Quarterly Financial Report

Transcription

1 3 Quarterly Financial Report as of September 30, 2013

2 Group Key Figures Quarterly Financial Report as of September 30, 2013 Axel Springer AG 2 3rd Quarter 9 Months millions Q3/2013 Q3/2012 Change 9M/2013 9M/2012 Change Group Total revenues % 2, , % Digital Media revenue share (pro forma) 39.1 % 37.3 % 39.3 % 36.2 % International revenue share 36.7 % 35.2 % 37.3 % 34.4 % Circulation revenues % % Advertising revenues % 1, , % Other revenues % % EBITDA 1) % % EBITDA margin 1) 15.1 % 19.1 % 17.5 % 19.1 % Consolidated net income % % Consolidated net income, adjusted 2) % % Segments Revenues Digital Media % % Newspapers National % % Magazines National % % Print International % % Services/Holding % % EBITDA 1) Digital Media % % Newspapers National % % Magazines National % % Print International % % Services/Holding Liquidity and financial position Free cash flow 3) % % Capex 4) Total assets 5) 4, , % 4, , % Equity ratio 5) 48.1 % 46.9 % 48.1 % 46.9 % Net liquidity/debt 5) Share-related key figures 6) Earnings per share (in ) >100 % % Earnings per share, adjusted (in ) 7) % % Closing price (in ) % % Market capitalization 8) 4, , % 4, , % Free float 41.5 % 41.3 % 41.5 % 41.3 % Average number of employees 14,332 13, % 14,423 13, % 1) Adjusted for non-recurring effects. 2) Adjusted for non-recurring effects and amortization and impairments from purchase price allocations. 3) Cash flow from operating activities, minus capital expenditures, plus cash inflows from disposals of intangible assets and property, plant, and equipment. 4) Capital expenditures on intangible assets, property, plant, and equipment, and investment property. 5) As of September 30, 2013 and December 31, 2012, respectively. 6) Price data based on XETRA closing prices. 7) The earnings per share (basic/diluted) adjusted for non-recurring effects and amortization and impairments from purchase price allocations were calculated on the basis of average weighted shares outstanding in the reporting period (98.9 million). 8) Based on outstanding shares at the closing price, excluding treasury shares.

3 Quarterly Financial Report as of September 30, 2013 Axel Springer Group Quarterly Financial Report as of September 30, 2013 Axel Springer AG 3 Business developments and operating results at a glance Revenues and earnings The Axel Springer Group continues to benefit from the growing digitization of its business. At 2,443.1 million, the consolidated revenues generated in the first nine months of the current year were slightly higher (+ 1.5 %) than the corresponding year-ago figure. The declines registered in the print business were offset by growth in the digital media business. Adjusted for consolidation, currency, and calendar effects, total revenues were slightly less ( 0.8 %) than the year-ago figure. EBITDA of million was less than the corresponding figure for the first nine months of last year (PY: million). This development was mainly due to significantly higher expenses for structural adjustments in the print business and for accelerating the process of digitization. Business performance in line with expectations Axel Springer s revenue and earnings performance in the first nine months of 2013 basically fulfilled the expectations expressed in our Annual Report The development of total revenues was in line with our expectation of an increase in the low single-digit percentage range. We also increased our advertising revenues, as expected. These gains were driven by the growth of our digital media activities. As expected, circulation revenues came out less than the year-ago figure. The development of earnings was influenced, as expected, by significantly higher expenses for structural adjustments in the print business and for accelerating the process of digitization. Important events affecting the Group s business performance In a legally binding preliminary agreement Axel Springer AG agreed to sell its regional newspapers, TV program guides, and women s magazines to Funke Mediengruppe. In this connection, the parties also agreed to form joint ventures for the marketing of print and digital media products and retail distribution, thereby bundling the parties activities, resources, and expertise in these areas. Axel Springer will exercise managerial control and hold the majority of shares in both these companies. According to the agreements that have been reached, it is planned to implement these measures with economic effect as of January 1, The regional newspaper groups, TV program guides, and women s magazines contributed 94.8 million to EBITDA and million to the revenues of the Axel Springer Group in financial year Of the total purchase price of 920 million, an amount of 660 million is payable in cash. Axel Springer will extend a multi-year loan to finance the remainder of the purchase price. Axel Springer AG is currently negotiating the detailed agreements required to implement the preliminary agreement with Funke Mediengruppe. These agreements are expected to be signed with legally binding effect in the second half of the fourth quarter, after all the necessary preconditions have been fulfilled. The transaction is pending, subject to the approval of the competent merger and cartel authorities. These authorities are expected to issue their rulings in early It is expected that the transaction will be finalized in the spring of By means of this transaction, Axel Springer continues to pursue its strategy of rigorous digitization, in order to become the leading digital publisher. The company will focus even more strictly on its core multimedia journalism brands, the WELT Group and the BILD Group, including the related magazine brands (AUTO BILD Group, COMPUTER BILD Group, SPORT BILD).

4 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 4 As part of its online classifieds growth initiative, the European online jobs exchange StepStone signed an agreement in early October to purchase 100 % of YOURCAREERGROUP, effective January 1, YOURCAREERGROUP operates several industry portals focusing on hotels, restaurants, and tourism. Operating in Germany, Austria, and Switzerland, among other countries, these job portals are among the most successful in their respective segments, listing approximately 12 thousand job openings and drawing 500 thousand unique visitors per month, on average. In early November, StepStone signed another agreement to purchase 100 % of Saongroup, which operates job portals in 16 countries and holds leading positions particularly in Ireland, Northern Ireland, and South Africa. It is planned that the transaction will be closed in November With the purchase of YOURCAREERGROUP and Saongroup, StepStone is further extending its position as the leading job portal in Germany and one of the leading online job exchanges in Europe. In the first quarter, we sold approximately 2.6 percentage points of our equity stake in Do an TV Holding A.S., Istanbul, Turkey. The proceeds from this transaction amounted to 61.6 million. Forecast for 2013 We expect to generate a low single-digit percentage increase in Group-wide total revenues in financial year We anticipate that the expected decrease in circulation revenues will be more than offset by the expected increase in advertising revenues, coupled with stable other revenues. We continue to anticipate organic growth in our digital media activities, reinforced by acquisition effects, whereas the revenues generated in our national and international print business will continue to decline, in line with market conditions. a single-digit percentage decrease in the Group s EBITDA, compared to By reason of the effects mentioned above and the higher share of non-controlling interests in the Digital Media segment, the Group s adjusted earnings per share in 2013 will be significantly less than the corresponding figure for The forecast for financial year 2013 still includes the revenue and earnings contributions of the activities to be acquired by Funke Mediengruppe with effect from January 1, 2014, as per the preliminary agreement. Implementation of the Group s business strategy The highest strategic priority for Axel Springer is the consistent digitization of our business. By further developing our digital offerings in Germany and abroad, and by means of targeted acquisitions, we are pursuing the goal of becoming the leading digital publisher. In the print business, we are focused on maintaining Axel Springer s market leadership position on the strength of excellent journalism and, above all, the practice of strict cost discipline. Changes in the Management Board In July 2013, the Supervisory Board of Axel Springer AG appointed Dr. Julian Deutz to the Management Board, effective January 1, He will succeed the current Chief Financial Officer Lothar Lanz in April It is planned that Lothar Lanz will join the Supervisory Board as of the same date. An election proposal to this effect will be presented to the annual shareholders meeting We are increasing our investments in the company s further development in financial year We are accelerating the pace of digitization and increasingly adjusting the structures of our print business to reflect the structural changes. This plan necessitates higher expenditures for expanding the digital business and significant expenses for structural adjustments in the print business. By reason of these expenditures, we anticipate

5 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 5 General economic conditions State of the economy According to the International Monetary Fund (IMF), the global economy is currently undergoing a phase of subdued growth. The IMF also perceives a shift in the main drivers of global economic growth, as more momentum is being generated by the industrialized nations. The United States in particular has experienced strong consumer demand for several quarters. By contrast, the euro zone is still in recession, despite robust growth in Germany. The growth rates of emerging-market countries are slowing. Compared to Europe and the United States, however, at least China is still generating considerably faster economic growth. In the opinion of the economic research institutions who contributed to the Autumn Report published in October 2013, Germany is poised for an economic upturn at the start of the third quarter. According to these economic experts, the uncertainties caused by the euro crisis have subsided. Other positive factors include the continued availability of low-cost financing and the favorable condition of the jobs market. The economic experts anticipate a significant increase in consumer spending, mainly as a result of increased employment and appreciable wage increases. Press distribution market Once again, the German press distribution market contracted slightly. The total paid circulation of newspapers and magazines was 4.0 % less than the corresponding figure for the year-ago period. Due to the copy price increases implemented in the last four quarters, however, circulation revenues declined by only 2.4 %. The 363 daily and Sunday newspapers tracked by IVW generated total sales of 20.5 million copies per issue, reflecting a decrease of 3.9 % from the corresponding year-ago figure. As in the year-ago period, newsstand sales declined by a much greater margin ( 8.8 %) than subscription sales ( 2.0 %). Within the press distribution market, the demand for daily and Sunday newspapers declined by 3.7 %, weighted for their respective publication frequencies. Total sales of general-interest magazines, including membership and club magazines, came to million copies per issue, reflecting a decrease of 2.9 % from the year-ago period. The number of titles tracked by IVW was 849 (3.2 % less than the year-ago figure). Weighted for their respective publication frequencies, the demand for general-interest magazines declined by 4.8 %. The Business Climate Index of German enterprises published by the ifo Institute in the third quarter of 2013 was considerably higher than the reading for the second quarter. Furthermore, the Consumer Climate Index published by the GfK Group has risen steadily since the beginning of the year. According to calculations of the German Federal Statistical Office, consumer prices rose at a rate 1.6 % in the first three quarters of Thus, the inflation rate is considerably lower than it was in the first nine months of According to the German Federal Employment Agency, there were 2.9 million unemployed job seekers in September 2013, that being 2.2 % higher than the year-ago figure. The unemployment rate was 6.6 %.

6 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 6 Operating results of the Group At 2,443.1 million, the total revenues generated in the first nine months of 2013 were slightly higher than the year-ago figure ( 2,407.7 million). The lower revenues generated in the print segments were offset by higher revenues in the Digital Media segment. Adjusted for consolidation, currency, and calendar effects, total revenues were slightly less ( 0.8 %) than the year-ago figure. Segment Revenues Digital Media Newspaper National Magazines National Print International 11.7 % Services/Holding 3.4 % Total Revenues millions 13.5 % 39.3 % Circulation Advertising Other % 1, , , M/2012 9M/2013 2,443.1 As a result of declines in the three print segments, the circulation revenues of million were 5.2 % less than the year-ago figure ( million) and accounted for 34.1 % (PY: 36.5 %) of the Group s total revenues. As in prior periods, the comparison of segment revenues shows considerable growth in the Digital Media segment, coupled with revenue declines in the print segments, due to market conditions. Axel Springer s digital activities experienced strong growth of 16.6 %. The underlying organic growth was reinforced by consolidation effects. On the other hand, the print segments experienced revenue declines. In Germany, newspaper revenues declined by 6.6 % and magazine revenues by 2.4 %. The revenues generated in our international print activities were 10.4 % less than the corresponding year-ago figure. The increase in advertising revenues, which rose by 6.6 % to 1,330.4 million (PY: 1,248.0 million), was driven by growth in the Digital Media segment. Already today, the Group generates nearly two thirds (62.4 %) of its total advertising revenues in its digital media activities. The advertising revenues generated in our print activities declined from the year-ago period. They accounted for 54.5 % (PY: 51.8 %) of the Group s total revenues. The other revenues of million were slightly less than the year-ago figure of million and accounted for 11.4 % (PY: 11.7 %) of total revenues.

7 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 7 Digital Media Revenues (Pro forma) millions in percent of total revenues 36.2 % % The international revenues of million were 10.0 % higher than the year-ago figure and accounted for 37.3 % (PY: 34.4 %) of Axel Springer s total revenues. This increase reflects the growing internationalization of the Group s digital business. The increase in total expenses to 2,215.0 million (PY: 2,157.8 million) resulted mainly from higher personnel expenses and from consolidation effects. 9M/2012 The pro-forma revenues of the Digital Media segment rose to million (PY: million), corresponding to an organic growth rate of 6.6 %. Thus, the proportion of pro-forma total revenues represented by pro-forma digital revenues rose from 36,2 % in the first nine months of last year to 39,3 % in the reporting period. Pro-forma revenues include the revenues of the companies acquired in 2012 and 2013, on the basis of unaudited financial information. Revenues of companies that have been sold were deducted from the pro-forma revenues accordingly. International Revenues millions in percent of total revenues 34.4 % M/2012 9M/2013 9M/ % At million, purchased goods and services were little changed from the corresponding year-ago figure ( million). The ratio of purchased goods and services to total revenues narrowed to 31.2 % (PY: 31.8 %), particularly due to the higher share of revenues contributed by companies in the Digital Media segment, which have proportionally lower expenses for purchased goods and services. This effect was partially offset by higher ratios of purchased goods and services to total revenues in the performance-based marketing business. The personnel expenses of million were 68.2 million or 10.1 % higher than the year-ago figure (PY: million). This increase resulted mainly from the consolidation of subsidiaries acquired in the prior year, as well as higher restructuring expenses and the revaluation of virtual stock option plans. Depreciation, amortization, and impairments amounted to million. Despite the higher depreciation and amortization charges contained within purchase price allocations, this figure was less than the corresponding year-ago figure of million, which included an impairment of goodwill in the Digital Media segment in the amount of 17.4 million. The decrease in other operating income to 47.4 million (PY: 48.6 million) resulted mainly from the fact that the year-ago figure included higher effects related to the revaluation of contingent purchase price liabilities. Mainly due to the consolidation of subsidiaries acquired in the prior year, the other operating expenses of million were slightly higher than the yearago figure (PY: million), which also included effects resulting from the revaluation of available-for-sale assets.

8 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 8 The income from investments in the amount of 27.9 million (PY: 8.9 million) was particularly influenced by the profit realized on the sale of 2.6 % of our equity stake in Do an TV. The corresponding figure for the first nine months of 2012 included the impairment of an investment in the Digital Media segment. The operating income from investments included within EBITDA amounted to 14.0 million (PY: 16.3 million). At 18.8 million, the financial result was higher than the corresponding year-ago figure (PY: 40.3 million), due to lower interest expenses for financial liabilities (including the effects of interest rate hedges), and lower net interest expenses for pension plans. Income taxes amounted to 89.2 million in the first nine months of 2013 (PY: 82.7 million). The tax rate was 30.4 % (PY: 30.5 %). The decrease in earnings before interest, taxes, depreciation, and amortization (EBITDA) from million to million was mainly the result of significantly higher expenses for structural adjustments in the print business and for accelerating the process of digitization. The EBITDA margin also declined, to 17.5 % (PY: 19.1 %). The EBITDA figure does not contain non-recurring effects such as gains or losses on the sale of divisions and investments or depreciation related to purchase price allocations, for example. EBITDA Consolidated net income amounted to million (PY: million). Adjusted consolidated net income fell to million (PY: million). Consolidated Net Income millions 9M/2013 9M/2012 Consolidated net income Non-recurring effects Effects of purchase price allocations Taxes attributable to these effects Consolidated net income, adjusted Attributable to non-controlling interest, adjusted Adjusted consolidated net income attributable to shareholders of Axel Springer AG Earnings per share (basic/diluted) amounted to 1.77 (PY: 1.62). Based on the average weighted shares outstanding in the reporting period (98.9 million), adjusted earnings per share (basic/diluted) declined from 2.21 to Adjusted consolidated net income and adjusted earnings per share are not defined under International Financial Reporting Standards, and should therefore be regarded as supplementary information to the consolidated financial statements. millions EBITDA margin in % 19.1 % % M/2012 9M/2013

9 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 9 Operating results of the segments Digital Media Thanks to strong organic growth rates and intensive acquisition activity, the importance of the Digital Media segment for Axel Springer has grown enormously. Since the fourth quarter of 2012, it is the Group s biggest segment, in terms of both revenues and earnings. The Digital Media segment is divided into three areas of competence: Content portals and other digital media Performance marketing Axel Springer Digital Classifieds In the area of content portals, Axel Springer s main focus in the first nine months of 2013 was to acquire paying subscribers also in the stationary Internet. DIE WELT started this process in December 2012, when it introduced different content packages for digital subscriptions. The reach of welt.de increased by 7.2 % in the first nine months of the year. In October 2013, Bild.de launched several strategic partnerships with the goal of further extending its dominant position as Germany s biggest news and entertainment portal. The online travel magazine TRAVELBOOK.de combines articles written by the journalists of Bild.de with user-generated content from Tripadvisor. In cooperation with the streaming service AMPYA of ProSiebenSat.1, BILD Music offers more than 20 million music titles and nearly 60 thousand music videos, which can be played on demand for a subscription fee of 9.99 per month after a free trial month. On BILD Tickets, a cooperative venture with Ticketmaster/DEAG, Bild.de users can buy tickets for musical, cultural, and sports events. Through the acquisition of a 50.1 % equity interest in Runtastic in early October, one of the leading vendors of mobile apps for measuring sports and fitness data, Axel Springer expanded its digital sports portfolio around the core brands of BILD, BILD am SONNTAG, SPORT BILD, and DIE WELT. In order to close the gap between strategic late-phase investments and early-phase activities, Axel Springer invested in Project A Ventures in October. This company specializes in the financing and incubation of startups in the area of Internet, mobile, and online advertising technologies. The lead investor in Project A is the Otto Group. This transaction is still pending, subject to the approval of the merger control authorities. BILD launched its paymodel, BILDplus, in June Basic news is still available free of charge, users can choose among different subscription models for exclusive, in-depth reporting. BILDplus is a brand subscription that enables customers to pay only once for the right to use all BILD products, both online and offline. Since August 2013, moreover, subscribers also have access to new reporting on the German National Soccer League. Axel Springer procured the rights for digital National Soccer League reporting for the next four years.

10 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 10 The overlap-free net reach of all of Axel Springer s digital media combined (measured on the basis of unique visitors according to comscore) rose to an average of 92.7 million unique visitors in the first nine months of 2013, reflecting an increase of 10.7 % since the comparable period of 2012 (83.8 million). The gross reach figures and average monthly number of visits to selected portals are presented in the table below. Traffic Figures Content Portals (Selection) Millions (monthly average) Unique visitors 9M/2013 1) Change yoy Visits Change 9M/2013 2) yoy aufeminin.com % ) 1.4 % Onet.pl % ) 11.3 % computerbild.de % % Bild.de % % welt.de % % fakt.pl % ) 20.4 % blesk.cz % ) 43.7 % transfermarkt.de % % azet.sk % ) 2.2 % forbes.ru % 6.1 7) 58.7 % autobild.de % % onmeda.de % % blic.rs 1.5 >100% ) 48.5 % cas.sk % ) 25.4 % finanzen.net % % abendblatt.de % % 1) Source: comscore 9M/ ) Source: IVW 9M/ ) Source: Company data, Jan. Aug ) Source: Gemius. 5) Source: NetMonitor. 6) Source: AIM Monitor. 7) Source: Yandex Metrika. Key Figures Digital Media millions 9M/2013 9M/2012 Change External revenues % Share in cons. revenues 39.3 % 34.2 % Advertising revenues % Other revenues % Content portals & other digital media % Performance marketing % Axel Springer Digital Classifieds % EBITDA 1) % Content portals & other digital media % Performance marketing % Axel Springer Digital Classifieds % EBITDA margin 1) 20.5 % 20.2 % Content portals & other digital media 21.7 % 21.8 % Performance marketing 4.1 % 4.9 % Axel Springer Digital Classifieds 40.9 % 43.3 % 1) Segment EBITDA includes non-allocated costs of 9.4 million (PY: 8.8 million). The total revenues generated in our digital activities rose by 16.6 % to million (PY: million). This increase is attributable to both consolidation effects and organic growth. The advertising revenues of million were 19.9 % higher than the corresponding year-ago figure (PY: million). This increase resulted both from consolidation effects, including those related to the acquisitions of Onet.pl, Immoweb.be, allesklar.com/meinestadt.de, and Totaljobs, and additionally from organic growth. The other revenues of were slightly less than the year-ago figure ( million). This decrease resulted from the sale of the online games provider gamigo in the prior year.

11 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 11 The pro-forma revenues of the Digital Media segment rose from million in the first nine months of last year to million in the reporting period. The proportion of pro-forma total revenues represented by proforma digital revenues rose from 36,2 % in the year-ago period to 39,3 % in the reporting period. Based on the current portfolio, therefore, Axel Springer s digital revenues experienced organic growth of 6.6 % in the first nine months of Most of this increase occurred in the areas of content portals and other digital media (+11.6 %), as well as Axel Springer Digital Classifieds (+5.9 %), while the organic growth of the performance marketing business was 2.7 %. Key Figures Digital Media 3rd Quarter millions Q3/2013 Q3/2012 Change External revenues % Share in cons. revenues 39.1 % 35.7 % Advertising revenues % Other revenues % Content portals & other digital media % Performance marketing % Axel Springer Digital Classifieds % At million, EBITDA of the Digital Media segment was 18.5 % higher than the year-ago figure of million and accounted for 46.0 % (PY: 36.1 %) of consolidated EBITDA. The Axel Springer Digital Classifieds Group contributed the largest share to segment EBITDA, due to the acquisitions-driven expansion of the digital media portfolio, as well as organic growth. The competence area of content portals and other digital media also contributed to this increase, mainly due to consolidation effects. Organic earnings growth was held back by higher expenses for the accelerated process of digitization, which nearly doubled from 10.6 million in the year-ago period to 20.3 million in the reporting period, mainly in connection with the introduction of paid-content models. The EBITDA contribution of the performance marketing area was less than the corresponding year-ago figure, due to market conditions. Therefore, the EBITDA margin of 20.5 % was only slightly higher than the EBITDA margin for the first nine months of 2012 (20.2 %). EBITDA 1) % Content portals & other digital media % Performance marketing % Axel Springer Digital Classifieds % EBITDA margin 1) 18.8 % 19.6 % Content portals & other digital media 18.7 % 16.2 % Performance marketing 3.9 % 4.8 % Axel Springer Digital Classifieds 39.1 % 44.6 % 1) Segment-EBITDA includes non-allocated costs of 3.4 million (PY: 2.1 million). Newspapers National The Newspapers National segment mainly comprises the newspapers of the BILD Group and the WELT Group. Until the implementation of the acquisitions contractually agreed with Funke Mediengruppe, the Newspapers National segment also still includes HAMBURGER ABENDBLATT and BERLINER MORGENPOST. On September 21, 2013, a special BILD edition on the federal parliamentary elections was distributed free of charge to nearly every household in Germany, with a circulation of 41 million copies. From a marketing standpoint, this special edition was just as successful as the first special edition, BILD für ALLE, in June In the regions of western Germany and in Munich, which represent about one third of BILD s total circulation, the copy price was raised from 0.60 to 0.70 on August 19.

12 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 12 Circulation and Reach Newspapers National Thousands Circulation Change 9M/2013 1) yoy Reach 2) Change Bild/B.Z. 3) 2, % 12, % Bild am Sonntag 1, % 9, % Die Welt/Welt Kompakt % % Welt am Sonntag/ Welt am Sonntag Kompakt % % Hamburger Abendblatt % % Berliner Morgenpost % % 1) Source: IVW, average paid circulation. 2) Source: ma 2013 Pressemedien II. 3) BILD and B.Z. are presented together as of Q1/2013. The year-ago comparison figures were adjusted accordingly. Due to market conditions, the circulation and reach numbers of the German newspapers declined in the first nine months of Key Figures Newspapers National millions 9M/2013 9M/2012 Change External revenues % Share in cons. revenues 32.0 % 34.7 % Circulation revenues % Advertising revenues % Other revenues % million were 8.5 % less than the corresponding figure for the first nine months of In the third quarter, however, advertising revenues were 10.5 % higher than the corresponding figure for the third quarter of 2012, due to the additional revenues generated on the special BILD edition on the federal parliamentary elections. The other revenues of 19.4 million were 9.6 % less than the year-ago figure. At million, segment EBITDA was 20.9 % less than the year-ago figure (PY: million). Aside from the lower revenues, this decrease resulted mainly from higher restructuring expenses, which rose from 10.0 million in the year-ago period to 22.7 million in the first nine months of The EBITDA margin declined accordingly to 20.0 % (PY: 23.6 %). Key Figures Newspapers National 3rd Quarter millions Q3/2013 Q3/2012 Change External revenues % Share in cons. revenues 33.6 % 34.1 % Circulation revenues % Advertising revenues % Other revenues % EBITDA % EBITDA margin 19.0 % 22.4 % EBITDA % EBITDA margin 20.0 % 23.6 % At million, the total revenues of the Newspapers National segment were 6.6 % less than the corresponding year-ago figure ( million). Mainly due to lower circulation numbers for all titles, the circulation revenues of million were 4.9 % less than the corresponding figure for the first nine months of 2012 ( million). However, the circulation revenues for the third quarter were only 3.2 % less than the corresponding year-ago figure, mainly due to the copy price increase affecting about one third of BILD s circulation as of August 19, The advertising revenues of

13 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 13 Magazines National The Magazines National segment mainly comprises the activities of our automotive, computer, sports, and music magazines. Until the implementation of the acquisitions contractually agreed with Funke Mediengruppe, this segment also still includes our TV program guides and women s magazines. Circulation and Reach Magazines National Thousands Circulation 9M/ ) Change yoy Reach 2) Change Hörzu 1, % 3, % TV Digital 1, % 4, % Bild der Frau % 4, % Auto Bild % 2, % Computer Bild % 3, % Sport Bild % 4, % 1) Source: IVW, average paid circulation. 2) Source: ma 2013 Pressemedien II. The circulation numbers of our German magazines were lower than the respective year-ago figures, in line with the market trend. At million, the total revenues of the Magazines National segment were slightly less than the corresponding year-ago figure ( million). Compared to the year-ago figure of million, circulation revenues fell slightly, by 2.3 %, to million, due to generally lower circulation numbers. At 83.0 million, the advertising revenues of the Magazines National segment were 4.3 % less than the year-ago figure ( 86.7 million). In the third quarter, however, advertising revenues were 6.1 % higher than the corresponding year-ago figure, due to the positive development of the Group s women s, sports and automotive magazines. Despite the lower revenues, segment EBITDA of 75.3 million was 5.9 % higher than the year-ago figure ( 71.0 million). This development reflected the positive effects of lower restructuring expenses, compared to the first nine months of last year ( 3.1 million; PY: 9.4 million). Accordingly, the EBITDA margin rose slightly from 21.0 % to 22.7 %. Key Figures Magazines National 3rd Quarter millions Q3/2013 Q3/2012 Change External revenues % Share in cons. revenues 13.3 % 13.7 % Key Figures Magazines National millions 9M/2013 9M/2012 Change External revenues % Share in cons. revenues 13.5 % 14.1 % Circulation revenues % Advertising revenues % Other revenues % EBITDA % Circulation revenues % Advertising revenues % EBITDA margin 21.5 % 20.5 % Other revenues % EBITDA % EBITDA margin 22.7 % 21.0 % Print International Axel Springer s international print publications, including both newspapers and magazines, are combined within the Print International segment. As in prior periods, Switzerland, Poland, and the Czech Republic are still the highest-revenue countries for Axel Springer.

14 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 14 The circulation and reach numbers of the leading masscirculation dailies in the countries in which our joint venture Ringier Axel Springer Media operates are presented in the table below. Circulation and Reach Print International (Selection) Thousands Circulation 9M/2013 Change yoy Reach Change Fakt 1) % 1, % Blesk 2) % 1, % Novy Cas 3) % % Blic 4) % % Alo! 4) % % 1) Poland. Circulation: ZKDP, Jan. Aug vs. Jan. Aug. 2012; Reach: PBC General, Jan. June 2013 vs. Jan. June ) Czech Republic. Circulation: ABC CR, Jan. Aug vs. Jan. Aug. 2012; Reach: Media Projekt, GfK Praha, Jan. June 2013 vs. Jan. June ) Slovakia. Circulation: ABC SR, Jan. Aug vs. Jan. Aug. 2012; Reach: MML-TGI, Median SK, Jan. June 2013 vs. Jan. June ) Serbia. Circulation: ABC Serbia, Jan. Aug vs. Jan. Aug. 2012; Reach: Ipsos Strategic Marketing, Jan. Aug vs. Jan. Aug Due to market conditions, the circulation numbers of our international newspapers and magazines were mainly lower in the first nine months of The development in Serbia was stabilized by means of additional salespromoting measures. The third-quarter numbers were affected by the sale of the Group s women s magazines and TV program guides in France at the beginning of the third quarter. Particularly in eastern Europe, the general economic conditions remained difficult. Due to market conditions, the total revenues of the Print International segment declined by 10.4 % to million in the reporting period. Adjusted for consolidation, currency, and calendar effects, the drop in revenues was only 6.7 %. Circulation revenues were 9.2 % lower than the year-ago figure; on an adjusted basis, the decline was 4.2 %. Advertising revenues of 87.6 million were 19.1 % less than the year-ago figure; on an adjusted basis, the decline was 17.2 %. This development resulted from lower revenues in all international markets, although the declines were most pronounced in Poland and the Czech Republic. The revenue decline accelerated in the third quarter, due to consolidation effects related to the sale of the French magazines. Adjusted for consolidation, currency, and calendar effects, the total revenues generated in the third quarter were 6.3 % less, circulation revenues were 4.0 % less, and advertising revenues were 15.5 % less than the respective figures for the third quarter of Segment EBITDA of 36.0 million was less than the yearago figure ( 41.1 million). The revenue declines were largely offset by cost optimization measures. The restructuring expenses of 3.1 million were on the level of the corresponding year-ago figure ( 3.0 million). Therefore, the EBITDA margin narrowed only slightly, from 12.8 % to 12.5 %. Key Figures Print International millions 9M/2013 9M/2012 Change External revenues % Share in cons. revenues 11.7 % 13.3 % Key Figures Print International 3rd Quarter millions Q3/2013 Q3/2012 Change External revenues % Share in cons. revenues 10.5 % 12.8 % Circulation revenues % Advertising revenues % Other revenues % Circulation revenues % Advertising revenues % Other revenues % EBITDA % EBITDA margin 12.5 % 12.8 % EBITDA % EBITDA margin 12.8 % 12.3 %

15 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 15 Services/Holding The Services/Holding segment comprises the three Group-owned national printing plants, as well as the internal department of Logistics and various service and holding company functions. Key Figures Services/Holding millions 9M/2013 9M/2012 Change External revenues % Share in cons. revenues 3.4 % 3.7 % EBITDA At 83.9 million, the external revenues of the Services/Holding segment were 5.5 % less than the corresponding year-ago figure ( 88.8 million), due to market conditions. EBITDA of 36.9 million was significantly less than the year-ago figure ( 16.0 million), mainly due to adverse non-recurring effects, particularly including those related to the valuation of share-based compensation programs and higher restructuring expenses. Key Figures Services/Holding 3rd Quarter millions Q3/2013 Q3/2012 Change External revenues % Share in cons. revenues 3.4 % 3.7 % EBITDA Liquidity Cash flows and capital expenditures At million, the cash flow from operating activities was less than the corresponding figure for the first nine months of last year ( million). This decrease resulted mainly from the development of the operating business compared to the year-ago period, as well as higher net income tax payments. The positive cash flow from investing activities amounted to 3.3 million. Apart from the expenditures effected under the ongoing capital investment program, this development was also particularly influenced by the cash inflows resulting from the sale of 2.6 percent of our equity stake in Do an TV ( 61.6 million). The cash outflow of million in the first nine months of last year resulted mainly from the acquisition of a 100 % equity interest in Totaljobs. The cash flow from financing activities amounted to million in the first nine months of 2013 (PY: 0.6 million). This figure reflects the dividend payment to the shareholders of Axel Springer AG and the net repayment of loans. The year-ago figure also included the receipt of the purchase price on the sale of a 30 % equity interest in Axel Springer Digital Classifieds GmbH to General Atlantic. Net liquidity and financing The total cash and cash equivalents of million were nearly unchanged from the corresponding figure at the end of 2012 ( million). Over the same period, financial liabilities were reduced from million to million. Thus, the net debt as of the reporting date amounted to million (December 31, 2012: million). Aside from promissory note loans maturing in April 2016 (nominal value million) and in April 2018 (nominal value million), Axel Springer has been granted a credit facility in the amount of million, the drawdowns under which will be due and payable in September The promissory note loan and the credit facility can be used both for general business purposes and for financing acquisitions. As of September 30, 2013, 30.0 million (December 31, 2012: million) of the existing long-term credit facility had been utilized. As of the reporting date, unutilized short-term and long-term credit facilities amounted to million (December 31, 2012: million).

16 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 16 Financial position The consolidated total assets of 4,629.5 million were less than the corresponding figure at year-end 2012 ( 4,808.2 million). The decrease in non-current assets to 3,704.1 million (December 31, 2012: 3,841.4 million) resulted primarily from the reduced amount of intangible assets and property, plant, and equipment, due to amortization and depreciation charges. In addition, non-current financial assets were 34.9 million less than the corresponding figure at year-end 2012, mainly due to the sale of 2.6 percentage points of our equity stake in Do an TV and the revaluation of our investment in iproperty, the result of which was recognized in equity, not in income. The decrease in non-current assets to million (December 31, 2012: million) resulted mainly from the reduction of trade receivables. The Group s equity of 2,227.4 million was less than the corresponding figure at December 31, 2012 ( 2,253.1 million), particularly as a result of currency translation effects related to the international subsidiaries in the amount of 46.6 million, which are recognized in other comprehensive income. The increase in the equity ratio to 48.1 % (PY: 46.9 %) resulted mainly from the reduction of financial and tax liabilities and the lower amount of trade payables. The decrease in non-current provisions and liabilities to 1,482.1 million (December 31, 2012: 1,602.0 million) resulted mainly from the repayment of financial liabilities. Current provisions and liabilities fell to million (December 31, 2012: million), mainly due to the lower amounts of trade payables and tax liabilities. The Axel Springer share and investor relations Share price The Axel Springer share exhibited a positive performance in the first nine months of The closing price of on September 30 was 27.3 % higher than the share price at the beginning of the year. In particular, the share price was boosted by the announcement of the transaction with Funke Mediengruppe in late July Thus, the Axel Springer share performed much better than the German lead index, the DAX, in the reporting period. Over the same period, our share also outperformed the comparison index DJ EuroStoxx Media, which tracks the most important European media shares, and the MDAX, in which the Axel Springer share is listed. Performance Axel Springer Share Axel Springer 1) 1) 1) DAX MDAX DJ EuroStoxx Media Closing price: /01/13 30/09/13 1) Indexed on the year-end share price of Axel Springer AG as of December 31, 2012.

17 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 17 Share Information 9M/2013 9M/2012 Change Earnings per share 1) % Earnings per share, adjusted 2) % Closing price % Highest price % Lowest price % Market capitalization in millions 3) 4, , % Daily traded volume (Ø, in thousands) 7, , % 1) Diluted/basic. 2) Diluted/basic, adjusted for non-recurring effects and write-downs from purchase price allocations, and calculated on the basis of average weighted shares outstanding in the reporting period (98.9 million). 3) Based on shares outstanding at the closing price, excluding treasury shares. Analyst reports on the Axel Springer share are currently published by 18 brokers. In total, nine firms have issued a buy recommendation for our share, seven have issued a hold/neutral recommendation, and two have issued a sell/underweight recommendation. The latest recommendations and share price targets can be found in the Investor Relations section of our website at In the year to date, we have participated in eight investor conferences in New York, London, Frankfurt, Hamburg, Baden-Baden, and Nice. In addition, we presented the company at road shows in Los Angeles, San Diego, San Francisco, Boston, Oslo, Copenhagen, Düsseldorf, Cologne, and Luxembourg. Finally, we held numerous meetings with investors and analysts in Berlin. In the first nine months of 2013, we held telephone conferences with investors and analysts on the occasion of the publication of our Annual Report on March 6, 2013, the publication of our first-quarter report on May 7, 2013, and the publication of our semiannual report on August 7, All these events were transmitted live on the Internet, as usual. Furthermore, audio recordings of the telephone conferences, as well as all reports and presentations, are made available on our website. Information on Listing Share type Stock exchange Registered share with restricted transferability Germany (Prime Standard) Security Identification Number , ISIN Thomson Reuters Bloomberg DE , DE SPRGn.DE SPR GY Annual shareholders meeting The annual shareholders meeting of Axel Springer AG was held in Berlin on April 24, About 460 shareholders representing 77.5 % of voting capital participated. All proposed resolutions of the management including the distribution of a dividend of 1.70 (PY: 1.70) per qualifying share were approved by majorities of at least 91.3 %. Based on the closing price at the end of 2012, the dividend yield of the Axel Springer share came to 5.3 %. The total dividend payout to our shareholders was million. The annual shareholders meeting of Axel Springer AG also approved the conversion of Axel Springer AG to a European Company (Societas Europaea, SE) pursuant to Art. 37, 2 para. 4 SE Regulation. By converting to the legal form of a European company, which we expect to take effect upon registration in the Commercial Register before the end of 2013, Axel Springer AG means to underscore and facilitate the company s orientation to European and international markets. Workforce Axel Springer had an average of 14,423 (PY: 13,504) employees (excluding vocational trainees and journalism students) in the first nine months of The 6.8 % increase over the year-ago period resulted primarily from the addition of new personnel in the Digital Media segment, due to acquisitions and organic growth.

18 Quarterly Financial Report as of September 30, 2013 Axel Springer AG 18 Share ownership program Again this year, Axel Springer offered its employees the chance to benefit directly from the appreciation of the company s value by participating in the share ownership program. All employees of Axel Springer AG and its German subsidiaries who were entitled to a profit-sharing bonus for the year 2012, or who had entered into a target agreement, were given the option of converting their bonus into shares of Axel Springer AG, for which purpose they received a subsidy from the company. The vesting period for both programs is four years. Report on risks and opportunities The risks and opportunities of Axel Springer have not changed significantly from the presentation in the Annual Report The risk structure and risk positions will be re-evaluated after the final confirmation and finalization of the agreement reached with Funke Mediengruppe. As before, no risks that could endanger the survival of Axel Springer as a going concern can be discerned. Events after the reporting date At the start of October 2013, we signed an agreement to purchase 100 % of YOURCAREERGROUP, a leading operator of job portals for hotels, restaurants, and tourism in the German-speaking countries. The transaction will be finalized and the acquisition will take effect economically on January 1, At the start of November 2013, we signed an agreement to purchase 100 % of Saongroup, a leading operator of job portals particularly in Ireland, Northern Ireland, and South Africa. The finalization of this transaction is planned for November These acquisitions are related to our online classifieds growth initiative. The corresponding agreements entail a financial obligation of about 124 million, in the form of purchase prices to be paid. In October 2013, we settled the option rights that had been granted in connection with the acquisition of a subsidiary in prior years, and thereby acquired the remaining minority interests in this company, for a purchase price of about 38 million. Forecast report General economic environment In its World Economic Outlook published in October 2013, the International Monetary Fund (IMF) predicted a moderate strengthening of the global economy, although it acknowledged the lingering risk of setbacks. According to the IMF s forecast, the global economy will grow at real rates of 2.9 % in 2013 and 3.6 % in The United States will continue to serve as a reliable engine of global economic growth, whereas the countries of the euro zone will probably emerge from recession again only in Major emerging-market countries like China will experience strong economic growth, albeit not as strong as previously. The economic research institutions contributing to the Autumn Report 2013 expect the German economy to end the full year 2013 with only minor growth of 0.4 % in real terms, due to the phase of weak economic growth in the winter months of 2012/2013. For the year 2014, however, the economic experts predict considerably faster growth of 1.8 % in real terms. Consumer spending is an important pillar of the German economy. In view of rising personal incomes, consumer spending will continue to expand in the second half of 2013 and could possibly increase at an even faster rate in The economic experts expect consumer spending to rise in real terms by 0.9 % in 2013, and then by 1.4 % in Business investment will increase only slowly in the future, because the anxieties surrounding the euro crisis will subside only gradually. In 2013, business investment will contract by 0.5 % in real terms, but it is expected to increase substantially in 2014, by 5.2 % in real terms, as companies invest in business expansion to accommodate the more favorable outlook for sales. In their Autumn Report, the economic research institutions predict a generally small increase in German exports of 0.5 % in real terms, for the current year. In connection with the anticipated recovery of the global economy, which will stimulate foreign demand over the course of the coming year, German exports are expected to expand at a real rate of 5.0 % in 2014.