Axel Springer AG. Company Presentation. November 2005

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1 Axel Springer AG Company Presentation November 2005

2 EBITA / Net Income from 1985 to 2004 in EURm 1) Successful turnaround story and EBITA on all-time high EBITA Net Income 1) Figures until 2002 in HGB accounting standard, 2003 and 2004 in IFRS, 2004 figures including the Kirch settlement

3 Share Price and Ownership Structure Axel Springer's share price developed significantly better than the comparable indices Share Price (Jan 02- Oct 05) 1) Ownership Structure 190 Axel Springer 180 Prime Media DJ EuroStoxx Media +82% % 10.0% % -34% 10.8% 50.0% + 10 shares 19.4% Axel Springer Gesellschaft für Publizistik Hellman & Friedman L.P. Friede Springer Axel Springer AG Free Float 1) Jan 02 = 100 2

Axel Springer company overview Company overview Newspapers Magazines & International Printing & Logistics Services / Holding Dr. Mathias Döpfner Chairman & CEO Dr.

4 Axel Springer company overview Company overview Newspapers Magazines & International Printing & Logistics Services / Holding Dr. Mathias Döpfner Chairman & CEO Dr. Andreas Wiele Rudolf Knepper Vice Chairman Steffen Naumann COO & CFO Ex. Sales 04 EUR1,398m EUR771m EUR144m EUR88m EBITA 04 EUR251m EUR10m Cost centre Cost centre Employees 4,482 2,942 2, Responsibilities BILD Group WELT Group Berlin Newspapers Hamburger Abendblatt BILD.T-Online.de Stepstone.de Immonet.de PR department Personnel dept. TV guides Women s Computer Automobile Men s Youth Financial Family Special Interest titles Internat. Publishing Offset printing Logistics and Distribution PIN AG Finance and accounting Investor relations IT Real Estate Customer service Insurance services 3

5 Market Position Market leader in the German print media 17% Market Share by Adspend 1) 22% Market Share by Circulation 2) 10% 8% 7% 7% 5% 4% 8% 6% 4% 4% 3% Axel Springer G+J Burda Bauer WAZ Newspapers Magazines total Axel Bauer WAZ Burda Holtzbrinck G+J Springer 1) Source: AC Nielsen; Gross adspend, excluding classified ads and supplements, ) Source: IVW 2004, weighted market share taking into account d ifferent title frequencies 4

6 Title Reach Axel Springer reaches more than 36 million readers aged 14 and over Reach of Axel Springer titles 55.9% 59.1% Position in other markets Stake of 12.0% in ProSiebenSat.1- Germany s largest Free to air TV channel family 27% stake in regional FTA TV channel HAMBURG 1 AS holds direct and indirect stakes in ten of Germany's fifteen largest stations 50.6% Strong position in the internet classifieds business Stepstone (49.9% stake), No. 3 immonet.de (74.9% stake), No. 3 Entire population Women Men AUTOBILD.de (100%), No. 3 5

7 Newspapers Newspapers No. 1 in Germany German Newspaper Market Core Newspaper Segments Market Share 6,8% 3.2% Newsstand papers No. 1 82% 21,7% Sunday newspapers No. 1 63% 68,3% Regional newspapers Newsstand papers Sunday newspapers National quality papers National quality papers Regional newspapers 1) No. 3 13% No. 1 2) 59% No. 1 2) 24% 1) Portfolio also includes Leipziger Volkszeitung, Ostseezeitung and others 2) Advertising market (gross advertising volumes) among all Mon -Fri subscription newspapers in Hamburg / Berlin. Source: IVW

8 Magazines Germany s no. 2 magazine publisher with more than 50 titles and no. 1 or 2 positions in 10 out of 13 sub segments¹ TV listings Computer Cars Weekly No. 2 38% Fortnightly No. 3 10% All TV Guides No. 2 28% Women s Games No. 1 31% PC No. 1 41% Aud. / Vid. No. 1 60% Youth / Music / Lifestyle Cars No. 1 57% Finance Weekly No. 1 2) 28% Monthly No. 3 19% 1) By circulation 2) Without yellow press Music No. 1 n.a. Youth No. 1 35% Lifestyle No. 3 22% Source: IVW 2004, weighted weekly Business/ Finance No. 2 16% 7

9 Magazines International Business: Established broad base with substantial scope for further growth Country Product Position Poland 15 magazines 1 newspaper No. 2 publisher Hungary 22 magazines 11 newspapers No. 1 publisher Czech Republic 8 magazines No. 1 publisher car magazines Russia 3 magazines Revenues 2004: 374 EURm 16% of total revenues of Axel Springer 8 countries with almost 100 titles License business: > 30 titles Romania 1) France Spain Switzerland 11 magazines 5 magazines (1 title in JV) 10 magazines 8 magazines, 1 newspaper No. 2 publisher magazines No. 1 publisher computer magazines 1) 40% stake in Joint Venture 8

Printing & Logistics Printing & Logistics competence Offset Printing Logistics Ahrensburg Berlin-Spandau Essen-Kettwig

Rotogravure integrated in Joint Venture Prinovis with Arvato and Gruner + Jahr (25.

Vertriebs GmbH (100%) that serves internal and external clients (>500 titles) - Domestic delivery: Buch und Presse (77%), VV

companies in Eastern Europe and Spain Mail: Coordination, planning and distribution of mail in metropolitan areas, assures

10 Printing & Logistics Printing & Logistics competence Offset Printing Logistics Ahrensburg Berlin-Spandau Essen-Kettwig Modernisation program for Offset plants of roughly 400 EURm finished no major new investments required in foreseeable future Rotogravure integrated in Joint Venture Prinovis with Arvato and Gruner + Jahr (25.1% stake) Press: Coordination, planning and steering of logistics activities: Logistics portfolio: - Marketing and Sales: AS Vertriebs GmbH (100%) that serves internal and external clients (>500 titles) - Domestic delivery: Buch und Presse (77%), VV Vertriebsvereinigung (49,5%), Presse Vertrieb Pfalz (32%), 7 East German wholesalers - Foreign delivery: Six distribution companies in Eastern Europe and Spain Mail: Coordination, planning and distribution of mail in metropolitan areas, assures direct access to readers Mailing Service Joint Venture with Holtzbrinck, WAZ and Rosalia (25% stake) in the course of formation Majority stake in PIN AG to be part of the Joint Venture 9

11 Headcount as at January 1st Successful turnaround Turnaround Program Headcount 1) Cost Reduction Consolidation of activities Headcount reductions Operational efficiency G&A Portfolio Reorganization Book Business Logistics (Overbruck) Titles with low profitability Launch of promising titles -32% 14,030 13,847 11,386 10,738 ~9, ) 1) Without apprentices. 2) Without rotogravure 10

12 Newspapers and Magazines Revenues in EURm 1) Growth in core business despite difficult market environment 2,084 1,997 +1% 2,017 +4% 2,096 Q /2005 1,589 +3% 1, Q 1-3/04 Q 1-3/05 1) Figures until 2002 in HGB accounting standard, 2003 and 2004 in IFRS. Revenues of current newspapers and magazines portfolio 11

13 EBITA in EURm and EBITA-Margin in % 1) EBITA-margin of 14.1% in Q 1-3/2005 tops expectations /2005 Q / % 93 2) % % 93 2 ) +33% % +233% % 9.3% % 14.1% Q 1-3/04 Q 1-3/05 1) Figures until 2002 in HGB accounting standard, 2003 and 2004 in IFRS 2) Kirch settlement 12

14 Net Income in EURm 1) Strong increase in net income % 148 Q /2005 H1 +13% % Q 1-3/04 Q 1-3/ ) Figures until 2002 in HGB accounting standard, 2003 and 2004 in IFRS 13

15 Newspapers Newspapers: Strong EBITA of 251 EURm in 2004 and strong Q 1-3/2005 EBITA in EURm/EBITA-Margin in % (FY) EBITA in EURm/EBITA-Margin in % (Q 1-3/05) +38% +18% Q1-3/2004 Q 1-3/ % 17.9% 19.3% 21.9% 14

16 Magazines Magazines: EBITA back on track after launch of new titles EBITA in EURm/EBITA-Margin in % (FY) EBITA in EURm/EBITA-Margin in %(Q 1-3/05) -86% +63% Q 1-3/2004 Q1-3/ % 1.3% 4.8% 7.7% 15

17 Growth Strategy Axel Springer focuses on six keys for profitable growth Strategy Leadership in core markets Internationalization of core business Digitization of core business Profitability Creativity Entrepreneurship Integrity Company Values 16

18 Growth Strategy 5 growth drivers 1. Launch of magazines and newspapers in Germany 2. Launches and acquisitions abroad 3. Development or acquisition of digital businesses 4. Recovery of advertising market 5. Transforming acquisition 17

19 Growth Strategy Successful growth strategy in Germany and International AS has founded the 4 most successful new magazines of the year German core markets Internationalization Digitization EPG Since 2003, Axel Springer has launched a total of 24 new titles. 18

20 Growth Strategy Strategic options for transforming acquisitions Support growth Internationalisation of print Improve strategic positioning Extend core business TV as second pillar in Germany 19

21 ProSiebenSat.1 Acquisition of majority of P7S1 1) TV market leader in our core German Media Market Profitability Profitable Business in an appealing advertising market Creation of structure for digital future Continuity Attractive European Media Stock Quality 1) 100% of ordinary and 25% of preference shares 20

22 ProSiebenSat.1 ProSiebenSat.1 at a glance P7S1 group Sat.1 ProSieben SevenOne Intermedia MM Merchandising Media kabel eins Euvia Media N24 No. 1 in the German TV market 21

23 ProSiebenSat.1 Market leader with growing audience share Audience shares among year-olds in Germany 35% 30% 25% 28,1% 28,9% 29,4% 30,5% 0,7% 0,5% 0,5% 5,0% 4,9% 5,2% 5,5% 24,4% 26,1% 25,3% 0,6% 25,6% 0,5% 0,6% 2,1% 2,3% 2,5% 2,6% 20% 15% 11,1% 11,5% 11,6% 12,2% 4,7% 5,0% 5,5% 6,4% 17,6% 16,3% 16,8% 15,7% 8,3% 7,6% 8,0% 7,5% 10% 5% 12,0% 12,0% 12,1% 12,1% 17,6% 18,2% 16,8% 16,0% 5,4% 7,1% 7,5% 6,7% 9,3% 8,7% 8,8% 8,2% 0% 2002A 2003A 2004A H1 2005A Pro7 Sat.1 Kabel1 N A 2003A 2004A H1 2005A 2002A 2003A 2004A H1 2005A 2002A 2003A 2004A H1 2005A RTL VOX Super RTL n-tv RTL II ARD ZDF Source: AGF/GfK-Fernsehforschung, SevenOne Media, Panel D+EU 22

24 ProSiebenSat first increase in group revenues since 2000 Net revenues (EURm) Q , , , , , ,6% 1.353, ,3 Q1-3/04 Q1-3/05 Source: P7S1 Note: IFRS since

25 ProSiebenSat.1 Successful turnaround achieved Pre-tax profit (EURm) Q 1-3/ ,4 217, ,8% 202, ,6 21,4 61, , Q 1-3/04 Q 1-3/05 P7S1 group achieved the best pre-tax result in its history in

26 Axel Springer + ProSiebenSat.1: The New Group Strong brands in the most important media segments Axel Springer AG Newspapers Magazines & International TV and related activities 25

27 Axel Springer + ProSiebenSat.1 Market leader in the German advertising market Split of print advertising revenues 1) Split gross advertising revenues in free-tv Share of combined entity in total advertising market Axel Springer 17% Others 19% Axel Springer + P7S1 14% G+J 8% Burda 7% P7S1 43% Others 59% Bauer 5% WAZ 4% RTL group 38% Others 86% Source: Nielsen Media Research, AS: including investments/jvs larger 50%, classified ad revenues 100% included Source: Nielsen Media Research (as of June 2005) Note: 2005 YTD Source: ZAW Note: Net-advertising revenues Axel Springer and ProSiebenSat.1 are both market leaders in their respective markets in the German media landscape 1) Basis: Gross advertising revenues 2004, including brand products, services, wholesale, without rubrics and supplements, media ad vertising 26

28 Axel Springer + ProSiebenSat.1 The New Group pro-forma overview 2004 Revenues Revenues by source Axel Springer EUR 2,402m P7S1 EUR 1,835m Total EUR 4,237m TV 40% Newspaper 33% % % 49% 49% 93% 93% 39% 39% % 28% 22% 22% 40% Axel Springer P7S1 Total Other 8% Magazines 18% TV advertising Print advertising Circulation Other* * Including printing A media group with a balanced revenue split Note: Pro-forma values based on addition of consolidated annual reports of the financial year

29 Axel Springer + ProSiebenSat.1 The New Group pro-forma overview 2004 (continued) EBITDA Cash-Flow before financing Axel Springer EUR340m 1) P7S1 EUR321m Total EUR661m Axel Springer EUR180m 2) P7S1 EUR123m Total EUR302m P7S1 49% Axel Springer 51% P7S1 37% Axel Springer 63% 1) Adjusted for EUR92.6m Kirch settlement, incl. income from associates (EUR40m) 2) Adjusted for Kirch settlement and tax-effect A media group with two equally strong and profitable main pillars Note: Pro-forma values based on addition of consolidated annual reports of the financial year

30 Axel Springer + ProSiebenSat.1 The New Group: Transaction steps Voluntary public tender offer Voluntary public tender offer of (3 months weighted average share price) closed on November 3rd, 2005, replacing a mandatory tender offer. Take up of 31.2 million shares (28.5% of preference shares, 14.3% of total shares). Final take up only determined after regulatory approval due to investors withdrawal right Merger process Evaluation of the strategic and financial merits by both companies Valuation of both entities in accordance with the Standards of Company Valuation (IDW-ES1) by two separate auditors which will be appointed by the respective companies Bilateral exchange ratio and merger agreement negotiations as well as preparation of a joint merger report Additional confirmation of the adequateness of the exchange ratio by an independent merger accountant to be appointed by a court Invitation to separate shareholders meetings for both companies to authorize the merger Tender offer price reflects the minimum price required by law. Exchange ratio for merger is based on standard valuation procedures which reflect the fair value of both companies 29

31 Financing of the transaction PTO to be refinanced by equity increase Uses of funds (EURm) 440 3,241 Sources funds (EURm) 440 3,241 2,451 (1) 350 2, Purchase price for GMP stake existing debt Public tender offer Total Debt Treasury shares Bridge financing/ equity increase Total 1) Combined, expected net debt of both companies as of December 31st, 2005, plus other expenses, less cash and cash equivalents which remain in the companies 2) Pro-forma values based on addition of consolidated annual reports of the financial year 2004, less EUR92.6m from Kirch settlement 30

32 Timetable of the transaction Indicative timetable Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Jun-06 Signing and announcement Submit offer document BaFin review of offer document Tender period Cartel authority review period Media-concentration review period Closing and settlement Valuation and merger process Preparation Closing and settlement of the share purchase and tender offer subject to regulatory approval Completion of merger process aimed at earliest possible date after closing of share purchase and tender offer 31

33 Summary Axel Springer ProSiebenSat Combination of two profitable market leaders in adjunct segments Superior brand family with unique reach Creative competence and successful business development Well positioned for the digital age Major beneficiary of economic upswing Citigroup Annual Media Conference, September 12,

34 Investor Relations Contact Claudia Thomé Head of Investor Relations Phone: +49 (0) Mobile: +49 (0) Diana Grigoriev Investor Relations Manager Phone: +49 (0) Axel Springer AG Axel-Springer-Str Berlin / Germany Fax: +49 (0)

35 Disclaimer This document, which has been issued by Axel Springer AG (the Company ), comprises the written materials/slides for a presentation of the management. 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. The contents of this document are to be kept strictly confidential. Some of the information has not been legally verified. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. 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 involve risks and uncertainties. The actual performance, results and timing of the business of the Company could differ materially from the performance, results and timing discussed in this document. This document does not constitute an offer to sell or a solicitation of an offer to purchase any securities of the Companyand neither this document nor any copy of it may be taken or transmitted into the United States or distributed, directly or indirectly, in the United States or to any US person. In addition, neither this document nor any copy of it may be taken or transmited into Canada or Australia or distributed or redistributed in Japan or to any resident thereof. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. 34

Roadshow Presentation

Roadshow Presentation May 2006 AXEL SPRINGER AG EBITA/Net income from 1985 to 2005 1) EBITA and net income on all-time high after sucessful turnaround 400 338 300 287 243 2) 231 200 151 100 41 148 0 31