Axel Springer’s transformation and the chances of digitization

Capital Markets Day Dr. Mathias Döpfner, Chairman and CEO , October 6, 2008 EBITDA on record high

(in €m)

3,500 800

3,000 700 600 2,500 500 2,000 400 1,500 300 1,000 200

500 100

0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Revenues (left-hand scale)1) EBITDA (right-hand scale)1)

1) 1991 – 2002 HGB, 2003 – 2007 IFRS

2 October 6, 2008 Capital Markets Day EBITA on record high (in €m) Revenue (IFRS) EBITA (IFRS)

Revenue (HGB) EBITA (HGB)

2,864 2,777 2,578 2,321 2,402 2,392 2,376

422 375 336 338

215 110 33

2001 2002 2003 2004 2005 2006 2007 2001 2002 2003 2004 2005 2006 2007

Margin (%) 1.2 4.0 9.3 14.0 14.1 15.8 16.4

3 October 6, 2008 Capital Markets Day Excellent top line growth in Q1-2/2008

(in €m) Total Revenues EBITDA

+11.1% 1,343.1 1,208.5 +7.2% 213.9 199.4

Q1-2/07 Q1-2/08 Q1-2/07 Q1-2/08

4 October 6, 2008 Capital Markets Day Clear strategy with traceable success

Strategy

Market leadership in Internationalization Digitization German-language core business Profitable Growth

Creativity Entrepreneurship Integrity

Corporate values

5 October 6, 2008 Capital Markets Day Growth driven by internationalization and digitization (in €m) 70% 30% of revenues stable of revenues growing with high margins with growing margins Print Newspapers Magazines Digital Inter- National National Media Q1-2/2008 national Revenue 627.0 287.4 207.9 171.5

Growth yoy -1.3% -3.0% +6.4% >+100%

EBITDA margin 25.4% 17.8% 5.0% 3.5%

EBITDA target >25% >12% >10% >20% 2010

6 October 6, 2008 Capital Markets Day Competitive advantages of Axel Springer

1. Less exposure to advertising and classifieds

Positioning 2. Strong media brands is paying off in difficult markets

3. Consistent digitization strategy

7 October 6, 2008 Capital Markets Day German newspaper advertising revenues have been stable since 2003

120

100

80

60 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

(1998=100) USA UK

Source: USA NAA; UK NMA; Germany Nielsen and ZMG; Revenue Growth of Q1-Q2/2008 taken for full year

8 October 6, 2008 Capital Markets Day Axel Springer is less dependent on advertising and classifieds than its competitors

Advertising revenues Classified revenues as % of total revenues as % of total advertising revenues 80%1)

2) 57% 5) 54%3) 52%4) 56% 46% 36%4)

19%

USAUK Germany Axel USAUK Germany Axel Springer Springer

1) In 2004, Source: Newspaper Association of America 2) In 2006, Source: Zenith, Advertising Association Yearbook 4) JP Morgan estimates, company data 3) in 2007, Source: BDZV 5) in BDZV, local and regional subscription papers (69% of circulation in Q2/2008)

9 October 6, 2008 Capital Markets Day Classified revenues benefiting from online contribution (Revenues in €m, illustrative)

2002 2003 2004 2005 2006 2007

Online classified revenues (real estate / jobs) from national brands (Immonet, Stepstone [50%])

Print classified revenues (strong regional focus on and Berlin)

10 October 6, 2008 Capital Markets Day Competitive advantages of Axel Springer

1. Less exposure to advertising and classifieds

Positioning 2. Strong media brands is paying off in difficult markets

3. Consistent digitization strategy

11 October 6, 2008 Capital Markets Day Dominant market position in German newspaper market with extremely strong brands

German newspaper market1) Core newspaper segments Market share1)

7% 3% Newsstand No. 1 81% papers

21%

Sunday No. 1 70% newspapers

68%69% National quality No. 3 18% Regional subscription papers papers Newsstand papers National quality papers Regional No. 12) 59% Sunday newspapers subscription papers No. 12) 25%

1) Daily newspapers based on BDZV/IVW Q2/2008 / Based on paid circulation Q2/2008 2) Source: Hügel Statistik. Based on gross advertising volumes among all regional newspapers in Hamburg/Berlin, Q2/2008.

12 October 6, 2008 Capital Markets Day 12 Unique brand expansion path: example BILD

13 October 6, 2008 Capital Markets Day Competitive advantages of Axel Springer

1. Less exposure to advertising and classifieds

Positioning 2. Strong media brands is paying off in difficult markets

3. Consistent digitization strategy

14 October 6, 2008 Capital Markets Day Successful digitization ahead of market

Core competences Development unique visitors (m) in Germany 17.0 1) Q2/08: 1. Content / brands + 20.6% pro forma digital 2. Ad sales / marketing revenues 10.2% of total

14.1 Market Growth: revenues. 3. Classifieds / + 6.2%1) marketplaces

Q2/07 Q2/08

1) Source: Comscore (development unique visitors).

15 October 6, 2008 Capital Markets Day Core competence 1: Content/brands

Infotainment

Quality

Regional

Cars

Women

TV

Business

Consumer Electronics

Sports

Youth

16 October 6, 2008 Capital Markets Day Core competence 2: Ad sales/marketing

Reach-based (CPM)

Performance-based (CPC, CPL, CPA)

17 October 6, 2008 Capital Markets Day Core competence 3: Classifieds/marketplaces

Performance- Jobsbasiert (CPC, CPL, CPA)

Performance- RealImmobilien:basiert Estate (CPC, CPL, CPA)

Performance- Marketplacesbasiert (CPC, CPL, CPA)

18 October 6, 2008 Capital Markets Day Digitization through acquisitions & organic growth Organic 2006 2007 2008 Total Acquisitions 5 16 6 27 Organic 3 19 11 33 Disinvestments 1 1 0 2 Total 7 34 17 58

2006 2007 2008

Acquisitions

19 October 6, 2008 Capital Markets Day Case study: WELT-Group – successful transition from newspaper to multimedia brand

Single Newsroom web-to-print workflows create content for all channels and media

Mobile Online Video

Online-first strategy Quality journalism Articles and photos are distributed for three national and a regional newspaper online first and across several channels seven days a week

20 October 6, 2008 Capital Markets Day Transformation of WELT brand into digital multi- media family increases both, print and online reach

WELT Group: WELT/WELT KOMPAKT Total reach (gross) across all media Reach: 0.73m contacts + 4% since 2006 5.4m1)

+74% WELT am SONNTAG Reach: 1.285m contacts 3.1m1) + 19% since 2006

WELT ONLINE Reach: 3.37m contacts 2006 2008 + 155% since 2006

Source: Print: AWA 2006, 2008; Online: AGOF 2006-I, 2008-I (NpM), Addition of Contacts

21 October 6, 2008 Capital Markets Day Total reach (gross) of WELT / WELT am SONNTAG grows while competitors decline (in m)

WELT1)/WamS FAZ/FAS SZ

2.07 2.07 2.01 2.04

1.84 1.82 1.92 1.83

1.54

1.36 1.35 1.26

2005 2006 2007 2008

Source: AWA 2005 to 2008; 1) since 2006 / WELT Kompakt

22 October 6, 2008 Capital Markets Day Profit improvements by integrated editorial workflow and innovative advertising solutions

EBITA Circulation Advertising Merchandising Cost EBITA 2004 revenues revenues and other reduction 2007 revenues

23 October 6, 2008 Capital Markets Day Total reach growth driven by online activities

Total reach (gross) across all media1)

79.4 75.5 +5.2% Magazines 35.6m reader (+2.0%)

Newspapers 26.8m reader (+1.1%)

Online 17.0m user (+20.6%)

Q1-2/07 Q1-2/08

1) In million gross contacts for consolidated assets., Source: MA, AWA, Comscore.

24 October 6, 2008 Capital Markets Day Seven reasons why Axel Springer is best positioned for monetization of media convergence

9 Paradigm shift: online first 9 Aggressive attacker instead of depressed defender 9 Transformation of existing business into digital multimedia brands 9 Acquisition of new businesses according to core competences 9 Integrated content producer 9 Centralized multimedia sales 9 Ownership of digitization – everybody is responsible

25 October 6, 2008 Capital Markets Day