Investor Presentation September 2010 Disclaimer
This document, which has been issued by Axel Springer Aktiengesellschaft (the "Company"), comprises the written materials/slides for a presentation of the management.
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2 Axel Springer has started transforming its business over the past 6 years to create a leading European integrated multimedia company
Axel Springer in 2004 Axel Springer in H1/10 Our Vision
1) Europe’s Digital 24% leading integrated Digital multimedia company 2%
50% 50% Print digital print 98% Print 76% Strong brands
Digital activities represent 24%1) of revenues and 15% of EBITDA in H1/10
1) Pro forma for acquisitions
3 Shareholder structure and trading volume
Shareh old er st ruct ure ( as of S ep 2010) TdiTrading vo lume2)
Free Float 24.2%1) 30
20 CEO Mathias
Döpfner (1.5%) 0s) aily Volume
51. 5% 00 DD 8.3% (0 Average: 11.4 10 Average 8.9% 7.0%
Axel Springer Gesellschaft fur Publizistik Jul-09 Jul-10 Apr-09 Oct-09 Apr-10 Jun-09 Jun-10 Jan-09 Mar-09 Jan-10 Mar-10 May-09 Aug-09 Nov-09 May-10 Aug-10 Feb-09 Feb-10 Sep-09 Dec-09 Dr h.c. Friede Springer Axel Springer AG Deutsche Bank AG Free Float 1) Management board overall owns 2.0% of the share capital 2) Monthly average daily volume on XETRA Source: Datastream
4 Our strategy focuses on our core competencies
1 Leadership in Germany
. Strengthen and expand leading market position
. Strong brands drive high media reach and advertising revenues
Core Competencies
Content portals
Classifieds/Marketplaces
Performance marketing
2 International expansion 3 Digital transformation
. Replicating the “German model” internationally . Existing brands extended online
. JV with Ringier in CEE . Business model enhanced in digital world
5 1 Germanyyp represents a uni que newsp ppaper market
National newspaper circulation revenues Key themes in German market (07-09 CAGR) 2.9% . Strong circulation revenues in Germany 0.3% . Higher proportion of total revenues than in other countries -3.6% -3.1% . More resilient than in the UK and the US 3) 4) 4) 4) Axel Springer Germany UK US . Potential for regular cover price increases BILD reach vs TV shows5) . Higher share of younger readers (reach in m) American Idol - The X Tuesday Factor . No free sheets Wetten, 28.7 12.5 dass…? Dr. House 11.8 1) . Stronggp position of BILD with 81% market 949.4 898.9 share 7.8 3.7 . Newspapers with higher share of advertising 2.4 spend than TV as opposed to US2) BILD Le Figaro USA Today The Sun
1) Including Berlin newsstand newspaper B.Z.; market share based on paid circulation of newsstand newspapers 5) UK: Year average for The X Factor 2009, BARB (BroadcastersAudience Research Board); average 2) Source: ZenithOptimedia July 2010 reach of Sun between Oct.08 to Sept. 09 NRS (National Readership Survey), USA: USA TODAY 3) Source: company information; National Newspaper circulation sales as % of total National Newspaper sales Reader Brand Research 2009; MRI Fall 2009, Nielsen Television - TV Ratings for Primetime: Season- 4) Source: PwC Global Entertainment and Media Outlook, 2009-2013, 2009E forecast to-Date (2009-2010 Season Through Jan. 24, 2010), France: Daily newspapers: EPIQ-Studie 2008/2009, TV: Viewers 4J.+ Mediametrie 2009; Germany: Average for “Wetten, dass…?” 2009, Viewers age 14+, GFK/TV Panel 2009, ma 2010 Pressemedien II
6 6 1 Axel Sppgringer is Germany ’s leadin gpg print marketer and publisher
Market share by circulation1) Market share byyp adspend3)
19% With 19% market share, AlSiAxel Springer reac hes 17% 52% of the German population2)
9% 7% 7% 7% 5% 5% 4% 4% 4% 3% 3%
Axel G+J Burda WAZ Bauer DuMont Axel Bauer WAZ SWMH Burda Holtz- G+J Springer Springer brinck Newspapers Magazines Newspapers Magazines
1) Source: Company estimates based on IVW H1/10, paid circulation; weighted market share taking into account different title frequencies 2) Source: ma 2010 Pressemedien II; combined reach among German-speaking 14+ year olds of all covered Axel Springer AG newspapers, magazines and 100% owned subsidiaries 3) Source: Nielsen Media Research; gross adspend, excl. classified ads, supplements and media advertising, 2010 Jan.-June, 100% owned subsidiaries and Jahr Top Special Verlag
7 Lead over German print marketers even further expanded
Gross advertising revenues (in %)
+4.3%-pts H1/08 38.7 37.9 H1/09 H1/10 34.4 -1.8%-pts 21.8 -1.9%-pts 19. 4 20.0 17.6 16.4 15.7
+0.2%-pts +0.4%-pts
10. 1 -12%1.2%-pts 9.6 989.8 989.8 9.3 9.7 7.3 6.4 6.1
Axel Springer* Bauer Burda Gruner+Jahr DuMont IQ Media
Basis: Leading German print marketers. Source: Nielsen Media Research, Newspapers and magazines without classifieds and media ads. *without Financial Media.
8 2 Axel Sppgringer: a strong gp platform for international expansion
CEE JV Individual countries Digital
Hungary Czech Poland Switzerland Spain France Republic
Slovakia Serbia Russia Romania
. Combining reach of No. 1 tabloid . Country-by-country approach . Roll-out of successful business positions in all JV countries . Strong market positions in each models to other countries, partly without physical presence . Goal: Growth and digitization country . Making use of network effects and economies of scale
9 2 CEE JV with Ringier: 5 market-leading mass market brands, strong digitization potential
. No. 1 tabloid: . Su ccessfu l Eastern FAKT European business since (Axel Springer) the 1990s . No. 1 tabloid: Blesk Reach: 4.7m . > 100 pp,rint titles, > 70 (Ringier) Poland Reach: 1.5m online offerings . PF 2009 JV financials: Czech revenues €414m, Republic EBITDA €62m . No. 1 tabloid: Nový Slovakia Čas (Ringier) . 50% economic ownership Reach: 1.2m . No. 1 tabloid: with 100% consolidation for Hunggyary Blikk (Ringier) Axel Spgpringer Rh11Reach: 1.1m . Closing for all JV countries . No. 1 tabloid: Blic (Ringier) except Hungary Reach: 0.8m on July 1, 2010
Axel Springer Presence Serbia Goal: Growth and Ringier Presence digitization
10 3 We have become the largggpyyest digital player by revenue among European print publishers
Digital media revenues (in €m) 569
)) 423
332 evenues (€m rr
127 117 FY09
40 36 29 20
Axel Schibsted Sanoma Lagardere DMGT Trinity Telegraaf L'Espresso Johnston Springer1) Mirror Press FY09 21%29% 12% 2% 5% 5% 6% 3% 4% total nues H1/1024% 28%2) 13% N/A 6%3) 5%4) 8% 4% 5% reve % of 1) Based on pro forma revenues for Digital Media 2) Online revenues include revenues from online classifieds, the online portion of Media Houses Scandinavia revenues and the online portion of Aftonbladet revenues. Exclude any online revenues from Media Houses International division 3) Based on H1/10 financials ending April 4, 2010 4) Based on interim results, 26 weeks to July 4, 2010
11 Digital strategy along core competencies
Core Competencies
A Content portals
Audience B Classifieds / Marketplaces Advertisers
C Performance marketing
Cross-synergies between core competencies increase revenues and profitability
12 A BILD – examppgle of our successful transition to digital channels
News1)
150m
sits (in m) 100m Site vi 50m Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Sport 2)Automotive 2)Computer 2)
89.4 5.3 43.9 s (in m) ts (in m) ts (in m) t 262.6 t 27.8 27.3 18.3 9.7 0.3 Site visi Site visi Site visi
3) t por ip.de nline t1.de elt.de Motor News rr SS hh OO ww C Spo Pc und Auto Auto /sport Auto Kicker 1) Source: IVW, Jul 2010 2) Source: IVW, Jan – Jul 2010 (monthly average) 3) Axel Springer’s sport sites include: sportbild.de, Bild.de/Sport and Transfermarkt; Source: IVW (sportbild.de and Transfermarkt), Webtrekk (Bild.de/Sport)
13 A auFeminin – stronggg growth driven b y international expansion
International revenue Leading market positions* contribution (in €m)
UK: #1 soFeminine 0.6 +40.8% 18.9 Belgium: #1 iVillage 0.5 Germany: #1 auFeminin 0.6 goFeminin 4.6 +9.8% 13.5 7.8 Libelle 0.3 Fem 3.7 12.3 +47.8% 2.6 +107.5% 5.3 France: #1 auFeminin 7.4 +36.2% 11.1 LeJournal de 6.0 9.7 -16.0% Unique Visitors in million 8.1 Femmes Source: FR: Nielsen NetRatings May 2010 IT, ES : Niel sen N etR ati ngs M ay 2010 UK: comScore May 2010 DE: IVW May 2010 – AGOF 2010 Spain: #1 BE: CIM May 2010 - Belgium H1/08 H1/09 H1/10 enFemenino 2.8 Italy: #1 alFemminile 3.1 Terra Mujer 1.0 France International Donna Moderna 151.5
* Additional presence in Canada, Morocco, Poland, Switzerland, Vietnam
14 A Paradigm shift – Monetization of digital content works
Regional portals Mobile portals iPhone Apps iPad Apps
. Selected content . #1 mobile portal . Approximately . WELT-App and premium available via paid . Free for BILD mobile 240.000 WELT and “Iconist” App launched subscriptions customers BILD apps sold to . WELT-App best-selling . Free for print date publisher-App in subscribers Germany . BILD App announced for H2/10
15 B Utilizingggp marketing power to drive brand awareness for StepStone
Key facts Leading position in online job classifieds
. No. 1 jobsite in Germany1) . Online jobsites in 11 countries . Acquisition steps: . 100% in several steps for approx. €130m . Portfolio optimization: sale of software business for €110m . Net purchase price of approx. €20m
Expansion potential
. Cooperation with national newspapers . Further international potential (eg Ringier JV) . Strong growth expected in the job market
1) Based on reach; Source: Comscore
16 C Online Performance Marketing – Axel Springer shapes European market leader
Revenues (in €m) Acquired
08/2009 +15% -13%
178 02/2010 161 154 140
17 H1/09 H1/10 H1/09 H1/10
17 We have a strong track record of acquiring digital assets and fostering their growth
150 600 Investments (€m): (07A-09A) 200
2007 PF 250 EV/EBITDA multiple: 12x
Content Classifieds/ Performance portals marketplaces marketing Total
KtKey assets acquired
Revenues 31% 5% 16% 15% CAGR: (07 -09A) EBITDA CAGR: (07-09A) 15% 3% 22% 13%
18 Financial performance We have had a strong financial performance over the last few years
Revenues
3,000 2,864 2,777 2,634 2,729 2,612 1,364 2,321 2,452 2,437 2,402 1,255 +8.7% 2,000 ues (€m) nn 1,000 Reve 0 20012) 20022) 2003 2004 2005 2006 2007 2008 2009 H1/09 H1/10 Dig ita l revenues PiPrin t revenues EBITDA
470 486 500 433 434 25% 300 25% 414 +61.0% 261
1) nn E 400 334 20% 20% B nn IT 279 200 162 19.1% D 300 226 17.7% 17.3% 18.3% 18.2% 17.8% 15% 15% A 191 m 200 12.8% 10% 12.9% 10% a 11.4% 100 gr
EBITDA (€m) i EBITDA (€m) n BITDA margi 100 8.2% 5% EBITDA (€m)
EBITDA margi 5% 67%6.7% EE 0 0% 0 0% 2) 2) 2001 2002 2003 2004 2005 2006 2007 2008 2009 H1/09 H1/10 EBITDA EBITDA margin 1) Including restructuring items of €75m 2) According to HGB
20 Print margins close to record high, Print International and Digital Media continue to expand margins
(in €m) Newspapers Magazines Print International Digital Media National National
H1/10 H1/09 yoy H1/10 H1/09 yoy H1/10 H1/09 yoy H1/10 H1/09 yoy Revenues 584. 4 590. 6 -11%1.1% 243. 0 263. 3 -7.7% 154. 3 151. 6 +18%1.8% 333. 9 200. 8 +66. 3%
Circulation 300.1 307.2 -2.3% 163.2 180.8 -9.7% 93.1 92.5 +0.7% - - -
Advertising 270.5 269.4 +0.4% 69.3 72.9 -4.9% 52.8 53.9 -2.0% 250.1 145.4 +72.1%
Other 13.9 14.1 -1.3% 10.5 9.6 +9.1% 8.3 5.2 +59.3% 83.8 55.5 +51.1%
EBITDA 155.5 129.5 +20.1% 57.8 31.8 +81.8% 15.9 2.1 >100% 40.2 16.9 >100%
EBITDA 26.6% 21.9% 23.8% 12.1% 10.3% 1.4% 12.0% 8.4% margin
21 Strong cash flow generation and high dividend yield
Free cash flow (ltm1), in €m) Dividend yield2)
400 Axel Springer 5.9%
Sanoma 5.1% 292 300 Lagardere 4.6% 260 250 239 243 246 DMGT 3.5% 233 231 220 209 199 206 Telegraaf Media 2.7% 200 177 175 Schibsted 1.2%
Gruppo L'Espresso 0.0%
100 Johnston Press 0.0%
Mondadori 0.0%
RCS Media Group 0.0% 0
77 77 77 77 88 88 88 88 99 99 99 99 00 00 Trinity Mirror 00%0.0% Q1/0 Q2/0 Q3/0 Q4/0 Q1/0 Q2/0 Q3/0 Q4/0 Q1/0 Q2/0 Q3/0 Q4/0 Q1/1 Q2/1
1) Last twelve months 2) Based on actual 2009 dividend per share divided by share price as of December 31, 2009; Source: CapitalIQ
22 Looking ahead Axel Springer 2010 outlook1)
Group
Revenues Significant increase yoy Revenue Circulation < 2009 categories Advertising > 2009 EBITDA Level of 2008 achievable Other > 2009
Segments Newspapers Magazines Print Inter- Services/ Digital Media National National national2) Holding
Revenues < 2009 < 2009 > 2009 > 2009 < 2009
EBITDA > 2009 > 2009 > 2009 > 2009 < 2009
Mid-term Margin targets EBITDA ≥ 25% ≥ 20% ≥ 15%2) ≥ 20% -
1) Based on the assumption that the positive market trend of H1/10 continues for the rest of the year 2) Including joint venture with Ringier as of July 1, 2010
24 Key investment highlights
No. 1 ppygppublisher in Germany reaching 52% of the population Leading market positions and brands across Europe CEE JV creates the leading platform for growth in the region Attractive portfolio of leading online properties that scale internationally Proven digitization strategy: already 24% of revenues digital Geared for cyclical advertising recovery Strong profitability, healthy balance sheet , and high dividend
25 Investor Relations contacts
Claudia Thomé Daniel Fard-Yazdani Head of Investor Relations Deputy Head of Investor Relations Phone: +49 (0)30 2591 77421 Phone: +49 (0)30 2591 77425 Mobile: +49 (0)160 90445035 Mobile: +49 (0)151 52844459 claudia. thome@axelspringer. de daniel.fard -yazdani@axelspringer. de
Axel Springer AG Axel-Springer-Str. 65 10888 Berlin / Germany Fax: +49 (0)30 2591 77422
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