked panies are inspired to themselves actively shoul- about her experiences providing coverage of the der social responsibility. Chechen War and human rights violations by the Russian army. JOURNALISM, LITERACY, YOUNG TALENT Since early 2005, G+J has partnered with the G+J has a longstanding tradition of promoting young BürgerStiftung (CivicFoundation) Hamburg to spon- journalistic talent. In April 2004, the renowned Hen- sor projects for children and teens in the city’s so- ri Nannen School of Journalism in Hamburg cele- brated its 25th anniversary. It is funded by G+J and ZEIT publishing house. G+J also supports the Ham-

O G+J helps to convey the fascination of reading to children in Hamburg-St. Pauli

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cially challenged districts. The emphasis here is on partnered with the Körber Foundation and the Uni- promoting reading and language skills, which are versity of Hamburg in organizing the “Kinderuni” essential to having a future in our knowledge soci- (“Children’s University“) locally. GEOLINO spon- ety and actively participating in our democracy. For sors this annual invitation for 8- to 12-year-olds to this reason, G+J and the BürgerStiftung Hamburg get to know universities and attend lectures by se- sponsor the literacy project “Kölibri” in the St. Pauli lect professors in other German cities as well. Germany’s Federal district and the language project “Family Literacy,” For 40 years, the “Jugend forscht” (“Youth Re- President Horst Köhler which caters to immigrant families. G+J was also searches”) natural sciences and technology con- scrutinizes the research a sponsoring partner of the “Seiteneinsteiger” test initiated by STERN has rewarded the most done by “Jugend forscht” (translates roughly to “Page Newbies”) reading fes- original works by young inventors and researchers. winners tival for children and teens, which made its debut In its first call for entrants in 1965, STERN maga- on November 2, 2005 with 135 events throughout zine proclaimed its search for "tomorrow’s re- the Hamburg city area. searchers and scientists among today’s boys and Beyond journalism, BRIGITTE has dedicated it- girls.” Since then, nearly 130,000 teens have par- self to promoting the art and culture of writing. The ticipated in “Jugend forscht.” The fact that par- magazine awards a publishing contract and guar- ticipant numbers are up yet again in the contest’s anteed honorarium of €10,000 to the best first nov- anniversary year shows that “Jugend forscht’s“ el submitted for its BRIGITTE Fiction Award. Rough- popularity continues to grow, even forty years on. ly 2,000 aspiring writers among BRIGITTE’s read- Today as 40 years ago, the competition can still o "Schools Helping Schools," a STERN Foundation project ership submitted manuscripts in 2005. The judges claim to be an exemplary project when it comes chose Markus Lüngen’s debut novel, “18,” as the to engaging teens in the natural sciences, mathe- year’s winner. matics and technology. Enabling the blind to read is the objective behind The “StartUp Initiative,” organized by STERN, the magazine for the blind developed by Henri Nan- McKinsey, the Sparkassen banks and German TV

In 2005, “Stiftung STERN” raised €2,365,200 in donations

nen and Gerd Bucerius in 1968. Every two weeks, broadcaster ZDF since 1997, promotes young busi- the non-profit project publishes select articles from ness talent. Its three modules – StartUp Workshop, STERN magazine and “Die Zeit” weekly newspa- StartUp Contest and German StartUp Awards – cul- per in Braille. BRIGITTE and GEO magazines also tivate entrepreneurship at its different stages: from have a special reading service for the blind. students to emergent start-ups to proven entre- G+J doesn’t just promote young journalistic preneurs. talent. Student competitions mounted by the mag- azines STERN, GEO, GEOLINO and NATIONAL HELP FOR PEOPLE IN NEED GEOGRAPHIC promote and challenge children and Each year around Christmas time, SÄCHSISCHE teens in many ways. Since 2003, GEOLINO has ZEITUNG newspaper solicits donations for its "Licht- blick – (‘Ray of Hope’) people helping people in need” campaign. For over ten years, "Lichtblick" “Jugend forscht” has used these funds to provide quick, unbureau-

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cratic help where it is needed most, in collabora- Euro for Euro by the publishing company. In all, “Du bist Deutschland“ media campaign tion with some 330 charity institutions in the Dres- €660,000 were received in donations for the earth- den region. quake victims, and €1.485 million for the people G+J employees in Hamburg also feel a re- in Southeast Asia. sponsibility to the socially disadvantaged people in their city. Since 1978, they have organized an an- PROMOTING INNOVATIONS AND INDIVI- nual Christmas bazaar, the proceeds of which go DUAL INITIATIVE to charitable institutions in Hamburg. In January In February 2005, the G+J magazine P.M. launched 2006, Bernd Kundrun presented €11,000 each to its sweeping P.M. Innovation Campaign. Numerous four institutions and €2,000 to the Hamburg promotions and events were organized to com- Spendenparlament (Donations Parliament). municate a zest for knowledge and a passion for STERN has been committed to a wide range of innovations. The events reached their climax in the aid projects since 1973. The magazine’s social in- “P.M. Gala of Innovations“ in Berlin in November

G+J employees feel a responsibility to their fellow human beings

volvement began with the fight against famines in 2005, at which the W.I.N. Award and the Innova- Ethiopia and was followed by a several-year pro- tion Sponsors Special Award were presented for St. Pauli’s children are happy to re- ject for children with cancer. Then, in 1990, STERN the first time. W.I.N. stands for Wissen (Knowledge), ceive compelling reading material raised millions for a freezing Russia in the period Ideas and New developments. The award is de- of political transition. “Stiftung stern – Hilfe für signed to promote the inventive spirit in Germany Bernd Kundrun presents the proceeds from the Christmas bazaar to charitable institutions Menschen e.V.” raises donations for specific aid and draw greater public attention to innovative measures, allowing it to provide swift, operative help products. for people in need. The foundation partners with The “Partners for Innovation” initiative, a union various UNICEF-funded relief organizations, in- of high-ranking representatives from business, cluding Deutsche Welthungerhilfe (German Agro academe and politics, is another program that pro- Action), CARE and Doctors Without Borders. motes innovations and personal involvement. All In 2005, “Stiftung stern” raised a total of over Germany, the “Du bist Deutschland” (“You are €2,365,200 in donations. While the lion’s share Germany“) media campaign that G+J and 24 oth- went to the “Schools Helping Schools” project in er media companies developed as part of this ini- Southeast Asia, assistance for the earthquake vic- tiative sparked public discourse about self-re- tims in Pakistan was the second focus of relief sponsibility and taking the initiative. “Du bist spending. The G+J publishing company support- Deutschland” was the biggest social marketing ed each of the two relief campaigns with a €100,000 campaign in the history of German media: the cam- start-up donation, to which donations from STERN paign was seen and heard in 40 magazine titles, readers and G+J employees were added. After a eight nationwide and 13 local newspapers, on 2,326 STERN report in November 2005 once again point- billboards, on eleven TV channels and in 1,866 ed up the disastrous situation in Pakistan, G+J’s Ex- movie theaters. p ecutive Board called on all employees to make a personal contribution, which would be matched

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72 RESPONSIBILITY | ENVIRONMENTAL REPORT ENVIRONMENTAL REPORT | RESPONSIBILITY 73

PAN-EUROPEAN ENTHUSIASM Great Leap Forward Football legend Uwe FOR THE Seeler gives the starting signal for the First European “Big Jump” ENVIRONMENT river swim along the River Elbe in Hamburg At Gruner + Jahr, professional environmental communications doesn’t end in our own back yard

A TRADITION OF SUSTAINABLE COMMITMENT At Gruner + Jahr, social responsibility is a longstanding tradition – including, espe- cially, responsibility to the environment. Environmentally conscious management has been a key feature in G+ J’s corporate policy for 15 years. The environmen- tal concept adopted by the G+J Executive Board in 1991 is continually updated and improved, and environmental guidelines provide parameters for our envi- ronmental commitment. At the heart of G+J’s environmental policy lies the use of papers produced in environmentally compatible ways. Other aspects being optimized in all divisions are resource conservation, energy efficiency, waste reduction and recycling. We also promote ecological consciousness through in- tensive communications with customers, suppliers and employees.

ENVIRONMENTAL MANAGEMENT CONTINUES AT PRINOVIS G+J’s printing plants in Itzehoe and Dresden became part of arvato, Axel Sprin- ger and G+J’s gravure joint venture in July 2005. The new company, PRINOVIS, systematically continues their tradition of environmental management at the va- rious plants. The Input/Output chart on page 75 shows the materials and energy consumption at the former G+J printing plants in Itzehoe and Dresden from 2000 through mid-2005, when they became part of PRINOVIS. The chart demonstra- tes the ongoing optimization of energy, paper and ink consumption and further reduction of waste. In 2000, Gruner Druck in Itzehoe (now PRINOVIS Itzehoe) became Germany's first printing plant to introduce integrated quality and envi-

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INPUT/OUTPUT CHART The Input/Output Chart shows materials and energy consumption at the former G+J printing plants in Itzehoe and Dresden since 2001. Because the German gravure operations of G+J, Axel Springer ronmental management. In our upscale magazines ranges from 15 percent (e.g. and arvato Bertelsmann were merged into PRINOVIS in May 2005, the materials flow for G+J 2005, Prinovis Dresden follo- STERN) to 33 percent (e.g. GEO). printers is shown only for the first half of the year. wed suit. Quality and envi- ronmental reviews based on INNOVATIVE PROJECTS PRELIMINARY PRODUCTS (IN T) 2001 2002 2003 2004 2005 the DIN EN ISO 9.001 and G+J’s publications not only provide broad and diver- 14.001 international standards sified coverage of environmental topics – they also Paper 382,453 392,141 381,161 395,616 181, 241 are continually performed, initiate innovative ecological campaigns to get rea- Printing ink 12,082 12,179 12,481 12,239 5,434 Additives 31 27 31 26 17 and a process-oriented ma- ders to support ecological projects. One example is nagement system evolved. the “GEO Protects the Rainforest” Society, which AUXILIARY SUBSTANCES (IN T) PRINOVIS has adopted a shared environmental and Over 80 experts studied has initiated or sponsored over 50 preservation and Adhesives 159 138 131 135 55 quality policy for all its plants. The energy con- the flora and fauna at development projects in the tropics since 1989. Binding wire 257 213 209 217 106 sumption figures for the second half of 2005 illus- the Berlin Tiergarten on “GEO Biodiversity Day,” a project for exploring Packaging material 718 660 585 634 369 trate PRINOVIS’ ecological evolution: PRINOVIS is GEO’s 7th Biodiversity nature in one’s own back yard, made its debut in Lubricants and anti-blocking agents 50 50 45 48 25 well below the industry average in its energy con- Day 1999 and has since become an institution. Each Other auxiliary substances 01111

sumption per ton of printed products. year, on the first weekend in June, tens of thousands OPERATING MATERIALS (IN T) PRINOVIS’ environmental guidelines and other of experts and amateurs worldwide take to brooks, Photochemicals 13 13 13 11 5 information are posted on the Internet at www.pri- meadows and forests to study indigenous flora and Films 00000 novis.com. fauna in what has become Europe’s biggest field Printing plates and rubber blankets 77 74 79 81 38 research event. Detergents 51 40 42 33 15 PAPER – A RENEWABLE RESOURCE Acids 206 268 192 227 90 Papers used in production at G+J must comply with “LIVING ELBE” GETS ENTHUSIASTIC INTER- Lye/Leaches 231 216 155 146 63 the highest environmental standards. Important NATIONAL RESPONSE Salts 59 71 94 102 31 aspects include wood from sustainable forestry, en- On July 17, 2005, the second big Elbe swim – initia- Other chemicals 36 40 74 133 66

vironmentally friendly pulp and paper production, ted by G+J and the German Environmental Aid Foun- ENERGY (IN MWH) the use of environmentally compatible inks, and pa- dation e.V. (DUH) – was celebrated along the entire Power 90,784 96,101 95,274 94,620 44,902 per recycling. Protecting the world’s remaining an- River Elbe. The Elbic enthusiasm proved so infectio- Natural gas 118,109 114,164 122,883 121,473 60,486 cient forests is an important global task for the fu- us that on the very same day, over 100,000 people Fuel/heating oil 5,725 7,130 7,641 2,154 1,463 ture. Since 1993, G+J has spoken out against the along more than 30 rivers in twelve European coun- WATER (IN M3) uncontrolled exploitation of rainforests, and toget- tries joined in the first European river swim, or “Big her with the other publishers in the Association of Jump.” Since its establishment in 1997, the “Living Own/in-house extraction 247,041 287,633 254,991 260,404 129,507 Foreign supply 28,851 29,711 27,518 25,435 12,206 German Magazine Publishers (VDZ), promotes the Elbe” eco-partnership between the DUH and G+J Wastewater 101,476 112,607 105,434 107,905 60,103 communication and coordination process between has managed to transform the image of what was business, ecological and social lobbies in determi- once Europe’s dirtiest river. Today, it serves as an EMISSIONS (IN KG) ning the need to protect forests. innovative, positive role model for other rivers. p Toluene 54,371 48,620 43,807 41,024 21,780 All of G+J’s German magazines are printed on Nitrogen oxides 21,800 21,541 21,414 15,044 7,547 100 percent chlorine-free bleached papers. Recy- Sulfur dioxide 2,140 2,687 2,760 1,275 640 22.7 cled papers are also used. Our newspapers are 21.9 22.6 Carbon monoxide 347 365 319 442 223 printed on up to 100 percent recycled paper. G+J Greener than their peers Dust 3,050 3,151 3,125 3,118 1,561 21.8 21.3 21.7 also uses recycled paper for office and corres- PRINOVIS printing facilities (green) continue to WASTES (IN T) pondence purposes. The recycled paper share in use less energy per imprinted space than the Waste paper 46,447 48,548 46,754 47,421 22,153 industry average (gray) Waste requiring special supervision 349 286 507 315 160 2003 2004 2005 Shown in Wh per hours, based on surveys by the German Other waste 942 1,083 1,250 1,034 287 Printing and Media Industries Federation (bvdm)

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YOUNG COSMOPOLITANS FROM MOSCOW TO MADRID G+J has special training programs to promote international management talents When 24-year-old Julia Stepanova from Russia first laid eyes on the Gruner + Jahr building on Ham- burg Harbor, she realized what it means to have signed on at Europe’s biggest publishing compa- ny. “This makes you really proud of what you do,” says the young woman, who is passing through several departments at the mother house in Ham- burg in her capacity as an “International Country Trainee“. To be followed by three more stints in Austria, France and Italy. Julia, who also speaks flu- ent German and English, already has every reason to be proud of herself: she completed her degree in “Linguistics and Intercultural Communications” at the tender age of 22, and went on to become the assistant to the managing director of G+J in Moscow. It soon became clear that the dedicated young woman was capable of more. And so G+J Rus- sia´s managing director sent her to train in Hamburg.

O Young Muscovite Julia Stepanova feels at home in Hamburg

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O Julia Stepanova at work in the distribution department

She describes her expectations of the trainee pro- involves training at all the important publishing de- gram thus: “I would like to learn as much as pos- partments in Hamburg, then two six-month stints sible. At the moment I only have a hunch of how at two international G+J offices. “Business Eng- things work here. In Moscow, approximately 100 lish and perfect fluency in another language be- people work at G+J. Here in Hamburg, the num- sides German are essential. Ideally, applicants will ber is over 2,000. This is an entirely new dimen- have grown up bilingual,” says Brümmer. sion.” Her dream job in Moscow would be as pub- Oliva Zumft Cortines, 25, easily meets these lishing director of a magazine or group of maga- lingual requirements: her mother is Spanish. Oliva zines. But at this point of course she has no idea studied international business in Madrid, Florence where she will ultimately end up. and Reutlingen. She gained first experiences in Swantje Brümmer, the woman in charge of publishing during a traineeship with the manage- trainees at G+J, stresses that international trainees ment of G+J’s living and housing magazines. Her are chosen by the international offices themselves: assessment of the trainee program: “The various “These are young people who have proven them- stations are different pieces in a puzzle, which to- selves on the job and are to go a step further now.” gether give you the big picture. You build a per- In Germany, young executives for the highly pop- sonal network and learn how the various markets ular ”International Corporate Trainee” program are differ from each other.” selected in a slightly different process. During the Both trainees are very taken with the positive 18-month program, participants are systematical- atmosphere at G+J. “You can tell that people en- ly prepared for an international career at G+J. This joy their work and that they believe in their job and their products,” remarks Oliva Zumft Cortines. Her Russian colleague agrees: “There is an atmosphere of openness here. It matches the company’s lo- cation on Hamburg’s harbor: You can feel the free- INTERNATIONAL dom that reigns here.” The two executives-in-train- HR DEVELOPMENT ing share this positive assessment of G+J as an AT GRUNER + JAHR employer with the overwhelming majority of em- ployees in the Magazine Division Germany. In a h Two months abroad as part of regular 14-month h Cooperation with the Hamburg Media survey, 85 percent of respondents indicated they trainee program for all trainees School (HMS): Internships abroad at G+J would choose G+J again as an employer. 91 per- h International Country Trainee Program: offices for HMS masters students cent feel that G+J has a positive image, and 83 Participants: Trainees from G+J’s international h G+J Transfer: Incentive program, Participants: percent are very satisfied or satisfied with the prod- offices, Program: six months home country, four Executives, Program: two- to four-weeks post- ucts created by their department. months Hamburg, four months in another country ings abroad at a G+J branch G+J strives to further promote international ex- (breakdown may differ from case to case) h G+J Exchange: Posting abroad for executives- change. Dr. Jürgen Althans, Vice President of HR h International Corporate Trainee Program: in-training seeking an international career, Development, stresses: “Although media are cul- Participants: Trainees from Germany, Program: six to twelve months at a G+J turally bound by their very nature, we have much Program: six months Germany, six months each in branch abroad to learn from each other – both in the editorial two other countries teams and in the publishing departments.“ p

Oliva Zumft Cortines gets to know IU STERN’s advertising department

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Achim Twardy, Chief Financial Officer of G+J U

MANAGEMENT REPORT 2005 Growth through portfolio decisions, improved results in core business

Gruner + Jahr had a very gratifying year in 2005. cured the future of its gravure business through For the first time in four years, G+J increased its the PRINOVIS venture jointly set up with arvato revenues and achieved significant growth in prof- and Axel Springer, which also provides the foun- its. Revenues rose by 7.6 percent to €2.62 billion dation for future growth in this segment. In May (2004: €2.44 billion), Operating EBIT improved 2005, for lack of prospect of achieving a market- from €213.3 million in 2004 to €250.3 million. Re- leading position in the American magazine mar- turn on Sales for the year amounted to 9.5 percent ket in the foreseeable future, G+J decided to sell (2004: 8.7 percent) its underperforming magazine business in the U.S. Portfolio changes were a major contributor to to the Meredith Corporation and the American in- G+J’s growth. For one, G+J was able to enhance vestor Joseph Mansueto at mid-year. This trans- its powerful market position in Germany and in- action did not include the printing operations of ternationally by acquiring the majority of shares Brown Printing. Overall, the portfolio adjustments in Motor Presse Stuttgart with its more than 140 were largely made without tying up additional fi- magazines. The step provided an entrance into nancial resources. In the years ahead, the portfo- countries and segments that G+J was not previ- lio measures taken in 2005 are expected to yield ously represented in. And for another, G+J se- sustained positive effects on earnings.

2003 2.48

2004 2.44

Revenues up 2005 2.62 In 2005, G+J grew its revenues

for the first time in four years in € billions

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2003 238.0 brigitte.de etc.) showed a positive development in online advertising sales. In 2005, their cumu- 2004 213.3 lated ad sales put them among the Top 10 G+J ad media for the first time. After Germany’s Federal Cartel Office approved 2005 250.3 G+J’s acquisition of the majority of shares in Mo- Operating EBIT € tor Presse Stuttgart in May 2005, Motor Presse Compared with revenues, in millions has been consolidated on the balance sheet since net income grew July 1, 2005. The publisher’s business developed overproportionately proved efficiency and processes, it significantly in line with expectations and positively overall. improved its performance, despite the persistently G+J and MPS are intensifying their cooperation, difficult situation in the advertising markets. Nu- as part of which G+J took on the subscription dis- merous launches served to strengthen the G+J tribution for Motor Presse’s titles in Germany ef- brand portfolio in 2005, especially in growing seg- fective January 1, 2006. G+J is now in charge of ments. A new title in the luxury segment was all Motor Presse distribution. magazines, growing its circulation and increasing launched – PARK AVENUE – and HEALTHY LIV- The magazine business in France also made its result to levels well above the previous year. ING made its debut in the health segment. By a significant contribution to growth in the core In the International Magazine Division, the year launching VIEW, G+J further enhanced the strength business. The country’s biweekly TV listings ti- brought an improvement of results from core busi- of the STERN brand family. Diversification busi- tles TÉLÉ 2 SEMAINES and TV GRANDES ness, especially in Austria and Poland, and the nesses like BRIGITTE’s audiobook edition and the CHAÎNES continued their growth trend in the dis- establishment of titles launched in 2004. The in- book edition in collaboration with Elke Heidenreich tribution and ad sales market and played a key novation campaign continued with the simulta- contributed to an enhanced market position and part in the improved result generated by the French neous launch of GEO in five Eastern European profitability at BRIGITTE. As in 2004, STERN is the magazine business. countries and Turkey, and in Italy. Under the aus- biggest single generator of revenues and profits at Thanks to systematic brand management, pices of a Chief Editorial Office in Hamburg, the G+J. One factor that deserves special mention FEMME ACTUELLE remains Prisma Presse’s flag- Big in France first-ever international issue of a G+J magazine is the positive performance of ESSEN&TRINKEN ship in terms of income. The people magazine Thanks to systematic was developed, then translated in the respective FÜR JEDEN TAG, which increased its total circu- GALA again posted a very gratifying rise in circu- brand management, countries by a local editorial team and enhanced lation by more than 25 percent year on year, to lation and ad sales, and a record result for 2005. FEMME ACTUELLE with local content. Motor Presse Stuttgart played In the core business – i.e. after adjusting for port- over 400,000 copies. NEON, a magazine concept VOICI stood its ground in a keenly-fought com- remains Prisma Presse’s a vital role in the realization of the project, shoul- folio changes – G+J significantly grew its earn- unique to the German market, is winning over petitive environment. The modernization of VSD flagship in terms of dering production, marketing and distribution with ings in 2005. Adjusted revenue is up slightly year more and more readers, and with 160,000 sold triggered an exceedingly positive development in income its structures in the Czech Republic, Slovakia, on year, by 1.2 percent. The innovation campaign copies made breakeven barely 18 months after the advertising and distribution markets. CAPI- Hungary and Romania. G+J also expanded to two begun in 2003 was continued with steady invest- its launch. G+J’s German websites (stern.de, TAL bucked the trend among French business other growth markets: in Greece, G+J bought up ments in new magazines, and rounded out through half of the Daphne Communications magazine the systematic extension of secondary business- publishing company, effective July 1, 2005. Also es related to publishing. Return on Sales before effective July 1, 2005, G+J established a joint publishing investments was 11.4 percent. The Magazine Division Germany was a key contributor to this improved result. Thanks to im-

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venture with Styria Media in Croatia. In another thousand mark in total circulation in the year of its International Publishing house step, all of Hubert Burda Media’s magazines in fifth anniversary, and continues to grow. It out- G+J generates roughly 57 percent Croatia, Serbia and Slovenia are to be acquired performed the market in terms of ad sales growth, of its revenues outside Germany and contributed to a joint venture with the Finnish- and introduced a new supplement, ENABLE, to Dutch publishing company Sanoma International. extraordinarily positive response from advertisers The project is pending clearance by the antitrust and readers. The SÄCHSISCHE ZEITUNG and authorities. These steps open up promising po- Breakeven MORGENPOST SACHSEN newspapers remained tential in rapidly growing markets. In the Nether- NEON wins over more very profitable despite a sluggish market perfor- lands, an issue of GLAMOUR was very success- and more readers. At mance. The assignment of the newspaper print- fully launched under license, marking G+J’s entry 160,000 sold copies, ing operations to the newspaper division opened into the women’s magazines segment. All titles the magazine achieved up potential for cost cuts and revenue increases. launched in 2004 showed a positive development. breakeven barely Dresdner Druck- und Verlagshaus publishing house In Spain, GALA continued to add circulation, tran- eighteen months after further strengthened its market position in ad sales scending a difficult market environment. GALA its launch and postal delivery by acquiring the WVD media and G+J, the integration of the printing plants and Above expectation ployees increased by 2 percent. The contribution BIOGRAFIA in Russia and QUEST in the Nether- group. the realization of synergy projects have begun. In the Netherlands, made to total revenue by the businesses in Ger- lands have already well exceeded their target cir- The printing division strengthened its market PRINOVIS has been proportionately consolidat- QUEST has already well many, rose to 43 percent due to portfolio effects culation. position despite price and cost pressure from the ed at G+J since July 1, 2005. Investments in the exceeded its circulation (2004: 38 percent), while the U.S. business ac- In the newspaper unit, the FINANCIAL TIMES market. Now that the EU authorities have cleared future were made both at PRINOVIS and at Brown targets counted for 16 percent (2004: 22 percent). Eu- DEUTSCHLAND soared past the one-hundred- the gravure merger between arvato, Axel Springer Printing’s operations in the U.S.: PRINOVIS has rope and the other countries contributed 41 per- laid a cornerstone for future growth with its new cent to total revenue, a large portion of which plant in Liverpool, which will take up production came from the French business. Successful port- in mid-2006; and in the U.S., Brown Printing re- folio measures and the profitability of the core alized an extensive reinvestment program at its business allowed G+J to continue its innovation Waseca plant. Brown Printing’s two biggest cus- programs in core markets, as well as step up its tomers, Time Inc. and Meredith Corporation, ex- expansion to foreign growth markets and to new tended their contracts by eight and five years re- lines of business related to its strong magazine spectively, securing a positive future for G+J’s brands. p U.S. printing business. Adjustments to the portfolio have led to fur- ther changes at G+J in 2005. The acquisition of Motor Presse Stuttgart and the finalization of PRI- NOVIS resulted in a significant increase in head- 11,352 count, to 13,981 employees (2004: 11,567). Ad- 2003 justed for portfolio changes, the number of em- 2004 11,567

2005 13,981

More employees The acquisition of Motor Presse Stuttgart and the PRINOVIS effect resulted in a significant staff increase

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86 FINANCIAL STATEMENTS | INCOME STATEMENT BALANCE SHEET | FINANCIAL STATEMENTS 87

BALANCE SHEET Gruner + Jahr Group As of December 31, 2005 INCOME STATEMENT ASSETS in € '000 12/31/2005 12/31/2004* Change Gruner + Jahr Group Intangible assets 498,843 246,265 252,578 January 1, 2005 – December 31, 2005 Property, plant and equipment 738,875 557,462 181,413 Financial assets 64,516 42,471 22,045

in € '000 2005 2004* Change Non-current Assets 1,302,234 846,198 456,036

Inventories 71,249 66,733 4,516 Revenues 2 ,623,688 2,438,650 185,038 Trade accounts receivable 344,396 299,407 44,989 Change in inventories 805 -10,560 11,365 Amounts due from affiliated companies 173,913 194,107 -20,194 Other operating income 121,137 109,885 11,252 Other assets 159,947 152,794 7,153 Income and revenues 2,745,630 2,537,975 207,655 Cash and cash equivalents 64,127 61,337 2,790

Current assets 813,632 774,378 39,254 Cost of materials -935,807 -812,298 -123,509

Personnel costs -771,055 -726,641 -44,414 Deferred tax assets 23,056 13,103 9,953 Amortization of intangible assets and Prepaid expenses 9,778 8,590 1,188 depreciation of property, plant and equipment -80,814 -99,091 18,277 2,148,700 1,642,269 506,431 Other operating expenses -730,059 -720,563 -9,496 Capital gains and losses 125,807 14,371 111,436 LIABILITIES in € '000 12/31/2005 12/31/2004* Change Result from operating activities 353,702 193,753 159,949

Partners' shares / Subscribed capital 77,307 77,307 0 Results from associated companies 12,129 7,709 4,420 Retained earnings 196,878 111,670 85,208 Income from other participations 7,896 16 7,880 Net income / loss for the year 9,910 -25,521 35,431

Earnings before interest and taxes (EBIT) 373,727 201,478 172,249 Shareholders' equity (before minority interests) 284,095 163,456 120,639

Net interest -53,343 -39,598 -13,745 Minority interests 248,562 78,170 170,392 Income taxes -48,650 -43,026 -5,624 Shareholders' equity (incl. minority interests) 532,657 241,626 291,031

Net income before minority interests 271,734 118,854 152,880 Profit participation capital 40,903 40,903 0

Minority interests -187,839 -46,219 -141,620 Provisions for pensions and similar obligations 547,714 581,577 -33,863 Other provisions 105,377 50,844 54,533 NET INCOME AFTER MINORITY INTERESTS 83,895 72,635 11,260 Provisions 653,091 632,421 20,670

Liabilities to financial institutions 22,737 3,399 19,338 * after retrospective adjustment due to revised IAS 32 (put-options) Leasing liabilities 125,482 128,173 -2,691 Trade accounts payable 244,294 223,203 21,091 Amounts due to affiliated companies 17,569 5,322 12,247 Other Liabilities 353,349 232,120 121,229

Liabilities 763,431 592,217 171,214

Deferred tax liabilities 43,971 15,543 28,428 Deferred income 114,647 119,559 -4,912

2,148,700 1,642,269 506,431

* after retrospective adjustment due to revised IAS 32 (put-options)

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88 FINANCIAL STATEMENTS | G+J IN FIGURES, SUPERVISORY BOARD/EXECUTIVE BOARD SUBSIDIARIES | FINANCIAL STATEMENTS 89

G+J IN FIGURES MAJOR SUBSIDIARIES AND PARTICIPATIONS Magazines - Newspapers - Printing Facilities As of December 31, 2005 As of December 31, 2005 WHOLLY OWNED GERMAN AFFILIATES FOREIGN AFFILIATES AND JOINT VENTURES

Gruner + Jahr AG & Co KG, Hamburg Adria Magazin d.o.o., Zagreb, Croatia 50.00% in € millions 2005 2004* 2003 Druck- und Verlagshaus Gruner + Jahr Aktiengesellschaft, Hamburg AG+J S.N.C., Paris, France 75.00% Antenna Publications Ltd., Nikosia, Cyprus 50.00% Revenues 2,624 2,439 2,481 Berliner Presse Vertrieb Gesellschaft mbH, Berlin Brown Printing Company, Waseca, USA 100.00% Operating EBIT 250 213 238 BÖRSE ONLINE Verlag GmbH & Co. KG, Munich Daphne Communications S.A., Athens, Greece 48.70% Cash flow 1) 259 229 236 DPV Worldwide GmbH (formerly: DPV Deutscher Pressevertrieb GALA Ediciones S.L., Madrid, Spain 50.00% GmbH), Hamburg Total assets 2,149 1,642 1,787 Gruner + Jahr / Mondadori S.P.A., Milan, Italy 50.00% DPV Network GmbH (formerly: IPV Inland Presse Vertrieb GmbH), Equity (incl. minority interests) 533 242 228 Gruner + Jahr Polska Sp. z.o.o. & Co. Spolka Hamburg Third-party liabilities 1,616 1,400 1,559 Komandytowa, Warsaw, Poland 100.00% Ehrlich & Sohn GmbH & Co. KG, Hamburg Fixed assets 1,302 846 923 Gruner + Jahr ZAO, Moscow, Russia 100.00% G+J Corporate Media GmbH, Hamburg G y J Espana Ediciones S.L.S en C., Madrid, Spain 100.00% Current assets 847 796 864 G+J Electronic Media Sales GmbH, Hamburg G y J Publicaciones Internacionales S.L. y Cia, S. en C., Personnel costs 771 727 764 G+J Electronic Media Service GmbH, Hamburg Madrid, Spain 50.00% No. of employees at balance sheet date 13,981 11,567 11,352 G+J International Magazines GmbH, Hamburg G y J Revistas y Communicaciones S.L., Madrid, Spain 100.00% No. of employees (average) 12,719 11,634 11,849 G+J Woman Verlag GmbH, Hamburg G+J Clip (Beijing) Publishing Consulting Co. Ltd., Beijing, China 51.00% G+J Zeitschriften-Verlagsgesellschaft mbH, Hamburg G+J Glamour C.V., Diemen, Netherlands 100.00% 1) calculated by the DVFA/SG method Life & Health Verlagsgesellschaft mbH, Hamburg G+J RBA Sp.z.o.o. & Co. Spolka komandytowa, Warsaw, Poland 100.00% * after retrospective adjustment due to revised IAS 32 (put-options) Living at Home Multi Media GmbH, Hamburg G+J/RBA Publishing C.V., Amsterdam, Netherlands 100.00% Neon Magazin GmbH, Hamburg G+J Uitgevers C.V., Diemen, Netherlands 100.00% Norddeutsche Verlagsgesellschaft mbH, Hamburg Motor Presse France SAS, Issy-les-Moulineaux, France 54.90% Park Avenue GmbH, Hamburg Motor-Presse Polska Sp.zo.o., Wroclaw, Poland 54.90% “Picture Press” Bild- und Textagentur GmbH, Hamburg Motorpress Argentina S.A., Buenos Aires, Argentina 46.12% stern.de GmbH, Hamburg Motorpress Brasil Editora Ltda, Sao Paulo, Brazil 25.11% View Magazin GmbH, Hamburg SUPERVISORY BOARD EXECUTIVE BOARD Motorpress Ibérica, S.A., Madrid, Spain 54.90% As of January 31, 2006 As of January 31, 2006 Motorpresse (Switzerland) AG, Scherzenbach, Switzerland 54.90% GERMAN JOINT VENTURES AND ASSOCIATED NG France S.N.C., Paris, France 100.00% Dr. Gunter Thielen Gütersloh, Chairman Dr. Bernd Kundrun UNDERTAKINGS Orion S.N.C, Paris, France 100.00% Klaus Unger Hamburg, Deputy Chairman Chairman Dresdner Druck- und Verlagshaus GmbH & Co. KG, Dresden 60.00% Prisma Presse Société en nom collectif, Paris, France 100.00% Fabrice Boé Birgit Breuel Hamburg Financial Times Deutschland GmbH & Co. KG, Hamburg 50.00% Shanghai G+J Consulting and Service Co., Ltd., Shanghai, China 100.00% President Magazine Division France Dorit Harz-Meyn Hamburg G+J/RBA GmbH & Co. KG, Hamburg 50.00% Verlagsgruppe NEWS Ges.m.b.H., Tulln, Austria 56.03% Dr. Bernd Buchholz Thomas Holtrop Oberursel Hamburger Journalistenschule Gruner + Jahr – VSD S.N.C., Paris, France 100.00% President Magazine Division Germany Bernd Köhler Dresden DIE ZEIT GmbH, Hamburg 95.00% Angelika Jahr-Stilcken Johann C. Lindenberg Hamburg Motor Presse Stuttgart GmbH & Co. KG, Stuttgart 54.90% Journalistic Member manager magazin Verlagsgesellschaft mbH, Hamburg 24.90% Dr. Siegfried Luther Gütersloh Dr. Torsten-Jörn Klein PRINOVIS Ltd. & Co. KG, Hamburg 37.45% Dr. Peter Reuter Hamburg President International Magazine Division Scholten Verlag GmbH, Stuttgart 54.90% Burkhard Schmidt Hamburg Achim Twardy Sport+Freizeit Verlag GmbH & Co. KG, Stuttgart 54.90% Rolf Schmidt-Holtz Gütersloh Chief Financial Officer SPIEGEL-Verlag Rudolf Augstein GmbH & Co. KG, Hamburg 25.25% Michael Walter Hamburg President Corporate and Publishing Services/Newspapers WVD Mediengruppe GmbH, Chemnitz 30.00%

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90 FINANCIAL STATEMENTS | NOTES NOTES | FINANCIAL STATEMENTS 91

NOTES TO THE GLOBAL FINANCIAL STATEMENTS Gruner + Jahr Group

I. GENERAL BACKGROUND nancial Expenses. The previous year’s figures had to be adjusted accordingly, current asset value is capitalized as goodwill and amortized by the straight-line The companies included in the consolidation saw the following developments Bertelsmann AG owns majority interests in Gruner + Jahr AG & Co KG, Ham- in a retrospective application of the revised IAS 32 standard as stipulated by method over its assumed useful life. Hidden reserves and charges revealed at during the year under review: burg (G+J KG) and Druck- and Verlagshaus Gruner + Jahr AG, Hamburg (G+J IAS 32.97. the time of first consolidation are written down or written back in subsequent Companies included German Foreign Total AG). These companies and their subsidiaries are included in Bertelsmann’s fiscal years in accordance with the treatment of the relevant assets and liabil- The fiscal year is identical with the calendar year. Included at December 31, 2004 62 39 101 consolidated annual financial statements. G+J AG is the managing general ities. Negative differences not resulting from anticipated losses are written The financial statements comply with the obligation to show the figures of the Additions 28 23 51 partner in G+J KG, with a two percent interest in that partnership. In particular, back over a scheduled period in accordance with the provisions of IAS 22. The present fiscal year in contrast with those of the previous fiscal year. There is no G+J AG possesses the powers of direction for the G+J Group’s foreign print- same principles are used for the capital consolidation of partially consolidated Disposals 7 1 8 direct comparability between the reporting periods because firstly, the majori- ing and publishing activities, which are for legal purposes largely assigned di- undertakings. Included on December 31, 2005 83 61 144 ty in Motor Presse Stuttgart GmbH & Co. KG (MPS) was acquired effective rectly to the shareholders. Associated companies valued at equity are carried at the proportion of the eq- July 1, 2005. And secondly, a joint venture among Axel Springer (AS), BAG and A majority stake in MPS was acquired effective July 1, 2005. Accordingly, MPS and uity owned in them. The principles used for fully consolidated companies are Although no legal obligation exists, the joint parent company G+J KG and G+J G+J KG was established effective July 1, 2005, whereby the gravure opera- its subsidiaries (altogether 31 companies) were fully consolidated as of July 1, 2005. used for the calculation of differences between acquisition cost and value of AG voluntarily draw up global financial statements for the G+J Group, which tions of all three partners were merged into the PRINOVIS printing group. In 2004, MPS’ predecessor company, the Vereinigte Motor Verlage GmbH & Co. the equity share held. Losses on associated undertakings in excess of the comprises its German and foreign subsidiaries. KG, was shown under Other Holdings. The financial statements are presented in Euro rounded off to the nearest book value of the relevant shareholding are not shown unless there is an oblig- The balance sheet and income statement of the G+J Group for the fiscal year € € thousand Euros ( ´000), or in millions. For greater clarity, individual items ation to make an additional contribution. All intra-group profits and losses, sales In a joint venture among the AS, BAG and G+J KG media groups, their gravure op- from January 1 to December 31, 2005 were prepared in accordance with In- were summarized in the balance sheet and income statement presentations. revenues, expenses, earnings, accounts receivable and payable and provisions erations were merged into the PRINOVIS printing group effective July 1, 2005. BAG ternational Financial Reporting Standards (IFRS) and with the interpretations These items are analyzed and explained in greater detail in the notes to the fi- in the accounts of the companies included in the consolidation are eliminated. and G+J KG each own 37.45%, AS owns 25.1% of the shares. PRINOVIS is fully issued by the Standard Interpretations Committee/International Financial Re- nancial statements. The same principles are used proportionately in the case of partially consoli- consolidated in Bertelsmann’s group balance sheet. In BAG’s segment reporting, it porting Interpretations Committee (SIC/IFRIC) of the IASB. There is a state- dated undertakings. Interim results from the supply of goods and services be- is divided equally between the arvato and “Gruner + Jahr” divisions, like a joint ven- ment of changes in equity as of December 31, 2005. However, the notes to II. CONSOLIDATION tween the companies included in the consolidation were ignored because they ture. Thus, in divergence from the actual holding amount, the PRINOVIS group is the consolidated financial statements as of December 31, 2005 do not con- PRINCIPLES USED IN THE CONSOLIDATION are of only minor significance for the Group’s net worth, earnings and finan- prorated at 50% in the financial statements. tain all the data required by IFRS. Nor has a cash flow statement been pre- cial situation. The financial statements of the fully consolidated companies were examined by the pared. Therefore, the financial statements of the G+J Group do not fully com- All significant subsidiaries directly or indirectly controlled by G+J AG and G+J appointed auditors in accordance with the auditing principles that apply in the re- ply with IFRS. KG as defined in IAS 27 are included in the consolidated financial statements. spective countries. Joint ventures as defined in IAS 31 are consolidated proportionately to the in- The revised accounting standard IAS 32 became effective on January 1, 2005. COMPANIES INCLUDED IN THE CONSOLIDATION terest held in them. Significant associated companies are carried in the balance Audit certificates were obtained for the annual financial statements prepared in ac- Contrary to IAS 32.18 b), the equity components of partnerships to be classi- 144 companies (including the parent companies) were fully consolidated (2004: sheet at values determined at equity as stipulated in IAS 28 in those cases cordance with applicable national laws. Secondary commercial balance sheets were fied as equity under company law were not shown as third-party liabilities in 101). All except 24 (2004: 29) affiliated German and foreign companies were in- where significant influence can be exerted. also prepared by the foreign subsidiary undertakings using the uniform IAS/IFRS ac- the financial statements. As last year, they will be shown at book value as part cluded in the consolidation. counting and valuation methods which are standard throughout the Group. of equity. Uniform accounting and valuation methods are used in the preparation of the The companies not included have no significant business activities and were financial statements of the parent company G+J KG and G+J AG and the sub- These reporting packages and the accompanying notes were also examined by the Put-options held by minority shareholders are no longer shown as pending excluded from the global financial statements because they are as a whole of sidiary undertakings included in the consolidation. relevant auditors, who supplied written confirmation that the national financial state- transactions, but instead are treated as installment purchases and hence as fi- minor importance for the group’s net worth, earnings and financial situation. ments had been correct reconciled with the standard Group accounting and valua- nancial liabilities. For this reason, the shares subject to the put-option are in- The acquisition method is used for capital consolidation pursuant to IFRS 3. Twenty-seven jointly held companies (2004: three) were included pro rata in the tion procedures. cluded in the capital consolidation as if the shares had already been purchased. This offsets the cost of acquisition of the interest in a company against the group balance sheet. This resulted in €29 million in additions to goodwill (2004: €11 million), as put- share of the equity acquired. Allowance is made for deferred taxation on hid- CURRENCY TRANSLATION options were taken into account in the capital consolidation. As a result of this den reserves and charges revealed at the time of first consolidation except in Of the seventeen associated companies (2004: fifteen), six (2004: seven) were rededication of minority shares subject to the provision as Other Liabilities, the cases where the relevant tax payments or refunds are made at the time of their reported at equity. The others were reported at (acquisition) cost due to their The annual financial statements of the foreign subsidiary undertakings were relevant profit shares of minority shareholders are now reported as Other Fi- revelation. Any remaining positive difference between acquisition cost and secondary relevance for the group balance sheet. translated into Euro in accordance with the provisions of IAS 21 relating to func-

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tional currencies. Assets and liabilities are translated at the middle rate apply- Property, Plant & Equipment Useful life Securities available for sale are valued in accordance with IAS 39 at their fair mar- hedges, as well as from asset increases based on reevaluations. It is added to ing on balance sheet closing date, while the average exchange rate over the Buildings 10 – 50 years ket value on the balance sheet closing date, wherever this can be determined. or deducted from equity and does not affect earnings. fiscal year under review is used for items in the income statement. Difference Machinery and technical equipment 5 – 15 years Any resulting profit/loss is (initially) added or charged to earnings. At the time in balance sheet items arising from fluctuations in exchange rates used in the of outflow, or when there are indications of a final decrease in value, these prof- Office and factory equipment 3 – 12 years PROVISIONS previous year and similar differences arising for this reason between the income its/losses are included in Profit and Loss Statement. In cases where write-downs In accordance with IAS 19, the level of provisions for pensions and similar oblig- statement and the balance sheet are credited or debited to equity without af- were taken on grounds which no longer apply, the assets are written up again ations is determined by the projected unit credit method. This method makes fecting earnings. LEASING and charged to earnings. Through December 31, 2004 value adjustments to se- allowance not only for basic biometric statistical data but also for current long- curities available for were fully charged to earnings, exercising the choice that In cases where a group company enjoys all significant opportunities and bears all sig- term interest rates on the capital market and current assumptions on future Average rate Closing day rate existed until that date. In cases where it is impossible to determine a fair mar- nificant risks under leasing agreements and can consequently be regarded for finan- trends in salary and pension levels. The proportion of pension expenses attrib- 1/1-12/31/05 1/1-12/31/04 12/31/05 12/31/04 ket value, the relevant shareholdings and securities are carried at their ongoing cial purposes as the owner of the relevant assets (finance leases), these assets are utable to interest is included in the net interest item. historical acquisition cost. US Dollar (USD) 1.2475 1.2461 1.1797 1.3621 capitalized at the time of signature of the leasing agreement at the lower of market value or cash value of future leasing installments. The payment obligation resulting from Except the “other personnel-related provisions” calculated under IAS 19, all oth- Polish Zloty (PLN) 4.0268 4.5188 3.8600 4.0845 INVENTORIES the finance lease is carried at the same level under liabilities to financial institutions. er provisions are made based on IAS 37, provided there is a legal or factual ex- Russian Ruble (RUB) 35.2712 35.8463 33.9200 37.7574 ternal obligation to do so. They are included at full cost of the most probable Inventories are carried at the lower of acquisition or manufacturing cost or market In cases where it is reasonably certain that the leased assets will pass into the volume of liability. Long-term provisions are reduced. ownership of the group company, they are depreciated over their useful life. In value. Manufacturing cost includes material and direct manufacturing costs plus manufacturing overheads attributable to the relevant production process. In cases Other provisions are created in accordance with IAS 37 as from the time when III. ACCOUNTING AND VALUATION METHODS all other cases they are depreciated over the period of the licensing agreement. where acquisition or manufacturing cost is higher than market value on balance it appears probable not only that an obligation has arisen that will cause a future INTANGIBLE ASSETS The level of installments payable by the lessee varies with fluctuations in inter- est rates charged by the lessor. In addition to the aforementioned finance lease sheet closing date, the relevant inventory items are written down to net realizable cash outflow, but also that its amount can be reasonably determined. Provisions Intangible assets created within the group are capitalized at development cost, agreements, hire agreements definable as operating lease agreements were value. Inventories are normally carried at acquisition or manufacturing cost. Iden- for warranties and threatening losses are created at full manufacturing-related provided that they fulfill the conditions stipulated in IAS 38. Intangible assets signed in some cases. In these cases the leased assets remain the property of tical inventory items are valued at average cost. cost. Long-term provisions are discounted. acquired from third parties are capitalized at acquisition cost. Intangible assets the lessor and the leasing installments are treated as expenses arising during are normally amortized by the straight-line method over their useful life. Capi- the accounting period. Total leasing installments payable during the basic, non- RECEIVABLES LIABILITIES

talized software is amortized over three to four years, licenses over the period terminable leasing period are shown under other financial liabilities. Miscellaneous receivables and other assets are normally carried at the lower of nom- Liabilities are carried at nominal value. Long-term liabilities are discounted. Lia- of the relevant licensing agreement and supply rights and subscription cus- inal or current market value. Long-term receivables are discounted. Receivables de- bilities in foreign currencies are normally translated at the exchange rate apply- tomers over periods of not more than 15 years. Regular amortization of good- IMPAIRMENTS OF INTANGIBLE nominated in foreign currencies are translated at the exchange rates applying on ing on balance sheet closing date. will and of rights similar to goodwill with indefinite useful lives is no longer ASSETS AND PROPERTY, PLANT AND EQUIPMENT balance sheet closing date. Due provision is made for any discernible risks. shown in the income statement. These assets are subject to an annual impair- FINANCIAL DERIVATIVES ment test and are subject to an impairment write-down, if applicable. Impairments of intangible assets and property, plant and equipment is charged DEFERRED TAXATION In accordance with IAS 39, all financial derivatives are carried in the balance in accordance with IAS 36 in cases where the net realizable value of the assets In accordance with IAS 12, deferred taxation assets or liabilities were created sheet at market value. These financial instruments are taken up in the balance at balance sheet closing date has fallen below the book value. The net realiz- GOODWILL for all timing differences between the tax balance sheet and the IAS consoli- sheet at the date on which the transaction was made and classified separately able value is calculated as the higher of the net disposal value or the cash val- dated balance sheet – except for goodwill items not deductible for tax purpos- as either fair value or cash flow hedges. Individual derivatives do not meet the Goodwill represents the excess of the purchase price of an acquired entity and ue of the anticipated future cash flow from the assets. es – and for tax-deductible losses carried forward from prior years. Deferred the share of fair values of the assets and liabilities acquired. requirements of IAS 39 for capitalization as covering transactions even though In cases where the grounds for impairments no longer apply, the assets are taxation assets are adjusted to allow for items not expected to qualify for later they do provide financial security. Changes in market value of financial deriva- Goodwill is not regularly amortized (written-down) in the income statement, but written up again. The write-up in no case exceeds the amount which would deduction. The tax rates used for calculating the amount of the deferrals are those tives are handled as follows: is recognized as an asset and subject to an annual impairment test. Any write- have applied if the impairments had not been applied. This rule does not apply expected to apply in the future on the basis of currently known tax legislation. FAIR VALUE HEDGES: Changes in market value of these derivatives used as down is immediately charged to income as an impairment expense. Write-ups of for goodwill and intangible assets with indefinite useful life identified as part of Adjustments reflecting the effect of tax rate changes on deferred taxation as- hedges for assets and liabilities are included in the income statement and re- goodwill are not reported as a positive item on the balance sheet. the purchase price allocation pursuant to IFRS 3. sets or liabilities are normally made in the accounting period in which the rele- vant tax regulations are published and are added to or deducted from earnings. flected in the contra movements in the balance sheet items covered by them.

PROPERTY, PLANT AND EQUIPMENT SHAREHOLDINGS AND SECURITIES CASH FLOW HEDGES: Changes in the current value of these derivatives used OTHER COMPREHENSIVE INCOME Property, plant and equipment are carried at acquisition or manufacturing cost Significant holdings in associated companies are shown at equity. All other share- as hedges to secure future cash flow are included in other comprehensive in- less accumulated depreciation. Scheduled depreciation is charged at uniform holdings and securities included under fixed or current assets are treated as se- Other comprehensive income differences resulting from currency translation come and do not affect earnings. These items are written back against the earn- rates throughout the group and assumes the following periods of useful life: curities available for sale. and the calculation of the fair value of securities available for sale and cash flow ings on the transactions covered by them.

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CHRONICLE 95

The other 10 percent remain the property of the burg; in 1984, it will be renamed the Henri Nannen company’s Managing Partner Ernst Naumann, who School in honor of the STERN founder’s 70th an- later trades them for 5 percent of the shares in G+J. niversary.

1971 G+J buys a 24.75 percent stake in Spiegel- 1979 In the U.S., G+J buys the Brown Printing Verlag (Der Spiegel). John Jahr (at 70) and Dr. Gerd Company, a gravure/offset printer in Waseca, Min- Bucerius (at 65) retire from active management. nesota. In Paris, the French edition of GEO hits newsstands. HÄUSER and ART are launched in 1972 G+J acquires 15 percent of the Vereinigte Germany. Motor-Verlage GmbH & Co. KG (Auto Motor Sport). The Gruner + Jahr GmbH & Co. becomes the Gruner 1980 The business magazine IMPULSE is + Jahr AG & Co printing and publishing company. launched in Germany. The company publishes the premier issue of the monthly magazine ESSEN&TRINKEN. 1981 Following the successful launch of GEO in France, G+J introduces a title modeled on the P.M. 1973 Bucerius swaps his G+J holdings for shares concept to the French market: the monthly maga- in Bertelsmann AG, which is now G+J’s majority zine ÇA M‘INTÉRESSE. Spain, too, shows a burgeon- shareholder (60 percent). The remaining shares be- ing demand for popular science: MUY INTERESANTE long to John Jahr (35 percent) and Ernst Naumann gets off to a successful start here. (5 percent). 1982 PRIMA, a women’s magazine newly intro- 1975 John Jahr sells a 9.9 percent-stake to duced in France, reaches sold circulation of one Bertelsmann AG, keeping 25.1 percent. million copies within a year.

1976 Bertelsmann AG takes over Ernst Nau- 1984 FEMME ACTUELLE is launched in France. CHRONICLE 1948–2005 mann’s 5-percent holding and now owns 74.9 percent of the shares. GEO makes its debut in 1985 G+J decides to build a new headquarter 1948 The Federal Republic of Germany had not & Co. Gruner owns 39.5 percent, Jahr 32.25 per- Germany. on Baumwall in Hamburg. 100 percent of shares are yet been founded when the Henri Nannen GmbH cent and Bucerius 28.25 percent of the shares in acquired in the Ehrlich & Sohn publishing compa- published the first issue of STERN on Aug 1, in a the new company. 1978 G+J becomes the first German publishing ny. G+J buys a 24.9-percent stake in Manager Mag- print run of 130,735 copies. company to venture onto the international maga- azin Verlagsgesellschaft (Manager Magazin). 1969 Richard Gruner sells his shares. After the zine market: It takes over Cosmos Distribuidora SCHÖNER ESSEN and FLORA are added to the 1965 Magazine publishers John Jahr (CON- ownership restructuring, Jahr and Bucerius each S.A. (DUNIA, SER PADRES HOY) in Spain. In the magazine portfolio. STANZE, BRIGITTE, SCHÖNER WOHNEN, CAPI- own 37.5 percent, and Reinhard Mohn (Bertels- U.S., G+J buys up Parents Magazine Enterprises TAL) and Dr. Gerd Bucerius (STERN, Die Zeit etc.) mann) owns a 25 percent stake. Gruner + Jahr ac- Inc. with its titles PARENTS and YM. In Germany, 1986 TÉLÉ LOISIRS makes its debut in France, merge with printer Richard Gruner (Gruner & Sohn, quires 90 percent of the Munich-based publisher the popular-science magazine P.M. makes its debut. and the women’s magazine MIA is launched in Gruner Druck GmbH) into the Gruner + Jahr GmbH Kindler & Schiermeyer (JASMIN, ELTERN, TWEN). G+J’s School of Journalism is established in Ham- Spain.

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1987 GEO WISSEN launches in Germany. In ONLINE. In America, G+J buys seven women’s 1999 The GEO family continues to grow: GEO has been published monthly since February 2004. France, the people magazine VOICI premieres. magazines, including FAMILY CIRCLE and MC EPOCHE, a history magazine, makes its debut. Un- Also in Germany, NATIONAL GEOGRAPHIC GEO makes its debut in Spain. CALL’s, from the New York Times Company. In der license by the National Geographic Society, G+J WORLD, a bilingual popular-science magazine for Poland, the women’s magazine NAJ makes its first launches NATIONAL GEOGRAPHIC in Germany. children, premieres in November 2003. The inter- 1989 The first issue of the travel magazine GEO appearance. national extension of G+J’s popular-science portfo- SAISON hits newsstands in Germany. 2000 G+J brings the FINANCIAL TIMES lio continues with the launch of GEOFOCUS in 1995 BRIGITTE YOUNG MISS, published as a DEUTSCHLAND to German newsstands in a joint Russia. G+J sells its Eastern European newspaper 1990 The CHEMNITZER, DRESDNER and MECK- special issue since 1990, starts being published as venture with the Pearson media group, London. operations to Switzerland’s Ringier-Verlag for strate- LENBURGER MORGENPOST dailies are launched. a separate magazine. 75 percent of the WOCHEN- Three new titles are launched internationally: the gic reasons. In a joint venture with the Milan-based Mondadori POST is sold off. G+J goes live with its first Inter- business magazine CAPITAL in Spain, the technol- imprint, G+J launches the women’s magazine VE- net sites: geo.de, mopo.de, pm-magazin.de, stern.de ogy-oriented consumer title JACK in Italy, and NA- 2004 The launch of 23 magazine innovations RA in Italy. G+J moves into the new Pressehaus and tvtoday.de. In France, the business magazine TIONAL GEOGRAPHIC in the Netherlands. In the worldwide sets a new record for the publisher. In on Baumwall in Hamburg’s harbor. The G+J Exec- L’ESSENTIEL DU MANAGEMENT makes its debut. U.S., G+J enters the business magazine sector by France, Prisma Presse launches TÉLÉ 2 SEMAINES utive Board anchors environmentally conscious con- buying INC. and FAST COMPANY. LIVING AT HOME and TV GRANDES CHAÎNES, the country’s first two duct in the corporate mission. 1996 FOCUS is launched in Poland, and Germany and the accompanying Internet portal make their de- biweekly TV guides. QUEST makes its debut in the sees its first issues of ELTERN FOR FAMILY and but in Germany. Netherlands. GALA premieres in Spain, the fifth 1991 The newspaper business undergoes fur- the children’s magazine GEOLINO. The French G+J country where the international people magazine is ther development: Berliner Verlag – which pub- subsidiary Prisma Presse takes over the weekly 2001 The internationalization of successful mag- published. In Germany, GEO KOMPAKT becomes lishes BERLINER ZEITUNG, BERLINER KURIER, glossy VSD. The illustration printing plant at G+J’s azine brands continues with GALA in Poland and the ninth title in the popular GEO family. WOCHENPOST and the TV listings guide F.F. – is print center in Dresden takes up operations. Russia. Following the merger with the Kurier group ESSEN&TRINKEN FÜR JEDEN TAG, launched in acquired by means of a joint venture. G+J also ac- and the launch of the women’s magazine WOMAN, 2003, begins its collaboration with VOX and TV chef quires a majority stake in Dresdner Druck- und 1997 In Germany, the Internet programming guide the NEWS group in Austria now publishes 14 mag- Tim Mälzer. Verlagshaus, which publishes SÄCHSISCHE TV TODAY ONLINE + COMPUTER (later ONLINE azines. G+J takes over the majority of shares in Motor ZEITUNG. In France, CAPITAL is launched and im- TODAY) makes its debut. Brown Printing acquires Presse Stuttgart, adding motor, telecommunications mediately becomes the country’s leading busi- the PennWell and Graftek printing plants in Woodstock. 2002 In Germany, the biweekly women’s maga- and men’s magazines to the G+J portfolio. ness publication. The new newspaper printing machine at G+J’s print- zine WOMAN is launched in October. In summer, G+J, arvato (Bertelsmann) and Axel Springer form ing center in Dresden takes up operations. the STERN spin-off STERN SPEZIAL BIOGRAFIE the gravure company PRINOVIS. 1992 G+J takes over the remaining 50 percent makes its newsstand debut. In France, GEO ADO of Berliner Verlag. In Italy, the popular-science title 1998 G+J takes over the lifestyle magazine MO- becomes the latest addition to the juvenile maga- 2005 The international innovation campaign con- FOCUS premieres and rapidly becomes the coun- JE MIESZKANIE in Poland, followed by TOP GIRL, zine market. The parenting title FUMU PARENTS is tinues. G+J launches 16 new magazines in eleven try’s highest-circulation monthly magazine. a magazine for girls and young women, in Italy. the publisher’s second step in opening up the Chi- countries, including PARK AVENUE, VIEW and GEO follows up its success in Germany, France nese magazine market. The Berlin newspaper oper- HEALTHY LIVING in Germany, GLAMOUR in the 1993 G+J Poland is established, with headquar- and Spain by launching in Russia. G+J introduces ations are sold to the Georg von Holtzbrinck publish- Netherlands, and an international GEO edition in ters in Warsaw. The women’s magazine CLAUDIA a new title in China as well: CAR & MOTOR. A 56 ing group. the Czech Republic, Slovakia, Hungary, Romania, is launched in the Polish market. In France, the peo- percent shareholding in the Vienna-based NEWS Croatia and Turkey. In summer, the U.S. magazine ple magazine GALA makes its debut. group (NEWS, TV MEDIA) marks the publisher’s en- 2003 GLAMOUR, produced under license in operations are sold to Meredith Corp. and the pub- try into the Austrian market. In fall, the NEWS group Poland, becomes the country’s most successful lisher Joe Mansueto. The publisher enters one of 1994 The people magazine GALA and the list- launches its third title, FORMAT. The newspaper launch of the year 2003. Young readers in Germany Europe’s biggest growth markets by acquiring 50 ings guide TV TODAY are launched in Germany. portfolio is enhanced with a 50-percent stake in find new inspiration in NEON, a magazine that is suc- percent in the Greek magazine publisher Daphne G+J takes over the investors’ magazine BÖRSE the Expres publishing company, Bucharest. cessfully tested in 2003 with two pilot issues. NEON Communications. p 98_99_GJ_GB_Weltkarte_engl.qxd 05.04.2006 16:45 Uhr Seite 98

WORLDWIDE PRESENCE Approximately 14,000 employees produce more than 285 magazines and newspapers in 21 countries on three continents

Germany Poland Russia

Netherlands Contact France Information Spain Publisher: Portugal Gruner + Jahr AG & Co KG Switzerland Corporate Communications + Italy Public Affairs China Austria Am Baumwall 11

Czech Republic D-20459 Hamburg Ukraine Germany Mexico Croatia Romania Slovakia Contact: Greece Dr. Andreas Knaut Brazil Hungary Phone: +49 40 3703 0 E-mail: [email protected]

Argentina Realization: G+J Corporate Media GmbH Friesenweg 2 a-c D-22763 Hamburg Germany

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ANNUAL REPORT 2005