Annual Report 2008 WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 This annual report is a translation of the original text in Dutch, which is the official version. In case of any discrepancies the Dutch version will prevail. The annual report is available in the English language via: www.tmg.nl For more information: [email protected] Telegraaf Media Groep N.V. Visiting address Basisweg 30, Amsterdam, the Netherlands Mail address P.O. Box 376, 1000 EB Amsterdam, the Netherlands Telephone: +31(0)20 - 585 9111 WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 Annual Report 2008 WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 Participating interests Executive Board Corporate Staff Operating Companies Sky Telegraaf Keesing Radio Media Media Group Nederland Group WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 Contents 06 Profile, Core Values and Mission 41 Financial Statements 43 Consolidated Financial Statements 07 Vision and Ambition, Objectives 47 Notes to the Consolidated Financial Statements 87 Company Financial Statements and Strategy 89 Notes to the Company Financial Statements 08 Report from the Executive Board 95 Other Information 97 Subsequent Events 10 Management information 98 Auditors’ Report 10 Members of the Executive Board 99 Provision in the Articles of Association concerning 11 Members of the Supervisory Board the appropriation of profit 12 Report from the Supervisory Board 100 Stichting Preferente Aandelen Telegraaf Media Groep N.V. and Stichting Beheer van Prioriteitsaandelen 13 Consolidated Keyfigures Telegraaf Media Groep N.V. 101 Stichting Administratiekantoor van Aandelen 14 Consolidated Information Telegraaf Media Groep N.V. 14 Financial Performance 17 Corporate Affairs 103 Organisational Structure 19 Telegraaf Media Nederland 104 Products and Activities 19 Telegraaf Media Nederland 19 National Dailies (paid) 106 Key Figures 21 National Dailies (free) 22 Regional Dailies 22 Free Local Papers 23 Magazines 23 Digital Media 2 5 Sky Radio Group 2 6 Keesing Media Group 2 7 Other Activities and Operating Companies 28 International 29 Participating Interests 31 Risk management 35 Statement of Responsibility 36 Corporate Governance 39 Corporate Responsibility WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 6 TMG Annual Report 2008 Profile | Core Values | Mission PROFILE TMG is a reliable and committed employer. Employees are offered extensive development opportunities and good income. TMG (Telegraaf Media Groep) is the largest Dutch media In exchange, TMG expects its employees to proactively handle group. TMG’s three publishing groups, Telegraaf Media changes, to further develop themselves and to contribute to the Nederland, Sky Radio Group and Keesing Media Group have development of the enterprise in a drastically changing market leadership positions in daily newspapers, magazines, marketplace in a committed, and professional way. puzzle magazines, online and offline media and radio. TMG adopts a client-oriented approach in relation to suppliers TMG is the largest newspaper publisher in the Netherlands with of products and services. TMG would like to support them by the leading national dailies De Telegraaf and Sp!ts and has a optimising contacts with existing and potential clients and strong position in the Randstad area and surroundings with creating greater flexibility in this respect, through divergent regional dailies and (free) local papers. media forms. TMG has a strong market position in the Netherlands in the TMG wants to provide information and entertainment to magazine market on the basis of titles aimed at specific target consumers, using various medium types, thus ensuring content groups in the segment of Entertainment, Automotive and Puzzles. is accessible anywhere at anytime. Intentional, focused on the interests of the general public or narrowly defined target groups, In the Dutch radio market, TMG holds a majority interest in informative and entertaining. Sky Radio (85,9%), the market leader among commercial radio stations. In terms of our shareholders, profitability, predictability of financial results and integrity are key. TMG is solidly financed. TMG is furthermore increasingly active in new, mostly digital, The company is for an important portion of its operating result forms of media via the (mobile) Internet and in combinations of dependent on the Dutch economy. various media types (cross media). In the international scene, TMG holds a 6% interest in MISSION ProSiebenSat.1 Media AG, one of the largest European radio and television enterprises. In the Netherlands the stations SBS6, TMG is actively engaged in finding and creating loyalty Net5 and Veronica belong to ProSiebenSat.1 Media AG. among general and/or specific public interest groups and Outside the Netherlands, TMG is active in France, Belgium and communities and in exploiting their multi-media leisure time Denmark with puzzle magazines. consumption: TMG employs over 3.000 people and achieves yearly revenues • Getting in touch with users, readers, listeners and viewers of about € 700 million. through a targeted offering of general and customised media products, by leveraging the reach of strong TMG brands and The shares in TMG are traded on the NYSE Euronext (Amsterdam). by cross promotion in various media platforms. • Creating loyalty by providing attractive content and applica- tions in the area of information and entertainment, including CORE VALUES news, music, puzzles and games. Made for and by users. • Exploiting the reach among public interest groups. TMG is a self-confident enterprise with a strong identity. The enterprise is focused on the long term with multi-media products for consumers. TMG is solid and financially strong. The company’s policy reflects its core values professional, change-oriented and committed, while maintaining integrity in all areas. Everything is focused on responding to client desires and needs. WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 TMG Annual Report 2008 7 Vision and Ambition | Objectives | Strategy VISION AND AMBITION OBJECTIVES TMG wants to organise the extremely broad multimedia • TMG achieved in 2008, including discontinued operations, a consumer offering that chaotically bombards the consumer, normalised EBITA margin of 7.2%, the same as 2007. in such a way that it arrives in a well-organised and • At the time of publication of the semi-annual results 2008, precisely targeted manner. This allows advertisers to grab the assumption was to reach a margin of at least 8% for the the consumer’s attention with a clear focus. whole year. A recurring EBITA margin targeted to grow at a rate of 10% per year over the next three years. TMG is a vital media enterprise that is successful in reaching • Furthermore, the assumptions identified at the time were that the 35 year and older consumer group for its advertisers. the income developments and the rate at which cost reductions This target group tends to make extensive use of traditional and the outsourcing of non-core activities could be achieved, media – daily newspapers, radio, TV – and TMG enjoys a would affect improvements in margin. An also important prominent position in each of these sectors. factor is the further shaping of the multi media portfolio TMG is efficient in collecting and creating appealing content through acquisitions and divestments. for this target group in the area of news, music and games. • In accordance with the 2008 financial statements the 2008 normalised EBITA margin is 9.1%. Given the present TMG is also an innovative media enterprise and grows by economic developments this margin will be under pressure. focusing on the target group of the future: the ‘internet generation’ (mostly younger than 35 years of age), who spend much of their media time on the internet in general and using STRATEGY ‘social media’ in particular. TMG intends to become the trend-setting media enterprise for TMG’s enterprise strategy consists of the following the internet generation. TMG provides advertisers with an elements: opportunity to efficiently reach this target group. • TMG seeks growth by exploiting platforms of existing and new media, involving service to broad public interest groups, The company is convinced that success follows from the right whereby advertisers are offered reach on the basis of approach to the most important parts of traditional activities integrated media concepts centred on information and leading to greater efficiency and by carefully positioning itself in entertainment, including news, music, puzzles and games. the new media world as a means of realising essential growth. • To expand reach, TMG is developing a portfolio of different types of media companies that complement print media and/ or are innovative in relation to the publishers of print media (internet, digital). Geographical boundaries increasingly play less of a role. • Reaching the same general or specific public interest groups and communities via multiple media platforms creates opportunities for synergy, varying from integrated product concepts and propositions that combine ‘old’ and ‘new’ media to the cross-promotion of strong brands. • Reducing fixed costs in core operating units is crucial for TMG to be able to adapt to the new reality and to be able to continue to invest in growth in the areas of print, internet and digital. WorldReginfo - 9701bc24-2c91-4db4-a80d-86d6b3458885 8 TMG Annual Report 2008 Report from the Executive Board TMG (Telegraaf Media Groep N.V.) made significant Internationally,