Financial Statements of Axel Springer SE for the period ending December 31, 2019

Content

3 Balance Sheet

4 Income Statement

5 Notes to the Financial Statement

5 General Information

5 Accounting policies

7 Notes to the balance sheet

14 Notes to the income statement

16 Other disclosures

27 Responsibility Statement

28 Independent Auditor’s Report

The combined management report of Axel Springer SE and Axel Springer Group is published in the Axel Springer Group’s 2019 annual report.

2

Financial Statements 2019 Axel Springer SE Balance Sheet Balance Sheet

€ millions Note 12/31/2019 12/31/2018 Intangible assets 10.0 13.0

Property, plant and equipment 306.6 205.7

Non-current financial assets 6,467.5 5,781.2

Fixed assets (1) 6,784.1 5,999.9

Inventories (2) 3.8 5.0

Receivables and other assets (3) 216.5 164.0

Cash and cash equivalents 72.9 61.2

Current assets 293.2 230.2

Prepaid expenses 6.1 5.2

ASSETS 7,083.3 6,235.3

€ millions Note 12/31/2019 12/31/2018 Subscribed capital 107.9 107.9

Additional paid-in capital 547.9 547.9

Retained earnings 1,666.3 1,658.8

Distributable profit 125.2 226.6

Equity (4) 2,447.3 2,541.2

Provisions (5) 264.7 168.6

Liabilities (6) 4,344.0 3,497.1

Deferred income 27.4 28.4

EQUITY AND LIABILITIES 7,083.3 6,235.3

3

Financial Statements 2019 Axel Springer SE Income Statement Income Statement

€ millions Note 2019 2018 Revenues (11) 806.8 851.1

Internal costs capitalized 1.1 1.4

Other operating income (12) 10.1 188.9

Purchased goods and services (13) – 204.3 – 221.6

Personnel expenses (14) – 303.8 – 210.0

Amortization, depreciation and impairments of intangible assets and property, plant and equipment (1) – 7.8 – 10.0

Other operating expenses (12) – 485.5 – 467.3

Net income from non-current financial assets (15) 338.1 68.2

Net interest income (16) 4.2 – 22.3

Income taxes – 26.0 – 54.1

Net income 132.7 124.3

Withdrawal from other retained earnings (4) 0.0 102.3

Transfer to other retained earnings (4) – 7.5 0.0

Distributable profit 125.2 226.6

4 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements Notes to the Financial Statements

General information systematically using the straight-line method over the expected useful life. Additional write- Axel Springer SE is a European exchange-listed downs to the lower fair value on the balance stock corporation (Societas Europaea) with its sheet date are charged if the impairment is ex- head office in Berlin, Germany. The company is pected to be permanent. registered with the commercial register of Ber- lin-Charlottenburg Local Court under the num- Systematic depreciation and amortization were ber HRB 154517 B. based on the following typical useful lives:

The annual financial statements were prepared in years Useful life in accordance with the provisions of the Ger- Intangible assets man Commercial Code (Handelsgesetzbuch) Software 3 - 5 and the German Stock Corporation Act Licenses 3 - 5 (Aktiengesetz) in conjunction with Article 61 of Supply rights 3 Council Regulation (EC) No 2157/2001. Internet platform 3 The balance sheet and income statement cor- Purchased titles and publishing rights 15 respond to the classification requirements of Property, plant and equipment the German Commercial Code (Handelsgesetz- Buildings 50 buch); the income statement was prepared us- Leasehold improvements 3 - 10 ing the total cost (nature of expense) method. Technical equipment and machinery 3 - 25 The annual financial statements were prepared Other operational and business equipment 3 - 15 in euros (€); all amounts are reported in € mil- lions unless otherwise indicated. Totals and per- centages were calculated based on the non- Non-current financial assets are recognized at rounded euro amounts and may differ from a acquisition cost or at the lower fair value on the calculation based on the reported amounts in balance sheet date if impairments are ex- millions of euros. To improve clarity and legibil- pected to be permanent. Write-ups of non-cur- ity, individual line items were aggregated in the rent financial assets are presented under in- balance sheet and income statement and then come from non-current financial assets. presented separately in the notes to the annual financial statements. Current assets

The annual financial statements and the com- Raw materials and supplies as well as merchan- bined management report of the Company and dise are measured at acquisition cost or the Axel Springer Group will be published in the Fed- lower fair value on the balance sheet date. In- eral Gazette. ventory risks associated with the storage period or reduced utility are accounted for through Accounting policies appropriate allowances.

Fixed assets Receivables and other assets are recognized at nominal value or acquisition cost or the lower Intangible assets and tangible fixed assets that fair value on the balance sheet date. Individual have been purchased are recognized at cost. risks are accounted for through adequate al- Finite-lived assets are depreciated lowances.

5 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

Cash and cash equivalents include cash on the financial year. Income and expenses from hand, cash in banks as well as checks and are plan assets are combined with the interest cost recognized at nominal value or the lower fair of pension provisions („net interest income from value on the balance sheet date. pension accounting“). Income and expenses re- sulting from changes in the actuarial interest Provisions and liabilities rate are recognized under other operating in- come and personnel expenses respectively. Provisions for pensions and similar obligations (“pension provisions”) are measured on the ba- Liabilities are recognized at the settlement sis of actuarial calculations according to the amount. projected unit credit method and reflect future compensation and pension adjustments. Dis- Taxes counting is based on the average market inter- est rate of the past ten financial years on the Deferred taxes basis of an assumed remaining maturity of 15 Deferred taxes are calculated for temporary years. differences between the tax bases of assets and liabilities and the carrying amounts of In order to secure and fulfill pension obligations those assets and liabilities in the separate fi- of Axel Springer SE a so-called Contractual nancial statements as well as for interest and Trust Arrangement exists. The legally independ- losses carried forward. Dependent enterprises ent registered association, Axel Springer Pen- in the fiscal unit for income tax purposes and sionstreuhand e.V., Berlin, is responsible for the partnerships in which Axel Springer SE is in- management in trust of assets that serve only vested are also included in the calculation. De- to fulfill pension obligations and are protected ferred tax assets and liabilities are netted; any from access by all other creditors (plan assets). resulting net deferred tax assets are not recog- The plan assets are measured at fair value and nized. netted with the pension provisions. Other taxes Provisions for taxes and other provisions are Expenses for other taxes have been reported recognized based on prudent business judg- under other operating expenses and are listed ment for contingent liabilities and expected separately in the notes. losses from executory contracts in the neces- sary settlement amount, taking into account Currency translation expected price and cost increases. Provisions with a remaining term of more than one year As a rule, receivables and other assets, cash are discounted at the matching average mar- and cash equivalents, and liabilities denomi- ket interest rate of the past seven financial nated in foreign currency are translated at the years. mean spot exchange rate prevailing on the bal- ance sheet date. Net interest income only includes interest from the compounding of provisions attributed to

6 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

Notes to the balance sheet

(1) Fixed assets

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

01/01/2019 117.9 2.6 120.5

Additions 1.1 1.5 2.6

Transfers 1.4 – 1.5 – 0.1

Disposals – 3.2 – 0.8 – 4.0

12/31/2019 117.2 1.8 119.0

Accumulated amortization and impairments

01/01/2019 106.6 0.8 107.4

Amortization and impairments of the financial year 5.5 0.0 5.5

Disposals – 3.1 – 0.8 – 3.9

12/31/2019 109.0 0.0 109.0

Carrying amounts

12/31/2019 8.3 1.7 10.0

12/31/2018 11.3 1.8 13.0

Impairments of intangible assets in the amount of € 0.8 million were recognized in the previous year.

7 Financial Statements 2019 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

01/01/2019 31.0 6.5 48.5 166.0 252.0

Additions 0.0 0.0 2.6 101.8 104.4

Transfers 0.0 0.0 0.3 – 0.2 0.1

Disposals 0.0 – 5.1 – 5.7 0.0 – 10.8

12/31/2019 31.0 1.4 45.6 267.6 345.6

Accumulated depreciation and impairments

01/01/2019 0.2 6.5 39.6 0.0 46.3

Depreciation and impairments of the financial year 0.1 0.0 2.3 0.0 2.4

Disposals 0.0 – 5.1 – 4.6 0.0 – 9.7

12/31/2019 0.3 1.4 37.3 0.0 39.0

Carrying amounts

12/31/2019 30.7 0.0 8.3 267.6 306.6

12/31/2018 30.8 0.0 8.8 166.0 205.7

Advanced payments and construction in pro- gress mainly related to the construction of the new Axel Springer building in Berlin.

8 Financial Statements 2019 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 Acquisition cost

01/01/2019 5,756.1 330.6 36.2 0.0 0.5 6,123.4

Additions 397.1 299.4 2.9 3.8 0.0 703.1

Transfers 0.0 0.0 0.3 0.0 – 0.3 0.0

Disposals – 12.6 – 72.1 – 0.6 0.0 0.0 – 85.3

12/31/2019 6,140.6 557.9 38.8 3.8 0.1 6,741.2

Accumulated impairments

01/01/2019 222.3 108.0 11.9 0.0 0.0 342.2

Impairments of the financial year 30.5 5.9 1.3 0.0 0.0 37.7

Write-ups of the financial year – 14.9 – 91.4 0.0 0.0 0.0 – 106.3

12/31/2019 237.9 22.5 13.2 0.0 0.0 273.7

Carrying amounts

12/31/2019 5,902.7 535.4 25.6 3.8 0.1 6,467.5

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 additions largely related to contributions to the amount of € 37.7 million (PY: € 177.8 million) affiliated companies' additional paid-in capital were recognized in the reporting period. and loans to affiliated companies in order to fi- nance company acquisitions. Further, additions and disposals related to intra-Group restructur- ing.

(2) Inventories

€ millions 12/31/2019 12/31/2018 Raw materials and supplies 1.7 3.2

Merchandise 2.1 1.8

Inventories 3.8 5.0

9 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

(3) Receivables and other assets Additional paid-in capital As at the balance sheet date, the additional € millions 12/31/2019 12/31/2018 paid-in capital remained unchanged at Trade receivables 28.3 26.8 € 547.9 million. Receivables from affiliated companies 159.2 124.5 Retained earnings Receivables from companies in which Retained earnings developed as follows: the company has a participating interest 0.2 0.8 Other Other assets 28.8 11.9 Statutory retained Retained Receivables and other assets 216.5 164.0 € millions reserve earnings earnings

Balance at 01/01/2019 10.2 1,648.6 1,658.8

Transfer from net income Receivables from affiliated companies mainly 2019 7.5 7.5 included financial receivables from Group-wide Balance at 12/31/2019 10.2 1,656.1 1,666.3 cash management.

(4) Equity As of December 31, 2019, retained earnings of € 61.6 million (PY: € 44.8 million) were subject to a Subscribed capital profit distribution restriction. The restriction The fully paid-in capital stock of € 107.9 million amount resulted from the fair value measure- comprises 107,895,311 registered no-par-value ments of plan assets in the amount of € 22.1 mil- shares, each with a notional value of € 1.00 per lion (PY: € 5.8 million and from the measurement share. Shares can only be transferred with the of the settlement amount of pension obliga- Company's consent. tions in the amount of € 20.4 million (PY: € 25.1 million), see Note (5). Additionally, deferred Authorized capital tax liabilities recognized to these effects led to The Executive Board is authorized, pursuant to a calculative surplus of deferred tax assets, Section 5 (4) of the Articles of Association to in- which raised the restricted retained earnings in crease the capital stock by April 17, 2023, subject the amount of € 19.1 million (PY: € 13.9 million). to the approval of the Supervisory Board, by is- suing new registered no-par value shares (5) Provisions against contributions in cash and/or in kind (in- cluding mixed contributions in kind) on one or € millions 12/31/2019 12/31/2018 more occasions by a total of up to € 10.5 million Pension provisions 3.6 20.0 (authorized capital). In principle, the sharehold- Provisions for taxes 28.8 29.6 ers must be granted a subscription right. How- Other provisions 232.3 119.1 ever, the Executive Board is authorized, with the Provisions 264.7 168.6 approval of the Supervisory Board, to exclude the subscription right of the shareholders in certain cases.

10 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

Pension provisions Plan assets comprised the following: Pension provisions were determined as follows: € millions 12/31/2019 12/31/2018 € millions 12/31/2019 12/31/2018 Land and buildings 177.0 160.7

Settlement amount of pension Non-current securities 141.7 126.8 obligations 323.9 310.6 Cash and cash equivalents 1.3 2.9 Plan assets – 320.3 – 290.7 Insurance claims 0.2 0.2 Pension provisions 3.6 20.0 Fair value of plan assets 320.3 290.7

Pension provisions were recognized to account for obligations arising from vested pension Land and buildings included the Axel Springer rights and current benefits of former and active high-rise (main building) in Berlin, which was employees of Axel Springer SE and their surviv- transferred into plan assets in the previous year ing dependents, based on individual contracts, (see note (8)). At the reporting date the fair labor management agreements, and contribu- value amounted to € 177.0 million (PY: € 160.7 mil- tions made to company pension plans by way lion) and was calculated by an expert based on of salary conversion. a discounted cashflow method using a discount rate of 4.3 % (PY: 4.5 %) and a capitalization inter-

est rate of 3.5 % (PY: 3.7 %). The settlement amount of the pension obliga- tions was determined based on an actuarial in- Non-current securities exclusively comprised terest rate of 2.7 % (PY: 3.2 %) p.a. as well as a shares in a special alternative investment fund pension and qualifying trend of 1.5 % (PY: 1.6 %) (AIF) as defined in the German Capital Invest- p.a. The life expectancy was taken from ment Code (investment assets), which particu- Dr. Klaus Heubeck's Mortality Tables 2018 G. larly invests in securities, money market instru- ments, and derivatives. The recognized market The settlement amount of pension obligations value of the investment assets corresponded to using an interest rate based on the average their share value. market interest rate of the past seven financial years (2.0 %; PY: 2.3 %) amounted to € 353.5 million Cash and cash equivalents were recognized at (PY: € 347.1 Mio.). The difference of € 29.6 million the nominal amount. Insurance claims con- (PY: € 36.5 million) compared to the recognized sisted of pledged reinsurance policies which amount (€ 323.9 million; € 310.6 million) was sub- were recognized at the asset value. ject to a profit distribution restriction, taking de- ferred taxes into account (see Note (4)).

11 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

The following acquisition costs were incurred Other provisions for plan assets: Other provisions included, in particular, provi- sions for performance-dependent compensa- € millions 12/31/2019 12/31/2018 tion and share-based payment plans Land and buildings 156.0 156.0 (€ 108.8 million; PY: € 46.5 million), structural Non-current securities 130.8 123.2 measures (€ 53.8 million; PY: € 15.6 million), com-

Cash and cash equivalents 1.3 2.9 mitments based on partial retirement agree- ments (€ 10.8 million; PY: € 11.9 million) and out- Insurance claims 0.2 0.2 standing supplier invoices (€ 35.4 million; PY: Acquisition cost of plan assets 288.3 282.3 € 17.9 million).

(6) Liabilities

Remaining term Remaining term longer longer than longer than longer up to 1 year, up than up to 1 year, up than € millions 12/31/2019 1 year to 5 years 5 years 12/31/2018 1 year to 5 years 5 years Liabilities to banks 1,163.9 3.4 1,160.5 0.0 454.1 1.1 453.0 0.0

Promissory note 704.5 69.0 635.5 0.0 704.5 0.0 310.5 394.0

Advance payments 4.7 4.7 0.0 0.0 4.8 4.8 0.0 0.0

Trade payables 16.2 16.2 0.0 0.0 18.6 18.6 0.0 0.0

Liabilities to affiliated companies 2,436.9 2,436.8 0.1 0.0 2,286.1 2,286.1 0.0 0.0

Liabilities to companies in which the company has a participating interest 0.9 0.9 0.0 0.0 1.0 1.0 0.0 0.0

Other liabilities 16.8 16.7 0.1 0.0 28.0 27.8 0.3 0.0

Liabilities 4,344.0 2,547.7 1,796.2 0.0 3,497.1 2,339.4 763.8 394.0

Liabilities to affiliated companies included Other liabilities included tax liabilities of mainly financial liabilities arising from Group- € 4.4 million (PY: € 16.8 million). wide cash management.

12 Financial Statements 2019 Axel Springer SE Notes to the Financial statements

(7) Contingent liabilities period of three years and a lease back of sub- areas for further periods of five and seven As of the balance sheet date, the following con- years. In the reporting year, lease expenses tingent liabilities existed: amounted to € 10.9 million. Lease payments will partly be adjusted in accordance with the con- € millions 12/31/2019 12/31/2018 sumer price index every two years. Based on the Guarantees 3.6 1.8 circumstances at the reporting date, estimated Warranties 121.5 137.0 lease expenses over the remaining contractual

of which to affiliated companies 101.8 112.7 term will amount to € 33.4 million.

Contingent liabilities 125.1 58.8 (9) Other financial commitments

The claims from the cited contingent liabilities Other financial commitments as of the report- are not expected to be asserted based on the ing date amounted to € 415.4 million (PY: beneficiaries' previous payment practices and € 247.4 million), thereof € 25.7 million (PY: considering the knowledge acquired leading up € 33.6 million) to affiliated companies. to the preparation date. (10) Deferred taxes (8) Transactions not included on the balance sheet Deferred taxes were calculated based on a combined income tax rate of 31.0 %, remaining At the beginning of 2018 the Axel Springer high- unchanged from last year. As in the previous rise (main building) in Berlin was transferred in year, the calculation of taxes as of December 31, trust to the Axel Springer Pensionstreuhand e.V., 2019 resulted in net deferred tax assets. This was Berlin (“association”), for recognition as plan as- mainly the result of the lower measurement of sets and the profit before tax resulting from the pension obligations for tax purposes. transfer amounted to € 148.3 million. For the continued use of the building a lease contract over a period of 30 years was concluded be- tween Axel Springer SE and the association. In the reporting year lease expenses 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 ex- penses over the remaining contractual term will amount to € 164.8 million.

At the end of 2017 the Axel-Springer-Passage in Berlin was sold and the profit before tax result- ing from the disposal amounted to € 281.8 million. A lease contract was concluded with the pur- chaser of the property. Started on January 1, 2018, this contract includes the lease back of the complete Axel-Springer-Passage for a

13 Financial Statements 2019 Axel Springer SE Notes to the Financial statements

Notes to the income (13) Purchased goods and services statement € millions 2019 2018 Raw materials and supplies and (11) Revenues purchased merchandise 40.9 42.6

Purchased services 163.4 179.0 € millions 2019 2018 Purchased goods and services 204.3 221.6 Circulation revenues 372.0 391.8

Advertising revenues 283.8 310.3 Other revenues 151.0 149.0 Revenues 806.8 851.1 (14) Personnel expenses

€ millions 2019 2018 Revenues were realized almost entirely in Ger- Wages and salaries 265.6 164.9 many. Social security, pension and other benefit expenses 38.3 45.2

(12) Other operating income and of which for old age pensions 20.7 27.7

expenses Personnel expenses 303.8 210.0

Income unrelated to the accounting period from the disposal of fixed assets (€ 0.4 million; Expenses from share-based payment plans in PY: € 149.6 million), from the reversal of provisions the amount of € 62.7 million (PY: € 3.3 million) and (€ 1.7 million; PY: € 16.1 million) from receivables from restructuring measures in the amount of written down in previous years (€ 0.2 million; PY: € 49.9 million (PY: € 7.6 million) were recognized in € 14.9 million) was recognized under other oper- personnel expenses. ating income. The average number of employees during the In the previous year income from the disposal of year was as follows: fixed assets an amount of € 148.3 million resulted from the transfer of the Axel Springer high-rise 2019 2018 (main building) in Berlin to the plan assets of the Salaried employees 824 823 company. Editors 495 511

Wage-earning employees 4 7 Currency translation in the reporting period re- Total employees 1,323 1,341 sulted in gains of € 2.9 million (PY: € 1.9 million) and losses of € 3.1 million (PY: € 3.0 million).

Other operating expenses contained expenses from other taxes in the amount of € 2.7 million (PY: € 3.2 million).

14 Financial Statements 2019 Axel Springer SE Notes to the Financial statements

(15) Income from non-current financial (16) Net interest income assets € millions 2019 2018 € millions 2019 2018 Other interest and similar income 20.9 1.0

Income from profit transfer 304.5 234.2 of which from affiliated companies 1.0 0.9

Expenses from loss transfer – 45.3 – 22.9 of which net interest income from pension accounting 19.9 0.0 Profit and loss transfer 259.2 211.3

Interest and similar expenses – 16.7 – 23.3 Income from participating interests 4.7 16.6

of which from affiliated companies – 6.9 – 5.1 of which from affiliated companies 0.0 8.8 of which net interest income from Impairments of non-current financial pension accounting 0.0 – 4.6 assets – 37.7 – 177.8 of which from the compounding of Write-ups of non-current financial other provisions – 0.1 – 0.2 assets 106.3 13.3 Net interest income 4.2 – 22.3 Income from loans 5.6 4.7

of which from affiliated companies 5.5 4.5 Net income from non-current The net interest income from pension account- financial assets 338.1 68.2 ing (€ 19.9 million; PY: € - 4.6 million) consists of in-

terest expenses from the compounding of pen- sion provisions (€ 9.7 million; PY: € 10.6 million) and income from plan assets in the amount of € 29.6 million (PY: € 6.0 million).

15 Financial Statements 2019 Axel Springer SE Notes to the Financial statements

Other disclosures

(17) Supervisory Board

Dr. Giuseppe Vita (Chairman of the Supervisory Board Iris Knobloch (until December 2019) of Axel Springer SE, until April 17, 2019) Président Warner Bros. Entertainment France S.A.S. Honorary Chairman of Axel Springer SE Seats on comparable boards in Germany and abroad:

. Accor S.A., France (Vice Chairwoman of the Board of Directors Ralph Büchi (Chairman of the Supervisory Board of Axel and Lead Independent Director) Springer SE, since April 17, 2019) COO of Ringier AG (until end of January 2020), CEO of . Larzard Ltd., Bermuda (Board of Directors) Ringier Axel Springer Schweiz AG (until end of March . LVMH Moet Hennessy – Louis Vuitton SE, France (Board of Di- 2020) rectors, since April 2019) Seats on comparable boards in Germany and abroad: Lothar Lanz (until April 2019) . DeinDeal AG, Switzerland (Board of Directors, subsidiary of Member of various Supervisory Boards Ringier AG) Seats on other mandatory supervisory boards in Germany: . Le Temps SA, Switzerland (Delegate of the Board of Direc- . Bauwert AG (Vice Chairman) tors, subsidiary of Ringier AG) . Dermapharm Holding SE . Ringier Africa AG, Switzerland (Board of Directors, subsidi- . Home 24 AG (Chairman) ary of Ringier AG) . TAG Immobilien AG (Vice Chairman) . Ringier Axel Springer Media AG, Switzerland (Chairman of the Board of Directors, until March 31, 2019) . Zalando SE (Chairman, until May 2019)

Dr. h. c. Friede Springer Dr. Nicola Leibinger-Kammüller (until December 2019) Vice Chairwoman of the Supervisory Board of Axel President and Chairwoman of the Managing Board of Springer SE TRUMPF GmbH + Co. KG Seats on other mandatory supervisory boards in Germany: Oliver Heine . Siemens AG Attorney at law and partner in the law firm Heine & Partner Seats on comparable boards in Germany and abroad: Seats on other mandatory supervisory boards in Germany: . Berthold Leibinger Beteiligungen GmbH, Germany (Board of Directors) . Lloyd Fonds AG (since June 2019) . TRUMPF Schweiz AG, Switzerland (Chairwoman of the Board Dr. Alexander Karp (until December 2019) of Directors) CEO Palantir Technologies Inc. Seats on other mandatory supervisory boards in Germany: Ulrich Plett (since April 2019) German Public Auditor . BASF SE (since May 2019) Seats on comparable boards in Germany and abroad: Seats on comparable boards in Germany and abroad: . KIRON Open Higher Education gGmbH, Germany (Advisory . The Economist Newspaper Limited, United Kingdom (Board of Board) Directors, until November 2019) . Corestate Capital Holding S.A., Luxembourg (Supervisory Board)

16 Financial Statements 2019 Axel Springer SE Notes to the Financial statements

Prof. Dr.-Ing. Wolfgang Reitzle Philipp Freise (since January 7, 2020) Entrepreneur Member and Co-Head of EMEA Private Equity at KKR Seats on other mandatory supervisory boards in Germany: Seats on other mandatory supervisory boards in Germany: . Continental AG (Chairman) . GfK SE (Vice Chairman) . Linde AG (Chairman, until April 2019) Seats on comparable boards in Germany and abroad:

. Medical Park AG (Chairman until September 2019) . Leonine Holding GmbH, Germany (Advisory Board) . Willy Bogner GmbH & Co. KGaA (Chairman, until September 2019) Johannes P. Huth (since January 7, 2020) Member and Head of KKR EMEA Seats on comparable boards in Germany and abroad: Seats on other mandatory supervisory boards in Germany: . Ivoclar Vivadent AG, Liechtenstein (Board of Directory) . Hensoldt Holding GmbH (Chairman) . Linde plc, Ireland (Chairman of the Board of Directors) Seats on comparable boards in Germany and abroad:

Martin Varsavsky . SoftwareOne Holding AG, Switzerland (Board of Directors) Entrepreneur Franziska Kayser (since January 7, 2020) Director Private Equity KKR Seats on other mandatory supervisory boards in Germany:

. GfK SE

(18) Executive Board

Dr. Mathias Döpfner Jan Bayer Chairman and Chief Executive Officer, Journalist President News Media International, Media scholar Seats on comparable boards in Germany and abroad: Seats on comparable boards in Germany and abroad:

. Axel Springer Schweiz AG, Switzerland (Chairman of the . eMarketer Inc., USA (Board of Directors)

Board of Directors) . Insider Inc., USA (Chairman of the Board of Directors, until . eMarketer Inc., USA (Chairman of the Board of Directors) March 2019 only member)

. Insider Inc., USA (Board of Directors, Chairman until March . Media Impact GmbH & Co. KG, Germany (Chairman of the 2019) Advisory Board, until January 2019)

. Netflix Inc., USA (Board of Directors) . ONET S.A., Poland (Supervisory Board)

. Ringier Axel Springer Schweiz AG, Switzerland (Board of Di- . Ringier Axel Springer Media AG, Switzerland (Chairman of rectors, until April 2019) the Board of Directors, since April 2019, formerly Vice Chair-

. upday GmbH & Co. KG, Germany (Chairman of the Advisory man) Board, since November 2019) . Ringier Axel Springer Schweiz AG, Switzerland (Chairman of

. Warner Music Group Corp., USA (Board of Directors) the Board of Directors, until April 2019) . upday GmbH & Co. KG, Germany (Vice Chairman of the Ad- visory Board, since November 2019)

. Visoon Video Impact Management GmbH, Germany (Su- pervisory Board)

17 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

Dr. Stephanie Caspar Dr. Andreas Wiele President News Media National & Technology, Master’s President Classifieds Media, Lawyer Degree in Business Administration Seats on mandatory supervisory boards in Germany:

Seats on comparable boards in Germany and abroad: . AWIN AG (Chairman) . Media Impact GmbH & Co. KG, Germany (Chairwoman of the . Immowelt AG (Chairman) Advisory Board, since February 2019) . Immowelt Holding AG (Chairman) Dr. Julian Deutz Seats on comparable boards in Germany and abroad: Chief Financial Officer, Master’s Degree in Business . @Leisure Holding B.V., Netherlands (Chairman of the Board of Administration Directors, until April 2019) Seats on mandatory supervisory boards in Germany: . Car & Boat Media SAS, France (Chairman of the Supervisory . AWIN AG Board)

Seats on comparable boards in Germany and abroad: . Coral-Tell Ltd., Israel (Chairman of the Board of Directors)

. Axel Springer Beteiligungen Schweiz AG, Switzerland (Chair- . Digital Classifieds France SAS, France (Chairman of the Su- man of the Board of Directors) pervisory Board)

. Axel Springer International AG, Switzerland (Chairman of . Elvaston Capital Management GmbH, Germany (Advisory the Board of Directors) Board)

. Axel Springer Schweiz AG, Switzerland (Board of Directors) . Homeday GmbH, Germany (Supervisory Board)

. CompuTel Telefonservice AG, Switzerland (Chairman of the . Immoweb SA, Belgium (Chairman of the Board of Directors) Board of Directors) . Insider Inc., USA (Board of Directors, until March 2019) . Digital Classifieds France SAS, France (Supervisory Board) . Magnolia International AG, Switzerland (Chairman of the . eMarketer Inc., USA (Board of Directors) Board of Directors)

. Insider Inc., USA (Board of Directors) . Project A Ventures GmbH & Co. KG, Germany (Advisory Board)

. Jean Frey AG, Switzerland (Chairman of the Board of Direc- . Purplebricks Group plc, United Kingdom (Board of Directors) tors) . StepStone GmbH, Germany (Chairman of the Supervisory . Ringier Axel Springer Media AG, Switzerland (Board of Direc- Board) tors)

. StepStone GmbH, Germany (Supervisory Board)

(19) Compensation of the Supervisory Board and the Executive Board

As in the prior year, the remuneration of the have a term of six years and can be exercised members of the Supervisory Board amounted to first in four years. The fair value of the stock ap- € 3.0 million. preciation rights at the grant date was deter- mined using a Black-Scholes model to be The remuneration of the members of the Execu- € 1.0 million. tive Board amounted to € 22.1 million (PY: € 22.4 million including a long-term stock-based The remuneration of former members of the Ex- compensation component of € 1.0 million). In the ecutive Board and their surviving dependents in previous year 225,000 stock appreciation rights the reporting period amounted to € 2.5 million were issued to the member of the Executive (PY: € 2.5 million); provisions in the amount of Board, who does not participate in the Long- € 26.7 million (PY: € 27.0 million) were recognized Term Incentive Plan granted in 2016. The stock for pension obligations. appreciation rights bound by various conditions

18 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

(20) List of investments

Significant investments as of December 31, 2019 are listed below.

Net Net Share- Via Equity income Share- Via Equity income No. Company holding No. € million1) € million1) No. Company holding No. € million1) € million1)

affilinet Limited, London, United Axel Springer España S.A., Madrid, 1 100.0% 10 2.1 0.2 29 100.0% 1.8 – 0.8 Kingdom Spain

4) Axel Springer France S.A.S., Paris, 2 Airbnb, Inc., San Francisco, USA 0.1% - - 30 100.0% 8.4 2.5 France ANTENNE BAYERN GmbH & Co. KG, 4) 3 16.0% - - Axel Springer Ideas Engineering Ismaning 31 100.0% 47 0.9 0.0 2) GmbH, Berlin 4 APM Print d.o.o., Belgrade, Serbia 100.0% 112 7.2 0.9 80.1% 25 1.9 0.0 Axel Springer INSIDER Ventures 5 Appcast, Inc., Lebanon, USA 91.2% 127 3.0 – 0.2 32 GmbH, Berlin 19.9% 90 1.9 0.0

AS TV-Produktions- und 6 100.0% 3.7 0.5 Axel Springer International GmbH, Vertriebsges. mbH, Hamburg 33 100.0% 2,007.8 0.0 2) Berlin 7 AS TYFP Media GmbH & Co. KG, Berlin 50.0% 23.3 0.0 Axel Springer International Holding 34 100.0% 33 2,049.1 0.0 2) Autobazar.EU portál s.r.o., Nové GmbH, Berlin 8 100.0% 138 4.6 0.2 Mesto nad Váhom, Slovakia Axel Springer International Limited, 35 100.0% 34 421.5 – 5.1 9 AVIV Group GmbH, Berlin 100.0% 23 – 91.4 0.0 2) London, United Kingdom

Axel Springer Kundenservice GmbH, 10 AWIN AG, Berlin 80.0% 24 97.4 – 87.5 36 100.0% 0.5 0.0 2) Hamburg 11 AWIN B.V., Amsterdam, Netherlands 100.0% 10 – 0.3 – 0.7 Axel Springer Mediahouse Berlin 37 100.0% 1.1 0.0 2) AWIN Global Affiliate Network S.L., GmbH, Berlin 12 100.0% 10 – 1.6 – 0.8 Madrid, Spain Axel Springer Medien Accounting 38 100.0% 1.2 0.0 2) 13 AWIN Inc., Wilmington, USA 100.0% 14 56.6 2.1 Service GmbH, Berlin

Axel Springer Offsetdruckerei Ahrens- 14 AWIN Ltd., London, United Kingdom 100.0% 10 84.9 7.2 39 100.0% 22.4 – 2.5 burg GmbH & Co. KG, Ahrensburg 0.0% 72 2.7 0.5 5) AWIN VEICULAÇÃO DE PUBLICIDADE Axel Springer Offsetdruckerei Kettwig 15 40 100.0% 2.3 – 4.0 NA INTERNET LTDA., São Paulo, Brasil GmbH & Co. KG, Essen 100.0% 10 2.7 0.5 Axel Springer Plug and Play 16 Axel Springer All Media GmbH, Berlin 100.0% 12.3 0.0 2) 41 50.0% 25 4.0 3.9 Accelerator GmbH, Berlin

17 Axel Springer Asia GmbH, Hamburg 100.0% 34 60.3 – 0.7 Axel Springer Porsche GmbH & Co. 42 50.0% 25 0.8 – 1.8 KG, Berlin 18 Axel Springer Audio GmbH, Berlin 100.0% 4.5 0.0 2)

Axel Springer Schweiz AG, Zurich, Axel Springer Auto-Verlag GmbH, 43 100.0% 35 6.5 3.8 19 100.0% 3.0 0.0 2) Switzerland Hamburg

Axel Springer Services & Immobilien 2) Axel Springer Beteiligungen Schweiz 44 100.0% 2.2 0.0 20 100.0% 43 8.3 5.5 GmbH, Berlin AG, Zurich, Switzerland

Axel Springer Sport Verlag GmbH, 2) Axel Springer Corporate Solutions 45 100.0% 1.3 0.0 21 100.0% 1.3 0.3 Hamburg GmbH & Co. KG, Berlin 46 Axel Springer Teaser Ad GmbH, Berlin 100.0% 16 1.5 – 0.2 Axel Springer Digital Classifieds 22 100.0% 24 1,091.6 0.0 2) GmbH, Berlin "Axel Springer Verlag" Beteiligungs- 47 100.0% 170.9 0.0 2) gesellschaft mbH, Berlin Axel Springer Digital Classifieds 23 100.0% 22 1,135.7 0.0 2) Holding GmbH, Berlin 48 B.Z. Ullstein GmbH, Berlin 100.0% 47 15.4 0.0 2)

2) 24 Axel Springer Digital GmbH, Berlin 100.0% 3,194.3 0.0 Bilanz Deutschland Wirtschafts- 49 100.0% 47 0.0 0.0 2) magazin GmbH, Hamburg Axel Springer Digital Ventures 25 100.0% 24 692.7 0.0 2) GmbH, Berlin 50 BILD GmbH, Berlin 100.0% 62.9 0.0 2) Axel Springer Digital Ventures US 26 100.0% 25 4.5 0.0 51 Blendle B.V., Utrecht, Netherlands 14.6% 25 – 3.5 – 4.1 GmbH, Berlin 52 Bonial Holding GmbH, Berlin 72.5% 24 – 140.6 – 104.4 Axel Springer Digital Ventures US II 27 100.0% 25 12.8 0.0 GmbH, Berlin 53 Bonial International GmbH, Berlin 100.0% 52 18.6 0.0 2)

Axel Springer Druckhaus Spandau 28 100.0% – 2.2 – 4.2 54 Bonial SAS, Paris, France 98.0% 53 – 3.7 0.2 GmbH & Co. KG, Berlin

19 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

Net Net Share- Via Equity income Share- Via Equity income No. Company holding No. € million1) € million1) No. Company holding No. € million1) € million1)

55 Bonial Ventures GmbH i.L., Berlin 74.9% – 10.7 – 0.9 85 Immoweb SA, Brussels, Belgium 100.0% 66 46.3 17.9

Business Insider Europe Limited, 86 Immowelt AG, Nuremberg 100.0% 88 27.9 20.7 56 100.0% 90 1.1 0.3 London, United Kingdom 87 Immowelt Hamburg GmbH, Hamburg 100.0% 88 34.2 9.9 Candidate Manager Ltd, Dublin, 57 100.0% 120 – 1.3 – 0.4 Ireland 88 Immowelt Holding AG, Nuremberg 100.0% 9 175.2 25.8

58 Car&Boat Media SAS, Paris, France 100.0% 66 90.7 15.8 89 infoRoad GmbH, Heroldsberg 80.3% 19 1.1 0.8

CaribbeanJobs Ltd, George Town, 59 100.0% 120 1.9 0.3 90 Insider Inc., New York, USA 100.0% 25 27.4 0.2 Cayman-Island 91 Jobs LU Ltd, Dublin, Ireland 100.0% 120 1.9 0.8 60 Commerz-Film GmbH, Berlin 100.0% 34 269.1 3.7 92 Jobs.ie Ltd, Dublin, Ireland 100.0% 120 13.4 3.7 61 comparado GmbH, Lüneburg 100.0% 83 2.2 0.9

Jobsite UK (Worldwide) Limited, COMPUTER BILD Digital GmbH, 936 100.0% 131 17.9 7.7 62 100.0% 0.6 0.0 2) London, United Kingdom Hamburg 94 Lakestar II LP, Guernsey, Guernsey 5.7% 25 281.5 26.7 Concept Multimédia SAS, Aix-en- 63 100.0% 66 10.3 4.0 Provence, France Lamudi Global S.à.r.l., 95 10.0% 9 51.9 – 1.0 Senningerberg, Luxembourg 64 Coral-Tell Ltd., Tel Aviv, Israel 100.0% 9 38.5 19.0

Lerer Hippeau Ventures IV, LP, 96 1.6% 25 178.1 86.3 65 CV Keskus OÜ, Tallinn, Estonia 100.0% 114 4.5 1.8 New York, USA

Digital Classifieds France SAS, Paris, Lerer Hippeau Ventures V, LP, 66 100.0% 9 707.6 – 2.0 97 1.8% 25 159.7 40.5 France New York, USA

Dreiundneunzigste "Media" MAZ & More TV-Produktion GmbH, 2) 4) 98 100.0% 150 0.0 0.0 67 Vermögensverwaltungsges. mbH, 100.0% - - Berlin Berlin 99 Media Impact GmbH & Co. KG, Berlin 74.9% 16 – 6.4 – 5.8 Dreizehnte "Media" 68 Vermögensverwaltungsges. mbH, 100.0% – 3.2 0.0 100 meinestadt.de GmbH, Cologne 100.0% 124 10.2 0.0 2) Hamburg Ozy Media, Inc., Mountain View CA, 101 14.0% 25 – 12.8 – 4.5 Editions Mondadori Axel Springer USA 69 (EMAS) S.E.N.C., Montrouge Cedex, 50.0% 30 5.1 4.9 PACE Paparazzi Catering & Event France 102 100.0% 0.3 0.0 2) GmbH, Berlin Einhundertsiebte "Media" 50.0% 9 25.5 0.0 Pnet (Pty) Ltd, Johannesburg, South 70 Vermögensverwaltungsges. mbH, 103 100.0% 120 5.0 1.1

Berlin 50.0% 108 25.5 0.0 Africa 2) 71 eMarketer Inc., New York, USA 100.0% 25 25.2 11.3 104 Press Impact GmbH, Hamburg 100.0% 2.7 0.0

72 eprofessional GmbH, Hamburg 100.0% 10 3.2 0.3 105 profession.hu Kft, Budapest, Hungary 100.0% 114 12.9 11.4

Project A Ventures GmbH & Co. KG, 73 Falguière Conseil SAS, Paris, France 100.0% 66 0.6 – 3.7 106 26.3% 24 43.9 – 4.3 Berlin Finanzen Corporate Publishing 74 100.0% – 11.3 0.0 Project A Ventures II GmbH & Co. KG, GmbH, Berlin 107 2.1% 24 83.9 – 3.2 Berlin 75 finanzen.net GmbH, Karlsruhe 75.0% 25 3.1 8.8 Purplebricks Group plc, Solihull, 108 26.6% 9 121.5 – 108.9 76 Garantie System SAS, Paris, France 100.0% 58 6.8 0.2 United Kingdom

109 QWANT SAS, Paris, France 18.1% 25 – 4.2 – 14.2 77 Gehalt.de GmbH, Hamburg 51.0% 124 2.7 0.7 Radio Hamburg GmbH & Co. KG, Good & Co Labs, Inc., San Francisco, 110 35.0% 18 2.9 6.7 78 100.0% 127 – 1.0 – 3.1 Hamburg USA RADIO/TELE FFH GmbH & Co. Group Nine Media, Inc., New York, 111 15.0% 18 - - 4) 79 8.7% 25 64.9 – 37.5 Betriebs-KG, Bad Vilbel USA Ringier Axel Springer d.o.o., Belgrade, Housell Inmo Online, S.L., Madrid, 112 100.0% 114 10.7 1.0 80 16.3% 9 1.8 – 10.7 Serbia Spain Ringier Axel Springer Magyarország 81 ICI Formations SAS, Paris, France 100.0% 126 1.9 0.3 113 100.0% 114 5.6 1.1 Kft, Budapest, Hungary

1.0% 128 3.2 2.0 Ringier Axel Springer Media AG, 82 ictjob SPRL, Waterloo, Belgium 114 50.0% 35 545.0 15.2 Zurich, Switzerland 99.0% 124 3.2 2.0 Ringier Axel Springer Polska Sp. z o. o., 115 100.0% 114 301.8 1.4 83 Idealo Internet GmbH, Berlin 74.9% 24 41.0 18.7 Warsaw, Poland

Immoweb Financial Services SA, 3) Ringier Axel Springer Schweiz AG, 84 100.0% 85 - - 116 50.0% 20 7.3 – 3.7 Brussels, Belgium Zurich, Switzerland

20 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

Net Net Share- Via Equity income Share- Via Equity income No. Company holding No. € million1) € million1) No. Company holding No. € million1) € million1)

Ringier Axel Springer SK, a.s., United Classifieds s.r.o., Bratislava, 117 87.5% 114 32.4 – 6.5 138 60.0% 117 3.3 – 0.6 Bratislava, Slovakia Slovakia

118 Saknai Net Ltd., Tel Aviv, Israel 100.0% 64 7.3 3.4 Universum Business Consulting 139 100.0% 143 – 1.9 – 0.1 Shanghai Co. Ltd, Shanghai, China 119 Sales Impact GmbH, Hamburg 100.0% 0.5 0.0 2) Universum Communications Inc., 140 100.0% 143 – 1.7 – 0.3 120 Saongroup Limited, Dublin, Ireland 100.0% 131 5.5 5.1 New York, USA

Universum Communications Ltd, 121 SeLoger SAS., Paris, France 100.0% 66 266.8 46.2 141 100.0% 143 2.2 0.5 London, United Kingdom 122 ShareASale.com Inc., Chicago, USA 100.0% 13 3.5 4.9 Universum Communications Pte Ltd, 142 100.0% 143 – 2.4 – 0.1 SPRING Axel Springer Digital News Singapore, Singapore 123 100.0% 7.8 0.7 Media GmbH & Co. KG, Berlin Universum Communications 143 100.0% 127 3.9 0.3 StepStone Continental Europe Sweden AB, Stockholm, Schweden 124 100.0% 127 314.9 0.0 2) GmbH, Berlin 94.5% 2.1 – 11.6 144 upday GmbH & Co. KG, Berlin StepStone Deutschland GmbH, 2) 125 100.0% 124 27.7 0.0 Düsseldorf 5.5% 67 2.1 – 11.6

Varsavsky Axel Springer 126 StepStone France SAS, Paris, France 100.0% 124 0.2 – 3.1 145 93.3% 25 3.9 – 0.1 GmbH & Co. KG, Berlin 127 StepStone GmbH, Berlin 100.0% 23 519.4 0.0 2) 146 Verimi GmbH, Frankfurt am Main 6.5% 54.8 – 28.7 0.0% 129 1.1 0.4 5)

128 StepStone NV, Brussels, Belgium 147 Vertical Media GmbH, Berlin 88.0% 150 – 4.3 – 1.6 100.0% 124 1.1 0.4 148 Visual Meta GmbH, Berlin 96.0% 83 4.1 2.9

StepStone Österreich GmbH, Vienna, 129 100.0% 125 0.7 – 0.6 Austria 149 WEBIMM SAS, Paris, France 65.0% 121 4.7 1.6

StepStone Services Sp. z o.o., 150 WeltN24 GmbH, Berlin 100.0% 36.3 0.0 2) 130 100.0% 124 2.2 0.6 Warsaw, Poland YOURCAREERGROUP GmbH, 151 100.0% 124 2.1 0.0 2) StepStone UK Holding Limited, Düsseldorf 131 100.0% 127 240.3 – 53.6 London, United Kingdom YOURCAREERGROUP Österreich 152 100.0% 124 1.5 0.3 51.0% 114 - - 3) GmbH, Vienna, Austria StepStone.pl Sp. z o.o., Warsaw, 132 Poland 49.0% 124 - - 3) 1) Unless otherwise stated, equity and net income according to local statutory fi-

133 Studydrive GmbH, Berlin 100.0% 124 – 0.1 – 0.8 nancial statements of the financial year 2018. Amounts in foreign currency translated at the exchange rate prevailing on December 31, 2019. Tecoloco International Inc, Panama 2) Control and profit and loss transfer agreement or profit and loss transfer 134 100.0% 120 – 3.9 – 0.2 City, Panama agreement. 3) The company was newly founded. Financial statements have not been availa- Totaljobs Group Limited, London, 135 100.0% 131 4.6 – 6.0 United Kingdom ble yet. 4) Equity and net income are not mentioned as the financial statements are not Transfermarkt GmbH & Co. KG, 136 51.0% 50 1.7 1.7 published. Hamburg 5) Shareholding less than 0.0 %. 137 Ullstein GmbH, Berlin 100.0% 47 3.7 0.0 2)

(21) Declaration of conformity with the German Corporate Governance Code

In accordance with section 161 of the German shareholders on the Company's website at Stock Corporation Act (Aktiengesetz), Axel www.axelspringer.de → Investor Relations → Cor- Springer SE has made the declaration of con- porate Governance. The declaration of con- formity with the German Corporate Governance formity is also published in the Company's 2019 Code issued by the Executive Board and Super- annual report. visory Board permanently available to the

21 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

(22) Duty of disclosure concerning transaction) in the amount of 6.01 % of the vot- investments ing rights (6,484,234 voting rights) and to rights of first offer (exercise period/term: at the earli- The number of shares with voting rights, instru- est five years after December 18, 2019, physical ments, and the proportion of voting rights re- transaction) in the amount of 43.48 % (46,907,558 spectively cited in the notifications below each voting rights), in total 49.48 % (53,391,792 voting related to the date specified in the relevant no- rights). The following were specified as the com- tification. The following information represents plete chain of subsidiaries, beginning with the the last notification of a person subject to the ultimate controlling party: KKR Management notification to the company, if not, for reasons LLP, KKR & Co. Inc, KKR Group Holdings Corp., KKR of transparency, the presentation of further Group Partnership L.P., KKR Europe V Holdings notifications is required. Limited, KKR Europe V S.à r.l., KKR Associates Europe V SCSp, KKR European Fund V (USD) KKR Management LLP, Wilmington, Delaware, SCSp, KKR Traviata Aggregator GP LLC, KKR Tra-

USA (name of shareholders holding directly 3 % viata Aggregator L.P., Traviata I S.à r.l., Traviata or more voting rights, if different from the person II S.à r.l. (with voting rights in the amount of subject to the notification obligation: Traviata 89.73 % and instruments in the amount of 51.46 %,

B.V., Axel Springer Gesellschaft für Publizistik in total 95.74 %), Traviata B.V. (with voting rights

GmbH & Co, Dr. h. c. Friede Springer), notified us in the amount of 89.73 % and instruments in the

(via a notification dated January 3, 2020) that, amount of 51.46 %, in total 95.74 %). Acting in con- due to a voluntary group notification with trig- cert between Traviata B.V., Traviata II S.à r.l., gered threshold on subsidiary level, its propor- Dr. h. c. Friede Springer, Friede Springer GmbH & tion of voting rights in Axel Springer SE as of Co. KG, Axel Springer Gesellschaft für Publizistik

January 1, 2020 amounts to 89.73 % (correspond- GmbH & Co, Dr. Mathias Döpfner (comprising all ing to 96,815,616 of a total of 107,895,311 voting shares held directly or indirectly by him) and rights; previous notification: 89.73 %). The voting Epiktet GmbH & Co. KG. The rights of first refusal rights are attributed to it in accordance with and put options refer to the same voting rights. section 34 of the German Securities Trading Act The rights of first offer refer to the same voting (Wertpapierhandelsgesetz – WpHG), whereby rights as attributed according to Section 34 (2)

51.82 % (55,913,616 voting rights) relate to the In- WpHG (acting in concert). KKR Management LLC ternational Securities Identification Number was converted into KKR Management LLP. KKR

(ISIN) DE0005501357 and 37.91 % (40,902,000 voting Fund Holdings GP Limited was removed from the rights) to ISIN DE0005754238. In addition, it noti- chain of subsidiaries. KKR Fund Holdings L.P. fied us, that its proportion of instruments changed its name to KKR Group Partnership L.P. amounts to 51.46 % (previous notification: 51.46 %) (sum of proportions of voting rights and instru- Tweedy, Browne Company LLC, Stamford, Con- ments: 95.74 %; previous notification: 95.74 %). In- necticut, USA, notified us (via a notification struments as defined by section 38 (1) No 1 WpHG dated January 2, 2020) that, due to an acquisi- relate to rights of first refusal in the amount of tion/disposal of shares with voting rights, its

6.01 % of the voting rights (6,484,234 voting rights) proportion of voting rights in Axel Springer SE as and to rights of first offer in the amount of 1.97 % of December 18, 2019 amounts to 0.00 % (corre-

(2,128,523 voting rights), in total 7.98 % (8,612,757 sponding to 0 of a total of 107,895,311 voting voting rights). Instruments as defined by section rights; previous notification: 4.90 %). The com- 38 (1) No 2 WpHG relate to put options (maturity/ pany subject to the notification obligation is expiration as of March 31, 2020; physical neither controlled nor does control any other

22 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

company that directly or indirectly holds voting B.V., Traviata II S.à r.l., Dr. h. c. Friede Springer, rights of the issuer. Friede Springer GmbH & Co. KG, Axel Springer Gesellschaft für Publizistik GmbH & Co, Dr. Ma- Dr. Mathias Döpfner (name of shareholders thias Döpfner (comprising all shares held holding directly 3 % or more voting rights, if dif- directly or indirectly by him) and Epiktet GmbH & ferent from the person subject to the notifica- Co. KG. No aggregation of voting rights and in- tion obligation: Dr. h. c. Friede Springer, Axel struments, as the instruments refer to voting Springer Gesellschaft für Publizistik GmbH & Co, rights attributed to the notifying person (Sec- Traviata B.V.) notified us (via a notification tion 34 WpHG). dated December 20, 2019) that, due to the ac- quisition/disposal of instruments as well as act- Dr. h. c. Friede Springer (name of shareholders ing in concert, his proportion of voting rights in holding directly 3 % or more voting rights, if dif- Axel Springer SE as of December 18, 2019 ferent from the person subject to the notifica- amounts to 89.73 % (corresponding to 96,815,616 tion obligation: Axel Springer Gesellschaft für of a total of 107,895,311 voting rights, previous Publizistik GmbH & Co, Traviata B.V.) notified us notification 49.93 %). Voting rights in the amount (via a notification dated December 20, 2019), of 37.91 % (40,902,000 voting rights) concerning that, due to the acquisition/disposal of instru-

ISIN DE0005754238 and in the amount of 51.71 % ments as well as acting in concert, her propor- (55,787,271 voting rights) concerning ISIN tion of voting rights in Axel Springer SE as of De-

DE0005501357 are attributed to him in accord- cember 18, 2019 amounts to 89.73 % (correspond- ance with section 34 WpHG; 0.12 % (126,345 voting ing to 96,815,616 of a total of 107,895,311 voting rights) are attributed to voting rights held di- rights, previous notification 44.48 %). Voting rectly by him. In addition, he notified us, that his rights in the amount of 37.91 % (40,902,000 voting proportion of instruments amounts to 85.92 % rights) concerning ISIN DE0005754238 and in the

(previous notification: 0.00 %; sum of proportions amount of 46.72 % (50,411,166 voting rights) con- of voting rights and instruments amounts to cerning ISIN DE0005501357 are attributed to her

89.73 %; previous notification: 49.93 %). Instru- in accordance with section 34 WpHG; 5.10 % ments as defined by section 38 (1) No 2 WpHG (5,502,450 voting rights) are attributed to voting relate to rights of first offer (exercise period/ rights held directly by her. In addition, she noti- term: at the earliest in five years after Decem- fied us, that her proportion of instruments ber 18, 2019; physical transaction) in the amount amounts to 46.12 % (previous notification: 0.00 %; of 85.92 % of the voting rights (92,708,293 voting sum of proportions of voting rights and instru- rights). The following were specified as the com- ments amounts to 89.73 %; previous notification: plete chain of subsidiaries, beginning with the 44.48 %). Instruments as defined by section 38 (1) ultimate controlling party: Dr. Mathias Döpfner No 2 WpHG relate to rights of first offer (exercise

(89.73 % voting rights, 85.92 % instruments, in total period/term: at the earliest in five years after

89.73 %), Brilliant 310. GmbH; Dr. Mathias Döpfner December 18, 2019; physical transaction) in the

(89.73 % voting rights, 85.92 % instruments, in total amount of 46.12 % of the voting rights (49,758,335

89.73 %), Epiktet Verwaltungsgesellschaft mbH, voting rights). The following were specified as

Epiktet GmbH & Co. KG (89.73 % voting rights, the complete chain of subsidiaries, beginning

85.92 % instruments, in total 89.73 %); Dr. Mathias with the ultimate controlling party: Dr. h. c.

Döpfner (89.73 % voting rights, 85.92 % instru- Friede Springer (89.73 % voting rights, 46.12 % in- ments, in total 89.73 %), Epiktet GmbH & Co. KG struments, in total 89.73 %), Friede Springer Ver-

(89.73 % voting rights, 85.92 % instruments, in to- waltungs GmbH, Friede Springer GmbH & Co. KG tal 89.73 %). Acting in concert between Traviata (89.73 % voting rights, 46.12 % instruments, in total

23 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

89.73 %), AS Publizistik GmbH, Axel Springer Ge- Springer SE as of December 18, 2019 amounts to sellschaft für Publizistik GmbH & Co (89.73 % vot- 89.73 % (corresponding to 96,815,616 of a total of ing rights, 46.12 % instruments, in total 89.73 %); 107,895,311 voting rights; previous notification:

Dr. h. c. Friede Springer (89.73 % voting rights, 0.59 %). The voting rights are attributed to it in

46.12 % instruments, in total 89.73 %), Friede accordance with section 34 WpHG, 51.82 % relate Springer Verwaltungs GmbH, Friede Springer to ISIN DE0005754238 (55,913,616 voting rights)

GmbH & Co. KG (89.73 % voting rights, 46.12 % in- and 37.91 % (40,902,000 voting rights) to ISIN struments, in total 89.73 %), Axel Springer Gesell- DE0005754238. In addition, it notified us, that its schaft für Publizistik GmbH & Co (89.73 % voting proportion of instruments amounts to 51.46 % rights, 46.12 % instruments, in total 89.73 %); (previous notification: 7.41 %; sum of proportion

Dr. h. c. Friede Springer (89.73 % voting rights, of voting rights and instruments: 95.74 %; previ-

46.12 % instruments, in total 89.73 %), Friede ous notification: 8 %). Instruments as defined by

Springer GmbH & Co. KG (89.73 % voting rights, section 38 (1) No 1 WpHG relate to rights of first

46.12 % instruments, in total 89.73 %), Axel Springer refusal in the amount of 6.01 % of the voting

Gesellschaft für Publizistik GmbH & Co (89.73 % rights (6,484,234 voting rights) and to rights of voting rights, 46.12 % instruments, in total 89.73 %); first offer in the amount of 1.97 % (2,128,523 voting

Dr. h. c. Friede Springer (89.73 % voting rights, rights), in total 7.98 % (8,612,757 voting rights). In-

46.12 % instruments, in total 89.73 %), Friede struments as defined by section 38 (1) No 2

Springer GmbH & Co. KG (89.73 % voting rights, WpHG refer to put options (maturity/expiration

46.12 % instruments, in total 89.73 %), AS Publizistik as of March 31, 2020; physical transaction) in the

GmbH, Axel Springer Gesellschaft für Publizistik amount of 6.01 % of the voting rights (6,484,234

GmbH & Co (89.73 % voting rights, 46.12 % instru- voting rights) and to rights of first offer (exercise ments, in total 89.73 %). Acting in concert be- period/term: at the earliest five years after De- tween Traviata B.V., Traviata II S.à r.l., Dr. h. c. cember 18, 2019, physical transaction) in the

Friede Springer, Friede Springer GmbH & Co. KG, amount of 43.48 % (46,907,558 voting rights); in to-

Axel Springer Gesellschaft für Publizistik GmbH & tal 49.48 % (53,391,792 voting rights). The following Co, Dr. Mathias Döpfner (comprising all shares were specified as the complete chain of subsid- held directly or indirectly by him) and Epiktet iaries, beginning with the ultimate controlling GmbH & Co. KG. No aggregation of voting rights party: KKR SP Limited, KKR Associates Europe V and instruments, as the instruments refer to SCSp, KKR European Fund V (USD) SCSp, KKR Tra- voting rights attributed to the notifying person viata Aggregator GP LLC, KKR Traviata Aggre- (Section 34 WpHG). gator L.P., Traviata I S.à r.l., Traviata II S.à r.l.

(with voting rights in the amount of 89.73 % and

KKR SP Limited, George Town, Grand Cayman, instruments in the amount of 51.46 %, in total

Cayman Islands (name of shareholders holding 95.74 %), Traviata B.V. (with voting rights in the directly 3 % or more voting rights, if different amount of 89.73 % and instruments in the from the person subject to the notification obli- amount of 51.46 %, in total 95.74 %). Acting in con- gation: Traviata B.V., Axel Springer Gesellschaft cert between Traviata B.V., Traviata II S.à r.l., für Publizistik GmbH & Co, Dr. h. c. Friede Dr. h. c. Friede Springer, Friede Springer GmbH & Springer), notified us (via a notification dated Co. KG, Axel Springer Gesellschaft für Publizistik December 20, 2019) that, due to acquisition/dis- GmbH & Co, Dr. Mathias Döpfner (comprising all posal of shares with voting rights, due to acqui- shares held directly or indirectly by him) and sition/disposal of instruments as well as effec- Epiktet GmbH & Co. KG. The rights of first refusal tiveness of voting pooling agreements (acting in and put options relate to the same voting concert), its proportion of voting rights in Axel rights. The rights of first offer relate to the same

24 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

voting rights, that are allocated according to Holdings L.P., KKR Europe V Holdings Limited, KKR section 34 (2) WpHG (acting in concert). Europe V S.à r.l., KKR Associates Europe V SCSp, KKR European Fund V (USD) SCSp, KKR Traviata KKR Management LLC, Wilmington, Delaware, Aggregator GP LLC, KKR Traviata Aggregator

USA (name of shareholders holding directly 3 % L.P., Traviata I S.à r.l., Traviata II S.à r.l. (with vot- or more voting rights, if different from the per- ing rights in the amount of 89.73 % and instru- son subject to the notification obligation: Travi- ments in the amount of 51.46 %, in total 95.74 %), ata B.V., Axel Springer Gesellschaft für Publizistik Traviata B.V. (with voting rights in the amount of

GmbH & Co, Dr. h. c. Friede Springer), notified us 89.73 % and instruments in the amount of 51.46 %,

(via a notification dated December 20, 2019) in total 95.74 %). Acting in concert between Tra- that, due to acquisition/disposal of shares with viata B.V., Traviata II S.à r.l., Dr. h. c. Friede voting rights, due to acquisition/disposal of in- Springer, Friede Springer GmbH & Co. KG, Axel struments as well as effectiveness of voting Springer Gesellschaft für Publizistik GmbH & Co, pooling agreements (acting in concert), its pro- Dr. Mathias Döpfner (comprising all shares held portion of voting rights in Axel Springer SE as of directly or indirectly by him) and Epiktet GmbH &

December 18, 2019 amounts to 89.73 % (corre- Co. KG. The rights of first refusal and put options sponding to 96,815,616 of a total of 107,895,311 vot- relate to the same voting rights. The rights of ing rights; previous notification: 0.59 %). The vot- first offer relate to the same voting rights, that ing rights are attributed to it according to sec- are allocated according to section 34 (2) WpHG tion 34 WpHG, 51.82 % relate to ISIN DE0005754238 (acting in concert).

(55,913,616 voting rights) and 37.91 % (40,902,000 voting rights) to ISIN DE0005754238. In addition, it The Capital Group Companies, Inc., Los Angeles, notified us, that its proportion of instruments California, USA, notified us (via a notification amounts to 51.46 % (previous notification: 7.41 %; dated June 5, 2019) that, due to the acquisi- sum of proportion of voting rights and instru- tion/disposal of shares with voting rights, its ments: 95.74 %; previous notification: 8 %). Instru- proportion of voting rights in Axel Springer SE as ments as defined by section 38 (1) No 1 WpHG re- of May 31, 2019 amounts to 2.84 % (corresponding late to rights of first refusal in the amount of to 3,069,009 of a total of 107,895,311 voting rights;

6.01 % of the voting rights (6,484,234 voting rights) previous notification: 4.75 %), whereby these vot- and to rights of first offer in the amount of 1.97 % ing rights are attributed to it in accordance

(2,128,523 voting rights), in total 7.98 % (8,612,757 with Section 34 of the WpHG. The following were voting rights). Instruments as defined by section specified as the complete chain of subsidiaries, 38 (1) No 2 WpHG refer to put options (maturity/ beginning with the ultimate controlling party: expiration as of March 31, 2020; physical trans- The Capital Group Companies, Inc., Capital Re- action) in the amount of 6.01 % of the voting search and Management Company. rights (6,484,234 voting rights) and to rights of first offer (exercise period/term: at the earliest EuroPacific Growth Fund, Boston, Massachu- five years after December 18, 2019, physical setts, USA, notified us (via a notification dated transaction) in the amount of 43.48 % (46,907,558 February 28, 2019) that, due to the acquisition/ voting rights); in total 49.48 % (53,391,792 voting disposal of shares with voting rights, its propor- rights). The following were specified as the com- tion of voting rights in Axel Springer SE as of plete chain of subsidiaries, beginning with the February 25, 2019 amounts to 2.95 % (correspond- ultimate controlling party: KKR Management ing to 3,184,279 of a total of 107,895,311 voting

LLC, KKR & Co. Inc, KKR Group Holdings Corp., rights; previous notification: 3.07 %), whereby KKR Fund Holdings GP Limited, KKR Fund these voting rights are attributed to it in

25 Financial Statements 2019 Axel Springer SE Notes to the Financial Statements

accordance with Section 33 of the WpHG. The (24) Profit utilization proposal company subject to the notification obligation is neither controlled nor does control any other The Supervisory Board and Executive Board pro- company that directly or indirectly holds voting pose that the Company applies the full amount rights of the issuer. of the distributable profit of € 125.2 million (PY: € 226.6 million) to pay a dividend of € 1.16 Axel Sven Springer notified us (via a notification (PY: € 2.10) per qualifying share for the 2019 fi- dated November 29, 2018), that, due to the ac- nancial year. quisition/disposal of shares with voting rights, his proportion of voting rights in Axel Springer The company does not currently hold any

SE, as of November 26, 2018 amounts to 7.36 %. treasury shares, so that all the company’s

7.00 % (corresponding to 7,548,029 of a total of shares qualify for dividends. However, the num- 107,895,311 voting rights in Axel Springer SE) relate ber of shares qualifying for dividends may be to ISIN DE0005501357, 0.37 % (396,738 voting rights) reduced in the time remaining before the an- to ISIN DE0005754238, whereby these voting nual shareholders’ meeting. In that case, an ad- rights are held directly by him in accordance justed profit utilization proposal will be submit- with Section 33 of the WpHG. ted to the annual shareholders’ meeting, with- out changing the target dividend of € 1.16 per (23) Events after the reporting date qualifying share.

On January 23, 2020, Axel Springer has pub- lished plans to withdraw from the stock ex- change. In this context, a prior public delisting offer is required. According to an agreement concluded with Axel Springer SE, KKR an- nounced such an offer with a cash offer price of € 63.00. More information is available on the website www.traviata-angebot.de/delisting.

At the end of January 2020, the indirect joint venture of Axel Springer SE holding the shares in Homeday exercised the options exercisable since the end of December to increase the shares in Homeday GmbH and thus increased its shareholding to 54.4 %. The resulting future payment commitments are fully attributable to Axel Springer if the other partner of the joint venture does not participate in the financing of the company (see section (9)).

26 Financial Statements 2019 Axel Springer SE Responsibility Statement Responsibility Statement

To the best of our knowledge, and in accord- ance with the applicable reporting principles, the annual financial statements give a true and fair view of the assets, liabilities, financial posi- tion, and profit or loss of the Company, and the combined management report of the Company and the Axel Springer Group includes a fair re- view of the development and performance of the business and the position of the Company, together with a description of the principal op- portunities and risks associated with the ex- pected development of the Company.

Berlin, February 18, 2020

Axel Springer SE

Dr. Mathias Döpfner Jan Bayer

Dr. Stephanie Caspar Dr. Julian Deutz

Dr. Andreas Wiele

27 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report Independent Auditor’s Report

To the Axel Springer SE with German legal requirements and appro- priately presents the opportunities and risks Report on the audit of the of future development. Our opinion on the annual financial statements management report does not cover the parts of the management report mentioned in the and of the management annex to the auditor’s report report Pursuant to Section 322 (3) sentence 1 of the Opinions German Commercial Code (Handelsgesetzbuch, “HGB”), we declare that our audit has not led to We have audited the annual financial state- any reservations relating to the legal compli- ments of Axel Springer SE, Berlin, which com- ance of the annual financial statements and of prise the balance sheet as at December 31, 2019, the management report. and the income statement for the fiscal year from January 1 to December 31, 2019, and notes Basis for the opinions to the financial statements, including the recognition and measurement policies pre- We conducted our audit of the annual financial sented therein. In addition, we have audited the statements and of the management report in management report of Axel Springer SE, which is accordance with Section 317 HGB and the EU combined with the management report of the Audit Regulation (No 537/2014, hereinafter “EU group, for the fiscal year from January 1 to De- Audit Regulation”) and in compliance with Ger- cember 31, 2019. In accordance with the German man Generally Accepted Standards for Finan- legal requirements, we have not audited the cial Statement Audits promulgated by the Insti- parts of the management report as mentioned tute of Public Auditors in Germany (Institut der in the annex of the auditor’s report. Wirtschaftsprüfer, “IDW”). Our responsibilities under those requirements and principles are In our opinion, on the basis of the knowledge further described in the “Auditor’s responsibili- obtained in the audit, ties for the audit of the annual financial state- ments and of the management report” section  the accompanying annual financial state- of our auditor’s report. We are independent of ments comply, in all material respects, with the Company in accordance with the require- the requirements of German commercial law ments of European law and German commer- applicable to business corporations and give cial and professional law, and we have fulfilled a true and fair view of the assets, liabilities our other German professional responsibilities and financial position of the Company as at in accordance with these requirements. In addi- December 31, 2019 and of its financial perfor- tion, in accordance with Article 10 (2) f) of the EU mance for the fiscal year from January 1 to Audit Regulation, we declare that we have not December 31, 2019 in compliance with German provided non-audit services prohibited under legally required accounting principles, and Article 5 (1) of the EU Audit Regulation. We be- lieve that the audit evidence we have obtained  the accompanying management report as a is sufficient and appropriate to provide a basis whole provides an appropriate view of the for our opinions on the annual financial state- Company’s position. In all material respects, ments and on the management report. this management report is consistent with the annual financial statements, complies

28 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report

Key audit matters in the audit of the Auditor’s response annual financial statements As part of our audit, we examined the process implemented by the executive directors of Axel Key audit matters are those matters that, in our Springer SE as well as the accounting and professional judgment, were of most signifi- measurement guidelines used to calculate the cance in our audit of the annual financial state- fair values of non-current financial assets in or- ments for the fiscal year from January 1 to De- der to determine the possible risk of errors, and cember 31, 2019. These matters were addressed we also acquired an understanding of the steps in the context of our audit of the annual finan- involved in the process. We have established cial statements as a whole, and in forming our that the company's methods of calculating dis- opinion thereon; we do not provide a separate count rates and extrapolating future earnings opinion on these matters. are in compliance with the requirements of Ger- man commercial law and with pronouncements Below, we describe what we consider to be the issued by professional bodies. key audit matters: We have analyzed the business plans by com- (a) Measurement of non-current paring actual past earnings and the current financial assets performance of business figures. As part of our Reasons why the matter was determined to be analysis, we also examined the market perfor- a key audit matter mance of comparable companies based on fig- In the financial statements of Axel Springer SE, ures from the relevant financial year and fore- the balance sheet item "Non-current financial casted figures for future financial years. We assets" showed shares in affiliated companies, have verified the key assumptions made in the investments, and loans totaling EUR 6,468 mil- business plan in relation to growth and business lion, accounting for approximately 91 % of the performance by discussing these in detail with balance sheet total and exceeding the compa- the executive directors of Axel Springer SE. We ny's equity by EUR 4,020 million. assessed the appropriateness of these as- sumptions on this basis. The company carries out an annual impairment test for non-current financial assets in order to The appropriateness of the various key valua- determine whether there is a write-down or tion assumptions, such as the discount rate and write-up requirement. The result of these meas- the growth rate, for example, was examined urements depends to a large extent on how the with the support of internal valuation experts executive directors estimate future cash inflows based on an analysis of market indicators. We and derive the relevant discount rates. have analyzed the parameters that were con- sidered when calculating the discount rates to Given the materiality of non-current financial ensure correct extrapolation and have verified assets com-pared to both the balance sheet that the calculation is in compliance with the total and the equity, the complexity underlying corresponding requirements of German com- the valuation as well as the professional judge- mercial law. ment that can be exercised as part of the measurement, the measurement of non-current By means of sensitivity analyses, we have as- financial assets constitutes a key audit matter sessed the risk of impairment in the event of within the context of our audit. changes to the key measurement assumptions. Further, we have verified the mathematical

29 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report

accuracy of the valuation model taking into ac- that the revenue recognition is complex. Given count the requirements of German commercial the material importance and the complexity of law. the revenue recognition issues, we consider rev- enue recognition as a key audit matter. Write-ups and write-downs of non-current fi- nancial assets recognized in the balance sheet Auditor’s response were reconciled with the results of the impair- As part of our audit, we have verified the ac- ment test. counting and measurement guidelines applied in the financial statements of Axel Springer SE Based on our audit procedures, no reservations for the recognition of revenue in accordance apply in relation to the measurement of non- with the criteria defined in German commercial current financial assets. law. We have verified the processes imple- mented by the executive directors of Axel Reference to related disclosures Springer SE in relation to the revenue recogni- Information relating to the accounting and tion, in particular by verifying that returns and measurement principles applied to non-current further sales discounts have been taken into financial assets can be found in the notes to account correctly. the financial statements in the section “Ac- counting policies”. The changes in non-current To proof the existence of revenues, we have ex- financial assets are described in the section on amined, if revenues let to trade receivables and notes to the balance sheet, note (1) “Fixed as- if these have been offset with payments re- sets”. This section also contains an explanation ceived. of impairment losses and write-ups to non-cur- rent financial assets. Furthermore, we have randomly verified reve- nue recognition on the basis of contractual (b) Revenue recognition agreements in terms of the requirements of Reasons why the matter was determined to be German commercial law concerning the recog- a key audit matter nition of revenues. In addition, we obtained For the financial year 2019, Axel Springer SE confirmation of accounts receivable from cli- achieved revenues of EUR 807 million from circu- ents on a random basis. lation and advertising activities mainly. Circula- tion revenues are generated from the sales of Based on our audit procedures, no reservations newspapers and magazines ("print media") as apply in relation to the recognition of revenues well as digital subscription models. Advertising from the sale of circulation and advertising ser- revenues are generated from the marketing of vices. advertisements and advertising space in online and print media. Reference to related disclosures Detailed information concerning the composi- The executive directors of Axel Springer SE is- tion of revenues can be found in the notes to sued de-tailed accounting guidelines for the the financial statements, in the section on recognition of revenue and implemented pro- notes to the income statement, note (11) "Reve- cesses for the recognition of revenue. nues".

Given the large number of different contractual agreements for the various activities, our view is

30 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report

Other information Responsibilities of the executive directors and the Supervisory Board for The Supervisory Board is responsible for the re- the annual financial statements and port of the Supervisory Board. Furthermore, the the management report executive directors are responsible for the other information. The other information comprises The executive directors are responsible for the the parts of the management report as men- preparation of the annual financial statements tioned in the annex of the auditor’s report as that comply, in all material respects, with the well as the other parts of the annual report, ex- requirements of German commercial law appli- cluding the audited financial statements and cable to business corporations, and that the management report as well as our auditor’s re- annual financial statements give a true and fair port, in particular the responsibility statement view of the assets, liabilities, financial position in accordance with section 297 (2) sentence 4 and financial performance of the Company in HGB, the report of the Supervisory Board in ac- compliance with German legally required ac- cordance with section 171 (2) of the German counting principles. In addition, the executive Stock Corporation Act (Aktiengesetz, “AktG”) directors are responsible for such internal con- and the part “Group Key Figures”, the “Fore- trol as they, in accordance with German legally word”, the “Executive Board” and “The Axel required accounting principles, have deter- Springer Share”. We received a version of the mined necessary to enable the preparation of other information before issuing this auditor’s annual financial statements that are free from report. material misstatement, whether due to fraud or error. Our opinions on the annual financial state- ments and on the management report do not In preparing the annual financial statements, cover the other information, and consequently the executive directors are responsible for as- we do not express an opinion or any other form sessing the Company’s ability to continue as a of assurance conclusion thereon. going concern. They also have the responsibility for disclosing, as applicable, matters related to In connection with our audit, our responsibility is going concern. In addition, they are responsible to read the other information and, in so doing, for financial reporting based on the going con- to consider whether the other information cern basis of accounting, provided no actual or legal circumstances conflict therewith.  is materially inconsistent with the annual fi- nancial statements, with the management Furthermore, the executive directors are re- report or our knowledge obtained in the au- sponsible for the preparation of the manage- dit, or ment report that, as a whole, provides an ap- propriate view of the Company’s position and  otherwise appears to be materially mis- is, in all material respects, consistent with the stated. annual financial statements, complies with Ger- man legal requirements and appropriately pre- sents the opportunities and risks of future de- velopment. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a

31 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report

management report that is in accordance with of these annual financial statements and this the applicable German legal requirements, and management report. to be able to provide sufficient appropriate evi- dence for the assertions in the management re- We exercise professional judgment and main- port. tain professional skepticism throughout the au- dit. We also The Supervisory Board is responsible for over- seeing the Company’s financial reporting pro-  identify and assess the risks of material mis- cess for the preparation of the annual financial statement of the annual financial statements statements and of the management report. and of the management report, whether due to fraud or error, design and perform audit Auditor’s responsibilities for the audit procedures responsive to those risks, and ob- of the annual financial statements and tain audit evidence that is sufficient and ap- of the management report propriate to provide a basis for our opinions. The risk of not detecting a material misstate- Our objectives are to obtain reasonable assur- ment resulting from fraud is higher than for ance about whether the annual financial state- one resulting from error, as fraud may involve ments as a whole are free from material mis- collusion, forgery, intentional omissions, mis- statement, whether due to fraud or error, and representations, or the override of internal whether the management report as a whole control; provides an appropriate view of the Company’s position and, in all material respects, is con-  obtain an understanding of internal control sistent with the annual financial statements relevant to the audit of the annual financial and the knowledge obtained in the audit, com- statements and of arrangements and plies with the German legal requirements and measures (systems) relevant to the audit of appropriately presents the opportunities and the management report in order to design risks of future development, as well as to issue audit procedures that are appropriate in the an auditor’s report that includes our opinions on circum-stances, but not for the purpose of the annual financial statements and on the expressing an opinion on the effectiveness of management report. these systems of the Company;

Reasonable assurance is a high level of assur-  evaluate the appropriateness of accounting ance, but is not a guarantee that an audit con- policies used by the executive directors and ducted in accordance with Section 317 HGB and the reasonableness of estimates made by the EU Audit Regulation and in compliance with the executive directors and related disclo- German Generally Accepted Standards for Fi- sures; nancial Statement Audits promulgated by the Institute of Public Auditors in Germany (Institut  conclude on the appropriateness of the ex- der Wirtschaftsprüfer, “IDW”) will always detect ecutive directors’ use of the going concern a material misstatement. Misstatements can basis of accounting and, based on the audit arise from fraud or error and are considered evidence obtained, whether a material un- material if, individually or in the aggregate, they certainty exists related to events or condi- could reasonably be expected to influence the tions that may cast significant doubt on the economic decisions of users taken on the basis Company’s ability to continue as a going concern. If we conclude that a material

32 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report

uncertainty exists, we are required to draw We communicate with those charged with gov- attention in the auditor’s report to the re- ernance regarding, among other matters, the lated disclosures in the annual financial planned scope and timing of the audit and sig- statements and in the management report nificant audit findings, including any significant or, if such disclosures are inadequate, to deficiencies in internal control that we identify modify our respective opinions. Our conclu- during our audit. sions are based on the audit evidence ob- tained up to the date of our auditor’s report. We also provide those charged with govern- However, future events or conditions may ance with a statement that we have complied cause the Company to cease to be able to with the relevant independence requirements, continue as a going concern; and communicate with them all relationships and other matters that may reasonably be  evaluate the overall presentation, structure thought to bear on our independence and and con-tent of the annual financial state- where applicable, related safeguards. ments, including the disclosures, and whether the annual financial statements present the From the matters communicated with those underlying transactions and events in a man- charged with governance, we determine those ner that the annual financial statements give matters that were of most significance in the a true and fair view of the assets, liabilities, audit of the annual financial statements of the financial position and financial performance current period and are therefore the key audit of the Company in compliance with German matters. We describe these matters in our audi- legally required accounting principles; tor’s report unless law or regulation precludes public disclosure about the matter.  evaluate the consistency of the manage- ment report with the annual financial state- Other legal and regulatory ments, its conformity with German law, and requirements the view of the Company’s position it pro- vides; Further information pursuant to Article 10 of the EU Audit Regulation  perform audit procedures on the prospective We were elected as auditor by the annual gen- information presented by the executive di- eral meeting on April 17, 2019. We were engaged rectors in the management report. On the by the Supervisory Board on May 20, 2019. We basis of sufficient appropriate audit evi- have been the auditor of Axel Springer SE with- dence we evaluate, in particular, the signifi- out interruption since fiscal year 2007. cant assumptions used by the executive di- rectors as a basis for the prospective infor- We declare that the opinions expressed in this mation, and evaluate the proper derivation auditor’s report are consistent with the addi- of the prospective information from these as- tional report to the audit committee pursuant sumptions. We do not express a separate to Article 11 of the EU Audit Regulation (long- opinion on the prospective information and form audit report). on the assumptions used as a basis. There is a substantial unavoidable risk that future In addition to the financial statement audit, we events will differ materially from the prospec- have provided to the Company or entities con- tive information. trolled by it the following services that are not disclosed in the annual financial statements or

33 Financial Statements 2019 Axel Springer SE Independent Auditor’s Report

in the management report: auditing of volun- tary financial statements, advice in regards to payroll tax and social security matters, review- ing of the interim consolidated financial state- ments as well as auditing of internal control systems of service companies according to au- diting standard IDW PS 951 of the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, “IDW”).

German Public Auditor responsible for the engagement The German Public Auditor responsible for the engagement is Kristian Ludwig.

Annex to the auditor’s report:

Not audited parts of the management report

We have not audited the following parts of the management report:

 Information contained in the “Corporate Governance Report“ of the management re- port except for the “Compensation Report”

 Information contained in the “Economic Re- port” of the management report under the heading “Human resource development” and “Sustainability and social responsibility”

Berlin, February 19, 2020

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Ludwig von Michaelis Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)

34