Interim Report January 1 to September 30, 2004 Group Key Data

INTERIM REPORT JANUARY 1 TO SEPTEMBER 30, 2004 GROUP KEY DATA

Q1 – 3/2004 1) Q1 – 3/2003 1) Change in d million in d million in % Sales 1 831.2 1 788.8 2.4

Profit EBITA 2) 261.8 163.7 59.9 EBITA margin in % 14.3 9.2 DVFA/SG income 133.3 61.4 117.1 Net income 126.1 106.2 18.7

Cash flow from operating activities 202.5 258.5 – 21.7

Capital expenditure 89.2 115.2 – 22.6

Balance sheet total 3) 2 312.8 2 182.8 6.0

Share in c DVFA/SG earnings per share 4) 4.36 1.81 140.9 Closing price 5) 88.20 54.50 61.8

Number of employees Average 11 417 11 740 – 2.8

1) Q1 – 3: January 1 to September 30 2) Result before taxes, interest and goodwill amortisation, adjusted for extraordinary items 3) As of September 30, 2004 and December 31, 2003 4) Calculation basis: 30.6 million shares in Q1 – 3/2004 (excluding own shares), 34.0 million shares in Q1 – 3/2003 5) As of September 30, 2004 and September 30, 2003

EBITA/EBITA margin (Q1 – 3) DVFA/SG income (Q1 – 3) in c million in c million

300 180 14.3% 4.36 c 250 150

200 9.2% 120 1.81 c

150 90

100 60

50 30 2003 2004 2003 2004

EBITA DVFA/SG income EBITA margin DVFA/SG earnings per share

1 INTERIM REPORT

Axel Springer Group

In the first nine months of the 2004 financial year, Axel Retail press markets continue to decline Springer improved earnings before interest, tax and Ongoing weak demand cut across all industries. In the retail amortisation (EBITA) from d 163.7 million in the pre- sector, the expected stabilization of demand did not materialize. vious year to d 261.8 million. The net income for the Net paid circulation for newspapers and magazines declined period increased from d 106.2 million to d 126.1 million. by 3%. Across the industry, press sales were down 1%. The conclusion of a settlement agreement in the context of the insolvency scheme process at Taurus TV With 380 daily and Sunday newspapers registered with the GmbH (Kirch settlement) contributed d 92.6 million circulation organization IVW, total sales declined year-on-year to EBITA and d 62.3 million to net income. Net income in the first three quarters to 26.2 million copies. This was a of the previous year was impacted by non-recurring decline of 2.4% against the first three quarters of 2003. News- effects from company disposals. In the first nine months, stand sales lost 4.7%, subscriptions declined by 1.9%. sales increased by 2.4% year-on-year. Both circulation and advertising revenues increased. On the basis of The number of general-interest titles registered with IVW ongoing success in the introduction of new newspapers increased by 13 to 822. In the first nine months, total IVW and magazines combined with further cost cutting sales at 124.7 million copies per issue receded by 0.3% year- effects and the result of the first nine months, the on-year. Newsstand sales dropped by 2.5% while subscriptions Management Board continues to expect that sales and developed stable (+0.3%). This includes circulation in member- EBITA for the whole of the 2004 financial year will be ship magazines. higher than 2003, even before adjustment for the Kirch settlement. While in the newspaper market new accents were set primarily for young readers with launches of inexpensive titles in tabloid format, predatory competition continued via the low copy prices for weekly women’s press and TV guides. In the ECONOMIC ENVIRONMENT Electronics/Entertainment segment, imitation products with lower prices began to push onto the market for the first time. For the first nine months of the year, the leading economic institutes estimate real growth of 1.6% against the comparable period of the previous year. In the same period, private consumption declined by 0.3%. Consumer demand is still negatively impacted by lower employment figures. For the first nine months, the inflation rate was 1.6%.

Continuing stability in the advertising market According to Nielsen Media Research, gross advertising sales of classical media in the first nine months of 2004 (excluding classified ads) posted 5.8% growth year-on-year. Gross advertising investment of brand and service companies and large retailers (including media advertisement) totaled a 12.7 billion. However, decisive in business terms is the decisive net development. Here the trend was considerably less favorable. This was due to ongoing pressure on conditions. The classified ads market in particular, a central source of income for subscriber newspapers, experienced further decline in the family, travel and jobs vacancies market.

2 BUSINESS DEVELOPMENT The construction of the new office and business premises in Berlin was concluded as scheduled. The process of bundling In the first nine months, Axel Springer increased EBITA from central group management and service functions at the main a 163.7 million to a 261.8 million. Net income increased from office in Berlin with the objective of achieving further improve- a 106.2 million to a 126.1 million. The conclusion of a ments in efficiency was successfully completed in the first settlement agreement in the context of the insolvency scheme half of the year. process at Taurus TV GmbH contributed a 92.6 million to EBITA and a 62.3 million to net income. The prior-year figure Newspapers was influenced by extraordinary earnings from company dis- In the reporting period, BILD considerably expanded advertising posals. revenues with brand companies and the retail business as well as with advertising cooperations. BILD reached an average In the first nine months, the company generated a 2.4% year- circulation of 3.8 million copies. on-year sales increase, with both circulation and advertising revenues moving up. Ongoing cost management in the core With a revised contents and optical concept, BILD am SONNTAG business offset the start-up losses of new titles. has offered more topicality, service and sport since August. The main part of the newspaper has been extended from 48 Axel Springer continues to launch new titles. In Germany to 64 pages, 8 of which are devoted to more sports reporting. the company launched the fortnightly TV guide TV DIGITAL The positive trend in the advertisement and insert business at in March. In September the finance magazine FONDS&CO, BILD am SONNTAG continued. the literary magazine DER FREUND and the classified ads newspaper AUTOBILD.DE-AUTOMARKT was started.

FAKT, the Polish daily started in October 2003, has established itself as the largest daily newspaper in the country with more than 3 million readers. In October 2003, Axel Springer launched Newspapers in Germany REGGEL, the first modern quality newspaper for the Budapest Net paid circulation, IVW, average Q1 to Q3 2004 area. In the third quarter, Axel Springer Budapest launched two new magazines, AUTO BILD and GLAMOUR. The Rus- sian subsidiary Axel Springer Russia introduced also two BILD 3 843 451 new titles with FORBES RUSSIA and RUSSKIJ NEWS- BILD am SONNTAG 2 102 010 WEEK. The RPG (Romanian Publishing Group), in which Axel Springer has a 40% stake, launched the women‘s maga- DIE WELT 203 914 zine SANA in Rumania. WELT am SONNTAG 403 114

Axel Springer expanded the international licensing business. HAMBURGER ABENDBLATT 278 406 With five new licensed editions this year (Estonia, Finland, Slovakia, Latvia, Thailand), AUTO BILD is the fastest growing BERLINER MORGENPOST 151 721 international licensed title. In September, COMPUTER BILD B.Z. 230 577 started with a new offshoot in Lithuania. B.Z. am SONNTAG 129 867

EURO am SONNTAG The women’s magazine ALLEGRA, the TV guide TV MÜSOR 109 510 in Hungary and the car magazine AUTO SUKCES in Poland were discontinued.

3 WELT and WELT am SONNTAG kept advertising revenues Magazines in Germany stable in the first nine months. Since August, WELT am Net paid circulation, IVW, average Q1 to Q3 2004 SONNTAG has had a new modern layout, with a revised structure and new contents. After successful trials in Berlin and Frankfurt am Main, the launch of WELT KOMPAKT was HÖRZU 1 729 111 1) continued across Germany with extension of the distribution TV DIGITAL 1 040 811 FUNK UHR to Munich, Dusseldorf and parts of the Ruhr area. WELT 927 994 BILDWOCHE 321 248 KOMPAKT is the first regional quality newspaper in Germany TV NEU 296 346 in the compact tabloid format and the third national newspaper founded in the last 50 years. BILD der FRAU 1 273 904 FRAU von HEUTE 483 021 The restraint of the advertising market in the first nine months JOLIE 331 785 of the financial year was also felt in Berlin at the BERLINER JOURNAL für die FRAU 305 149 MORGENPOST and B.Z./B.Z. am SONNTAG. With modestly positive signals from the retail sector and the property markets, COMPUTER BILD 841 362 the two newspapers asserted their market position. COMPUTER BILD SPIELE 622 816 AUDIO VIDEO FOTO BILD 531 474 With net paid circulation of 278 000, the HAMBURGER ABENDBLATT developed more positively than the overall AUTO BILD 680 700 market of regional newspapers. In both the retail and advertising AUTOMOBIL TESTS 98 738 AUTO BILD MOTORSPORT 67 981 market, the company defended its leading position in the AUTO BILD ALLES ALLRAD 68 442 Hamburg region. AUTO BILD TEST & TUNING 57 186

Retroactive to January 1, 2004, Axel Springer has aquired SPORT BILD 490 977 a 14.5% share in Westfalen-Blatt Zeitungsverlage GmbH, one of the largest regional newspapers in North Rhine-Westphalia. MAXIM 245 374

Magazines POPCORN 323 936 Axel Springer successfully continued its expansion process in YAM! 251 660 Germany and abroad. The fortnightly TV guide TV DIGITAL, MÄDCHEN 214 248 launched in March, established itself as the quality magazine STARFLASH 117 869 for digital television. Circulation improved steadily with net ROLLING STONE 60 360 paid circulation averaging 1.2 million copies, while the estab- MUSIKEXPRESS 59 817 lished TV magazines had lower net paid circulation in the first METAL HAMMER 48 955 nine months than the comparable period of the previous year. FINANZEN 112 071

1) Included since the 2nd quarter of 2004

4 In the fiercely contested market of women’s magazines, BILD International der FRAU defended its market leadership in a commanding The Polish daily FAKT was launched by Axel Springer in fashion. According to the Media-Analyse 2004/II, BILD der October 2003. In just short time, it has firmly established FRAU reached a total of 5.5 million readers. The new monthly itself as the country‘s largest daily newspaper with more than women’s magazine JOLIE further improved its circulation, 500,000 copies sold and reaching around 3 million readers. creating a new high of over 365 000 net paid copies in the third quarter. Due to the ongoing difficult market situation, The new market segment of fortnightly TV guides has been the monthly Women’s magazine ALLEGRA was discontinued. established in France since the beginning of the year. As a result, competition has considerably intensified on the market In the first nine months of the year, COMPUTER BILD for TV guides, in which Axel Springer is represented by TÉLÉ increased its circulation year-on-year by 1.7% to over 841 000 MAGAZINE. copies. COMPUTER BILD thus confirmed its undisputed market leadership in the European computer magazine With FORBES RUSSIA and RUSSKIJ NEWSWEEK the market. Russian subsidiary Axel Springer Russia launched two new magazines. AUDIO VIDEO FOTO BILD, launched in December 2003, has developed in a very positive way. Over the year it averaged In October 2004, Axel Springer launched REGGEL, the first circulation of more than 531 000 net paid copies, becoming modern quality newspaper for the Budapest area. REGGEL the consumer electronic magazine market leader by a large is the ninth daily published by Axel Springer in Hungary. margin. The printing house in Keckemet was extended, being equipped for the additional requirements of the new daily REGGEL. AUTO BILD remains by far the largest car magazine in In September, Axel Springer Budapest launched the twenty- Germany. For its excellent brand management it was awarded third AUTO BILD and the monthly women’s magazine the title „Superbrand”. An independent jury of experts made GLAMOUR in a licensed edition. up of leading personalities selected the 46 best and strongest brands in Germany from a range of 700 brand names submitted. Axel Springer extended its international licensing business with five further licensed editions of AUTO BILD (Estonia, Since September, the fortnightly classified ads magazine Finland, Slovakia, Latvia, Thailand) and a new edition of AUTOBILD.DE-AUTOMARKT with a printed circulation COMPUTER BILD in Lithuania. In Lithuania the licensee exceeding 200 000 is being supplemented with the internet is Veidas Periodical Publishing. COMPUTER BILD already portal AUTOBILD.DE. The magazine is publishing offers for appears in Poland, Spain and the Czech Republic. more than 5 000 used cars on over 150 pages. The titles AUTO SUKCES in Poland and TV MÜSOR in The Munich-based Verlag Finanzen is publishing the new Hungary were discontinued. quarterly financial magazine FONDS & CO. For accessing new markets in Asia, Axel Springer founded a Since September 2004, Axel Springer has launched the quarterly representative office China based in Shanghai. literary magazine DER FREUND. The magazine deliberately does not use photos and advertising.

5 Electronic Media FINANCIAL SITUATION With a 49.9% stake in the online jobs portal StepStone Deutschland AG, Axel Springer is commencing a strategic Sales alliance for marketing national and regional job advertise- In the first nine months of the year, Axel Springer generated ment. After the successful development of IMMONET and a sales increase from a 1 788.8 million to a 1 831.2 million AUTOBILD.DE, the investment in StepStone is a decisive (+ 2.4%). strategic supplement of the online classified ads business in the third key segment of jobs. The stake in StepStone Deutsch- Advertising revenues rose by a 22.9 million (+ 3.3%) to reach land AG is still subject to approval for the Federal Cartel Office. a 708.9 million. Circulation revenues moved up by a 24.9 million (+ 2.9%) to a 892.9 million. At a 229.4 Miscellaneous In the first nine months of the year, IMMONET with average sales million were down slightly year-on-year (– 2.3%). Sales real estate offers of over 210 000 has firmly established itself generated outside of Germany increased from a 248.0 mil- as one of the leading real estate portals. With some 650 000 lion by a 19.1 million (+ 7.7%) to a 267.1 million. Thus, the being offers, AUTOBILD. DE, the internet portal belonging share of sales generated abroad rose from 13.9% to 14.6%. to the AUTOBILD group is one of the largest automobile markets in the internet. For strengthening the competence in Newspaper sales rose by a 45.0 million (+ 4.5%) to a 1 048.3 mil- classified ads, the B.Z. has been integrated into the AUTO- lion in the first nine months of the year. Advertising revenues BILD.DE internet portal. rose by a 26.9 million (+ 5.4%) to a 520.6 million. In particular, BILD and BILD am SONNTAG contributed to this positive In the first nine months of the year, the reporting highlights for development. At a 527.7 million circulation revenues for news- BILD.T-ONLINE were the European Championships (soccer) papers were up a 18.1 million (+ 3.6%) year-on-year. This is and the Olympic Games. With 244 million page impressions primarily due to the effect of price increases introduced at BILD in September, BILD.T-ONLINE consolidated its position as a and HAMBURGER ABENDBLATT to the middle of 2003. leading cross-media general-interest portal. Sales were extended considerably, both for online advertising as well as with cross- In the first nine months magazine sales, at a 553.5 million, media cooperations and the so-called Volk products. were up slightly year-on-year (+ 0.5%). At a 188.3 million, advertising revenues were down a 4.0 million (– 2.1%) on Printing and Logistics the previous year. While new titles and the car and computer After successful negotiations, in September Arvato and magazines developed well, traditional TV guides and women‘s Gruner+Jahr and Axel Springer signed a letter of intent magazines found themselves under earnings pressure. At for combining their five German gravure printing operations. a 365.2 million, circulation revenues were up a 6.8 million It was also agreed to include the printing operation which is (+ 1.9%) on the previous year. In addition to the positive being built by Arvato in Liverpool, England. The project is development at COMPUTER BILD, this growth was primarily still subject to the approval of the supervisory bodies and driven by the launch of the new AUDIO VIDEO FOTO BILD, the anti-trust authorities. TV DIGITAL and FRAU von HEUTE titles.

In the first nine months of 2004, the contract printing volume for offset and gravure printing rose year-on-year, despite the continuing weakness of the economy.

Logistics and Distribution supported the establishment of new distribution channels to better align them to consumer flows.

6 At a 44.8 million sales for Electronic Media declined year- The prior-year value was influenced by extraordinary earnings on-year by a 6.5 million (– 12.7%). External Printing sales from company disposals. DVFA/SG income rose from a 61.4 mil- increased by a 5.2 million (+ 5.5%) auf a 100.3 million. At lion to a 133.3 million. a 84.3 million Other revenues were a 4.1 million (– 4.6%) down year-on-year. The improved results are due – apart from the non-recurring income as a result of the settlement agreement – to higher Profit sales and ongoing cost management. This was countered by In the first nine months, Axel Springer increased EBITA the start-up costs of the expansion process, which negatively (adjusted for extraordinary items) from a 163.7 million to impacted EBITA particularly in the magazine segment. a 261.8 million. The net income for the period increased from a 106.2 million to a 126.1 million. The conclusion Total expenses (before taxes and goodwill amortisation) of the settlement agreement in the context of the insolvency rose at a level slightly below that of sales, by a 35.6 million scheme process at Taurus TV GmbH contributed a 92.6 mil- (+ 2.1%) to a 1 755.0 million. lion to EBITA and a 62.3 million to the net income for the period.

Sales by sectors Q3/2004 1) Q3/2003 1) Change Q1 – 3/2004 2) Q1 – 3/2003 2) Change in d million in d million in % in d million in d million in % Circulation 307.4 300.7 2.2 892.9 868.0 2.9 Advertising 213.4 206.6 3.3 708.9 686.0 3.3 Miscellaneous 78.0 81.6 – 4.4 229.4 234.8 – 2.3 Total 598.8 588.9 1.7 1 831.2 1 788.8 2.4

Sales by segments Q3/2004 1) Q3/2003 1) Change Q1 – 3/2004 2) Q1 – 3/2003 2) Change in d million in d million in % in d million in d million in % Newspapers 341.3 329.7 3.5 1 048.3 1 003.3 4.5 Magazines 179.5 177.6 1.1 553.5 550.7 0.5 Printing 37.5 32.4 15.7 100.3 95.1 5.5 Electronic Media 13.0 22.4 – 41.9 44.8 51.3 – 12.7 Other revenues 27.5 26.8 2.5 84.3 88.4 – 4.6 Total 598.8 588.9 1.7 1 831.2 1 788.8 2.4

1) Q3: 3rd quarter 2) Q1 – 3: January 1 to September 30

7 Capital expenditure SHARE In the first nine months, Axel Springer invested a 89.2 million after a 115.2 million in the previous year. a 79.8 million of The price of Axel Springer shares at the beginning of the year capital expenditure (previous year: a 110.3 million) related was a 70.00. During the course of the year, the share outper- primarily to tangible and intangible assets. Capital expenditure formed the MDAX and closed at a 88.20 (previous year: focused on the extension of the offset printing facility in a 54.50) on September 30, 2004. Ahrensburg, the construction of the new Berlin office and business premises, and the subscribers to TV DIGITAL, the In the first three quarters of the year, DVFA/SG net income TV guide launched in March. per share was a 4.36 after a 1.81 in the previous year. In the third quarter, DVFA/SG net income per share was a 2.35 Capital expenditure on financial assets amounted to a 9.4 mil- (previous year: a 0.44). lion (previous year: a 4.9 million). The financial assets position on the balance sheet is also impacted by the reclas- As at September 30, 2004 Axel Springer bundled share sification of SAT.1 Beteiligungs GmbH from current asset trading on the Frankfurt stock exchange in order to con- to fixed asset and increasing the stake in the context of the centrate trading at the location with the highest liquidity. Kirch settlement.

Depreciation and amortisation (without goodwill amortisation) amounted to a 65.6 million (previous year: a 59.6 million). Share performance Net liquidity Index January 2, 2004 = 100 The total of the cash flows from operating, investment and financing activities increased liquid funds by a 80.8 million As of September 30, 2004, funds (liquid funds and securities in current assets) amounted to a 380.1 million. With bank January 04 June 04 September 04 loans liabilities of a 192.6 million, Axel Springer closed the 130 third quarter of 2004 with net liquidity of a 187.5 million. 130 As of December 2003, net liquidity was a 99.4 million. 125 125 120 120 115 115 EMPLOYEES 110 110 105 In the first nine months of 2004, Axel Springer employed 105 an average staff of 11 417 people (not including trainees 100 100 and interns), 323 fewer than in the prior-year period. As 95 95 of October 1, 2004 the number of employees was 11 392 (previous year: 11 684). Axel Springer AG MDAX

80 75 70 65 60 55 50 45 40 8 35 ANNUAL SHAREHOLDERS‘ MEETING 2004 EVENTS OF PARTICULAR SIGNIFICANCE

On April 14, 2004, the Annual Shareholders’ Meeting of Within the context of the insolvency scheme process of Axel Springer AG voted Prof. Dr. Lepenies into the Supervisory Taurus TV GmbH i. I., a settlement arrangement was concluded Board. Dr. Joachim Theye has left the Supervisory Board. The between Axel Springer AG, Taurus TV GmbH i. I., KirchMedia other members of the Supervisory Board were reelected. GmbH & Co. KGaA i. I. and other parties. Under the settlement arrangement, Axel Springer AG agrees to waive its rights arising Furthermore, with a majority of 99.9% the Annual Shareholders’ from the put option claim which is in dispute between the Meeting resolved a participation program in the context of parties involved. In return, Axel Springer AG will retain its authorization to acquire and utilize own shares (Item 7 on indirect holding in ProSiebenSAT.1 Media AG of 10.2%, will the agenda). increase this by 1.8% with no financial consideration, and will receive from Taurus TV GmbH i. I. a payment of a 60.3 million. The detailed description of the management participation Overall, the settlement impacted EBITA for the nine months program can be found on the Company‘s Internet site at by a 92.6 million and net income of the period by a 62.3 milli- www.axel-springer.de/InvestorRelations/Shareholders’Meeting. on. In addition, the insolvency administrator of KirchMedia A rescind action has been filed against the resolution made GmbH & Co. KGaA i. I. will recognize a claim in the schedule by the Annual Shareholders’ Meeting 2004 on Item 7 of the of debts in an amount of a 325 million in favor of Axel Springer agenda. The rescind action was rejected by the Berlin District AG. The claim will be taken into account in the further insol- Court on September 27, 2004. The verdict is not yet final. vency proceedings.

In the context of management participation program and the conditions resolved at the Annual Shareholders’ Meeting on April 14, 2004, from August 16, 2004, Axel Springer AG OUTLOOK sold 62 300 shares at a price of a 54.00 per share plus 2% p.a. from July 1, 2004, i.e. a 54.13 per share to members of The Fall Report of the leading German economic research the Management Board. companies anticipates economic growth for 2004 of 1.8%. In the course of the rest of 2004, the growth is to be carried by the global economic upswing, while private consumption is expected to stagnate (0.0%). According to the Fall Report, the MANAGEMENT BOARD CHANGE export boom is set to weaken considerably in the second half of the year. Hubertus Meyer-Burckhardt, Head of Electronic Media, left the company by the end of June 2004 and was appointed Despite the upturn in advertising revenues in the first nine as the Management Board member for Corporate Develop- months of the year, a sustained recovery is not expected on ment of ProSiebenSat.1 Media AG with effect from July 1, the advertising market. No real market recovery is expected in 2004. The Management Board position has not been refilled. 2005. There is no short-term recovery in sight for classified ads. As a result this body has been reduced to four members. The Electronic Media division is now allocated to the Management On the basis of ongoing success in the introduction of new Board member for Newspapers and International. The produc- newspapers and magazines combined with further cost cutting tion and marketing of digital programming remains the core effects and the result of the first nine months, the Management component of corporate strategy and will be further expanded. Board continues to expect that sales and EBITA for the whole of the 2004 financial year will be higher than 2003, even before adjustment for the Kirch settlement.

9 INTERIM FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS

Assets Sept. 30, 2004 Dec. 31, 2003 in d’000 in d’000 A. Fixed assets I. Intangible assets 158 475 161 160 II. Tangible assets 1 041 337 1 034 565 III. Financial assets 178 422 88 785 1 378 234 1 284 510

B. Current assets I. Inventories 54 799 50 341 II. Accounts receivable and other assets 303 434 356 940 III. Securities 1) 185 516 189 104 IV. Cash and cash equivalents 375 777 294 807 919 526 891 192

C. Prepaid expenses 15 047 7 081 2 312 807 2 182 783

Stockholders’ equity and liabilities Sept. 30, 2004 Dec. 31, 2003 in d’000 in d’000 A. Stockholders’ equity I. Subscribed capital 102 000 102 000 II. Revenue reserves 663 217 618 967 III. Consolidated retained earnings 0 80 891 IV. Consolidated net income 124 034 0 V. Minority interests 4 976 5 794 894 227 807 652

B. Provisions 903 468 826 983

C. Liabilities 450 823 490 712

D. Deferred income 64 289 57 436 2 312 807 2 182 783

1) Includes own shares of c 181.2 million

10 CONSOLIDATED INCOME STATEMENTS

Q3/2004 1) Q3/2003 1) Q1 – 3/2004 2) Q1 – 3/2003 2) in d’000 in d’000 in d’000 in d’000 1. Sales 598 790 588 921 1 831 151 1 788 807 2. Change in inventories of finished goods and work in progress 4 744 5 587 4 266 2 121 3. Other operating income 107 975 14 170 140 479 105 501 4. Cost of materials – 189 787 – 184 934 – 559 608 – 543 838 5. Gross profit 521 722 423 744 1 416 288 1 352 591

6. Personnel costs – 199 903 – 210 133 – 590 181 – 603 388 7. Depreciation/amortisation of intangible and tangible assets – 26 959 – 26 284 – 82 376 – 93 202 8. Other operating expenses – 179 970 – 155 602 – 530 495 – 507 293 9. Income from equity holdings 8 140 6 083 22 281 19 284 10. Net interest balance – 670 1 649 – 3 330 2 277 11. Depreciation of financial assets and marketable securities – 161 – 70 – 161 – 70 12. Group income from operations 122 199 39 387 232 026 170 199

13. Taxes – 50 677 – 23 310 – 105 946 – 63 950 14. Consolidated net income 71 522 16 077 126 080 106 249 thereof earnings attributable to minority shareholders 1 313 112 2 046 – 156

EBITA reconciliation Income from operations 122 199 39 387 232 026 170 199 Net interest balance 670 – 1 649 3 330 – 2 277 Goodwill amortisation 4 343 6 931 16 783 33 574 EBITA including extraordinary items 127 212 44 669 252 139 201 496 Extraordinary items – 271 – 77 9 653 – 37 826 Adjusted EBITA 126 941 44 592 261 792 163 670

1) Q3: 3rd quarter 2) Q1 – 3: Januar 1 to September 30

11 CONSOLIDATED STATEMENTS OF CASH FLOW

Q1 – 3/2004 1) Q1 – 3/2003 1) in d’000 in d’000 Consolidated net income 126 080 106 249 Depreciation/appreciation of fixed assets 82 301 93 272 Change in provisions 78 544 62 282 Other expenses/income with no cash effect – 32 810 0 Income/loss from the disposal of fixed assets 3 077 – 50 881 Changes in inventories, receivables and other assets 2 222 68 431 Change of other borrowed funds – 56 942 – 20 845 Cash flow from operating activities 202 472 258 508

Outflow for capital expenditure on fixed assets – 89 162 – 115 188 Inflow from the sale of consolidated companies 10 000 65 052 Cash flow from investment activities – 79 162 – 50 136

Change in financial liabilities – 7 381 4 419 Dividends paid – 38 481 – 25 655 Other changes 3 364 2 627 Cash flow from financing activities – 42 498 – 18 609 Total cash flow 80 812 189 763

Funds on September 30, 2004 380 072 Funds on January 1, 2004 – 299 326 +/– Changes in funds due to differences in the companies consolidated 66 Changes in funds with cash effects 80 812

1) Q1 – 3: January 1 to September 30

In the statements of cash flow the payment flows are divided into the areas of operating, investment and financing activities. As company liquidity, other securities in current assets and cash and cash equivalents are included in funds.

12 GROUP SEGMENT REPORT

Electronic Other/ Q3 1) Newspapers Magazines Printing Media Consolidation Total in d million 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 External sales 341.3 329.7 179.5 177.6 37.5 32.4 13.0 22.4 27.5 26.8 598.8 588.9 Internal sales 3.6 5.4 0.8 0.5 115.5 112.5 1.6 0.5 2.2 1.6 Segment sales 344.9 335.1 180.3 178.1 153.0 144.9 14.6 22.9 29.7 28.4

Sales in Germany 314.2 314.0 137.1 129.9 143.1 137.7 14.5 22.8 25.8 25.6 Sales outside Germany 30.7 21.1 43.2 48.2 9.9 7.2 0.1 0.1 3.9 2.8 Segment sales 344.9 335.1 180.3 178.1 153.0 144.9 14.6 22.9 29.7 28.4

EBITA 48.7 42.8 – 6.6 5.9 0.5 0.5 86.1 – 2.9 – 1.8 – 2.1 126.9 44.2 of which depreciation – 7.2 – 4.5 – 3.6 – 2.5 – 10.8 – 8.3 – 0.7 – 0.6 of which income from equity holdings 2.5 2.3 1.3 2.0 0.5 0.4 1.0 0.8

Employees (average) 5 145 5 169 2 888 2 841 2 482 2 644 285 350

Electronic Other/ Q1 – 3 2) Newspapers Magazines Printing Media Consolidation Total in d million 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 External sales 1 048.3 1 003.3 553.5 550.7 100.3 95.1 44.8 51.3 84.3 88.4 1 831.2 1 788.8 Internal sales 8.0 9.4 1.6 1.3 348.6 341.9 4.1 2.0 7.7 5.6 Segment sales 1 056.3 1 012.7 555.1 552.0 448.9 437.0 48.9 53.3 92.0 94.0

Sales in Germany 969.6 951.4 414.5 405.5 421.3 409.2 48.3 53.0 80.3 81.9 Sales outside Germany 86.7 61.3 140.6 146.5 27.6 27.8 0.6 0.3 11.7 12.1 Segment sales 1 056.3 1 012.7 555.1 552.0 448.9 437.0 48.9 53.3 92.0 94.0

EBITA 165.2 123.9 8.3 40.6 1.5 1.2 87.3 – 3.6 – 0.5 1.6 261.8 163.7 of which depreciation – 21.4 – 21.5 – 9.5 – 9.5 – 30.3 – 25.1 – 3.5 – 2.6 of which income from equity holdings 7.0 7.0 5.5 5.8 1.5 1.3 4.2 3.6

Employees (average) 5 121 5 209 2 881 2 819 2 502 2 659 324 360

1) Q3: 3rd quarter 2) Q1 – 3: January 1 to September 30

EBITA (Earnings before Interest, Taxes and Amortisation) is used for division sales.

13 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Parent company Minority interests

Subscribed Generated Accumulated other capital Group equity comprehensive income Ordinary shares Adjustment item Adjustment from from currency initial application translation of the German Adjustment item Transparency and Minority for currency in e’000 Disclosure Act Equity capital translation Equity Group equity December 31, 2003 102 000 426 718 – 3 334 276 474 801 858 5 976 – 182 5 794 807 652 Dividends paid 0 – 36 720 0 0 – 36 720 – 1 761 0 – 1 761 – 38 481 Miscellaneous changes 0 0 79 0 79 – 1 103 0 – 1 103 – 1 024 Net income for the period 0 124 034 0 0 124 034 2 046 0 2 046 126 080 September 30, 2004 102 000 514 032 – 3 255 276 474 889 251 5 158 – 182 4 976 894 227

Parent company Minority interests

Subscribed Generated Accumulated other capital Group equity comprehensive income Ordinary shares Adjustment item Adjustment from from currency initial application translation of the German Adjustment item Transparency and Minority for currency in e’000 Disclosure Act Equity capital translation Equity Group equity December 31, 2002 102 000 319 527 – 653 0 420 874 6 333 – 135 6 198 427 072 Dividends paid 0 – 22 100 0 0 – 22 100 – 3 555 0 – 3 555 – 25 655 Revaluation of fixed assets 0 0 0 276 474 276 474 0 0 0 276 474 Miscellaneous changes 0 0 – 311 0 – 311 2 656 – 29 2 627 2 316 Net income for the period 0 106 405 0 0 106 405 – 156 0 – 156 106 249 September 30, 2003 102 000 403 832 – 964 276 474 781 342 5 278 – 164 5 114 786 456

14 EXPLANATORY NOTES TO THE INTERIM FINANCIAL STATEMENTS

Axel Springer Group

General notes The interim report on the period between January and September 2004 was prepared in line with the German Accounting Standard No. 6 (DRS 6) – Interim Reporting – of the German Accounting Standards Committee e. V. (DRSC).

The accounting and valuation methods used for the interim financial statements as of September 30, 2004 correspond to those used in the consolidated financial statements as of December 31, 2003.

Consolidated companies In the consolidated financial statements as of September 30, 2004, 35 German and 17 foreign companies were included in consolidation, in addition to Axel Springer AG. Thereof, four joint ventures were consolidated on a pro rata basis.

Following the transfer of its orders to Axel Springer AG, GMZ Druckerei GmbH & Co. was deconsolidated and discontinued with effect of January 1, 2004, since the business was transferred to Axel Springer AG. AS Media Service GmbH was transferred to Ullstein GmbH.

Berlin, November 2004

Axel Springer AG The Management Board

Report of the Supervisory Board Audit Committee The interim report for the period January to September 2004 and the report of the auditor on the audit examination of the interim financial statements were submitted to the Supervisory Board Audit Committee. The documents were explained by the Management Board and discussed with the auditor. The Audit Committee approved the interim financial statements.

Berlin, November 2004

Chairman of the Audit Committee Dr. Giuseppe Vita

Disclaimer This Interim Report contains forward-looking statements with the connected risks and imponderables. The actual development of business and profits at Axel Springer AG and the Group may deviate materially in the future from the assumptions made in this Interim Report. This Interim Report represents neither an offer for sale nor the request to submit an offer for the securities of Axel Springer AG. The publication of this Interim Report does not bring with it an obligation to update the statements made in it.

15 Financial calendar

Annual Results Press Conference March 9, 2005 Annual shareholders’ meeting April 20, 2005 Interim Report January – March 2005 May 2005 Interim Report January – June 2005 August 2005 Interim Report January – September 2005 November 2005

Share information Q1 – 3/2004 1) Q1 – 3/2003 1) The Interim Report and current information on in d in d Axel Springer AG are available on the Internet: DVFA/SG earnings per share 2) 4.36 1.81 www.axelspringer.de Closing price 3) 88.20 54.50 Highest price 91.00 63.00 This Interim Report is also available in German. Lowest price 70.00 41.00 For more information on the Interim Report, Average price 84.36 48.05 please contact:

Axel Springer AG Listing segment General Standard Investor Relations Security identification number 550 135 e-mail: [email protected] ISIN DE0005501357 Reuters SPRGn.F Axel-Springer-Straße 65 Bloomberg SPR GR 10888 Berlin Telephone: + 49 (0) 30 25 91-7 74 20/7 74 21

1) Fax: + 49 (0) 30 25 91-7 74 22 Q1 – 3: January 1 to September 30 2) Calculation basis: 34.0 million shares in Q1 – 3/2003; 30.6 million shares in Q1 – 3/2004 (excluding own shares) 3) As of September 30, 2004 and September 30, 2003