Roadshow presentation March 2010 Lothar Lanz, CFO & COO Claudia Thomé, Head of IR
Disclaimer This document, which has been issued by Axel Springer Aktiengesellschaft (the "Company"), comprises the written materials/slides for a presentation of the management. Whilst all reasonable care has been taken to ensure that the information and facts stated herein are accurate and that the opinions and expectations contained herein are fair and reasonable no representation or warranty, express or implied, is given by or on behalf of the Company, any of its directors, or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability is accepted for any such information or opinions. This document contains forward looking statements which involves risks and uncertainties. These forward looking statements speak only as of the date of this document and are based on numerous assumptions which may or may not prove to be correct. The actual performance and results of the business of the Company could differ materially from the performance and results discussed in this document. The Company undertakes no obligation to publicly update or revise any forward looking statements or other information contained herein whether as a result of new information, future events or otherwise. This document does not constitute or form any part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. 2
FY 2009: highly profitable despite recession, expanding market share 1. 2. 3. 4. 5. 6. 7. 8. EBITDA margin of 12.8% Dividend of 4.40 on record level of 2008 Net debt reduced considerably from 370m to 193m Equity ratio increased to 40.8% 21% of revenues from digital media* Nine of ten largest digital assets are profitable Market share of top-selling titles further expanded Number of employees increased by 0.7% *) Pro-forma 3
Lead over German print marketers further increased in 2009 Gross advertising revenues (in %) 36.1 33.6 21.9 20.3 17.8 16.6 2008 2009 9.9 10.4 10.1 9.2 7.6 6.6 ASMI G+J Burda Bauer DuMont IQ Media Source: Nielsen Media Research, Newspapers and magazines without classifieds and media ads 4
BILD outperforms German print advertising market Gross advertising revenues 2009 yoy +6.5% German print advertising market -6.3% Basis: Nielsen Media Research. Newspapers without classifieds and media ads. * Zeitungen und Publikumszeitschriften 5
WELT group with highest reach among quality news media peers Cross media net reach (in thousand) 2,435 2,131 2,079 1,954 Source: VA 2009-III; Basis: Readers per issue, users per week. 6
Digitization strategy consistently implemented Content portals Classifieds/Marketplaces Marketing 7
Reach of Germany s market leading news portals BILD.de outperforms SPIEGEL Online Visits (IVW) Unique Visitors (Comscore) 100 100m Mio. 66m Mio. 0 0m Mio. Jan 09 Jul 09 Jan 10 00mMio. Jan 09 Jul 09 Jan 10 8
Axel Springer acquires 100% of European job online portal StepStone Visits StepStone Europe (in m) 8.0 +25% yoy #2 #2 #2 7.0 #4 #1 #1 6.0 #4 #2 5.0 4.0 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Source: Comscore 9
Online Performance Marketing Axel Springer shapes European market leader Revenues (in m) +9% -21% 360 325 297 284 #1 #1 #2 #2 #2 10 2008 2009e 2008 2009 10
aufeminin strengthening market leadership Belgium: #1 aufeminin 0.5 Flair 0.2 France: #1 aufeminin 7.1 LeJournal de 4.9 Femmes enfemenino Yodona Strong international presence Spain: #1 1.0 2.8 sofeminine ivillage UK: #2 0.4 0.3 gofeminin Brigitte 0.8 alfemminile Style.it Germany: #1 2.4 Italy: #1 0.8 3.5 International revenue contribution (in m) 22.5 3.3 19.2 +9.8% +97.5% -5.3% 6.5 18.2 11.3 17.5 2007 2008 2009 France 24.7 +16.5% +74.3% -4.1% 28.8 International Unique Users in Mil. Source: Nielsen/comScore/AGOF, Dec 2009 International platform outside of France experiencing accelerated growth with tripled revenues since Axel Springer s investment in aufeminin in 2007 11
Financials FY 2009
Successful digitization: 21% of revenues digital Total revenues (in m) Revenue share digital media 2,728.5 264.7-4.3% +12.2% 2,611.6 296.9 Schibsted Axel Springer Sanoma 12% 21% 29% 1,248.1 1,138.5 Telegraaf 6% -8.8% Trinity Mirror 5% DMGT 5 % Johnston Press 4 % 1,215.8 1,176.2 L'Espresso 4 % -3.3% Lagardere 2% 2008 2009 Circulation revenues Advertising revenues Other revenues Basis: FY 2009 *) Pro forma, FY 2009 13
EBITDA 2009 still strong despite recessionary environment EBITDA Group (in m), EBITDA-margin 486.2 (17.8%) -31.4% 333.7 (12.8%) EBITDA still strong at 333.7m Margin of 12.8% still considerably higher than during last downturn (2001/02: 6.7% / 8.2%) EBITDA includes restructuring expenses of 74.9m (2008: 29.2m) 2008 2009 14
Continued cost discipline offset by higher restructuring and acquisitions in m 2009 2008 yoy Personnel 791.9 722.5 +9.6% Purchased goods 886.4 945.4-6.2% and services 722.5 791.9 Other operating 705.1 697.3 +1.1% Total Costs 2,383.5 2,365.2 +0.8% Restructuring 945.4 74.9 29.2 886.4 >100% costs Underlying cost savings of 70.9m, more than offset by higher restructuring costs and consolidation effects (StepStone and Digital Window) Major savings in production, paper, provisions and shipping costs Personnel costs relatively stable, adjusted for acquisition and other effects below prior year Restructuring costs up by 45.7m yoy 15
Segment revenues and EBITDA (in m) Newspapers National Magazines National Print International Digital Media 2009 2008 2009 2008 2009 2008 2009 2008 Services/ Holding 2009 2008 Revenues 1,213.7 1,277.6 517.8 564.1 311.7 409.8 470.4 378.2 98.1 99.0 Growth yoy -5.0% -8.2% -23.9% +24.4% -0.9% EBITDA 243.8 348.9 55.0 88.8 12.3 27.8 43.2 20.9-20.5-0.2 Δ yoy -30.1% -38.1% -55.8% >100% - - EBITDA margin 20.1% 27.3% 10.6% 15.7% 3.9% 6.8% 9.2% 5.5% - - 16
Newspapers National with strong profitability in m 2009 2008 yoy Circulation revenues slightly up due to copy price increases in 08 and 09 Revenues 1,213.7 1,277.6-5.0% Challenging advertising market Circulation 631.8 625.8 +1.0% EBITDA margin still at 20.1% Advertising Other 548.0 33.9 623.4 28.3-12.1% +19.6% EBITDA includes restructuring expenses of 50.4m (08: 18.7m) EBITDA Margin 243.8 20.1% 348.9 27.3% -30.1% EBITDA decline partly due to lower investment income after sale of regional newspaper stakes ( 15.1m) Additional marketing expenses in Q4 17
Magazines National: EBITDA margin still double-digit in difficult environment in m Revenues 2009 517.8 2008 564.1 yoy -8.2% Circulation slightly below last year, adjusted for portfolio changes only -2.4% Circulation Advertising Other 358.8 140.2 18.8 373.6 176.0 14.5-4.0% -20.3% +29.5% Advertising still difficult Double digit EBITDA margin in challenging environment EBITDA Margin 55.0 10.6% 88.8 15.7% -38.1% EBITDA includes restructuring expenses of 16.9m (08: 5.3m) 18
Print International impacted by significant downturn in advertising markets in m Revenues 2009 311.7 2008 409.8 yoy -23.9% ex FX -16.3% Significant revenue decline, especially in Poland, Hungary, Russia and Spain Circulation Advertising 185.7 113.5 216.4 177.4-14.2% -36.0% -6.3% -29.3% Revenues ex FX -16.3% (vs. -23.9% reported) Other EBITDA Margin 12.5 12.3 3.9% 16.0 27.8 6.8% -21.8% -55.8% -7.8% - EBITDA decline limited due to efficient cost saving measures of international units 19
Digital Media: strong revenue growth, EBITDA more than doubled in m Revenues 2009 470.4 2008 378.2 yoy +24.4% Strong revenue growth of 24.4%, adjusted for consolidation effects of 9.1% Advertising Other EBITDA 336.7 133.7 43.2 271.2 +24.1% 107.0 +25.0% 20.9 >100% EBITDA more than doubled EBITDA margin 9.2%, adjusted for launch costs even 13.0% Margin 9.2% 5.5% Main operative factors for EBITDA increase: immonet, idealo and Bild.de 20
Free cash flow/net financial debt (in m) Free cash flow Net financial debt 12/31/08 12/31/09 219.7 231.3-193.0 2008 2009-369.5 Credit line of 1.5bn secured until 2012, 1bn thereof extended until 2013 21
Net income impacted by non-operating items (in m) Non-operating items 571.1 Asset deals (2009: pre tax gain on sale of regional newspapers 214.4m and on sale of P7S1-stake 438.3m in 2008) 313.8 254.6 152.6 Purchase price allocations (2009-26.7m; 2008-46.5m) Other non-operating effects (2009-17.0m; 2008-85.7m) Tax effect on non-operating items (2009-9.5m; 2008 10.4m) 2008 2009 2008 2009 Adjusted for significant nonoperating items 22
Looking ahead
Outlook 2010 Group Revenues Stable to low single digit growth Circulation < 2009 EBITDA ~ 10% increase yoy Revenue categories Advertising Other > 2009 > 2009 Segments Newspapers National Magazines National Print International Digital Media Services/ Holding Revenues < 2009 < 2009 < 2009 > 2009 < 2009 EBITDA > 2009 > 2009 > 2009 > 2009 < 2009 24
Our vision is to become the leading integrated European multimedia company internationalization nationalization quality & mass market buy and build digitization cross media synergies Europe s leading integrated multimedia company 50% online 50% print Strong brands 1948 1998 2009 Country presence: 1 100% print revenues Revenue: 2,460m EBITDA: 296m Country presence: 7 Electronic revenues 1) represent 2% of total revenues 1) Electronic revenues include teletext, audiotex, interactive online services and TV production revenues 2) Including licenses 3) Pro-forma Revenue: 2,612m EBITDA: 334m Country presence: 36 2) Digital revenues represent 21% 3) of total revenues 25
Company overview and market opportunity
A clear strategy for growth and expansion 27
Evolution of our strategy Restructure the company 2002 2005 Build the digital business 2006+ Multimedia growth Future Focus on core competencies Rigid portfolio management Disposal or closure of 33 businesses/titles Cost savings EBITDA margin for main publications 1) up from 16.3% to 23.5% Headcount down by c. 4,000 people Early investments in online Paradigm shift Marketing capabilities benefiting from Axel Springer s reach Realise synergies from online acquisitions Maintain market leadership in print Best integrated European multimedia company (50% / 50% print / digital in 10 years) Focused acquisition strategy within core segments / capabilities Focus on mobile media International expansion 1) Main publications include: Bild, Bild am Sonntag, B.Z., Die Welt, Welt am Sonntag, Berliner Morgenpost, Hamburger Abendblatt, Sport Bild, Hörzu, Auto Bild, Bild der Frau, Computer Bild 28 28
Axel Springer is Germany s leading print marketer and publisher Market share by circulation 1) Market share by adspend 3) 19% With 19% market share, Axel Springer reaches 54% of the German population 2) daily 15% 7% 6% 5% 4% 9% 7% 5% 4% 4% 3% 3% Axel Springer Bauer WAZ SWMH Burda Holtzbrinck G+J Axel Springer G+J Burda Holtzbrinck WAZ Bauer Newspapers Magazines Newspapers Magazines 1) Source: Company estimates based on IVW 2009, paid circulation; weighted market share taking into account different title frequencies 2) Source: ma 2009 Pressemedien II; combined reach among German 14+ year-olds of all covered Axel Springer AG newspapers, magazines and 100% owned subsidiaries 3) Source: Nielsen Media Research; gross adspend, excluding classified ads, supplements and media advertising, 2009, 100% owned subsidiaries and Jahr Top Special Verlag. 29
Axel Springer is Germany s leading print publisher Core Axel Springer Brands Axel Springer Market share 1) Newsstand papers No. 1 81% National Sunday newspapers No. 1 86% National quality papers No. 3 17% Regional subscription papers No. 1 39% No. 2 17% Magazines No. 3 13% 1) Based on paid circulation IVW FY 2009 30 30
Unique brand expansion path: BILD example 31
BILD s media reach and advertising sales outperformed the market (2002-2009) BILD s reach increased BILD s advertising sales (Index of media reach) (Index of net advertising spending) -0.3% +3.4% +32.0% -14.7% -4.1% +1.4% 2002 2002 = = 100 100 2002 = 100 Print Market -family print - family print + digital 1) Market 1) -family print - family print + digital Source Digital: AGOF internet facts 2009-3 Unique Users Source Print: ma Pressemedien 2003-1 / 2010-1 (data for 2002/2009) for market reach of BILD family print titles including new titles founded after 2002 1) Gross figures. BILD, BamS, BILD der FRAU, Auto BILD Sport BILD and Computer BILD since 1998; Computer BILD Spiele since 2000, Audio Video Foto BILD since 2004, Auto BILD Motorsport since 2001, Auto BILD Allrad and Sportscars since 2002; Bild.de since 2002, BILDmobil since 2007 1) Net figures, excluding BILDWOCHE 2) ZenithOptimedia: Net Advertising Revenues newspapers & magazines 1999-2009 32
Strong international footprint Poland Newspapers market share: 37% 1) Newspapers 4 Magazines 14 Digital portals 30 Digital 29% Other magazines Romania 13 France 3) 10 Russia 3) 8 Czech Republic 7 Switzerland Market leader in TV listings, business/financial Newspapers 1 Magazines 14 Digital portals Hungary Market share 21%, largest consumer publisher 2) Newspapers 10 Magazines Digital portals 16 9 38 Print 71% International 21% 548m France, Italy, UK, Spain, Benelux, Swiss, USA, China, Sweden, Poland, Norway, Denmark Other digital Germany, UK Austria, Norway, Sweden, Italy Denmark, Belgium, France Portugal, Netherlands, Luxembourg, Switzerland, China, Singapore, United States Magazines Digital portals Spain Market leader in video-games magazines, computer magazines 1 12 Germany 79% 2,064m 2009: 2,612m France, Italy, UK, Spain, Belgium, Switzerland, Canada, Morocco Germany, UK France, Italy, Spain, Austria, Netherlands 1) Source: ZKDP; based on sold circulation 2009 2) Based on gross advertising revenues 3) partly in joint venture 33
Digital monetisation strategy Core Competencies Content portals Extend core print leadership position into online Capture advertising and / or circulation revenue from leading online properties Attract and retain valuable advertising customers Audience Classifieds Marketplaces / Marketplaces Deliver large and targeted audiences for listings across core categories Marketing Deliver to advertisers large and targeted audiences across core categories and platforms Branded advertising in print and online Digital performance-based advertising Advertisers Cross-synergies between core competencies allow Axel Springer to increase revenues and profitability 34
Digital is critical for future growth Unique visitors - Europe 1) (Dec 2009 per month in millions) Western European online advertising growth 2) vs. Axel Springer s online organic growth Axel Springer ProSiebenSat1 Hubert Burda Media RTL Group Groupe Lagardere Holtzbrinck 16% 26% 26% 1% 2008 2009 Western Europe Axel Springer Online share of advertising revenues Western Europe vs. Axel Springer 28.4% Gruner+Jahr Schibsted Group Vivendi Groupe Figaro Media peers 0 10 20 30 40 50 3.2% 1) 1) Source: comscore, Top 10 European-based media companies; Axel Springer includes aufeminin network and StepStone 2) Source: ZenithOptimedia, December 2009 growth at constant prices 3) Digital advertising revenues as percentage of Axel Springer s total advertising revenues 4) Source: ZenithOptimedia, December 2009 Share of Internet advertising in total adspend 7.9% 14.6% 2006 2009 2006 2009 Axel Springer 3) Western Europe 4) 35
Investor Relations contacts Claudia Thomé Head of Investor Relations Phone: +49 (0)30 2591 77421 Mobile: +49 (0)160 90445035 claudia.thome@axelspringer.de Daniel Fard-Yazdani Deputy Head of Investor Relations Phone: +49 (0)30 2591 77425 Mobile: +49 (0)151 52844459 daniel.fard-yazdani@axelspringer.de Axel Springer AG Axel-Springer-Str. 65 10888 Berlin / Germany Fax: +49 (0)30 2591 77422 36