Financial Statements of Axel Springer SE for the Period Ending 18December 31, 2018

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Financial Statements of Axel Springer SE for the period ending 18December 31, 2018

Content

3 Balance Sheet

4 Income Statement

5 Notes to the Financial Statements

5 General information

5 Accounting policies

7 Notes to the balance sheet

13 Notes to the income statement

15 Other disclosures

24 Responsibility Statement

25 Independent Auditor’s Report

The combined management report of Axel Springer SE and Axel Springer Group is published in the Axel Springer Group’s 2018 annual report.

Financial Statements 2018 Axel Springer SE Balance Sheet Balance Sheet

€ millions Note 12/31/2018 12/31/2017

Fixed assets (1) 5,999.9 5,797.3

Current assets 230.2 276.4

Prepaid expenses 5.2 4.0

ASSETS 6,235.3 6,077.6

€ millions Note 12/31/2018 12/31/2017

Equity (4) 2,541.2 2,632.7

Provisions (5) 168.6 333.2

Liabilities (6) 3,497.1 3,086.7

Deferred income 28.4 25.0

EQUITY AND LIABILITIES 6,235.3 6,077.6

Financial Statements 2018 Axel Springer SE Income Statement Income Statement

€ millions Note 2018 2017

Net income 124.3 271.9

Distributable profit 226.6 215.8

4 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements Notes to the Financial Statements

General information Systematic depreciation and amortization was based on the following typical useful lives: Axel Springer SE is a European exchange-listed stock corporation (Societas Europaea) with its head office in in years Useful life Berlin, Germany. The company is registered with the commercial register of Berlin-Charlottenburg Local Court under the number HRB 154517 B.

The annual financial statements were prepared in accordance with the provisions of the German Commercial Code (Handelsgesetzbuch, “HGB”) and the German Stock Corporation Act (Aktiengesetz, “AktG”) in conjunc- tion with Article 61 of Council Regulation (EC) No 2157/2001.

The balance sheet and income statement correspond to the classification requirements of the HGB; the income statement was prepared using the total cost (nature of expense) method. The annual financial statements were Non-current financial assets are recognized at acquisi- prepared in euros (€); all amounts are reported in € mil- tion cost or at the lower fair value on the balance sheet lions unless otherwise indicated. Totals and percentages date if impairments are expected to be permanent. Since were calculated based on the non-rounded euro the financial year 2018 write-ups of non-current financial amounts and may differ from a calculation based on the assets are presented under income from non-current fi- reported amounts in millions of euros. To improve clarity nancial assets. Previously they were recognized under and legibility, individual line items were aggregated in the other operating income and expenses. The prior year’s balance sheet and income statement and then pre- figure has been adjusted by € 1.1 million accordingly. sented separately in the notes to the annual financial statements. Current assets

The annual financial statements and the combined man- Raw materials and supplies as well as merchandise are agement report of the Company and Axel Springer measured at acquisition cost or the lower fair value on Group will be published in the Federal Gazette. the balance sheet date. Inventory risks associated with the storage period or reduced utility are accounted for Accounting policies through appropriate allowances.

Fixed assets Receivables and other assets are recognized at nominal value or acquisition cost or the lower fair value on the Intangible assets and tangible fixed assets that have balance sheet date. Individual risks are accounted for been purchased are recognized at cost. Finite-lived as- through adequate allowances. sets are depreciated systematically using the straight-line method over the expected useful life. Additional write- Cash and cash equivalents include cash on hand, cash downs to the lower fair value on the balance sheet date in banks as well as checks and are recognized at nomi- are charged if the impairment is expected to be perma- nal value or the lower fair value on the balance sheet nent. date.

5 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Provisions and liabilities expenses resulting from changes in the actuarial interest rate are recognized under other operating income and Provisions for pensions and similar obligations (“pension personnel expenses respectively. provisions”) are measured on the basis of actuarial calcu- lations according to the projected unit credit method and Liabilities are recognized at the settlement amount. reflect future compensation and pension adjustments. Discounting is based on the average market interest rate Taxes of the past ten financial years on the basis of an as- sumed remaining maturity of 15 years. Deferred taxes Deferred taxes are calculated for temporary differences In order to secure and fulfill pension obligations of Axel between the tax bases of assets and liabilities and the Springer SE a so-called Contractual Trust Arrangement carrying amounts of those assets and liabilities in the exists. The legally independent registered association, separate financial statements as well as for interest and Axel Springer Pensionstreuhand e.V., Berlin, is responsi- losses carried forward. Dependent enterprises in the fis- ble for the management in trust of assets that serve only cal unit for income tax purposes and partnerships in to fulfill pension obligations and are protected from ac- which Axel Springer SE is invested are also included in cess by all other creditors (plan assets). The plan assets the calculation. Deferred tax assets and liabilities are net- are measured at fair value and netted with the pension ted; any resulting net deferred tax assets are not recog- provisions. nized.

Provisions for taxes and other provisions are recognized Other taxes based on prudent business judgment for contingent lia- Expenses for other taxes have been reported under bilities and expected losses from executory contracts in other operating expenses and are listed separately in the the necessary settlement amount, taking into account notes. expected price and cost increases. Provisions with a remaining term of more than one year are discounted at Currency translation the matching average market interest rate of the past seven financial years. As a rule, receivables and other assets, cash and cash equivalents, and liabilities denominated in foreign cur- Net interest income only includes interest from the com- rency are translated at the mean spot exchange rate pre- pounding of provisions attributable to the financial year. vailing on the balance sheet date. Income and expenses from plan assets are combined with the interest cost of pension provisions. Income and

6 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Notes to the balance sheet

(1) Fixes assets

Intangible assets Rights and Advanced Intangible € millions licenses payments assets Acquisition or production cost

12/31/2018 117.9 2.6 120.5

Accumulated amortization and impairments

12/31/2018 106.6 0.8 107.4

Carrying amounts

12/31/2018 11.3 1.8 13.0

Impairments of intangible assets in the amount of € 0.8 million (PY: € 1.3 million) were recognized in the reporting period.

7 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Property, plant and equipment Other Advanced Technical equipment, payments equipment operational and Property, Land and and and office construction plant and € millions buildings machinery equipment in progress equipment Acquisition or production cost

12/31/2018 31.0 6.5 48.5 166.0 252.0

Accumulated depreciation and impairments

12/31/2018 0.2 6.5 39.6 0.0 46.3

Carrying amounts

12/31/2018 30.8 0.0 8.8 166.0 205.7

In the prior year impairments of property, plant and Disposals of the financial year particularly related to the equipment in the amount of € 0.8 million were recog- transfer of the Axel Springer high-rise (main building) in nized. Berlin into plan assets at the beginning of 2018 (see note (5) and note (8)), advanced payments and construction in progress related to the construction of the new Axel Springer building in Berlin.

8 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Non-current financial assets Shares in Loans to Loans to Non-current affiliated affiliated Other other financial € millions companies companies investments investments Other loans assets

12/31/2018 5,756.1 330.6 36.2 0.0 0.5 6,123.4

Accumulated impairments

12/31/2018 222.3 108.0 11.9 0.0 0.0 342.2

Carrying amounts

12/31/2018 5,533.8 222.6 24.4 0.0 0.5 5,781.2

Impairments of non-current financial assets in the amount The additions largely related to additional contributions to of € 177.8 million (PY: € 37.2 million) were recognized in affiliated companies' additional paid-in capital and loans the reporting period. to affiliated companies in order to finance company ac- quisitions. Further, additions and disposals related to in- tra-Group restructuring.

(2) Inventories (3) Receivables and other assets

€ millions 12/31/2018 12/31/2017 € millions 12/31/2018 12/31/2017

Inventories 5.0 2.6

Receivables and other assets 164.0 228.6

Receivables from affiliated companies mainly included financial receivables from Group-wide cash management.

9 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

(4) Equity from the fair value measurements of plan assets in the amount of € 5.8 million (PY: € 5.8 million and from the Subscribed capital measurement of the settlement amount of pension obli- The fully paid-in capital stock of € 107.9 million com- gations in the amount of € 25.1 million (PY: € 22.7 mil- prises 107,895,311 registered no-par-value shares, each lion), see Note (5). Additionally, deferred tax liabilities rec- with a notional value of € 1.00 per share. Shares can ognized to these effects led to a calculative surplus of only be transferred with the Company's consent. deferred tax assets, which raised the restricted retained earnings in the amount of € 13.9 million (PY: € 12.8 mil- Authorized capital lion). The Executive Board is authorized, pursuant to Section 5 (4) of the Articles of Association and based on the res- (5) Provisions olution of the annual shareholders’ meeting of April 18, 2018, to increase the capital stock by April 17, 2023, € millions 12/31/2018 12/31/2017 subject to the approval of the Supervisory Board, by issuing new registered no-par value shares against contributions in cash and/or in kind (including mixed contributions in kind) on one or more occasions by a total of up Provisions 168.6 333.2 to € 10.5 million (authorized capital). In principle, the shareholders must be granted a subscription right. How- ever, the Executive Board is authorized, with the ap- Pension provisions proval of the Supervisory Board, to exclude the subscrip- Pension provisions were determined as follows: tion right of the shareholders in certain cases. The au- thorization granted by the annual shareholders’ meeting € millions 12/31/2018 12/31/2017 on April 14, 2015, to increase the share capital and to exclude subscription rights in Section 5 (4) of the Articles of Association of the company was cancelled with the Pension provisions 20.0 145.7 new authorized capital taking effect.

Additional paid-in capital As at the balance sheet date, the additional paid-in capi- Pension provisions were recognized to account for obli- tal remained unchanged at € 547.9 million. gations arising from vested pension rights and current benefits of former and active employees of Axel Springer Retained earnings SE and their surviving dependents, based on individual Retained earnings developed as follows: contracts, labor management agreements, and contributions made to company pension plans by way of salary Other Statutory retained Retained conversion. € millions reserve earnings earnings The settlement amount of the pension obligations was

determined based on an actuarial interest rate of 3.2 %

Balance at 12/31/2018 10.2 1,648.6 1,658.8 (PY: 3.7 %) p.a. as well as a pension and qualifying trend of 1.6 % (PY: 1.5 %) p.a. The life expectancy was taken from Dr. Klaus Heubeck's Mortality Tables 2018 G (PY: As of December 31, 2018, retained earnings of Mortality Tables 2005 G). € 44.8 million (PY: € 41.2 million) were subject to a profit distribution restriction. The restriction amount resulted

10 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

The settlement amount of pension obligations using an German Capital Investment Code (investment assets), interest rate based on the average market interest rate of which particularly invests in securities, money market in- the past seven financial years (2.3 %; PY: 2.8 %) struments, and derivatives. The recognized market value amounted to € 347.1 million (PY: € 323.7 million). The of the investment assets corresponded to their share difference of € 36.5 million (PY: € 32.9 million) compared value. Cash and cash equivalents were recognized at the to the amount actually recognized (€ 310.6 million; nominal amount. Insurance claims consisted of pledged € 290.8 million) was subject to a profit distribution re- reinsurance policies which were recognized at the asset striction, taking deferred taxes into account (see Note value. (4)). The following acquisition costs were incurred for plan as- Plan assets comprised the following: sets:

€ millions 12/31/2018 12/31/2017 € millions 12/31/2018 12/31/2017

Fair value of plan assets 290.7 145.0 Acquisition cost of plan assets 282.3 136.7

Land and buildings included the Axel Springer high-rise Other provisions (main building) in Berlin, which was transferred into plan Other provisions included, in particular, provisions for assets in the financial year (see note (8)). At the reporting performance-dependent compensation and share-based date the fair value amounted to € 160.7 million and was payment plans (€ 46.5 million; PY: € 74.1 million), struc- calculated by an expert based on a discounted cashflow tural measures (€ 15.6 million; PY: € 18.0 million), com- method using a discount rate of 4.5 % and a capitaliza- mitments based on partial retirement agreements tion interest rate of 3.7 %. (€ 11.9 million; PY: € 12.3 million) and outstanding sup- plier invoices ((€ 17.9 million; PY: € 20.4 million). Non-current securities exclusively comprised shares in a special alternative investment fund (AIF) as defined in the

11 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

(6) Liabilities

Remaining term Remaining term longer longer than 1 longer than 1 longer up to 1 year, up to than 5 up to 1 year, up to than 5 € millions 12/31/2018 year 5 years years 12/31/2017 year 5 years years

Liabilities 3,497.1 2,339.4 763.8 394.0 3,086.7 1,888.7 732.0 466.0

Liabilities to affiliated companies included mainly financial with a remaining carrying amount of € 7.7 million to the liabilities arising from Group-wide cash management. Axel Springer Pensionstreuhand e.V., Berlin (“association”), for recognition as plan assets. The plan assets, Other liabilities included tax liabilities of € 16.8 million measured at fair value, amounted to € 156.0 million, thus (PY: € 7.2 million). the profit before tax resulting from the transfer amounted to € 148.3 million (see note (12)). The association paid (7) Contingent liabilities an amount of € 15.6 million in return. Therefore, plan assets increased by the amount of € 140.4 million. For the As of the balance sheet date, the following contingent li- continued use of the building a lease contract over a pe- abilities existed: riod of 30 years was concluded between Axel Springer SE and the association. In the reporting year lease ex- € millions 12/31/2018 12/31/2017 penses amounted to € 5.9 million. Lease payments will be adjusted in accordance with the consumer price index every two years. Based on the circumstances at the reporting date, the estimated lease expenses over the contractual term will amount to € 170.7 million. Contingent liabilities 58.8 51.6

At the end of financial year 2017 the Axel-Springer-Pas- The claims from the cited contingent liabilities are not ex- sage in Berlin was sold at a purchase price of € 330.0 pected to be asserted based on the beneficiaries' previ- million. Taking into account the remaining carrying ous payment practices and taking into account the amount at the disposal date (€ 48.2 million) the profit be- knowledge acquired leading up to the preparation date. fore tax resulting from the disposal amounted to € 281.8 million. A lease contract was concluded with the pur- (8) Transactions not included on the balance sheet chaser of the property. Started on January 1, 2018, this contract includes the lease back of the complete Axel- At the beginning of January 2018, the Axel Springer Springer-Passage for a period of three years and a lease high-rise (main building) in Berlin was transferred in trust back of sub-areas for further periods of five and seven

12 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

years. In the reporting year, lease expenses amounted to € 6.6 million), from receivables written down in previous € 10.9 million. Lease payments will partly be adjusted in years (€ 14.9 million; PY: € 9.3 million) was recognized accordance with the consumer price index every two under other operating income. In the previous year, addi- years. Based on the circumstances at the reporting date, tional income from compensation payments amounting to estimated lease expenses over the contractual term will € 7.2 million was included. amount to € 41.1 million. In the financial year’s income from the disposal of fixed (9) Other financial commitments assets an amount of € 148.3 million (PY: € 281.8 million) was exceptional and resulted from the transfer of the Other financial commitments as of the reporting date Axel Springer high-rise (main-building) in Berlin, in the amounted to € 247.4 million (PY: € 241.9 million), previous year from the sale of the Axel-Springer-Passage thereof € 33.6 million (PY: € 0.0 million) to affiliated com- in Berlin. panies. This resulted predominantly from the construction of the new building at the Berlin location. Currency translation in the reporting period resulted in gains of € 1.9 million (PY: € 1.1 million) and losses of (10) Deferred taxes € 3.0 million (PY: € 0.9 million).

Deferred taxes were calculated based on a combined in- Other operating expenses contained expenses from come tax rate of 31.0 %, remaining unchanged from last other taxes in the amount of € 3.2 million (PY: € 3.9 mil- year. As in the previous year, the calculation of taxes as lion). of December 31, 2018, resulted in net deferred tax assets. This was mainly the result of the lower measure- (13) Purchased goods and services ment of pension obligations for tax purposes. € millions 2018 2017

Notes to the income statement Purchased goods and services 221.6 199.9 (11) Revenues

€ millions 2018 20171) (14) Personnel expenses

€ millions 2018 2017

Revenues 851.1 823.2

1) Prior-year figures adjusted according to restructuring of revenues.

Revenues were realized almost entirely in Germany. Personnel expenses 210.0 240.4

(12) Other operating income and expenses

Income unrelated to the accounting period from the disposal of fixed assets (€ 149.6 million; PY: € 282.4 million), from the reversal of provisions (€ 16.1 million; PY:

13 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

The average number of employees during the year was (16) Net interest income as follows: € millions 2018 2017 2018 2017

Total employees 1,341 1,427

(15) Income from non-current financial assets Net interest income – 22.3 – 33.2

€ millions 2018 2017 Interest expenses from the compounding of pension provisions (€ 4.6 million; PY: € 8.6 million) included income from plan assets in the amount of € 6.0 million (PY: Profit and loss transfer 211.3 231.0 € 2.4 million).

(17) Income taxes

In the previous year income taxes included expenses from the reversal of a tax reserve in the amount of € 33.4 million.

Net income from non-current financial assets 68.2 216.8

14 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Other disclosures

(18) Supervisory Board

Dr. Giuseppe Vita Lothar Lanz Chairman of the Supervisory Board of Axel Springer SE Member of various Supervisory Boards Seats on comparable boards in Germany and abroad: Seats on other mandatory supervisory boards in Germany: ▪ Bauwert AG (Vice Chairman) UniCredit S.p.A., Italy (Chairman of the Board of Directors, until April 2018) ▪ Dermapharm Holding SE Dr. h. c. Friede Springer ▪ Home 24 AG (Chairman) Vice Chairwoman of the Supervisory Board of Axel Springer SE ▪ TAG Immobilien AG (Vice Chairman) ▪ Zalando SE (Chairman) William E. Ford (until April 2018) Seats on comparable boards in Germany and abroad: CEO General Atlantic ▪ Kinnevik AB, Sweden (Board of Directors, until May 2018) Seats on comparable boards in Germany and abroad: ▪ Authentic Brands Group L.L.C., USA (Board of Directors, until April 2018) Dr. Nicola Leibinger-Kammüller ▪ Black Rock Inc., USA (Board of Directors, since March 2018) President and Chairwoman of the Managing Board of TRUMPF ▪ IHS Markit Ltd., United Kingdom (Board of Directors) GmbH + Co. KG ▪ Oak Hill Advisors, L.P., USA (Partnership Committee, until February 2018) Seats on other mandatory supervisory boards in Germany: ▪ TBG AG, Switzerland (Board of Directors, until April 2018) ▪ Siemens AG ▪ Tory Burch LLC, USA (Board of Directors) ▪ Voith GmbH & Co. KGaA (until March 2018) Seats on comparable boards in Germany and abroad: Oliver Heine ▪ Berthold Leibinger Beteiligungen GmbH, Germany (Board of Directors) Attorney at law and partner in the law firm Heine & Partner ▪ TRUMPF Schweiz AG, Switzerland (Chairwoman of the Board of Seats on comparable boards in Germany and abroad: Directors) ▪ YooApplications AG, Switzerland (Board of Directors, until October 2018) Prof. Dr.-Ing. Wolfgang Reitzle Dr. Alexander Karp (since April 2018) Entrepreneur CEO Palantir Technologies Inc. Seats on other mandatory supervisory boards in Germany: Seats on comparable boards in Germany and abroad: ▪ Continental AG (Chairman) ▪ The Economist Newspaper Limited, United Kingdom (Board of Directors) ▪ Linde AG (Chairman) ▪ Medical Park AG (Chairman) Rudolf Knepper (until April 2018) ▪ Willy Bogner GmbH & Co. KGaA (Chairman, since January 2018) Entrepreneur Seats on comparable boards in Germany and abroad: ▪ Ivoclar Vivadent AG, Liechtenstein (Board of Directors) Iris Knobloch (since April 2018) ▪ Linde plc, United Kingdom (Chairman of the Board of Directors, since Président Warner Bros. Entertainment France S.A.S. October 2018) Seats on comparable boards in Germany and abroad: ▪ Accor S.A., France (Vice Chairwoman of the Board of Directors and Martin Varsavsky Senior Independent Director) Entrepreneur ▪ Central European Media Enterprises Ltd., Bermuda (Board of Directors, until March 2018) ▪ Lazard Ltd., Bermuda (Board of Directors, since April 2018)

15 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

(19) Executive Board

Dr. Mathias Döpfner Julian Deutz Chairman and Chief Executive Officer, Journalist Chief Financial Officer, Master’s Degree in Business Administration Seats on comparable boards in Germany and abroad: Seats on mandatory supervisory boards in Germany: ▪ Axel Springer Schweiz AG, Switzerland (Chairman of the Board of ▪ AWIN AG Directors) Seats on comparable boards in Germany and abroad: ▪ eMarketer Inc., USA (Chairman of the Board of Directors) ▪ Axel Springer Beteiligungen Schweiz AG, Switzerland (Board of Directors) ▪ Insider Inc., USA (Chairman of the Board of Directors) ▪ Axel Springer Digital Classifieds France SAS, France (Supervisory Board) ▪ Netflix Inc., USA (Board of Directors, since September 2018) ▪ Axel Springer International AG, Switzerland (Chairman of the Board of ▪ Ringier Axel Springer Schweiz AG, Switzerland (Board of Directors) Directors) ▪ Time Warner Inc., USA (Board of Directors, until June 2018) ▪ Axel Springer Schweiz AG, Switzerland (Board of Directors) ▪ Vodafone Group Plc., United Kingdom (Board of Directors, until ▪ CompuTel Telefonservice AG, Switzerland (Chairman of the Board of July 2018) Directors) ▪ Warner Music Group Corp., USA (Board of Directors) ▪ Do∕an TV Holding A.S., Turkey (Supervisory Board, until May 2018) ▪ Jean Frey AG, Switzerland (Chairman of the Board of Directors) Jan Bayer ▪ Ringier Axel Springer Media AG, Switzerland (Board of Directors) President News Media International (until December 31, 2018 ▪ SeLoger.com SAS, France (Supervisory Board) President News Media), Media scholar ▪ StepStone GmbH, Germany (Supervisory Board) Seats on comparable boards in Germany and abroad: ▪ eMarketer Inc., USA (Board of Directors) Dr. Andreas Wiele ▪ Insider Inc., USA (Board of Directors) President Classifieds Media (until March 1, 2018 President ▪ Media Impact GmbH & Co. KG, Germany (Chairman of the Advisory Classifieds und Marketing Media), Lawyer Board) Seats on mandatory supervisory boards in Germany: ▪ ONET S.A., Poland (Supervisory Board) ▪ AWIN AG (Chairman) ▪ Ringier Axel Springer Media AG, Switzerland (Vice chairman of the ▪ Immowelt AG (Chairman) Board of Directors) ▪ Immowelt Holding AG (Chairman) ▪ Ringier Axel Springer Schweiz AG, Switzerland (Chairman of the Board of Directors) Seats on comparable boards in Germany and abroad: @Leisure Holding B.V., Netherlands (Chairman of the Board of Directors) ▪ Visoon Video Impact Management GmbH, Germany (Supervisory ▪ Board, since January 2019) ▪ Aufeminin S.A., France (Board of Directors, until April 2018) ▪ Axel Springer Digital Classifieds France SAS, France (Chairman of the Dr. Stephanie Caspar Supervisory Board) President News Media National & Technology (From March 1, ▪ Car & Boat Media SAS, France (Chairman of the Supervisory Board) 2018 until December 31, 2018 President Technology and Data), ▪ Coral-Tell Ltd., Israel (Chairman of the Board of Directors) Master’s Degree in Business Administration ▪ Elvaston Capital Management GmbH, Germany (Advisory Board) Seats on comparable boards in Germany and abroad: ▪ Homeday GmbH, Germany (Supervisory Board, since December 2018) ▪ Media Impact GmbH & Co. KG, Germany (Supervisory Board) ▪ Immoweb SA, Belgium (Chairman of the Board of Directors) ▪ Visoon Video Impact Management GmbH, Germany (Supervisory ▪ Insider Inc., USA (Board of Directors) Board, until December 2018) ▪ Magnolia International AG, Switzerland (Chairman of the Board of Directors) ▪ meinestadt.de GmbH, Germany (Chairman of the Supervisory Board, until February 2018) ▪ Project A Ventures GmbH & Co. KG, Germany (Advisory Board, since March 2018) ▪ Purplebricks Group plc, United Kingdom (Board of Directors, since April 2018) ▪ SeLoger.com SAS, France (Chairman of the Supervisory Board) ▪ StepStone GmbH, Germany (Chairman of the Supervisory Board)

16 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

(20) Compensation of the Supervisory Board and rights at the grant date was determined using a Black- the Executive Board Scholes model to be € 1.0 million.

The remuneration of the members of the Supervisory In the previous year, the members of the Executive Board in the reporting period amounted to € 3.0 million Board were granted additionally a bonus of € 12.0 mil- (PY: € 3.0 million). lion by the Supervisory Board as part of a voluntary one- time special payment made by global growth investor The remuneration of the members of the Executive General Atlantic to Axel Springer in recognition of the Board of Axel Springer SE amounted to € 21.4 million outstanding success of the joint investment in the online plus a long-term stock-based compensation component classifieds business which did not result in expense for of € 1.0 million (PY: € 19.7 million, without the award). In the comp-any. In the previous year, the Executive Board the financial year 225,000 stock appreciation rights were thus received € 31.7 million, including the award. issued to the member of the Executive Board, who does not participate in the Long-Term Incentive Plan granted The remuneration of former members of the Executive in 2016. The stock appreciation rights bound by various Board and their surviving dependents in the reporting conditions have a term of six years and can be exercised period amounted to € 2.5 million (PY: € 2.5 million); pro- first in four years. The fair value of the stock appreciation visions in the amount of € 27.0 million (PY: € 26.3 million) were recognized for pension obligations.

(21) List of investments

Significant investments as of December 31, 2018 are listed below.

Share- Net in- Share- Net in- holding Via Equity come holding Via Equity come No. Company in % No. € million1) € million1) No. Company in % No. € million1) € million1)

@Leisure Holding B.V., Rotterdam, 16 AWIN SAS, Paris, France 100.0 13 – 1.3 – 0.5 1 51.0 25 7.5 1.0 Netherlands 6) AWIN VEICULAÇÃO DE PUBLICIDADE NA 0.0 73 2.2 1.1 2 AanZee VillaXL B.V., Bergen, Netherlands 100.0 1 8.4 0.8 17 INTERNET LTDA., São Paulo, Brazil 100.0 13 2.2 1.1 3 AC3 SAS, Guipavas, France 40.0 23 16.9 0.8 3) 18 Axel Springer All Media GmbH, Berlin 100.0 3.4 0.0 2) Admiral Strand Feriehuse ApS, Nørre 4 100.0 69 2.2 0.7 19 Axel Springer Asia GmbH, Hamburg 100.0 36 61.0 0.0 Nebel, Denmark 20 Axel Springer Audio GmbH, Berlin 100.0 0.0 0.0 2) 5 affilinet Limited, London, United Kingdom 100.0 13 1.8 0.4 21 Axel Springer Auto-Verlag GmbH, Hamburg 100.0 3.0 0.0 2) 6 Airbnb, Inc., San Francisco, USA 0.1 - - 5) Axel Springer Beteiligungen Schweiz AG, ANTENNE BAYERN GmbH & Co. KG, 22 100.0 44 6.7 5.5 7 16.0 - - 5) Zurich, Switzerland Ismaning Axel Springer Digital Classifieds France 8 APM Print d.o.o., Belgrade, Serbia 100.0 112 6.2 1.0 23 100.0 25 709.6 71.6 SAS, Paris, France AS TV-Produktions- und Vertriebsges. 9 100.0 3.2 0.3 Axel Springer Digital Classifieds GmbH, mbH, Hamburg 24 100.0 26 1,006.2 0.0 2) Berlin 10 AS TYFP Media GmbH & Co. KG, Berlin 50.0 23.3 0.0 Axel Springer Digital Classifieds Holding 25 100.0 24 1,050.4 0.0 2) 11 AS-NYOMDA Kft, Kecskemét, Hungary 100.0 113 1.9 1.0 GmbH, Berlin Autobazar.EU portál s.r.o., Nové Mesto 26 Axel Springer Digital GmbH, Berlin 100.0 3,107.4 0.0 2) 12 100.0 138 4.4 – 0.3 nad Váhom, Slovakia 27 Axel Springer Digital Ventures GmbH, Berlin 100.0 26 691.2 0.0 2) 13 AWIN AG, Berlin 80.0 26 184.9 7.1 Axel Springer Digital Ventures US GmbH, 28 100.0 27 4.5 0.0 14 AWIN Inc., Wilmington, USA 100.0 15 – 46.5 – 4.4 Berlin 15 AWIN Ltd., London, United Kingdom 100.0 13 85.2 5.9

17 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Share- Net in- Share- Net in- holding Via Equity come holding Via Equity come No. Company in % No. € million1) € million1) No. Company in % No. € million1) € million1) Axel Springer Digital Ventures US II GmbH, Concept Multimédia SAS, Aix-en-Provence, 29 100.0 27 12.8 0.0 66 100.0 23 6.4 2.6 Berlin France Axel Springer Druckhaus Spandau GmbH 67 Coral-Tell Ltd., Tel Aviv, Israel 100.0 25 25.8 15.1 30 100.0 2.0 – 5.7 & Co. KG, Berlin 68 CV Keskus OÜ, Tallinn, Estonia 100.0 114 2.6 1.7 31 Axel Springer España S.A., Madrid, Spain 100.0 3.4 – 0.3 69 DanCenter A/S, Copenhagen, Denmark 100.0 1 31.5 1.3 32 Axel Springer France S.A.S., Paris, France 100.0 5.9 3.0 Dreizehnte "Media" Vermögensverwal- 70 100.0 – 3.2 0.0 Axel Springer Ideas Engineering GmbH, tungsges. mbH, Hamburg 33 100.0 49 0.9 0.0 2) Berlin Editions Mondadori Axel Springer (EMAS) 71 50.0 32 5.8 5.7 34 Axel Springer ideAS Ventures GmbH, Berlin 100.0 49 4.8 0.0 2) S.E.N.C., Montrouge Cedex, France 35 Axel Springer International GmbH, Berlin 100.0 1,912.3 0.0 2) 72 eMarketer Inc., New York, USA 95.1 27 18.2 10.3 Axel Springer International Holding GmbH, 73 eprofessional GmbH, Hamburg 100.0 13 2.9 0.2 36 100.0 35 1,953.6 0.0 2) Berlin Finanzen Corporate Publishing GmbH, 74 100.0 – 11.3 0.0 Axel Springer International Limited, London, Berlin 37 100.0 36 282.2 – 0.1 United Kingdom 75 finanzen.net GmbH, Karlsruhe 75.0 27 5.4 10.1 Axel Springer Kundenservice GmbH, 38 100.0 0.5 0.0 2) Fünfundachtzigste "Media" Vermögensver- Hamburg 76 100.0 25 0.0 0.0 waltungsges. mbH, Berlin Axel Springer Mediahouse Berlin GmbH, 39 100.0 1.1 0.0 2) Funk & Fernsehen Nordwestdeutschland Berlin 77 7.6 20 0.2 0.5 GmbH & Co. KG, Hannover 40 Axel Springer Norway AS, Oslo, Norway 100.0 37 0.3 1.6 78 Garantie System SAS, Paris, France 100.0 61 6.6 0.7 Axel Springer Offsetdruckerei Ahrensburg 41 100.0 24.9 – 0.5 GmbH & Co. KG, Ahrensburg 79 Good & Co Labs, Inc., San Francisco, USA 100.0 127 – 0.6 – 2.3

Axel Springer Offsetdruckerei Kettwig 80 Group Nine Media, Inc., New York, USA 13.4 27 67.9 – 21.2 42 100.0 6.3 – 2.8 GmbH & Co. KG, Essen 81 ICI Formations SAS, Paris, France 100.0 126 1.4 0.8

Axel Springer Plug and Play Accelerator 43 50.0 27 3.8 – 0.4 82 ictjob SPRL, Waterloo, Belgium 1.0 128 5.2 1.6 GmbH, Berlin 82 ictjob SPRL, Waterloo, Belgium 99.0 124 5.2 1.6 Axel Springer Schweiz AG, Zurich, 44 100.0 37 13.2 – 0.1 Switzerland 83 Idealo Internet GmbH, Berlin 74.9 26 38.9 21.4 Axel Springer Services & Immobilien 45 100.0 2.2 0.0 2) 84 Immoweb SA, Brussels, Belgium 94.5 23 27.7 16.6 GmbH, Berlin 85 Immowelt AG, Nuremberg 100.0 87 20.8 13.6 Axel Springer Sport Verlag GmbH, 2) 46 100.0 1.3 0.0 Hamburg 86 Immowelt Hamburg GmbH, Hamburg 100.0 87 36.8 12.6 47 Axel Springer Syndication GmbH, Berlin 100.0 49 0.5 0.0 2) 87 Immowelt Holding AG, Nuremberg 55.0 25 160.7 11.4 Axel Springer TV Productions GmbH, 88 Insider Inc., New York City, USA 100.0 27 14.9 – 6.8 48 100.0 3.2 0.0 2) Hamburg 89 Jobs LU Ltd, Dublin, Ireland 100.0 121 1.0 0.9 "Axel Springer Verlag" Beteiligungsgesell- 49 100.0 170.9 0.0 2) 90 Jobs.ie Ltd, Dublin, Ireland 100.0 121 9.8 3.9 schaft mbH, Berlin Jobsite UK (Worldwide) Limited, London, 50 B.Z. Ullstein GmbH, Berlin 100.0 49 15.4 0.0 2) 91 100.0 131 9.7 3.6 United Kingdom 51 Belles Demeures S.A.S., Paris, France 100.0 105 5.9 1.5 92 Lakestar II LP, Guernsey, Guernsey 5.7 27 170.2 – 14.3 Belvilla Nederland B.V., Den Haag, 52 100.0 1 2.3 – 0.3 Lamudi Global S.à.r.l., Senningerberg, Netherlands 93 10.0 76 47.8 0.3 Luxembourg Belvilla Services B.V., Eindhoven, 53 100.0 1 11.3 6.1 Lerer Hippeau Ventures IV, LP, New York, Netherlands 94 1.6 27 101.7 – 1.1 USA Bilanz Deutschland Wirtschaftsmagazin 54 100.0 49 0.0 0.0 2) Lerer Hippeau Ventures V, LP, New York, GmbH, Hamburg 95 1.8 27 87.8 – 2.3 USA 55 BILD GmbH, Berlin 100.0 70.8 0.0 2) 96 MAZ & More TV-Produktion GmbH, Berlin 100.0 149 0.0 0.0 2) 56 Blikk Kft., Budapest, Hungary 100.0 114 3.2 2.9 97 Media Impact GmbH & Co. KG, Berlin 74.9 18 – 4.6 – 13.3 57 Bonial Holding GmbH, Berlin 72.5 26 – 36.2 – 40.7 98 meinestadt.de GmbH, Cologne 100.0 124 10.2 0.0 2) 58 Bonial International GmbH, Berlin 100.0 57 18.6 0.0 2) 99 NeoLotto Limited, Ta' Xbiex, Malta 13.0 – 4.3 – 7.1 59 Bonial SAS, Paris, France 98.0 58 – 3.8 – 0.9 100 Newspaper Impact GmbH, Hamburg 100.0 2.7 0.0 2) 60 Bonial Ventures GmbH, Berlin 74.9 – 9.8 – 0.9 101 Ozy Media, Inc., Mountain View CA, USA 16.8 27 -8.1 -7.8 61 Car&Boat Media SAS, Paris, France 61.0 25 74.9 13.7 PACE Paparazzi Catering & Event GmbH, 102 100.0 0.3 0.0 2) 61 Car&Boat Media SAS, Paris, France 39.0 23 74.9 13.7 Berlin CaribbeanJobs Ltd, George Town, 103 Pnet (Pty) Ltd, Johannesburg, South Africa 100.0 121 5.7 – 0.1 62 100.0 121 1.6 0.3 Cayman Islands 104 Praxis SARL, Chambery, France 100.0 105 1.4 0.8 63 Commerz-Film GmbH, Berlin 100.0 36 328.9 6.8 105 PressImmo On Line S.A.S., Paris, France 100.0 122 220.6 46.8 64 comparado GmbH, Lüneburg 100.0 83 1.4 1.2 106 profession.hu Kft, Budapest, Hungary 100.0 114 10.7 9.2 65 COMPUTER BILD Digital GmbH, Hamburg 100.0 0.6 0.0 2) 107 Project A Ventures GmbH & Co. KG, Berlin 26.3 26 51.7 9.8

18 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Share- Net in- Share- Net in- holding Via Equity come holding Via Equity come No. Company in % No. € million1) € million1) No. Company in % No. € million1) € million1) Purplebricks Group plc, Solihull, United Tecoloco International Inc, Panama City, 108 12.5 76 90.8 3.5 132 100.0 121 – 3.6 – 0.6 Kingdom Panama

109 QWANT SAS, Paris, France 18.1 27 9.9 – 8.6 Topreality.sk s.r.o., Nové Mesto nad 133 100.0 138 4.1 – 0.6 Váhom, Slovakia 110 Radio Hamburg GmbH & Co. KG, Hamburg 35.0 20 4.5 7.5 Totaljobs Group Limited, London, United RADIO/TELE FFH GmbH & Co. Betriebs- 134 100.0 131 10.1 1.7 111 15.0 20 - - 5) Kingdom KG, Bad Vilbel 135 Transfermarkt GmbH & Co. KG, Hamburg 51.0 55 1.7 1.4 Ringier Axel Springer d.o.o., Belgrade, 112 100.0 114 13.7 2.5 Serbia 136 Traum-Ferienwohnungen GmbH, Bremen 50.0 53 6.5 4.1 Ringier Axel Springer Magyarország Kft, 137 Ullstein GmbH, Berlin 100.0 49 3.7 0.0 2) 113 100.0 114 7.3 2.6 Budapest, Hungary 138 United Classifieds s.r.o., Bratislava, Slovakia 60.0 117 3.8 – 0.7 Ringier Axel Springer Media AG, Zurich, 114 50.0 37 530.2 7.0 Universum Communications Holding Inc., Switzerland 139 100.0 143 0.3 0.0 New York, USA Ringier Axel Springer Polska Sp. z o. o., 115 100.0 114 287.5 2.0 Universum Communications Inc., New Warsaw, Poland 140 100.0 139 – 1.4 1.2 York, USA Ringier Axel Springer Schweiz AG, Zurich, 116 50.0 22 10.6 – 10.9 Universum Communications Ltd, London, Switzerland 141 100.0 143 1.6 1.2 United Kingdom Ringier Axel Springer SK, a.s., Bratislava, 117 87.5 114 - - 4) Universum Communications Pte Ltd, Slovakia 142 100.0 143 – 2.3 – 0.2 Singapore, Singapore 118 Room 49 GmbH, Berlin 100.0 34 1.4 0.0 2) Universum Communications Sweden AB, 143 100.0 127 1.2 – 1.5 119 Saknai Net Ltd., Tel Aviv, Israel 100.0 67 3.5 3.5 Stockholm, Sweden

120 Sales Impact GmbH, Hamburg 100.0 0.5 0.0 2) 144 upday GmbH & Co. KG, Berlin 100.0 – 0.8 – 14.1

121 Saongroup Limited, Dublin, Ireland 100.0 131 10.4 5.2 145 Verimi GmbH, Frankfurt am Main 6.5 35.7 – 4.5

122 SeLoger.com SAS, Paris, France 100.0 23 289.4 – 0.1 146 Vertical Media GmbH, Berlin 88.0 149 – 2.7 – 1.1

123 ShareASale.com Inc., Chicago, USA 100.0 14 – 5.6 – 6.4 147 Visual Meta GmbH, Berlin 96.0 83 5.1 3.9 StepStone Continental Europe GmbH, 148 WEBIMM SAS, Paris, France 65.0 122 3.1 1.4 124 100.0 127 248.0 0.0 2) Berlin 149 WeltN24 GmbH, Berlin 100.0 36.3 0.0 2) 125 StepStone Deutschland GmbH, Düsseldorf 100.0 124 27.7 0.0 2) 150 YOURCAREERGROUP GmbH, Düsseldorf 100.0 124 2.1 0.0 2) 126 StepStone France SAS, Paris, France 100.0 124 3.3 – 0.5 YOURCAREERGROUP Österreich GmbH, 151 100.0 124 1.1 0.1 127 StepStone GmbH, Berlin 100.0 25 453.6 0.0 2) Vienna, Austria

128 StepStone NV, Brussels, Belgium 0.0 129 0.7 – 0.1 6) 1) Unless otherwise stated, equity and net income according to local statutory financial state-

128 StepStone NV, Brussels, Belgium 100.0 124 0.7 – 0.1 ments of the financial year 2017. Amounts in foreign currency translated at the exchange rate StepStone Österreich GmbH, Vienna, prevailing on December 31, 2018. 129 100.0 125 0.3 – 0.5 Austria 2) Control and profit and loss transfer agreement or profit transfer agreement. 3) StepStone Services Sp. z o.o., Warsaw, Equity and net income for the business year ended as at September 30, 2017. 130 100.0 124 1.6 0.4 Poland 4) The company was newly founded. Financial statements have not been available yet. 5) Equity and net income are not mentioned as the financial statements are not published. StepStone UK Holding Limited, London, 131 100.0 127 288.5 16.1 6) United Kingdom Shareholding less than 0.0 %.

(22) Declaration of conformity with the German (23) Duty of disclosure concerning investments Corporate Governance Code The number of shares with voting rights, instruments, In accordance with section 161 of the German Stock and the share of voting rights respectively cited in the Corporation Act (Aktiengesetz – “AktG”), Axel Springer notifications below each relate to the date specified in SE has made the declaration of conformity with the Ger- the relevant notification. In particular, it must be pointed man Corporate Governance Code issued by the Execu- out that a 1:3 stock split was carried out effective tive Board and Supervisory Board permanently available May 31, 2011, which tripled the number of shares, and to the shareholders on the Company's website at that due to a capital increase the Company's subscribed www.axelspringer.de → Investor Relations → Corporate capital increased from € 98,940,000 to € 107,895,311 Governance. The declaration of conformity is also pub- effective December 9, 2015; since that time, it comprises lished in the Company's 2018 annual report. 107,895,311 registered no-par-value shares (previously 98,940,000).

19 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

The following information represent the last notification of (new version). The following were specified as the full a person subject to the notification to the company, if chain of subsidiaries, beginning with the ultimate control- not, for reasons of transparency, the presentation of fur- ling party: Dr. h. c. Friede Springer (44.48 % of the voting ther notifications is required. rights), Friede Springer Verwaltungs GmbH, Friede

Springer GmbH & Co. KG (6.42 % of the voting rights), Axel Sven Springer, date of birth: January 13, 1966, noti- AS Publizistik GmbH, Axel Springer Gesellschaft für Pub- fied us (via a notification dated November 29, 2018), lizistik GmbH & Co. KG (37.54 % of the voting rights), Dr. that, due to the acquisition/disposal of shares with voting h. c. Friede Springer (44.48 % of the voting rights), Friede rights, his share of voting rights in Axel Springer SE, Springer GmbH & Co. KG (6.42 % of the voting rights), Axel-Springer-Straße 65, 10888 Berlin, as of November Axel Springer Gesellschaft für Publizistik GmbH & Co.

26, 2018 amounts to 7.36 %. 7 % (corresponding to (37.54 % of the voting rights); Dr. h. c. Friede Springer

7,548,029 of a total of 107,895,311 voting rights in Axel (44.48 % of the voting rights), Friede Springer GmbH &

Springer SE) relate to the security identification number Co. KG (6.42 % of the voting rights), AS Publizistik

ISIN DE0005501357, 0.37 % (corresponding to 396,738 GmbH, Axel Springer Gesellschaft für Publizistik GmbH & of a total of 107,895,311 voting rights in Axel Springer Co. KG (37.54 % of the voting rights). SE) relate to the security identification number ISIN DE0005754238, whereby these voting rights correspond EuroPacific Growth Fund, Boston, Massachusetts, USA, to voting rights that are directly attributable to him in ac- notified us (via a notification dated March 7, 2018) that, cordance with Section 33 of the German Securities Trad- due to the acquisition/disposal of shares with voting ing Act (WpHG, new version; the numeration has rights, its share of voting rights in Axel Springer SE, Axel- changed effectively as of January 3, 2018). Springer-Straße 65, 10888 Berlin, as of March 2, 2018

amounts to 3.07 % (corresponding to 3,309,617 of a to- Dr. h .c. Friede Springer, date of birth: August 15, 1942 tal of 107,895,311 voting rights in Axel Springer SE),

(name of shareholders holding directly 3 % or more vot- whereby these voting rights are attributable to it in ac- ing rights, if different from the person subject to the noti- cordance with Section 34 of the WpHG (new version). fication obligation: Axel Springer Gesellschaft für Publizis- tik GmbH & Co. KG), notified us (via a notification dated The Capital Group Companies, Inc., California, Los An- November 29, 2018), that, due to the acquisition/dis- geles, USA, notified us (via a notification dated January posal of shares with voting rights, his share of voting 25, 2018) that, due to the acquisition/disposal of shares rights in Axel Springer SE, Axel-Springer-Straße 65, with voting rights, its share of voting rights in Axel 10888 Berlin, as of November 26, 2018 amounts to Springer SE, Axel-Springer-Straße 65, 10888 Berlin, as

44.48 % (previous notification: 58.70 %), whereby with of January 22, 2018 amounts to 5.04 % (corresponding regard to the security identification number ISIN DE to 5,439,476 of a total of 107,895,311 voting rights in

DE0005501357 5.10 % (corresponding to 5,502,450 of Axel Springer SE, previous notification: 3.36 %), whereby a total of 107,895,311 voting rights in Axel Springer SE) these voting rights are attributable to it in accordance are held directly by her in accordance with section 33 with Section 34 of the WpHG (new version). The follow-

WpHG (new version) and 1.83 % (corresponding ing were specified as the full chain of subsidiaries, begin- 1,978,800 of a total of 107,895,311 voting rights in Axel ning with the ultimate controlling party: The Capital Springer SE) corresponds to voting rights that are at- Group Companies, Inc., Capital Research and Manage- tributable to her in accordance with Section 34 WpHG ment Company (voting rights: 5.04 %). (new version), and with regard to the security identification number ISIN DE0005754238 37.54 % (correspond- Dr. Mathias Döpfner, date of birth: January 15, 1963, ing to 40,505,262 of a total of 107,895,311 voting rights (name of shareholders holding directly 3 % or more vot- in Axel Springer SE) corresponds to voting rights that are ing rights, if different from the person subject to the noti- attributable to her in accordance with Section 34 WpHG fication obligation: Axel Springer Gesellschaft für

20 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

Publizistik GmbH & Co., Dr. h.c. Friede Springer) notified Fidelity Investment Trust, Boston, Massachusetts, USA, us (via a notification dated December 18, 2017, cor- notified us (via a notification dated July 13, 2017) that, rected on December 22, 2017) that, due to the acquisi- due to the acquisition/disposal of shares with voting tion/disposal of shares with voting rights, his share of rights, its share of voting rights in Axel Springer SE, Axel- voting rights in Axel Springer SE, Axel-Springer-Straße Springer-Straße 65, 10888 Berlin, as of July 10, 2017

65, 10888 Berlin, as of December 13, 2017 amounts to amounts to 2.99 % (previous notification: 3.06 %),

49.93 % (previous notification: 50.19 %), whereby with whereby 2.99 % (corresponding to 3,221,075 of a total regard to the security identification number ISIN of 107,895,311 voting rights in Axel Springer SE, previ-

DE0005501357 1.95 % (corresponding to 2,105,145 of ous notification: 3.03 %) are held directly by it in accord- a total of 107,895,311 voting rights in Axel Springer SE) ance with Section 21 WpHG; 0.03 % (corresponding to are held directly by him in accordance with section 21 32,862 of a total of 107,895,311 voting rights in Axel WpHG (previous version, the numeration changed effec- Springer SE) which were attributable to instruments in tively as of January 3, 2018) and 10.07 % (corresponding terms of Section 25 (1) No 1 WpHG according to the 10,865,514 of a total of 107,895,311 voting rights in Axel previous notification are no longer notified. The company Springer SE) corresponds to voting rights that are at- subject to notification is not controlled and does not con- tributable to him in accordance with Section 22 WpHG, trol any other company holding voting rights in Axel and with regard to the security identification number ISIN Springer SE.

DE0005754238 37.91 % (corresponding to 40,902,000 of a total of 107,895,311 voting rights in Axel Springer Axel Springer Gesellschaft für Publizistik GmbH & Co., SE) corresponds to voting rights that are attributable to Berlin, Germany, notified us (via a notification dated De- him in accordance with Section 22 WpHG. The following cember 17, 2015, corrected on January 15, 2016) that, were specified as the full chain of subsidiaries, beginning due to a change in the total number of voting rights, its with the ultimate controlling party: Dr. Mathias Döpfner total share of voting rights in Axel Springer SE, Axel-

(49.08 % of the voting rights) and Brilliant 310. GmbH. Springer-Straße 65, 10888 Berlin, Germany, as of De-

cember 9, 2015 amounts to 47.27 % (corresponding to FMR LLC, Wilmington, Delaware, USA, notified us (via a 51,000,030 of a total of 107,895,311 voting rights in Axel notification dated July 25, 2017) that, due to the acquisi- Springer SE, previous notification: 50.0000294 %), tion/disposal of shares with voting rights, its share of vot- whereby these voting rights are held directly by it in ac- ing rights in Axel Springer SE, Axel-Springer-Straße 65, cordance with Section 21 WpHG. The following were

10888 Berlin, as of July 19, 2017 amounts to 2.94 % specified as the full chain of subsidiaries, beginning with

(previous notification: 3.79 %), whereby 2.94 % (corre- the ultimate controlling party: Dr. h.c. Friede Springer sponding to 3,171,903 of a total of 107,895,311 voting (voting rights: 54.2 %, total: 54.2 %), Friede Springer Ver- rights in Axel Springer SE, previous notification: 3.65 %) waltungs GmbH (general partner of Friede Springer corresponds to voting rights that are attributable to it in GmbH & Co. KG), Friede Springer GmbH & Co. KG (vo- accordance with Section 22 WpHG; 0.13 % (corre- ting rights: 53.69 %, total: 53.69 %), AS Publizistik GmbH sponding to 144,617 of a total of 107,895,311 voting (general partner of Axel Springer Gesellschaft für Publi- rights in Axel Springer SE) which were attributable to in- zistik GmbH & Co.), Axel Springer Gesellschaft für Publi- struments in terms of Section 25 (1) No 1 WpHG accord- zistik GmbH & Co. (voting rights amounting to 47.27 %, ing to the previous notification are no longer notified. The total: 47.27 %). following were specified as the full chain of subsidiaries, beginning with the ultimate controlling party: FMR LLC, AS Publizistik GmbH, Berlin, Germany (name of share-

Fidelity Management & Research Company, as well as holders holding directly 3 % or more voting rights, if dif- FMR LLC, FIAM Holdings Corp., Fidelity Institutional As- ferent from the company subject to the notification obli- set Management Trust Company, as well as FMR LLC, gation: Axel Springer Gesellschaft für Publizistik GmbH & FIAM Holdings Corp., FIAM LLC. Co.), notified us (via a notification dated

21 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

December 17, 2015, corrected on January 15, 2016) Springer AG had exceeded the threshold of 50 % and that, due to a change in the total number of voting rights, simultaneously also the thresholds of 5 %, 10 %, and its total share of voting rights in Axel Springer SE, Axel- 25 % and thus amounts to around 59.82 % (this corre- Springer-Straße 65, 10888 Berlin, Germany, as of De- sponds to 20,337,710 shares with voting rights with re- cember 9, 2015 amounts to 47.27 % (corresponding to spect to Axel Springer AG’s capital stock totaling 51,000,030 of a total of 107,895,311 voting rights in Axel 34,000,000 shares with voting rights). Friede Springer

Springer SE, previous notification: 50.0000294 %), Verwaltungs GmbH holds voting rights amounting to whereby these voting rights are attributable to it in ac- 50.0000294 % as a result of the attribution of voting cordance with Section 22 WpHG. The following were rights held directly by Axel Springer Gesellschaft für Pub- specified as the full chain of subsidiaries, beginning with lizistik GmbH & Co. (corresponding to 17,000,010 the ultimate controlling party: Dr. h.c. Friede Springer shares carrying voting rights) in accordance with Sec-

(voting rights: 54.2 %, total: 54.2 %), Friede Springer Ver- tion 22 (1) sentence 1 No 1 WpHG, and amounting to waltungs GmbH (general partner of Friede Springer around 9.82 % as a result of the attribution of voting GmbH & Co. KG), Friede Springer GmbH & Co. KG (vo- rights held as treasury shares by Axel Springer AG (cor- ting rights: 53.69 %, total: 53.69 %), AS Publizistik GmbH responding to 3,337,700 shares) in accordance with (general partner of Axel Springer Gesellschaft für Publi- Section 22 (1) sentence 1 No 1 WpHG. zistik GmbH & Co.), Axel Springer Gesellschaft für Publi- zistik GmbH & Co. (voting rights: 47.27 %, total: Tweedy, Browne Company LLC, New York, USA, noti-

47.27 %). fied us in November 2003 (corrected via a notification in August 2004) that it had exceeded the voting rights

Friede Springer GmbH & Co. KG, Berlin, Germany, noti- threshold of 5 % on November 6, 2003, and that the fied us in January 2006 in accordance with Sections share of voting rights attributable to it amounts to 5.75 % 21 f. WpHG that at midnight on December 31, 2005/12 (rounded), corresponding to 1,955,211 of a total of a.m. on January 1, 2006, its share of voting rights in Axel 34,000,000 registered no-par-value shares in Axel

Springer AG had exceeded the threshold of 50 % and Springer AG with limited transferability and carrying vot- simultaneously also the thresholds of 5 %, 10 %, and ing rights. The shares are attributable to it in accordance

25 % and thus amounts to around 59.82 % (this corre- with Section 22 (1) No 6 WpHG. sponds to 20,337,710 shares with voting rights with re- spect to Axel Springer AG’s capital stock totaling 34,000,000 shares with voting rights). Friede Springer GmbH & Co. KG holds voting rights amounting to

50.0000294 % as a result of the attribution of voting rights held directly by Axel Springer Gesellschaft für Pub- lizistik GmbH & Co. (corresponding to 17,000,010 shares carrying voting rights) in accordance with Sec- tion 22 (1) sentence 1 No 1 WpHG, and amounting to around 9.82 % as a result of the attribution of voting rights held as treasury shares by Axel Springer AG (corresponding to 3,337,700 shares) in accordance with Section 22 (1) sentence 1 No 1 WpHG.

Friede Springer Verwaltungs GmbH, Berlin, Germany, notified us in January 2006 in accordance with Sections 21 f. WpHG that at midnight on December 31, 2005/12 a.m. on January 1, 2006, its share of voting rights in Axel

22 Financial Statements 2018 Axel Springer SE Notes to the Financial Statements

(24) Profit utilization proposal

The Supervisory Board and Executive Board propose that the Company applies the full amount of the distributable profit of € 226.6 million (PY: € 215.8 million) to pay a dividend of € 2.10 (PY: € 2.00) per qualifying share for the 2018 financial year.

The company does not currently hold any treasury shares, so that all the company’s shares qualify for divi- dends. However, the number of shares qualifying for divi- dends may be reduced in the time remaining before the annual shareholders’ meeting. In that case, an adjusted profit utilization proposal will be submitted to the annual shareholders’ meeting, without changing the target dividend of € 2.10 per qualifying share.

23 Financial Statements 2018 Axel Springer SE Responsibility Statement Responsibility Statement

To the best of our knowledge, and in accordance with the applicable reporting principles, the annual financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company, and the combined management report of the Company and the Axel Springer Group includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal opportunities and risks associated with the expected development of the Company.

Berlin, February 21, 2019

Axel Springer SE

Dr. Mathias Döpfner Jan Bayer

Dr. Stephanie Caspar Dr. Julian Deutz

Dr. Andreas Wiele

24 Financial Statements 2018 Axel Springer SE Independent Auditor’s Report Independent Auditor’s Report

To the Axel Springer SE Pursuant to Section 322 (3) sentence 1 of the German Commercial Code (Handelsgesetzbuch, “HGB”), we de- Report on the audit of the annual clare that our audit has not led to any reservations relat- financial statements and of the ing to the legal compliance of the annual financial state- management report ments and of the management report. Basis for the opinions Opinions We conducted our audit of the annual financial state- We have audited the annual financial statements of Axel ments and of the management report in accordance with Springer SE, Berlin, which comprise the balance sheet Section 317 HGB and the EU Audit Regulation (No as at December 31, 2018, and the income statement for 537/2014, hereinafter “EU Audit Regulation”) and in the fiscal year from January 1 to December 31, 2018, compliance with German Generally Accepted Standards and notes to the financial statements, including the for Financial Statement Audits promulgated by the Insti- recognition and measurement policies presented therein. tute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, “IDW”). Our responsibilities under In addition, we have audited the combined management those requirements and principles are further described report of Axel Springer SE and Axel Springer Group in the “Auditor’s responsibilities for the audit of the an- (“management report”) for the fiscal year from January 1 nual financial statements and of the management report” to December 31, 2018. In accordance with the German section of our auditor’s report. We are independent of legal requirements, we have not audited the parts of the the Company in accordance with the requirements of management report as mentioned in the annex of the au- European law and German commercial and professional ditor’s report. law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In In our opinion, on the basis of the knowledge obtained in addition, in accordance with Article 10 (2) f) of the EU the audit, Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the ◼ the accompanying annual financial statements com- EU Audit Regulation. We believe that the audit evidence ply, in all material respects, with the requirements of we have obtained is sufficient and appropriate to provide German commercial law applicable to business cor- a basis for our opinions on the annual financial state- porations and give a true and fair view of the assets, ments and on the management report. liabilities and financial position of the Company as at December 31, 2018 and of its financial performance Key audit matters in the audit of the annual for the fiscal year from January 1 to December 31, financial statements 2018 in compliance with German legally required accounting principles, and Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of ◼ the accompanying management report as a whole the annual financial statements for the fiscal year from provides an appropriate view of the Company’s posi- January 1 to December 31, 2018. These matters were tion. In all material respects, this management report addressed in the context of our audit of the annual finan- is consistent with the annual financial statements, cial statements as a whole, and in forming our opinion complies with German legal requirements and appro- thereon; we do not provide a separate opinion on these priately presents the opportunities and risks of future matters. development. Our opinion on the management report does not cover the parts of the management report mentioned in the annex to the auditor’s report.

25 Financial Statements 2018 Axel Springer SE Independent Auditor’s Report

Below, we describe what we consider to be the key au- based on figures from the relevant financial year and dit matters: forecasted figures for future financial years. We have verified the key assumptions made in the business plan in (a) Measurement of non-current financial assets relation to growth and business performance by discuss- Reasons why the matter was determined to be a key au- ing these in detail with the executive directors of Axel dit matter Springer SE. We assessed the appropriateness of these In the financial statements of Axel Springer SE, the bal- assumptions on this basis. ance sheet item "Non-current financial assets" showed shares in affiliated companies, investments, and loans The appropriateness of the various key valuation as- totaling € 5,781 million, accounting for approximately sumptions, such as the discount rate and the growth

93 % of the balance sheet total and exceeding the com- rate, for example, was examined with the support of in- pany's equity by € 3,240 million. ternal valuation experts based on an analysis of market indicators. We have analyzed the parameters that were The company carries out an annual impairment test for considered when calculating the discount rates to ensure non-current financial assets in order to determine correct extrapolation, and have verified that the calcula- whether there is a write-down or write-up requirement. tion is in compliance with the corresponding require- The result of these measurements depends to a large ments of German commercial law. extent on how the executive directors estimate future cash inflows and derive the relevant discount rates. By means of sensitivity analyses, we have assessed the risk of impairment in the event of changes to the key Given the materiality of non-current financial assets com- measurement assumptions. Further, we have verified the pared to both the balance sheet total and the equity, the mathematical accuracy of the valuation model taking into complexity underlying the valuation as well as the profes- account the requirements of German commercial law. sional judgement that can be exercised as part of the measurement, the measurement of non-current financial Write-ups and write-downs of non-current financial as- assets constitutes a key audit matter within the context sets recognized in the balance sheet were reconciled of our audit. with the results of the impairment test.

Auditor’s response Based on our audit procedures, no reservations apply in As part of our audit, we examined the process imple- relation to the measurement of non-current financial as- mented by the executive directors of Axel Springer SE as sets. well as the accounting and measurement guidelines used to calculate the fair values of non-current financial Reference to related disclosures assets in order to determine the possible risk of errors, Information relating to the accounting and measurement and we also acquired an understanding of the steps in- principles applied to non-current financial assets can be volved in the process. We have established that the found in the notes to the financial statements in the sec- company's methods of calculating capitalization rates tion “Accounting policies”. The changes in non-current fi- and extrapolating future earnings are in compliance with nancial assets are described in the section on notes to the requirements of German commercial law and with the balance sheet, section (1) “Fixed assets”. This sec- pronouncements issued by professional bodies. tion also contains an explanation of impairment losses and write-ups to non-current financial assets. We have analyzed the business plans by comparing actual past earnings and the current performance of business figures. As part of our analysis, we also examined the market performance of comparable companies

26 Financial Statements 2018 Axel Springer SE Independent Auditor’s Report

(b) Revenue recognition case assessments of revenue transactions before the re- Reasons why the matter was determined to be a key au- porting date. In addition, we obtained confirmation of ac- dit matter counts receivable from clients on a random basis. For the financial year 2018, Axel Springer SE achieved revenues of € 851 million from circulation and advertising Based on our audit procedures, no reservations apply in activities mainly. Circulation revenues are generated from relation to the recognition of revenues from the sale of the sales of newspapers and magazines ("print media") circulation and advertising services. as well as digital subscription models. Advertising revenues are generated from the marketing of advertise- Reference to related disclosures ments and advertising space in online and print media. Detailed information concerning the composition of revenues can be found in the notes to the financial state- The executive directors of Axel Springer SE issued de- ments, in the section on notes to the income statement, tailed accounting guidelines for the recognition of reve- note (11) "Revenues". nue and implemented processes for the recognition of revenue. Other information

Given the large number of different contractual agree- The Supervisory Board is responsible for the report of ments for the various activities, our view is that the reve- the Supervisory Board. Furthermore, the executive direc- nue recognition is complex. Given the material im- tors are responsible for the other information. The other portance and the complexity of the revenue recognition information comprises the parts of the management re- issues, we consider revenue recognition as a key audit port as mentioned in the annex of the auditor’s report as matter. well as the other parts of the annual report, excluding the audited financial statements and management report as Auditor’s response well as our auditor’s report, in particular the responsibility As part of our audit, we have verified the accounting and statement in accordance with section 297 (2) sentence 4 measurement guidelines applied in the financial state- HGB, the report of the Supervisory Board in accordance ments of Axel Springer SE for the recognition of revenue with section 171 (2) of the German Stock Corporation in accordance with the criteria defined in German com- Act (Aktiengesetz, “AktG”) and the part “Group Key Fig- mercial law. We have verified the processes imple- ures”, the “Foreword”, the “Executive Board” and “The mented by the executive directors of Axel Springer SE in Axel Springer Share”. We received a version of the other relation to the revenue recognition, in particular by verify- information before issuing this auditor’s report. ing that returns and further sales discounts have been taken into account correctly. Our opinions on the annual financial statements and on the management report do not cover the other infor- In addition, we have analyzed the key revenues for the fi- mation, and consequently we do not express an opinion nancial year 2018 to determine whether, inter alia, there or any other form of assurance conclusion thereon. is a correlation with the associated trade receivables and with payments received. In connection with our audit, our responsibility is to read the other information and, in so doing, to consider Furthermore, we have randomly verified revenue recogni- whether the other information tion on the basis of contractual agreements in terms of the requirements of German commercial law concerning ◼ is materially inconsistent with the annual financial the recognition of revenues. We have audited the reve- statements, with the management report or our nues for the financial year 2018 on a random basis with knowledge obtained in the audit, or regard to accrual accounting by performing case-by-

27 Financial Statements 2018 Axel Springer SE Independent Auditor’s Report

◼ otherwise appears to be materially misstated. The Supervisory Board is responsible for overseeing the Company’s financial reporting process for the prepara- Responsibilities of the executive directors and the tion of the annual financial statements and of the man- Supervisory Board for the annual financial agement report. statements and the management report Auditor’s responsibilities for the audit of the annual The executive directors are responsible for the prepara- financial statements and of the management report tion of the annual financial statements that comply, in all material respects, with the requirements of German Our objectives are to obtain reasonable assurance about commercial law applicable to business corporations, and whether the annual financial statements as a whole are that the annual financial statements give a true and fair free from material misstatement, whether due to fraud or view of the assets, liabilities, financial position and finan- error, and whether the management report as a whole cial performance of the Company in compliance with provides an appropriate view of the Company’s position German legally required accounting principles. In addi- and, in all material respects, is consistent with the annual tion, the executive directors are responsible for such in- financial statements and the knowledge obtained in the ternal control as they, in accordance with German legally audit, complies with the German legal requirements and required accounting principles, have determined neces- appropriately presents the opportunities and risks of fu- sary to enable the preparation of annual financial state- ture development, as well as to issue an auditor’s report ments that are free from material misstatement, whether that includes our opinions on the annual financial state- due to fraud or error. ments and on the management report.

In preparing the annual financial statements, the execu- Reasonable assurance is a high level of assurance, but is tive directors are responsible for assessing the Com- not a guarantee that an audit conducted in accordance pany’s ability to continue as a going concern. They also with Section 317 HGB and the EU Audit Regulation and have the responsibility for disclosing, as applicable, mat- in compliance with German Generally Accepted Stand- ters related to going concern. In addition, they are re- ards for Financial Statement Audits promulgated by the sponsible for financial reporting based on the going con- Institute of Public Auditors in Germany (Institut der cern basis of accounting, provided no actual or legal cir- Wirtschaftsprüfer, “IDW”) will always detect a material cumstances conflict therewith. misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the Furthermore, the executive directors are responsible for aggregate, they could reasonably be expected to influ- the preparation of the management report that, as a ence the economic decisions of users taken on the basis whole, provides an appropriate view of the Company’s of these annual financial statements and this manage- position and is, in all material respects, consistent with ment report. the annual financial statements, complies with German legal requirements and appropriately presents the oppor- We exercise professional judgment and maintain profes- tunities and risks of future development. In addition, the sional skepticism throughout the audit. We also executive directors are responsible for such arrange- ments and measures (systems) as they have considered ◼ identify and assess the risks of material misstatement necessary to enable the preparation of a management of the annual financial statements and of the manage- report that is in accordance with the applicable German ment report, whether due to fraud or error, design legal requirements, and to be able to provide sufficient and perform audit procedures responsive to those appropriate evidence for the assertions in the manage- risks, and obtain audit evidence that is sufficient and ment report. appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting

28 Financial Statements 2018 Axel Springer SE Independent Auditor’s Report

from fraud is higher than for one resulting from error, ◼ evaluate the consistency of the management report as fraud may involve collusion, forgery, intentional with the annual financial statements, its conformity omissions, misrepresentations, or the override of in- with German law, and the view of the Company’s po- ternal control; sition it provides;

◼ obtain an understanding of internal control relevant to ◼ perform audit procedures on the prospective infor- the audit of the annual financial statements and of ar- mation presented by the executive directors in the rangements and measures (systems) relevant to the management report. On the basis of sufficient appro- audit of the management report in order to design au- priate audit evidence we evaluate, in particular, the dit procedures that are appropriate in the circum- significant assumptions used by the executive direc- stances, but not for the purpose of expressing an tors as a basis for the prospective information, and opinion on the effectiveness of these systems of the evaluate the proper derivation of the prospective infor- Company; mation from these assumptions. We do not express a separate opinion on the prospective information and ◼ evaluate the appropriateness of accounting policies on the assumptions used as a basis. There is a sub- used by the executive directors and the reasonable- stantial unavoidable risk that future events will differ ness of estimates made by the executive directors materially from the prospective information. and related disclosures; We communicate with those charged with governance ◼ conclude on the appropriateness of the executive di- regarding, among other matters, the planned scope and rectors’ use of the going concern basis of accounting timing of the audit and significant audit findings, including and, based on the audit evidence obtained, whether a any significant deficiencies in internal control that we material uncertainty exists related to events or condi- identify during our audit. tions that may cast significant doubt on the Com- pany’s ability to continue as a going concern. If we We also provide those charged with governance with a conclude that a material uncertainty exists, we are re- statement that we have complied with the relevant inde- quired to draw attention in the auditor’s report to the pendence requirements, and communicate with them all related disclosures in the annual financial statements relationships and other matters that may reasonably be and in the management report or, if such disclosures thought to bear on our independence and where appli- are inadequate, to modify our respective opinions. cable, related safeguards. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, From the matters communicated with those charged future events or conditions may cause the Company with governance, we determine those matters that were to cease to be able to continue as a going concern; of most significance in the audit of the annual financial statements of the current period and are therefore the ◼ evaluate the overall presentation, structure and con- key audit matters. We describe these matters in our au- tent of the annual financial statements, including the ditor’s report unless law or regulation precludes public disclosures, and whether the annual financial state- disclosure about the matter. ments present the underlying transactions and events in a manner that the annual financial statements give a Other legal and regulatory requirements true and fair view of the assets, liabilities, financial position and financial performance of the Company in Further information pursuant to Article 10 of the compliance with German legally required accounting EU Audit Regulation principles; We were elected as auditor by the annual general meeting on April 18, 2018. We were engaged by the

29 Financial Statements 2018 Axel Springer SE Independent Auditor’s Report

Supervisory Board on April 25, 2018. We have been the German Public Auditor responsible for the auditor of Axel Springer SE without interruption since fis- engagement cal year 2007. The German Public Auditor responsible for the engagement is Nathalie Mielke. We declare that the opinions expressed in this auditor’s report are consistent with the additional report to the au- Annex to the auditor’s report: dit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report). Not audited parts of the management report

In addition to the financial statement audit, we have pro- We have not audited the following parts of the manage- vided to the Company or entities controlled by it the fol- ment report: lowing services that are not disclosed in the annual financial statements or in the management report: Due dili- ◼ Information contained in the “Corporate Governance gence services, auditing of voluntary financial state- Report“ of the management report except for the ments, advice in regards to payroll tax and social security “Compensation Report” matters, reviewing of the interim consolidated financial statements, auditing of the system to ensure compliance Berlin, February 22, 2019 with the requirements of Section 32 (1) of the German Securities Trading Act (Wertpapierhandelsgesetz, Ernst & Young GmbH “WpHG”), as well as auditing of internal control systems Wirtschaftsprüfungsgesellschaft of service companies according to auditing standard IDW PS 951 of the Institute of Public Auditors in Ger- many (Institut der Wirtschaftsprüfer, “IDW”).

Ludwig Mielke Wirtschaftsprüfer Wirtschaftsprüferin (German Public Auditor) (German Public Auditor)