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INTERIM REPORT 2000 1st January, 2000 until 30th June, 2000 Group Key Data 1st half 1st half DM million 2000 1999 Sales 2,734 2,496 Change (%) 9.5 8.0 Results Net profit 158 144 Return on sales (%) 5.8 5.8 Consolidated operating profit 249 232 Balance sheet Balance sheet total 3,321 3,112 Fixed assets 1,597 1,451 Fixed asset cover (%) 73.2 70.2 Liquid assets 713 762 Shareholders’ equity (excl. retained profits) 1,169 1,019 Equity ratio (%) 35.2 32.7 Long-term liabilities 207 186 Capital expenditure 213 133 Depreciation 104 84 Share Share price on 30th June (0) 1,210 970 Employees Average no. of employees 12,909 12,382 Interim report Group and Axel Springer Verlag AG Axel Springer Verlag performed very successfully in the first half of 2000. The consolidated net profit increased by almost ten per cent compared with the previous year and totalled DM 158 million. In spite of the comprehensive start that has been made on expanding the Internet operations and the initial costs associated with these activities, the Board of Management expects the net profit for the year to reach the same level as in the previous year. Business Environment The economic upswing in Germany The German advertising industry record- continued in the first half of 2000. The ed substantial growth again in the first GDP increased by 3.0%. Growth of 2.8% half of 2000. Gross advertising revenues is anticipated for the year as a whole. increased by 13.2 % to DM 17.4 billion This positive development was attribut- in the first six months of the year. Print able to a very large extent to strong media advertising (excluding classified export demand. The competitive position ads) grew by 12.2 % to DM 8.4 billion. of German suppliers outside Euroland Television channels generated 14.5 % improved thanks to the devaluation of higher advertising revenues, while radio the euro. The gradual increase in stations also reported double-digit employment strengthened private con- growth rates (+ 13.2 %). sumption too. Consumer spending only increased slightly, however, due to moderate collectively agreed pay increases and higher energy costs. 1 In the period under review, DM 3.9 bil- Total sales of daily and Sunday news- lion (+ 12.3 %) were spent on newspaper papers dropped by 1.9 %. There was a advertising (excluding classified ads). disproportionately large decrease of Advertising business was particularly 3.1 % in newsstand sales due to lower successful at national newspapers demand for both subscription and (+ 24.6 %) and newsstand papers non-subscription newspapers. (+ 15.0 %). Considerable growth was recorded in sales of classified adver- The trend towards budget-price tising as well, particularly with job newcomers continued with the high- advertisements. circulation TV guides and women's weeklies in the general-interest magazine The gross advertising revenues of segment. Overall demand for the general-interest magazines increased to increasingly large number of magazines DM 4.0 billion (+ 12.9 %). The principal was sluggish. Computer and business beneficiaries here were the business magazines, on the other hand, defied press (+ 38.8 %), computer and online the general market trend once again. magazines (+ 34.1 %), current affairs magazines (+ 15.4 %) and TV guides (+ 10.8 %). The retail press market did not benefit from the economic upswing in Germany. Compared with the first half of 1999, newspaper and magazine sales volume fell by another two per cent. Total sales revenues stagnated. 2 The Company other hand to develop new multimedia business models. Investment of a Axel Springer Verlag continued to triple-digit DM million amount and the develop successfully in the first half of creation of up to 300 new jobs in the 2000. Sales revenues rose considerably, next two to three years are planned in primarily because of the excellent adver- order to implement this strategy sys- tising business. Cost increases were kept tematically and offensively. relatively low in spite of the impact of German legislation on jobs paying In the television operations a decision less than DM 630 per month and on was taken in June 2000 to establish a fictitious self-employment. family of different channels, consisting of ProSieben, Kabel 1, N24 and SAT.1. Measures to consolidate and improve Axel Springer Verlag holds an interest the position of existing titles were of about 11.5 % in this channel family. continued in the print media field. The The competitive position is being opti- introduction and development of new mised by this co-operation between publications in fast-growing segments channels that have been independent up such as computer and business maga- to now. Axel Springer Verlag and Kirch- zines led to additional success. Media have at the same time decided to grant each other an option to transfer Important decisions were taken in the the shares held by Axel Springer Verlag electronic media field. The crucial to KirchMedia at a later date. activities here involve the reorganisation and strategic reorientation of the Inter- net operations. The objectives of the “two-leg strategy” are on the one hand to safeguard and develop existing newspaper and magazine brands and on the 3 Internationalisation of the company was launched as the first joint project on also continued systematically. Axel 30th March 2000. This increases the Springer Verlag acquired a majority in- number of versions of AUTO BILD that terest in the French publishing company are published in Europe outside Media Mag SA in May. This company Germany to a total of twelve. publishes four magazines, the most important of which is the weekly TV The German newspaper and magazine guide TÉLÉ MAGAZINE with a net paid operations were strengthened again too. circulation of about 513,000 copies. BILD appeared on a national public holiday in Germany for the first time With effect from 1st January 2000, Axel when EXPO 2000 opened. The exhibi- Springer Verlag took over the youth and tion “paper, people, press” opened music magazines MÄDCHEN, POPCORN, in the AXEL SPRINGER PASSAGE in HAMMER and MUSIKEXPRESS/SOUNDS Hamburg when the EXPO started on as well as the quarterly magazine MISS 1st June 2000 as well. This exhibition is BEAUTY @ND MORE via its subsidiary registered as one of eight EXPO 2000 Axel Springer Young Mediahouse in “Worldwide Projects” in Hamburg and Munich. Some of these publications will be informing the public about the appear in Poland, the Czech Republic, environmental life cycle of a newspaper Hungary and Romania as well. until 31st October 2000. In Portugal Axel Springer Verlag started Since February 2000, Axel Springer a joint venture with the Portuguese Verlag has been distributing the news- publishing company SVD (Sociedade paper KÖLN EXTRA free of charge in a Vicra Desportiva Lda). The plan is counter-attack intended to combat to co-operate on publishing new general- competition from free daily newspapers. interest magazines on the Portuguese market. A Portuguese edition of AUTO BILD with the name AUTOFOCO was 4 The monthly magazine COMPUTER Net paid circulation, IVW, six-monthly average 2000 BILD SPIELE that was launched in November 1999 maintained its position as market leader for game magazines BILD 4,319,065 BILD AM SONNTAG 2,493,947 in the first half of 2000 too. COMPUTER BILD 1,046,775 COMPUTER BILD SPIELE 635,501 DIE WELT introduced the new weekly BILDWOCHE 495,525 supplement WEBWELT in mid-April. DIE WELT 245,963 It provides information about Internet WELT AM SONNTAG 444,004 developments and trends in the new EURO AM SONNTAG 189,648 economy. FINANZEN 142,292 HAMBURGER ABENDBLATT 299,685 WELT AM SONNTAG is preparing to expand its regional coverage. A separate BERLINER MORGENPOST 171,975 regional edition for Munich is to be B.Z. 262,729 launched this year in addition to the B.Z. AM SONNTAG 150,871 existing Hamburg, Berlin and North Rhine-Westphalia editions. The development of the Axel Springer Verlag business publications was particularly encouraging. The net paid circulation of EURO AM SONNTAG amounted to 189,648 copies, an increase of 127 % over the first half of 1999. One of the reasons for the success of EURO AM SONNTAG is its up-to-the-minute news: it is the only business newspaper appearing at the weekend that gives its readers the end-of-the-week share prices at stock exchanges around the world. 5 FINANZEN, the monthly business Net paid circulation, magazine for investors, is also develop- IVW, six-monthly average 2000 ing successfully. The net paid circulation increased by 70% over the first half HÖRZU 2,113,432 FUNK UHR 1,175,504 of the previous year and now totals TVNEU 557,730 142,292 copies. AUTO BILD 807,892 The most recent business publication SPORT BILD 573,218 launched by Axel Springer Verlag is BILD DER FRAU 1,755,905 AKTIENRESEARCH, the weekly magazine JOURNAL FÜR DIE FRAU 406,477 for investors. “Professional analyses for ALLEGRA 206,239 private investors” is the motto of the FAMILIE&CO 254,281 magazine, which appeared for the first time on 13th April 2000. Followers of RUTE & ROLLE 77,904 the stock market can, for example, FOTOMAGAZIN 72,451 RALLYE RACING 71,104 obtain the latest share news and profes- TENNIS MAGAZIN 67,382 sional analyses from AKTIENRESEARCH FLIEGERMAGAZIN 46,877 ONLINE. SAVOIR VIVRE 37,115 AERO INTERNATIONAL 32,739 The Jahr Verlag publishing company in GOLF DIGEST 27,739 FLY AND GLIDE 22,987 Hamburg and "top special" – a sub- PHOTO TECHNIK sidiary of Axel Springer Verlag – agreed INTERNATIONAL 8,511 to set up a 50:50 joint venture with MÄDCHEN 320,406 effect from 1st October 2000.

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