2010 Annual report. Apeldoorn Chamber of Commerce trade registry no

Transcription

1 2010 Annual report Koninklijke Wegener NV Laan van Westenenk AZ Apeldoorn, The Netherlands P.O. Box 26, 7300 HB Apeldoorn, The Netherlands Telephone +31 (0) Fax +31 (0) info@wegener.nl Apeldoorn Chamber of Commerce trade registry no This Annual report is also available via the group s website: This is an English-language translation of Wegener s Dutch-language Annual report for 2010, which is also available via the internet. This version is not legally binding.

2 2

3 3 Contents Page 4 Royal Wegener in profile 5 Vision, mission, goals and strategy 7 Mecom Group plc 8 Wegener: 10-year data 10 Management Board members 11 Supervisory Board members 12 Report of the Supervisory Board 14 Report of the Management Board 16 > Financial review 21 > Risk management 26 > Outlook for > Developments by activity 38 > Corporate social responsibility 40 > Declaration of the Management Board Financial Statements 42 > 2010 Consolidated financial statements of Koninklijke Wegener NV 42 Consolidated balance sheet 44 Consolidated income statement 45 Consolidated comprehensive income statement 46 Consolidated statement of changes in equity 47 Consolidated cash flow statement 48 Notes to the consolidated financial statements 59 Disposal and acquisition of companies 61 Notes to the consolidated balance sheet 86 Notes to the consolidated income statement 95 Notes to the consolidated cash flow statement 96 Events after balance sheet date 97 Consolidated group companies and associates 100 > 2010 Company financial statements of Koninklijke Wegener NV 100 Company balance sheet 101 Company income statement 102 Notes to the company balance sheet 104 Notes to the company income statement 105 > Independent auditor s report 108 Other information 108 > Corporate Governance 113 > Remuneration report 116 > Profit distribution 118 > Wegener shares 119 > Share administration foundation report 119 > Financing preference share administration foundation report 120 > Group companies and their activities, and important associated companies

4 4 Royal Wegener in profile In November 1903, in the east-central Dutch city of Apeldoorn, Johan Frederik Wegener started publishing a news and advertising paper that would become De Nieuwe Courant and later Apeldoornse Courant, and which is known today as de Stentor. One hundred and seven years later, that small local publishing house has grown into today s Koninklijke (Royal) Wegener NV (Wegener) specialising in newspapers and digital media, with its headquarters in Apeldoorn, and a listing on the Euronext Amsterdam Stock Exchange. Wegener is the largest publisher of regional daily newspapers and free door-to-door papers in the Netherlands. Every day some 775,000 copies of Wegener s seven regional dailies are delivered to readers throughout a major portion of the country, reaching an average of 2.5 million readers daily. Each week Wegener also produces some 190 free door-to-door newspapers and weeklies which have a total circulation of around 9.6 million copies per week. In addition, Wegener develops and operates internet products that generate millions of unique users. Another group unit provides printed products and services. Since the end of October 2007, Wegener has been a member of Mecom Group plc, London. Supervisory Board Wegener Management (incl. Executive Board) Corporate affairs & Communication Legal Affairs Tax Affairs Publishing Printing Wegener Media Wegener MediaVentions Region East Region South Region West/North Central frontoffices Backoffices Wegener NieuwsDruk TC Tubantia Brabants Dagblad Dagblad De Pers Central editorial department dailies Operations AutoTrack Wegener NieuwsDruk Brabant (Best) De Stentor Eindhovens Dagblad D-t-D newspapers West Central editorial department weeklies Distribution dailies JobTrack Wegener NieuwsDruk Gelderland (Apeldoorn) De Gelderlander BN DeStem D-t-D newspapers North National sales Distribution weeklies Wegener NieuwsDruk Twente (Enschede) D-t-D newspapers East PZC Regional online Consumer marketing Finance & Control Marketing/sales Regional online D-t-D newspapers South Advertising marketing HRM Central staff D-t-D newspapers Limburg Enterprises IM&ICT Regional online Call centers Procurement & Facilities Sweetdeal SpeciaalMedia Organigram Wegener as of March 2011

5 5 Vision, mission, goals and strategy Vision Wegener is an enterprise that provides news and information to consumers, primarily focused on their own living and working environments. The reach of the vehicles to accomplish this is marketed to advertisers, while the group s consumer database is exploited for the sale of various other products and services. This strategic choice stems from the fact that regional, local and nearby content is highly distinctive, thereby representing high added value with substantial durability over time. To retain Wegener s position as pre-eminent provider of information from and about the specific living and working environments of people in the regions it serves, it is crucial to ensure that the value of the information provided is superior in an ever more competitive media environment, where many such products are available free of charge. This places great importance on innovation. The Wegener regional dailies and free door-to-door papers are being developed so they continue to be solidly perceived as best of class. Wegener s environment is marked by the changing media consumption patterns of consumers, the demands of advertisers and the dynamics of the media landscape. The group operates through a diversity of channels and with a broad, finely meshed portfolio of products online and print channels that serve to strengthen one another aimed both at the mass market and at niche markets. Thanks to this broad perspective, the group regards the entire country of the Netherlands as its market. The group works continuously and with a sharp focus on multimedia and cross-media initiatives. The entrepreneurial character of the Wegener group especially its ability to identify, capitalise on and integrate new activities, coupled with its efficient and effective use of the company s resources ensures that Wegener maintains a leadership position in the dynamic market environment in which it operates. Mission On the basis of the group s profound regional involvement and expertise with regard to people in those living and working environments, Wegener provides meaningful information to consumers and makes regional target audiences available for marketing activities. The group places high value on conducting its activities in a socially responsible manner, innovatively and with integrity. The quality, effectiveness and success of Wegener s products and services are the heart of the group s profitability. Wegener prizes the commitment of its people to achieving these objectives, and consequently seeks to be a responsive and challenging employer. Goals > Remaining on top as the largest and the best regional content publisher of the Netherlands. > Wegener wants to be of importance in the daily life of consumers in the whole of the Netherlands by offering: > Regional and local content > Service information concerning the daily life of the consumer > Products and services These activities are being paid by the consumer or cause sufficient reach and are therefore being paid for by advertisers. > By means of an effective, efficient and innovative organisation, realising a return on operating profit (Ebitda as a % of external revenue) that is high enough to ensure, as well as other benefits, that the group can continue to invest in new products, activities, and processes, thus to guarantee the continuity of the company over the longer term. > Conducting its activities in a way that creates shareholder value. > Being a stimulating and challenging employer. > By being a socially responsible enterprise, contributing to the working and living environment in general and to the welfare of all those involved with Wegener in particular.

6 6 Vision, mission, goals and strategy Strategy The strategic policy of Wegener will be implemented with emphasis on three dimensions in the coming planning period: A. Maximising reach through national coverage in the Netherlands. B. Building up a cross-media portfolio, with products in both mass markets and niche markets. C. Setting up a cross-media organisation and utilising it so as to achieve an operating result that guarantees the group s long-term continuity.

7 7 Mecom Group plc Mecom Group plc (Mecom) is a major, multi-platform European media group. Mecom publishes over 40 paid-for daily titles and over 250 free door-to-door newspapers and operates over 200 digital channels, giving it leading positions within the Netherlands, Norway, Denmark and Poland, with a combined print readership of over 18 million every week and over 42 million online users every month. Mecom, with its headquarters in London, is listed on the London Stock Exchange. Core values > Mecom is committed to creating added value for its shareowners, regional communities and employees. > Mecom creates commercial opportunities without compromising journalistic freedom. > By maximising the value of its content, Mecom seeks to protect high-quality journalism and editorial independence. > Mecom is committed to, and protects, high-quality journalism, editorial freedom and independence with publishing principles that ensure that no government, owner, advertiser, or any other interest group is entitled to interfere in editorial decisions. > Mecom is close to all its regional communities, to their cultural heritage and local culture, focusing on the needs and interests of its audiences. > Mecom recognises its employees as its greatest asset and works with them to achieve ongoing development. Further information on Mecom is available on its website,

8 8 Wegener: 10-year data Currency amounts in thousand euros, except where indicated otherwise 2008 Operating data Revenue 531, , ,288 - change from prior year (%) (9.4%) (15.4%) 2.2% Other income ,973 Profit from continuing operating activities before exceptional items 62,346 57,328 76,102 - as % of revenue 11.7% 9.8% 11.0% - change from prior year (%) 8.8% (24.7%) 5.9% Result from continuing operating activities (32,556) 7,853 11,300 Result on discontinued operating activities after tax Profit (32,556) 7,853 11,300 attributable to: - equity holders of Koninklijke Wegener NV (32,556) 7,853 11,348 - minority interests (48) Net profit after preference dividend and before exceptional items after tax attributable to equity holders Koninklijke Wegener NV 38,016 31,042 45,146 - as % of revenue 7.2% 5.3% 6.5% Cash flow from operating activities 35,563 32,518 53,041 Cash flow from investing activities (5,323) (7,392) (37,024) Cash flow from financing activities (31,611) (52,743) (17,398) Balance sheet data Equity attributable to equity holders of Koninklijke Wegener NV 278, , ,173 Minority interests 5 Subordinated loans Non-current liabilities 163, ,224 85,896 Current liabilities 216, , ,476 Liabilities relating to assets classified as held for sale Total capital 658, , ,550 Non-current assets 608, , ,192 Current assets 49,385 61, ,358 Assets classified as held for sale Ratio of equity to total capital Balance of interest-bearing loans less cash and cash equivalents (excluding cumulative financing preference shares) 88, , ,450 Personnel Average number of employees (full-time equivalents) 2,881 3,346 3,846 Staff costs (before exceptional items) 190, , ,998 Average staff cost per employee Average revenue per employee Number of issued ordinary shares - average (in thousands) 45,009 45,009 45,009 - year-end (in thousands) 45,009 45,009 45,009 Data per ordinary share (in euros) Equity (excluding cumulative financing preference shares) Earnings per share (0.76) Earnings per share before exceptional items (after tax) Cash flow from operating activities Proposed dividend per ordinary share or depository receipt Year-end price Since 2004 the 10-year data have been drawn up based on International Financial Reporting Standards (IFRS). Data for the previous years (2001 through 2003) were drawn up in accordance with Dutch reporting requirements, under application of Part 9 of Book 2 of the Dutch Civil Code and the directives of the Dutch annual reporting standards.

9 , , , , , , , % 1.9% (17.8%) (3.8%) (11.5%) (3.8%) (0.5%) 3,049 11,694 36,820 27,266 3,061 32,885 71,844 53,369 51,360 55,125 41,571 55, % 8.0% 7.8% 6.9% 5.0% 5.9% 7.4% 34.6% 3.9% (6.8%) 32.6% (24.8%) (22.9%) (42.5%) 31,249 29,108 38,966 18,929 1,238 (13,494) (7,679) 32,487 15,614 31,287 18,929 (57,858) (6,638) 3,287 32,492 15,525 30,729 18,745 (57,858) (6,638) 3,287 95) ,504 24,243 17,474 12,261 11,054 17,918 28, % 3.6% 2.7% 1.5% 1.3% 1.9% 3.0% 39,929 40,890 30,425 71,114 65,557 71,197 97,015 (25,193) 28,076 15,135 26,242 (7,680) 12,995 (28,229) 12,367 (72,094) (85,438) (68,575) (52,650) (124,550) (32,523) 299, , , , , , , ,113 2,145 1,525 4,015 1,540 90,000 90,000 90, , , , , , , , , , , , , , ,431 4, , , , , ,028 1,041,471 1,168, , , , , , , , ,425 93, , , , , ,893 6, , , , , , , ,748 4,034 4,337 4,723 6,098 6,642 7,468 8, , , , , , , , ,802 44,525 44,389 44,389 44,389 44,389 44,389 45,009 44,589 44,389 44,389 44,389 44,389 44, (1.30) (0.15) The terminology in the table is based on IFRS. Unless otherwise indicated, the figures presented relate to continuing operations.

10 10 Management Board members T. Velgaard (1960) Mr Velgaard was appointed as a member of the Management Board by the Extraordinary General Meeting of Shareholders on 22 December Following this meeting he was appointed as chairman of the Management Board (CEO) by the Supervisory Board. Mr Velgaard has been employed by Wegener since 4 October His earlier experience included positions as CEO Mecom Poland and Edda Media, Norway, also a part of Mecom. Mr Velgaard is a Norwegian national. W. Cornelisse (1953) Mr Cornelisse was appointed as a member of the Management Board (COO) by the General Meeting of Shareholders on 8 May Mr Cornelisse has been employed by the group since 1978, and served as director of Wegener NieuwsDruk from 1993 onward. His earlier experience included positions with Wolters Kluwer and the Oostelijke Dagbladen Combinatie. Mr Cornelisse is a Dutch national. The members of the Management Board are all male. None of the board members holds a directorship in an exchange-listed company. Former members: C.G. Boot RA (1960) Resigned as of 1 September 2010 J.V. Munsterman (1951) Resigned as of 4 October 2010

11 11 Supervisory Board members D.J. Montgomery (1948) Principal position: > Chief Executive Mecom Group plc Additional offices: > Director Tournigan Energy Ltd Initial appointment: 2009 Mr Montgomery resigned from the Supervisory Board at 13 January E.A. van Amerongen (1953) Additional offices: > Chairman, Supervisory Board, BT Nederland NV > Chairman, Supervisory Board, Thales Nederland BV > Vice-chairman, Supervisory Board, Hitt NV > Member, Board of Directors, Shanks Plc (senior independent non-executive director) > Member, Supervisory Board, Imtech NV > Member, Supervisory Board/Review Board, ANWB > Member, Supervisory Board, Essent NV Initial appointment: 2009 S.M. van der Heijden (1960) Principal position: > CEO and Chairman, Management Board, TUI Nederland NV Additional offices: > Chairman, ANVR > Board member, VNO-NCW > Member, Supervisory Council, SGR > Chairman, Supervisory Council, CFR Initial appointment: 2009 In connection with the resignation of Mr Montgomery, at 26 January 2011 Mr S.M. van der Heijden was appointed Chairman of the Supervisory Board. The members of the Supervisory Board are all male. Mr Montgomery is a British national, and the other members are Dutch nationals. The Audit Committee and the Combined Management Compensation and Selection and Appointment Committee both consist of the entire Supervisory Board.

12 12 Report of the Supervisory Board The Supervisory Board herewith submits to the shareholders for your approval the annual accounts for the year 2010, which have been prepared by the Management Board. These accounts have been audited and approved by Ernst & Young Accountants LLP, and their unqualified independent auditor s report is provided with the accounts in this Annual report. We discussed the annual accounts with the auditor at our annual meeting and then signed it in accordance with the requirements of Section 2:101, subsection 2 of the Netherlands Civil Code. We recommend that the General Meeting of Shareholders approve these accounts. Additionally, we ask the General Meeting to grant discharge to the Management Board and the Supervisory Board with regard to the conduct of their duties in Further, we recommend that you agree to the Management Board s proposal for distribution of the results as set forth in this report. After consultation with the Management Board, we endorse their proposal to declare no dividend to holders of depository receipts for ordinary shares, nor to holders of ordinary shares. Considering the healthy financial situation of the company and continuing previous policy from the last years, we endorse the Management Board s proposal to declare a primary dividend of 5.33% on the outstanding depository receipts for cumulative financing preference shares. The Supervisory Board held eight regular meetings with the Management Board in Also, the members of the Supervisory Board held frequently informal consultations with and without the Management Board. Topics discussed at the latter meetings included the functioning of the Supervisory Board and the Management Board, as well as of the individual members of both boards. It was concluded that both boards as well as their individual members function properly. Regular topics were discussed at the meetings with the Management Board, such as the annual accounts, the half-year report, the budget, evaluation of the risk management and control systems, and aspects of the group strategy. In addition, the Board meetings addressed such topics as the Corporate Governance Code, the amendment to the articles of association regarding the remuneration of directors, the disadvantageous development of Dagblad De Pers, co-operation in the area of daily newspaper delivery with the Telegraaf Media Groep and the NDC Mediagroep, the NMa fine concerning BN/de Stem and PZC, as well as developments such as the resignation of Mr J.V. Munsterman and Mr C.G. Boot and the appointment of Mr T. Velgaard as member of the Management Board. At two meetings of the Supervisory Board the company s auditor was present. All supervisory directors were present at mostly all meetings of the Supervisory Board. None of them therefore exhibited frequent absence as referred to in Best Practice provision III.1.5 of the Dutch Corporate Governance Code (the Code). One or more members of the Supervisory Board attended three consultative meetings of the Central Works Council. These meetings were primarily devoted to the half-year report and the Social Annual report as well as the resignation of Mr J.V. Munsterman as of 4 October 2010 and appointment of Mr T. Velgaard as member of the Management Board. Intensive meetings about these changes in the Management Board took place between the Central Works Council and one or more members of the Supervisory Board. The Supervisory Board experienced these discussions as very constructive, which contributed to the process of regaining trust. With regard to the stipulations of Best Practice provision III.5, no separate Audit Committee or Remuneration and Selection and Appointment Committee meetings were held. Topics such as salaries, the bonus programme and the Mecom option plan were discussed by the full membership in the Supervisory Board s regular meetings. Remuneration policy was not changed, with the exception of the option plan introduced by Mecom. Further information on this point can be found in the Remuneration report section of this report (page 113).

13 Report of the Supervisory Board 13 On 13 January 2011, Mr D.J. Montgomery resigned as Chairman and member of the Supervisory Board. The resulting vacant Supervisory Board seat has not yet been filled, but the Board intends to do so shortly. Mr S.M. van der Heijden has been appointed Chairman of the Supervisory Board in accordance with the Supervisory Board regulations. Mr D.J. Montgomery is not independent in the sense meant in the Code, while the other two members are independent in the sense meant in the Code. Remuneration of the supervisory directors does not depend on Wegener s results. No option rights to Wegener shares have been granted to members of the Supervisory Board. There were no cases of conflicting interests with regard to the individual members of the Board in None of the supervisory directors were given personal loans, guarantees or any similar financial assistance. None of the supervisory directors held shares or depository receipts for shares in Koninklijke Wegener NV in In the opinion of the Supervisory Board, the terms of Best Practice provisions III.6.1-III.6.3 and III.7.1 -III.7.4 of the Code were met. On 1 September 2010, Mr C.G. Boot resigned as member of the Management Board, and on 4 October 2010, Mr J.V. Munsterman resigned as Chairman and member of the Management Board. Because the only Management Board member left, Mr Wil Cornelisse, reported sick on the very same day, the Supervisory Board took over management of the company, in accordance with the company s Articles of Association and delegated the authority to Mr Truls Velgaard. These changes caused a period of instability within the company. Various tiers of the company stood up to object to both Mr Munsterman s departure and Mr Velgaard s appointment. On occasion, the Supervisory Board has consulted with wide delegations of the management about the arising situation. These constructive meetings prevented further escalations and contributed to the process of regaining trust. The Supervisory Board is thankful for the cooperation with all parties involved, which contributed to the solution of the issue. On 22 December 2010, the Extraordinary General Meeting of Shareholders appointed Mr T. Velgaard as member of the Management Board. On the same date, the Supervisory Board appointed Mr Velgaard as Chairman of the Management Board. The Central Works Council issued a positive recommendation on the appointment of Mr T. Velgaard as member of the Management Board. The Supervisory Board is aware that the tough economic situation and, particularly, the changes to the Management Board made 2010 a difficult year for management and staff alike. The Board therefore greatly appreciates the results achieved by the Management Board as well as Wegener s management and staff. Apeldoorn, The Netherlands, 14 March 2011 Supervisory Board

14 14 Report of the Management Board The continuing economic crisis hit Wegener hard in 2010, adversely affecting advertising sales again. The first signs of economic recovery in the course of 2010 did not impact advertising sales at all. The recovery of the Dutch economy was primarily due to an upturn in exports. Domestic production lagged behind, particularly as a result of a lack of consumer confidence. The government crisis and the announced public cut-backs caused the domestic economic climate to deteriorate rather than pick up. The economic decline has had a negative impact on the recruitment and property advertising market segments in particular. The decline in advertising sales of the daily newspapers and the free door-to-door newspapers that began in 2009 continued in Circulation revenue for daily newspapers rose marginally (2%), although this was completely due to price increase; the number of paid subscriptions dropped modestly (2%). In total,revenue declined by 9% to EUR m. The Delta reorganisation programme launched in 2009 was completed in the first quarter of As of 1 January 2010, all publishing activities, with the exception of AutoTrack.nl and JobTrack.nl, and all back office departments were transferred to Wegener Media BV, creating a single publisher with a more flexible, variable cost-based organisation and a consistently lower cost level that is able to generate a quality impulse and meets the preconditions for a cross-media future. In addition to the effect of the Delta programme, a strict cost control policy compensated for the decrease in revenue with lower costs, contributing to an approximately EUR 60m decrease in the total cost (excluding exceptional items) in EUR 25 m of this decrease relates to lower staff costs, caused in part by a decrease of approximately 120 FTEs in the year under review. See also the section on financial performance as of page 16. In 2010, the first follow-up steps were taken to transform Wegener into a cross-media content business. These changes focused particularly on the front offices, where editorial boards and advertising sales need to switch from a mono-media to a cross-media set-up, for which various task forces devised plans. In addition, training programmes were set up for both journalists and salespeople alike. The transformation process will be settled in In conjunction with the Mecom developments, a plan was devised in November 2009 to better support the strategic path of transformation towards a comprehensive content business using technology. ICT is becoming an increasingly important tool and, in many cases, it is actually part of the product. In mid-2010, opportunities for greater cooperation across Mecom were explored. It was also recognised that the ICT infrastructure at Wegener needed improvement. This led to a Mecom-wide project. In the last few months of 2010, the plan proved to entail too many business risks for Wegener. The Mecom plan was adjusted, with outsourcing certain ICT components remaining an important point. The plan will be worked out in more detail in the first half of 2011, after which final decision making will take place, including an advice procedure with the Central Works Council, which is already involved in an earlier stage. In April 2010, the Netherlands Competition Authority (NMa) published a report on its findings of an investigation it had launched into alleged infringements of regulations that it had imposed in 2000 for Wegener s takeover of the VNU Dagbladengroep in Zeeuws-Vlaanderen. According to the NMa, Wegener has infringed these regulations. Wegener contests this. Based on its report, the NMa decided in July 2010 to fine Wegener and five (former) (non) executives more than EUR 20 million in total. Disagreeing with this decision, Wegener lodged an objection, arguing that it did not infringe any regulations and that, even if it had, the fine was disproportionate regarding the size of the activities in Zeeuws-Vlaanderen. In addition, Wegener instituted proceedings with the NMa to have the regulations in Zeeuws-Vlaanderen declared null and void. These proceedings as well as the objection proceedings were still ongoing at the end of the financial year. The fine has been accounted for in the balance sheet as a liability. Wegener wishes to emphasise that this does not mean that Wegener is pleading guilty.

15 Report of the Management Board 15 The year 2010 was characterised by changes in the Management Board. Halfway through the financial year, it was announced that Mr Koos Boot (CFO) would resign from the Management Board and leave the company on 1 September On 4 October 2010, the Supervisory Board and the Management Board announced that they and the chairman of the Management Board Mr Munsterman had agreed that Mr Joop Munsterman would resign with immediate effect. Because the only Management Board member left, Mr Wil Cornelisse, reported sick on the very same day, the Supervisory Board took over management of the company, in accordance with the company s Articles of Association and delegated the authority to Mr Truls Velgaard. These changes caused a period of instability within the company. Various tiers of the company stood up to object to both Mr Munsterman s departure and Mr Velgaard s appointment. The Central Works Council (CWC) launched an investigation into the course of events. The Supervisory Board nominated Mr Truls Velgaard as a new member of the Management Board. Following the CWC s positive recommendation, Mr Velgaard was appointed as a member of the Management Board by the Extraordinary General Meeting of Shareholders on 22 December The Supervisory Board then appointed him as Chairman of the Management Board. Following CWC s positive recommendation together with the work done by the Supervisory Board and Mr Velgaard to turn the sense within the company for the better, the company returned to further stability by the end of the financial year.

16 16 Report of the Management Board Financial review The main developments in 2010 compared with the preceding year can be summarised as follows (in millions of euros unless stated otherwise): Financial Statements 2010 Excluding exceptional items Financial Statements 2009 Revenue Result from continuing operating activities (27.8) Margin (5.2%) 11.7% 9.8% 3.1% Result for the year attributable to equity -holders of Koninklijke Wegener NV (32.6) Operating profit before depreciation and impairment losses (EBITDA) Margin 1.1% 15.2% 13.3% 6.7% Average number of employees on a full-time basis 2,881 3,346 Net debt (interest-bearing loans less cash and cash equivalents) Net debt / operating result before depreciation and impairment losses (net debt/ebitda) Equity Balance sheet total Solvency 42.3% 44.6% Cash flows from: - operating activities investing activities (5.3) (7.4) - financing activities (31.6) (52.7) Net cash flows (1.4) (27.6) Reporting The financial statements have been drawn up in accordance with the International Financial Reporting Standards as approved by the European Union. For information on the accounting policies used and the notes to the financial statements, please refer to the consolidated financial statements for 2010 in this report. When applying Wegener s accounting policies, the management has made judgments which have important consequences for the amounts recognised in the financial statements. Furthermore, in some areas estimates have been made about future developments which have a significant risk of causing a material adjustment to the book value of assets and liabilities in subsequent years. These judgments and estimates are explained in more detail in a section devoted to them in the section entitled Accounting policies (page 49), to which the reader is referred. The company financial statements of Koninklijke Wegener NV were drawn up in accordance with Dutch reporting requirements. Use was made of the facility offered under the law to apply the same principles for company financial statements as for consolidated financial statements. Equity at the end of 2010 and 2009 and the result for 2010 and 2009 according to the company financial statements are the same as the equity and the result according to the consolidated annual accounts to the extent that they are attributable to holders of equity in Koninklijke Wegener NV.

17 Report of the Management Board (Financial review) 17 Results A comparison of the financial results of 2010 with those of the preceding year is rendered difficult by the sale of the 37% share in AD NieuwsMedia BV, the sale of the printing plant in The Hague, and the acquisition of PCM Lokale Media, all of which took effect in the second half of If the effects of this acquisition and disposals are eliminated in 2010 and 2009, the autonomous figures for Koninklijke Wegener NV are: millions of euros Change Revenue (2.8%) Operating result (before exceptional items) % Permanent staff as at year-end (FTE) 2,836 2,904 (68) Revenues declined by 9.4%; the decline in organic growth was 2.8%. Operating activities The development of profit from operating activities before exceptional items is summarised below (in millions of euros): Change Advertisements in daily newspapers (8.1%) Advertisements in AD NieuwsMedia (37%) Advertisements in free door-to-door weekly newspapers (3.9%) Subscriptions to daily newspapers % Subscriptions to AD NieuwsMedia (37%) Graphic products (42.0%) Internet products % Other revenue from newspaper activities % Total revenue (9.4%) Costs of raw materials and stores (33.6%) Costs of work subcontracted and other external charges (3.5%) Staff costs (11.6%) Other operating expenses (9.6%) Operating profit before depreciation and impairment losses (EBITDA) before exceptional items % Depreciation (10.1%) Operating profit before exceptional items % As noted above, it is not easy to compare to the preceding year because of the sale of AD NieuwsMedia BV, and of the printing plant in The Hague at the end of July, as well as the acquisition of PLM on 15 July 2009.

18 18 Report of the Management Board (Financial review) The continuing economic crisis led to a decline in sales. Advertising sales in particular showed a marked decline compared to the preceding year, both for the dailies and for the free door-to-door weeklies. The increase in revenue from subscriptions to Wegener dailies is the result of price rises. The average paid circulation of the Wegener dailies in 2010 was 2.2% lower than in Revenues from graphic products were also under pressure as volumes declined, titles ceased publication, prices fell as a result of overcapacity in the market, and the printing plant in The Hague was sold. Internet revenue showed an increase compared to the preceding year. The revenue of Autotrack increased again compared to the previous year. Revenue of Jobtrack decreased compared to previous year, but during the year there was a positive development visible. In 2010 there were introduced several new online products which influenced the sales growth, such as a self service tool for advertisers. Other revenue from newspapers activities rose thanks to increases in sales of travel, admission tickets, books, CDs and other items through the Enterprises programme. The costs of raw materials and stores were lower due to significant lower paper prices and a marked decline in volume. After correction for divested and acquired business units (AD NieuwsMedia, printing plant in The Hague, and PLM), costs of work subcontracted and other costs increased as a result of higher commission costs which mainly relate to the annual fee for Dagblad De Pers. The costs of subcontracted printing activities increased compared to previous year, which was a result of the sale of the printing plant in The Hague. The Wegener free door-to-door weeklies for the surrounding areas of The Hague and the free door-to-door newspapers of PLM are printed in The Hague which results in higher subcontracted printing activities. Staff costs were lower primarily because average staffing was lower. The average employment level fell from 3,346 FTEs (full-time equivalents) in 2009 to an average of 2,881 FTEs in 2010 (-13.9%). After correction for divested and acquired business units (AD NieuwsMedia, printing plant in The Hague, and PLM), the decline is 8.2%. This is the result of the implementation of the Delta reorganisation plan, a strict policy with regard to filling vacant positions and the closure of the printing plant in Nijmegen in If the effects of the acquisitions and disposals in 2009 are eliminated, the other operating expenses fell by 1.9% compared to The decrease is a result of the response to the continuing economic crisis. Savings were achieved in all cost categories, ranging from office expenses, accommodation expenses, promotional costs and third-party services. In 2010 depreciation was lower as result of the sale of the printing plant in The Hague. The operating result before exceptional items increased by 8.7%, from EUR 57.3 million in 2009 to EUR 62.3 million in Exceptional items The exceptional items in 2010 resulted from the fine imposed by the NMa, the Dutch competition authority, costs of reorganisations, release of pension provision, impairment of the publishing rights of Dagblad De Pers, costs relating to the provision of the onerous contract for Dagblad De Pers, provision vacated office space and the tax effects of these items. The fine imposed by the NMa to Wegener and five of its former managers / directors relates to a possible infringement by Koninklijke Wegener NV of the conditions imposed by the NMa in 2000 relating to Wegener s takeover of VNU Dagbladen. The costs of reorganisation in 2010 include an addition to the reorganisation provision as a result of some reorganisations of departments. The reorganisations also include the severance payments for two board members.

19 Report of the Management Board (Financial review) 19 The release of pension provision stems merely from recalculation of used principles. In 2009 Wegener entered into a long-term contract with Mountain Media entitling Wegener to sell advertising in the Dagblad De Pers daily free newspaper in the Netherlands, under the condition that Wegener pays an annual fee to the publisher of Dagblad De Pers. Actual advertising revenues for Dagblad De Pers have fallen considerably behind the previous expectations of management, with the result that Wegener now expects to incur a loss over the life of the arrangement. A provision for onerous contract was accrued for the present value of anticipated future losses on this contract. Furthermore the publishing rights of Dagblad De Pers were impaired in 2010 to nil. The addition to the onerous contract for vacated office space, on balance, relates to an addition as a result of the supplementary agreement with de Persgroep Nederland on the sale of AD NieuwsMedia and a release resulting from new lease agreements. The exceptional items in 2009 resulted from the combined effect of the sale of AD NieuwsMedia BV and of the assets and liabilities of the printing plant in The Hague, costs of reorganisations (redundancies and provisions for onerous contracts), one-time pension costs (costs of future employer contributions for the moratorium shortfall and one-off compensation of the difference in funding ratio upon the transition to PGB), a write-off for prepaid financing costs, and the tax effects of these items. The costs of reorganisations in 2009 include an addition to the reserves for reorganisations stemming from a number of reorganisations in different group companies and a partial release at year-end 2008 of the provision formed for Delta. The decision was made in mid-2008 to reorganise and further integrate the publishing units of Wegener (Delta). The costs this entailed were recorded in The actual reorganisation was largely carried out in 2009 and was finished in The release is primarily the consequence of a higher rate of natural turnover and a lower average salary than was originally estimated. As a consequence of the reorganisations an addition to the provision for onerous lease was recorded. Taxes on results include the tax effects on all exceptional items to the extent that they are not covered by the participation exemption. The fine imposed on Wegener by the NMa is not deductible for the corporate income tax. Earnings per share Ordinary earnings per share attributable to holders of ordinary shares in Koninklijke Wegener NV fell from a profit of EUR 0.14 for 2009 to a loss of EUR 0.76 for Excluding exceptional items, the earnings per share rose from EUR 0.69 for 2009 to EUR 0.84 for 2010, or a rise of 21.7%. Financing and cash flows Operational cash flows, at EUR 35.6 million, were marked higher in 2010 than in This was largely due to a higher operating result (before exceptional items). The cash flow from investing activities came to a total of EUR 5.3 million in 2010, which is EUR 2.1 million lower than in This represents the effect of EUR 6.1 million less capital expenditure than in In 2010 the accelerated repayment of the loan of AD Nieuwsmedia amounts to 15.4 million. On the other hand, in 2009 the sale of AD NieuwsMedia BV and Wegener NieuwsDruk West, amounting to EUR 14.5 million, as well as Selekt Mail, amounting to EUR 4.0 million, affected the cash flow from investing activities. Investments in 2010 came to EUR 20.5 million, with EUR 7.2 million going to tangible fixed assets. The decline in capital expenditure in 2010 compared to 2009 largely reflects the finalisation of the capital expenditure in the new printing plant in Best. The cash flow in respect of intangible fixed assets primarily concerned investments in software and the payment of the investment of the publishing rights of the free daily Dagblad De Pers. Investments in 2009 primarily related to finalisation of the press renewal in Best (buildings and presses) and the investments in software.

20 20 Report of the Management Board (Financial review) On balance, the financing cash flow again showed a decrease of debt in Net debt declined from EUR million at year-end 2009 to EUR 88.3 million at year-end This is the result of the good operational cash flow and the accelerated repayment of the loan of AD NieuwsMedia of EUR 15.4 million. The net debt / EBITDA ratio before exceptional items is 1.1, which is improvement compared to No dividend was paid to holders of ordinary shares in Koninklijke Wegener NV in Holders of preference shares were paid EUR 1.6m in preference dividend (the same as in 2009). As a result of the loss in 2010 the equity decreased from EUR million at the end of 2009 to EUR million at the end of On balance, solvency decreased from 44.6% at the end of 2009 to 42.3% at the end of The most important reason for this decrease is the loss over Financing charges were significant lower in 2010 than in Main reason is the lower average debt and the lower amount in interest on financial lease agreements. The financing charges for 2009 include an extra amount written off for costs withdrawn for downsizing the overall credit facility of Mecom Group from EUR 1 billion to EUR 583 million. Taxes For 2010, there was tax income accounted for in the amount of EUR 4.9 million on a pre-tax loss of EUR 37.5 million. The fine imposed by the NMa is not deductible for the corporate income tax. For 2009, there was tax income accounted for in the amount of EUR 2.1 million on a pre-tax profit of EUR 5.8 million. The income arose because the sale of the shares in AD NieuwsMedia BV comes under the participation exemption. The effective tax rate for 2010, corrected for exceptional items, is 25.0% (2009: 28.2%). This figure deviates very slightly from the rate applicable to Wegener. The annual accounts show the relationship in detail of the tax burden according to the applicable rate to the tax burden according to the effective rate. Dividend proposal It is proposed that no dividend be paid on ordinary shares for 2010, as was the case for The Management Board has proposed to pay a preference dividend on the cumulative financing preference shares of 5.33% per share of EUR 7.00, which amounts to a total payment of EUR 1.6 million. This proposal was approved by the Supervisory Board on 14 March The preference dividend for 2009 was also EUR 1.6 million, and was paid in The preference dividend will become payable as of 1 June The preference dividend on the cumulative financing preference shares was not included as a liability on the balance sheet for 2010 or for 2009.

21 Report of the Management Board 21 Risk management Wegener recognises that there are risks associated with its business strategy. Changing media consumption and the related changing media spending have consequences for the company s strategic policy. To counter these changing market conditions and the economic crisis, the Delta reorganisation programme was concluded in The aim of this programme was not only to reduce costs, but to transform the organisation into a cross-media content organisation as well, so that it is less susceptible to the aforementioned market risks. In addition to concluding the Delta reorganisation programme, 2010 saw the first follow-up steps being made to transform Wegener into a cross-media content business. These changes mainly concern the front offices, where the editorial boards and advertising sales are transforming from a single media set-up to a cross-media one. Wegener endeavours to monitor and control the realisation of its strategic and operational objectives to the fullest extent possible. For this purpose, the group has established an effective risk management and control system. The Management Board is responsible for monitoring the strategic, financial and operational risks within Wegener, and uses the risk management and control system for this purpose. This effective risk management and control system ensures that: > the risks associated with the realisation of strategic and operational objectives are identified in a timely manner and remain limited to an acceptable level; > there is a reasonable degree of certainty that the financial reporting does not contain inaccuracies of material importance; and, > there is compliance with applicable legislation and regulations. Wegener s risk profile is aimed at continuity of operating activities in the long term, while reducing or, wherever possible, appropriately hedging risks. Willingness to take risks depends on the magnitude of the risk in relation to Wegener s result and/or equity, while it also depends on what area they are in. The starting point is that any risks taken must be sufficiently manageable. Risks A number of important risks specific to Wegener have been identified. However, the following summary of such risks is not necessarily exhaustive. It is possible that risks not presently identified, or not currently perceived as being of material consequence, may later have an important and negative impact on Wegener s profits and its ability to achieve its business objectives. The group s internal risk management and control systems are geared to timely identification of such risks and changes. The reader is also referred to page 81 and further of the annual accounts for a description of the financial risks. Advertising sales falling more than expected Part of Wegener s sales relies heavily on economic development, primarily advertising turnover and in particular employment ads. These sales fluctuate, depending on the economic conditions. The negative economic conditions over the last two years have, therefore, had a significant impact on Wegener s advertising sales. In 2010, the ongoing economic crisis led to a further fall in advertising sales for both the daily newspapers and the free local newspapers. The extent of this risk will remain more or less the same, depending on the extent of economic recovery. The effect of the declining advertising market on Wegener's business results was mitigated by the reorganisation carried out in 2009 and the new cost-savings measures taken in Wegener is also developing new products that meet market demand to generate new advertising income. The graph below shows the development of advertising volumes in the various categories of all of the Netherlands daily newspapers (total market) in relation to the annual change in Gross Domestic Product (economic gauge) from 1978 up to and including 2010.

22 22 Report of the Management Board (Risk management) Cyclicality of ad volume in Dutch daily newspapers 1978=100 Yearly change in GDP in % Family announcements Classifieds Local ads Recruitment ads National ads Total Yearly change GDP Insufficiently equipped to transform into a cross-media organisation in good time The majority of Wegener s sales relies on traditional print-related sales. The risk exists that Wegener cannot capitalise on changing media consumption and the related changing media spending in good time. To counter the risk of a decline in sales and results, Wegener s strategic policy is geared to transforming into a successful cross-media organisation. The risk, however, is that Wegener may not be able to make this change in good enough time. In 2010, the first follow-up steps were taken to transform Wegener into a cross-media content business. These changes mainly concern the front offices, where the editorial boards and advertising sales are transforming from a single media set-up to a cross-media one. New products will become more important alongside the existing key (printed) products. Concentration of printing facilities In striving to achieve the group s aim to enhance effectiveness and efficiency, the number of operating locations within Wegener NieuwsDruk has been reduced to the present three. The capacity utilisation level of the remaining printing presses has increased, and capacity costs decreased. The potential damage that could result from a disaster at a printing location or an interruption in the printing process has therefore increased. The impact such an event would have on the result and/or on equity depends on the nature of the disruption and is therefore difficult to quantify. Measures have been taken to reduce the chance that such a disruption could occur. Examples of these measures are: disaster plans are in place, regular inspections are conducted amongst others by insurers to improve the safety level, sprinkler systems have been installed, and compartmentalisation (fire protection) has been introduced. The concentration of printing activity means there is now virtually full-time staffing and thus continual monitoring and agreements have been made with other printers to offset lengthy periods of loss of profits. Significant dependence on ICT systems Large parts of Wegener s operating processes are based on automated systems and an infrastructure to make possible communication between the various systems. These systems and networks play a key role in almost every aspect of the group s operations. Wegener works with a number of different IT systems, divided into systems for advertising, editorial work, consumer market, distribution, financial matters and personnel.

23 Report of the Management Board (Risk management) 23 On the basis of a specific strategy in which improved effectiveness and efficiency thanks to benefits of scale play an important role, the company makes more and more use of central and uniform processing and storage of data, while certain of these services have been outsourced. Breakdowns in these systems and networks can have a major disruptive effect on operating processes. The impact such an event would have on the result and/or on equity depends on the nature of the disruption and is therefore difficult to quantify. These risks are limited by putting in place emergency plans and security contingency controls, such as twin data centres at both Atos and Getronics and networks with identical back-ups at the largest locations. In 2010, a Mecom-wide project called Waves was launched, the aim of which is to further standardise ICT systems and processes and to ensure the content business is better supported by ICT systems. As a result, part of Wegener's current ICT activities will be outsourced. The plan will be worked out in more detail and its implementation probably started in Naturally, implementation entails risks, for which appropriate measures will be taken in Dagblad De Pers In 2009, Wegener entered into a long-term contract under which it gained the right to sell advertising in Dagblad De Pers, on condition that it paid an annual fee to the Dagblad De Pers publisher, i.e. Mountain Media BV. Over the course of 2010, it emerged that actual Dagblad De Pers sales were considerably lower than previously expected, as a result of which Wegener, in all likelihood, will make a loss on this contract during the term of the agreement. A provision for loss-making contracts has been set aside in the 2010 annual accounts for this risk. There is also a risk regarding the management of this long-term agreement. The Management Board and the Wegener management team keep on searching for possibilities to compensate the negative consequences of this contract. Legislation and regulations The nature of Wegener s activities means that the group must deal with a multitude of legal regulations, such as copyright protection, tax legislation, employee health and safety protection, media controls, individual and organisational privacy protection, legislation with regard to the environment, and regulations regarding competition and free markets. Furthermore, two covenants were concluded with the Dutch tax administration with respect to distribution of daily papers and personal statements from authors and editorial staff as to the nature of their work. Changes, including international ones, in legislation and regulations can impact on the group s operating practices. There is a risk that Wegener executives do not observe the applicable legislation and regulations, thus leading to imposition of sanctions on Wegener that adversely affect business operations. To mitigate this risk, internal control measures are anchored in the operating processes. In April 2010, the Netherlands Competition Authority (NMa) published a report with findings from an investigation they had launched into alleged violations in Zeeuws-Vlaanderen of the conditions they had set in 2000 in relation to Wegener s takeover of the VNU Dagbladengroep. On the basis of this report, the NMa fined Wegener and five (former) directors a total amount in excess of EUR 20 million in July Wegener believes that there have been no violations and has filed an objection to the NMa s decision. Financing Wegener s financing is part of the financing arrangements for the entire Mecom group. This means that the credit margin available to Wegener depends on the needs of the Mecom group as a whole. Another aspect of Mecom s financing arrangements is that Wegener and almost all other country divisions of Mecom guarantee the entire arrangement, which means that, if Mecom cannot meet obligations arising from these arrangements, this can also affect Wegener. It is attempted to mitigate this risk by means of focused cash-flow planning and by holding consultations with Mecom on a regular basis.

24 24 Report of the Management Board (Risk management) Risk management and control system The group s system of risk management and control has its foundation in a number of key elements. The control environment In general, the group strives to maintain a culture marked by openness, integrity and a sense of social responsibility, making sure each employee understands the significance of these aspects of group culture, while at the same time ensuring strict adherence to all applicable legislation and regulations. The formal code of conduct for Wegener and all group companies sets forth the general guidelines for conduct that all employees are expected to embrace. Since 2005, this code has included a whistleblower provision to prompt employees to report irregularities and undesirable occurrences. Effective relationships with governmental bodies, the trade unions and social organisations are highly valued. Organisation Wegener s organisational structure is based on supporting a collaborative approach within which individual responsibilities are clearly defined and performance is measurable. Guiding principles are flexibility, rapid responses to changing market circumstances, creativity and innovative capacity. A number of procedures have been established to reinforce these concepts. They include a management manual, delegation of decision powers, investment approval procedures, a regulation on insider information, a human resources handbook, and the finance & control manual. The Management Board monitors developments in operating activities through regular meetings with the Wegener Management Team, supported by periodic management reports. Risk inventory An inventory of the risks relevant to the group s operations is an integral element of the process of managing the enterprise, particularly in drawing up long-term plans, the annual budget, project plans, and the periodic risk reports. In addition, risk inventories are regularly conducted in specific areas, including employee health and safety, the environment, ICT, and insurance cover. In the course of 2010, reports on the most important risks identified at the Wegener level were issued to the Management Board on a quarterly basis. Information provision and communication Systems for internal information provision and communication are primarily aimed at furnishing information to employees, supervisors and managers that is adequate for the conduct of their duties. Specific group procedures documented in group manuals aid this process. A whistleblower regulation and a complaints procedure enable employees to inform the group management of undesired situations. The Management Board monitors the development of business activities by means of regular meetings with the Wegener Management Team, supported by periodic management reports. Control activities A number of group activities are aimed specifically at risk management, information provision and reporting. Central to this is a structured planning and control process which is set forth in the finance & control manual. The planning and control cycle consists of a strategic plan drawn up annually, which includes a medium-term prognosis and an annual budget, and which is amplified by periodic projections of annual financial results and a monthly financial and management report. These reports are assessed and discussed by the Management Board and the management team. The reliability of the information flows is assured through an efficient administrative structure that requires all important procedures to be documented in writing. Internal control measures are also anchored in the operating processes. Disaster plans have been established for specific operating processes, primarily printing operations and ICT functions. An appraisal of the effectiveness of the administrative organisation and the procedures to assure continuity of the information systems to the extent they are used in drawing up the annual accounts forms a major and integral element of the annual detailed review by the external auditors. The external auditors report their findings and discuss them with the Management Board and the Supervisory Board on an

25 Report of the Management Board (Risk management) 25 annual basis. Along with this, external and internal (Mecom internal audit) experts conduct operational and EDP audit investigations on a regular basis. Evaluation of risk management and control systems The status of the risk management and control systems is evaluated using the COSO-II framework as a guideline, and findings are discussed within the Management Board and with the Supervisory Board. On the basis of this evaluation, the Management Board believes that the risk management and control system gives reasonable certainty concerning the following matters: > there is systematic assurance of the manner in which strategic, operational and financial goals are achieved; > the financial reporting for 2010 does not contain inaccuracies of material importance; > the risk management and control systems functioned properly during 2010 and there are no indications that these systems will not function properly in the coming year; and, > there is compliance with applicable legislation and regulations. No matter how well the group s risk management and control systems may be structured, they cannot offer absolute certainty that the company s objectives will always be faithfully achieved. When it makes decisions, the group s management is therefore mindful of the following factors: > there can be human errors of judgment; > cost/benefit considerations are always an aspect of accepting risks and applying control measures; > people can make simple mistakes or errors of judgment that have huge consequences; > executives could conspire to circumvent internal control measures; and, > the management of a group unit may, even temporarily, ignore the obligations it has agreed with the Management Board.

26 26 Report of the Management Board Outlook for 2011 Given the current economic situation, it is impossible to make any definite forecasts regarding advertising sales and hence the company s operating result in Various signs seem to indicate a moderate economic recovery, but this appears to be largely due to exports. The domestic market has not yet started to recover, which will again affect Wegener's advertising sales in The costs of newsprint will also rise. Partly resulting from the reorganisations implemented and ongoing cost-saving measures the costs will be lower. Investments will amount to approximately EUR 11 million in Average staffing levels in 2011 are expected to be about the same as those in The net debt position depends, of course, on how the result will develop. The level of the net debt position at the end of 2011 will also be determined by the above-mentioned investment level. In 2011, an estimated EUR 8 million will have to be paid in reorganisation expenses (to be debited from the provision created for this purpose at the end of 2010). No changes are expected in 2011 with regard to the financing arrangement as at the end of 2010.

27 Report of the Management Board 27 Developments by activity Daily newspapers Ownership ratios in the Dutch daily newspaper market barely changed in In September, Egeria acquired the remaining shares in Lux Media, the publisher of NRC Handelsblad and nrc.next, from co-owner and TV station Het Gesprek. The table below shows the new ratios in the Dutch daily newspaper market with respect to paid daily newspapers, based on the latest data (Q3 2010) from the HOI, Het Oplage Instituut (Institute for Media Auditing). Paid circulation of daily newspapers All paid daily newspapers Q abs Q abs Change Market share Q Wegener daily newspapers 728, ,000 (2.5%) 23.4% MGL 160, ,152 (3.0%) 5.1% Mecom total 888, ,152 (2.6%) 28.5% Telegraaf MediaGroep 822, , % 26.4% Persgroep Nederland 727, , % 23.4% Lux Media 250, , % 8.0% NDC 203, ,712 (3.6%) 6.5% Other paid daily newspapers 220, ,882 (3.7%) 7.1% All paid daily newspapers 3,113,595 3,121,839 (0.3%) 100.0% All regional paid daily newspapers 1,395,065 1,433,195 (2.7%) 44.8% All national paid daily newspapers 1,718,530 1,688, % 55.2% Source: HOI (Het Oplage Instituut) Surprisingly, national daily newspapers performed better than their regional counterparts: +1.8% versus -2.7%. The paid circulation of Persgroep Nederland s daily newspapers rose the most in the Q compared to the same quarter in 2009 (+3.1%), thanks in part to intensive marketing campaigns. Also, De Telegraaf and nrc.next saw their paid circulation rise. It is not yet clear if the rise of the circulation of the national daily newspapers is structural or just incidentally caused by marketing campaigns. The regional daily newspapers, on the other hand, lost ground. The biggest losers were the northern NDC daily newspapers. The Mecom Group, of which Wegener is part, is market leader with a 28.5% market share in paid circulation, immediately followed by the Telegraaf Media Groep with 26.4% and Persgroep Nederland with 23.4%. There are three players active in the free daily newspaper market, namely Metro, Sp!ts and Dagblad De Pers. Metro and Spits reduced their circulation in the third quarter of 2010, partly because of declining advertising income. Only Dagblad De Pers increased its circulation, for which Wegener is responsible. The table below shows the ratios.

28 Report of the Management Board (Developments by activity) Circulation of free daily newspapers Q abs Q abs Metro 453,279 Sp!ts 309,513 Titles Change Market share Q ,384 (2.0%) 45.7% 343,131 (9.8%) 31.2% Dagblad De Pers 228, , % 23.1% Total 990, , % 100.0% Source: HOI (Het Oplage Instituut) The table below displays the developments in circulation of the Wegener daily newspapers for each title. This data reflects the averages for all of 2010 and comes from an internal source. Average paid circulation Wegener Daily newspapers De Twentsche Courant Tubantia Change 107, ,390 (1,3%) de Stentor 121, ,329 (2,2%) De Gelderlander 139, ,859 (2,2%) BN/DeStem 103, ,513 (2,4%) 50,276 51,046 (1,5%) PZC Eindhovens Dagblad 100, ,449 (2,1%) Brabants Dagblad 120, ,860 (2,1%) Wegener daily newspapers 744, ,446 (2,0%) Source: Internal Wegener data The average paid circulation of the Wegener daily newspapers dropped in 2010 by 2.0% compared to As a result of the increase in subscription rates, circulation revenue rose by 1.9%. In 2010, the advertising market did not recover from the poor year of The effects of the economic crisis continued to make themselves fully felt in 2010, despite signs of economic recovery in the second half of the year under review. This recovery, however, was largely due to an upturn in exports. Domestic production lagged behind, particularly as a result of a lack of consumer confidence. This indicator remained low throughout the year as a result of a cabinet crisis, a lengthy cabinet formation period, rumours about severe government cut-backs and a euro crisis. Records on advertising figures in daily newspapers in the Netherlands (source: Nielsen Media Research) show that advertising in all daily newspapers dropped overall by 3% compared to 2009, which is chiefly accounted for by recruitment advertising. According to the same source, the number of recruitment advertisements in daily newspapers fell by more than 19% in in WONEN & TUINEN Buiig Temp: 10 0C Wind: Z5 Woekeren met ruimte De Opruiming Plofbank of relaxfauteuil Mooie tuin op een kleine plek Kaddafi, geliefd en gehaat 10/11 WOENSDAG 31 maart 2010 Dagblad voor Zuidwest-Nederland, 149e jaargang Prijs: 1,50 zaterdag 2,20 Editie: BREDA VOETBAL ACADEMIE BRABANT NAC trekt zich terug, Willem II en RKC gaan samen verder NAC bezwijkt onder druk fans Fusieplannen jeugdopleidingen clubs van de baan. Bredase aanhang opgelucht. NAC-coach Robert Maaskant baalt van afblazen project. door Dennis van Bergen BREDA De ontstane commotie bij de achterban van NAC heeft ertoe geleid dat de Bredase club er van afziet gezamenlijk met Willem II en RKC een regionaal opleidingscentrum te vormen. Dat bericht bracht de directie gis- termiddag naar buiten, tot vreugde van een groot deel van de geel/zwarte aanhang. Die meent dat de huidige directie steeds nadrukkelijker de Bredase clubcultuur de nek omdraait. We zijn blij dat dit onzalige plan is teruggedraaid, liet voorzitter Sjoerd van Fessem van de Clubraad, het officiële adviesorgaan van de club, weten. Hij wil snel met NAC in gesprek, omdat de niet vooraf ingelichte Clubraad zich gepasseerd voelt. Vrijdag jl. publiceerde BN De Stem het bericht dat NAC, Willem II en RKC de intentie hadden om vanaf komend seizoen gezamenlijk een jeugdopleiding te beginnen. In dit plan zouden de hoogste jeugdelftallen in Tilburg gaan voetballen onder de naam Voetbal Academie Brabant (VAB). Verschillende bronnen bij de drie clubs hadden dit off the record bevestigd. Hoewel de Bredase club het voortijdig uitlekken van de plannen hardop betreurde, bevestigde NAC het nieuws diezelfde vrijdagavond op de eigen site. Gisteren stelde NAC dat de eerder genoemde publicatie voor zulke heftige reacties gezorgd heeft, dat het proces ten aanzien van de definitieve planvorming nu niet in alle rust verder kan gaan. We kunnen niet anders besluiten dan het proces te stoppen. NAC-trainer Robert Maaskant deelt de vreugde van de NAC-fans bepaald niet: Met de VAB hadden we tegenwicht kunnen bieden aan de opleidingen van PSV en Feyenoord. NAC bekijkt nu hoe het verder moet met de jeugdopleiding. pagina s 32/33 videobeelden op bndestem.nl De echte robofridge komt uit Breda Politie spreekt gewonde oom Frans Bauer door Wim van den Broek FIJNAART De politie heeft giste- ren Giel de Krom gehoord, de man van de tante van Frans Bauer die maandagavond dood in haar woonwagen in Fijnaart is gevonden. De toestand van de 59-jarige man is stabiel. Hij ligt in een ziekenhuis in Rotterdam. Over zijn verklaring doet de politie geen mededelingen, evenmin over de doodsoorzaak van de vrouw en de verwondingen van De Krom. De exacte toedracht van het geweldsdelict is nog onduidelijk. De politie bekijkt of er sprake is van moord, poging tot zelfmoord of een combinatie daarvan. Het technisch onderzoek in de woonwagen werd gisteren rond uur afgerond. Daarna was het kamp weer voor iedereen toegankelijk. Beide slachtoffers werden maandagavond kort na zes uur gevonden in hun woonwagen, naast die van de ouders van Frans Bauer op het kampje aan de Molenstraat. Op het lichaam van de overleden vrouw wordt vandaag sectie verricht. Frans Bauer heeft alle optredens tot 10 april geannuleerd. pagina s 30/31 videobeelden op bndestem.nl The declining market also forced down advertising rates even more. In an attempt to persuade advertisers to buy advertising space, various publishers offered additionally high discounts. Wegener daily newspapers overall advertising revenue dropped by 8%. Computerstoring treft artsen en apothekers Friet eten in het studentenhuis en de robofridge brengt een biertje. Vlnr. Lonneke Boot, Han Murraij, Mike van Bruggen, Rolf Lettinga, Jacco Haagh en foto René Schotanus/het fotoburo Geert Zebregts. door Edine Wijnands BREDA Hij weegt zeventig kilo, komt op commando op je afrijden, opent zelf zijn koelkastdeurtje en pakt er een biertje voor je uit: de robofridge van de vier Avans-studenten Jacco Haagh, Rolf Lettinga, Geert Zebregts en Mike van Bruggen. De studenten lieten zich inspire- ren door de reclame van Heineken. Daarin wandelt een walking fridge naar bierdrinkers toe. Maar dat ding is een computeranimatie, weten de studenten in Breda. Die van ons bestaat en werkt echt. Ze maakten hem voor een studie-opdracht. We kregen een kistje met elektronica, met de opdracht: doe er wat mee, vertellen ze. Het was genoeg geweest als we het ding geprogrammeerd hadden, zodat hij zelf kon bewegen. Maar dat vonden we niet leuk. We zagen de reclame en dachten: dat doen we! De mobiele koelkast is uitgerust met sensoren, zodat hij nergens tegenaan loopt. Als je er met een groene bal naar zwaait, reageert hij en komt op je af. Een druk op de knop en hij geeft bier. Ideaal hè, vinden de vier. Deze eerste versie kan twaalf blikjes herbergen. Hij vult zichzelf nog niet, dat is jammer. Dat moeten we nog verbeteren. Avans laat het ding rondrijden tijdens de open dag op 10 april. Tot die tijd hebben de studenten er veel lol aan. En dan? Hij zou ideaal zijn voor het komende WK voetbal. videobeelden op bndestem.nl BREDA Huisartsenpraktijken op verschillende plekken in de regio moesten gisterochtend noodgedwongen sluiten als gevolg van een grote computerstoring. Daardoor konden artsen, maar ook apothekers en fysiotherapeuten niet in hun computersystemen. Zij konden zodoende niet de status van hun patiënten nakijken of medicijnen controleren. Om één uur s middags was de storing verholpen. De vermoedelijke oorzaak is een kabelbreuk of storing in het KPN-netwerk ergens in de buurt van Apeldoorn, waar een groot datacentrum zit. pagina s 2/3 IJskoud de beste Word ook abonnee! Zie bon op pagina 2 of bel ma-vr 28

29 Report of the Management Board (Developments by activity) 29 Given the various developments in the advertising segments of the Wegener daily newspapers, the relative shares in revenue changed as well. The division for 2010 is as follows: The largest segment is Local Brands & Services, with a 35% share in advertising revenue (2009: 46%). The revenue share of National Brands & Services dropped from 22% in 2009 to 18% in The recruitment advertisements share fell to 15% (last year 17%). Recruitment 15% Classified 2% Travel 6% Motors 6% Property 6% Announcements 12% Brands & Services Local 35% Brands & Services National 18% Based on the Nielsen Media Research forecast of a net expenditure of EUR 588 million on advertising in daily newspapers in 2010, the Wegener daily newspapers jointly achieved a 20% market share, which is the same as last year. In 2010, Wegener made great headway with sales of products and services to consumers (Enterprises). The regional daily newspaper web shops were completely revamped and an online shop was opened for De Weekkrant.nl. E-marketing and search engine optimisation were improved and Enterprises revenue in 2010 rose. The management in charge of the seven Wegener daily newspapers responded in 2010 to the ongoing poor economic conditions by implementing strict cost control, achieving cost savings in all categories. In late 2009, Wegener announced its plans to end its participation in Nationale Regiopers CV (NRp) as of the end of The NRp is the regional daily newspaper publishers sales organisation for national advertisers. Established in 1998, the NRp is a joint initiative of the regional daily newspaper publishers. Wegener took this step to be better able to realise its cross-media ambitions in the national advertising market, using the year 2010 to pave the way for the national sale of daily newspapers. As of 1 January 2011, Wegener integrated the sale of national advertisements for its regional daily newspapers and websites into its existing National Sales & Marketing department for Wegener Media s free local papers in Houten, thus creating a cross-media sales department. To better respond to consumer demand for video information, Wegener s three Brabant-based daily newspapers sought to collaborate with Omroep Brabant broadcasting corporation in By collaborating in a regional media centre, both parties hope to bolster their position in the regional media market. Complex media legislation has thus far made extensive cooperation impossible. A similar initiative was launched in Twente. In October 2010, De Twentsche Courant Tubantia presented a new format, a notable feature of which is that the paper is divided into two parts, namely the regional section and the section covering national and international news. The editors buy the latter section ready-made from the central Wegener editorial board, enabling the editors of De Twentsche Courant Tubantia to focus entirely on the region and thus improve the quality of the regional section. Both readers and advertisers responded enthusiastically to this change. In the year under review, Brabants Dagblad worked on transforming the Tilburg edition into a cross-media city platform, featuring printed products in various shapes and sizes, as well as digital products. The project was still ongoing at the end of In the second half of 2010, two groups of twenty Journalism students from Fontys University of Applied Sciences joined the editorial boards of the Brabants Dagblad and Eindhovens Dagblad respectively as an experiment. As part of their training, they worked with journalists of the papers on practical assignments and theory.

30 Report of the Management Board (Developments by activity) The placement lasted three months and Fontys provided on-site instruction. Journalists and readers alike were welcome to join the lectures. This collaborative venture was mutually beneficial: the students received training in an innovative manner and the editorial boards learned a great deal about new media and how to use them At the end of 2010, Wegener, the Telegraaf Media Groep (TMG) and the NDC Mediagroep (NDC) started working together on a distribution model for the joint distribution of daily newspapers to subscribers and single copy sales points. Under this new model, TMG s delivery activities regarding De Telegraaf will be integrated with those of Wegener and NDC, respectively, in those areas where Wegener and NDC distribute their regional morning newspapers. Wegener and NDC, respectively, will also be responsible for transporting the free daily newspaper Sp!ts to the distribution points in those areas. The purpose of this joint venture is to decrease the relevant daily newspapers distributions costs while delivering the same level of quality. The results from the pilot areas are positive. Dagblad De Pers In 2009, Wegener entered into a long-term agreement with Mountain Media, entitling it to sell advertisements in the free daily newspaper Dagblad De Pers in the Netherlands. Wegener pays the publisher of Dagblad De Pers an annual fee for this right. In early 2010, circulation was increased to 250,000. Research revealed a great demand from advertisers to establish distribution points in the larger areas outside the Randstad conurbation. Wegener also took over the Depers.nl website in The actual revenue of Dagblad De Pers was significantly lower than management had previously expected, meaning that Wegener will most likely incur a loss during the term of this agreement. Wegener aims to minimise this loss by exercising its contractual rights to revise the publishing model of Dagblad De Pers. Nevertheless, Wegener recognised exceptional items of EUR 63 million as of 31 December 2010 (approximately EUR 47 million after tax). Of the EUR 63 million, EUR 48 million relates to the current value of expected future net losses over the next 11 years of the agreement. The remaining EUR 15 million relates to the impairment of the publishing rights. Free door-to-door newspapers In 2010, the market for free door-to-door newspapers was adversely affected by the persistent poor economic climate and many free door-to-door newspaper publishers had a hard time. Wegener is the absolute leader in this market, with the Telegraaf Media Groep in a distant second place. Based on the Nielsen Media Research forecast of a net expenditure of EUR 579 million on advertising in free local papers (only the major publishers were included) in 2010, the Wegener free local papers jointly achieved a 25% market share in the advertising market, which is slightly less than last year. 20 Augustus 2008 NUMMER 34 of reageer op: redactie@almeredezeweek.nl P r a a t m e t d e P o l i t i e c h e f op 1 1 s ep t e m b e r Op zoek naar een baan? SNEL UW HUIS VERHUREN? BEL: Vacature Vizier Pagina 27, 28 & 29 Dé parketoutlet van Flevoland! Alle topmerken laminaat en lamelparket tegen outletprijzen! Ingekocht: Ruim 3000m2 Pergo laminaat 8 verschillende decors NORMAAL 32,95 19,95 p.m 2 Altijd inclusief plint en ondervloer! Bezorging in Almere gratis! Markerkant Almere - Tel Open: ma t/m vrij uur en za uur Wil je de schoolgaande kinderen van en naar school vervoeren? Neem dan contact op met mw. Nageswar mobielnummer Ik reken op U! The distribution of advertising revenue according to the various segments for 2010 is as follows: Travel 3% Voor particulieren en bedrijven Tel Motors 9% Betaalbaar en gezellig uitgaan? ZATERDAG 30 AUGUSTUS SALSA AVOND Property 12% Recruitment 5% Brands & Services 69% TEL (036) Stem op onze nieuwe site: Vrijwilligers gezocht voor onze school in Almere! Announcements 1% Classifieds 1% OPLAGE: stelling Deze week LEEftijDgREns voor piercings MOEt OMHOOg naar 21 jaar! VERHUURD 30 Jongeren in gesprek met de politie ALMERE - De politie Almere wil graag op een positieve manier in contact komen met jongeren. Daarom is er op donderdag 11 september van tot uur een Gesprek met de politie op het politiebureau aan de Baljuwstraat in Almere Stad. Politie en Almeerse jeugd kunnen deze avond op een ontspannen manier met elkaar praten over diverse onderwerpen. Door een gespreksleider worden die avond stellingen ingebracht waarover de jongeren hun mening kunnen spuien. Stellingen als Discrimineert de politie? of Almere een multiculturele stad, wat betekent dat? Goede ideeën voor betere omgang met elkaar, wederzijds begrip kweken maar ook misverstanden uit de weg ruimen, daar is de avond voor bedoeld. Woordvoerder van de politie Sven van der Burg: Het is echt een avond voor de Almeerse jeugd. We willen hiermee de verbinding leggen tussen de jeugd en de politie. De jongeren krijgen deze avond de mogelijkheid om te vertellen wat ze van de politie vinden. Wij willen hier ook van leren, dus is het de bedoeling dat er in alle openheid gesproken wordt. We gaan die avond ook niet controleren of er iemand bekend bij ons is. Begrip voor elkaar tonen en kennis delen is de strekking. De politie neemt het bezoek serieus. Naast een aantal wijkagenten is ook Hans Lesscher, districtschef Zuid die avond aanwezig om met de jeugd in gesprek te gaan. Met cartoons wil de politie Almere jongeren warm maken voor een gesprek met de politie. (Foto: aangeleverd) Contact met bewoners Het Gesprek met de politie past volledig in de lijn van de GGPZ, Gebieds Gebonden Politie Zorg. Hiermee wil de politie bereiken dat het contact met de bewoners beter verloopt en er samen met andere partijen wordt gewerkt aan het oplossen van problemen. Heel belangrijk daarbij is dan ook Wat vinden wij van elkaar? Dat is de vraag die we ons die avond stellen, aldus Van der Burg. Kijkje achter de politieschermen Via de website die speciaal voor deze avond is opgericht, kunnen jongeren zich aanmelden. De eerste tien jongeren die zich hebben aangemeld, worden uitgenodigd voor een kijkje achter de politieschermen in het trainingscentrum van de politie aan de Marathonlaan in Almere Stad. Hier kunnen jongeren zien waar de agenten in opleiding training krijgen en waar hun fysieke vaardigheden worden getest. Jongeren die zich wel willen aanmelden maar daarbij niet hun woonadres willen geven, kunnen het adres opgeven van het jongerencentrum of buurthuis in hun wijk. Wie meer wil weten kan bellen met , vraag naar de afdeling Communicatie van Politie Flevoland. Stand-up comedyolympisch zilver voor Marlies Smulders workshop in Cinescope ALMERE - De Almeerse roeister Mar- deze krant. Alle medewerkers van ALMERE - Voor beginnend stand-up comedytalent presenteert The Joker Comedy Club een stand-up comedyworkshop op zaterdag 30 augustus. Hier worden de deelnemers geïnspireerd en geholpen met tips door een professionele comedian met minimaal vijftien jaar ervaring in het vak. Deelnemers worden deze dag begeleid bij het schrijven van grappen en bij het uitvoeren hiervan op het podium. Er wordt geleerd hoe met het publiek om te gaan, de beste timing van grappen en hoe een goede grap te maken. Na deze workshop is er s avonds om uur in Cinescope een open podium waar de deelnemers zullen optreden. Hier kunnen ze gelijk toepassen wat ze die dag hebben geleerd. Om zelf dit beginnend talent te kunnen zien, kunnen kaarten gereserveerd worden via reserveren@thejokercomedyclub.nl. Kaarten voor het open podium kosten 4 euro. Wie interesse heeft stuurt een mail naar info@ thejokercomedyclub.nl of kijkt op lies Smulders heeft bij de Olympische Spelen in Beijing zilver veroverd in de Dames 8-roeiboot. Marlies Smulders is columniste bij Ook spoedcursus Almere DEZE WEEK feliciteren Marlies dan ook namens alle lezers van harte met deze uitstekende prestatie. theorie De Strubbenweg 13, 1324 GA Almere, Tel

31 Report of the Management Board (Developments by activity) 31 With a 69% share, Brands & Services is the largest segment. Revenue from national advertisers amounted to 32% of the total advertising revenue of Wegener s free door-to-door newspapers. In January 2010, the De Weekkrant Limburg was introduced in the province of Limburg. In March, two new papers were launched in Amsterdam and environs: De Weekkrant Amstelveen and De Weekkrant Amsterdam. For the remaining areas, Wegener has joint ventures with external publishers and, as such, has achieved the strategic aim of nation-wide coverage in De zorgvuldige autosite. The portfolio was adjusted in a number of places partly because of the disappointing revenues of the various titles. Titles were taken off the market, merged with other titles or their publishing frequency reduced. In 2010, another wide-scale study into the reach of the door-to-door newspapers in the Netherlands was carried out by Wegener order, designed to yield selling points that can be used in the sale of advertising space. The results of this study will become available in Spring of de grootste regionale businessclub Digital The Netherlands has an advanced infrastructure for internet applications. Although this is an advantage, it also means that there are many competitors. Based on the Nielsen Media Research forecast of a net expenditure of EUR 588 million on online brands & services and classified ads in 2010, the Wegener internet activities jointly achieved a 5% market share. In 2010, Wegener worked zealously to implement its strategic plan for digital and online development. Several existing websites were revamped to good effect. In addition, a great many new initiatives were developed and launched, including De grootste etalage van Nederland, Maakmedia and Sweetdeal (to be introduced in early 2011). There were also innumerable regional and local online initiatives. Wegener entered into an agreement with the NOS on the use of videos on Wegener news sites. Improved content, more references from the printed media and many special campaigns generated a 39% increase in unique visitors between December 2009 and December The joint website of the free local papers deweekkrant.nl also showed an increase in the monthly number of unique visitors (+52%), contributing to an increase in revenue from the news sites. Moreover, revenue increased, particularly from national customers, as a result of offering the entire Wegener online network. In 2010, AutoTrack.nl introduced a new platform, enhancing both the speed and success rate of searches for new and used cars. After a brief adjustment period, the new website was more highly rated by advertisers and visitors alike. AutoTrack also benefited from the collaboration with the ANWB, which materialised in JobTrack.nl had a difficult year because of the economic decline, although revenue picked up somewhat in the second half of According to Nielsen, the overall number of recruitment adverts placed online fell by 12%. The CareerID start-up was discontinued due to disappointing results.

32 32 Report of the Management Board (Developments by activity) Printing In 2010, the Wegener printing plants had a hard time generating revenue. There were three printing plants in the group throughout the year, having sold one in The Hague and closing one down in Nijmegen, both in Partly due to the sale of AD NieuwsMedia in 2009, external revenue in 2010 was lower than in the year before. In addition, a number of external contracts were not renewed or lower volumes printed as a result of a reduction in the number of advertisement pages. In total, autonomous external revenue dropped by 22% in 2010 compared to Internal revenue also fell, particularly as a result of the decision of daily newspaper publishers to stop printing specials separately and expand editions, reducing the need for edition changes. Internal revenue from free door-to-door newspapers increased slightly as a result of the introduction of new free door-to-door newspapers and part of PLM s order portfolio. In 2010, part of the Dagblad De Pers was also printed on Wegener s printing presses. In 2010, two printing plants were awarded the IFRA Quality Award, thereby joining the International Newspaper Color Quality Club. The revenue decrease at Wegener NieuwsDruk is mainly compensated with achieved cost savings in 2010, on the one hand due to divesting two printing plants and on the other hand making efficiency improvements. The number of FTEs strongly reduced. Personnel & Organisation Organisational development In the first half of 2010, the finishing touches were made to the Delta reorganisation programme. As of 1 January 2010, all publishing activities were combined under one publisher, Wegener Media. The front offices (editorial and sales) remained separated according to type of medium, while the administrative departments were centralised in the back offices. Besides achieving cost benefits, this allowed the administrative departments to improve their services by leveraging economies of scale. The reorganisation was a prelude to the publisher s transformation into a cross-media content business. In mid-2010, the next stage of this development process began. Task forces were formed at various levels of the company to prepare, initiate and complete the transformation. However, the transformation was temporarily put on hold due to the managerial problems ensuing from the former CEO s departure in the final quarter of In early 2011, the newly appointed CEO resumed the process with great zeal. Since Wegener had given notice of terminating its participation (as per 1 January 2011) in the NRp the regional daily newspapers joint advertising sales organisation in the national market at the end of 2009, the year under review was used to set up an in-house national daily newspaper sales department. This activity was assigned to the existing National Sales & Marketing department for the free door-to-door newspapers in Houten. In conjunction with Mecom developments, a large-scale study into an improved ICT service organisation was conducted in In the second half of the financial year, Wegener was actively involved in this process, which helped prevent decisions that would entail unacceptable business risks for Wegener. At the end of 2010, a plan was submitted for outsourcing part of the ICT services, which will impact the Wegener ICT department. The decision-making process at Wegener, including advice from the representative consultative platform, will be completed in the first few months of 2011, after which implementation will get underway in mid To improve internal communication, a new Wegener-wide intranet called WiM was launched in March Departments and staff can profile themselves on this platform, encouraging internal communication. Moreover, it offers improved access to all internal and external regulations.

33 Report of the Management Board (Developments by activity) 33 Personnel development Wegener employed a restrictive staff acquisition policy, particularly to safeguard the jobs of existing staff that may be at risk. This means that vacancies were filled internally wherever possible, using a weekly updated list of vacant positions. Of all vacancies originating in 2010, 18% were filled internally. Other vacancies were filled by external candidates, using the readership base of Wegener s own titles and sites. This staff acquisition policy, the above-mentioned organisational changes and the various efficiency measures resulted in job losses in All in all, Wegener s staff changes were as follows: Change Staff development in FTE End of 2010 End of 2009 abs % Wegener Media - daily newspapers 1,054 1,459 (405) (27.8%) - free door-to-door newspapers (362) (41.0%) - back offices % Wegener MediaVentions (11) (14.7%) Wegener NieuwsDruk (17) (4.2%) Dagblad De Pers Wegener Total 2,868 2,988 (120) (4.0%) In total, the number of jobs on FTE basis was reduced by 120 (4.0%) in Due to the Delta reorganisation, the back office operations of the various divisions were combined, as a result of which their FTE figures cannot be compared. Staff policy development 2010 was characterised by actual structuring of the development-oriented personnel policy outlined in The main focal points in 2010 were: 1. The introduction of an online career site 2. The implementation of the Wegener Academy throughout the Wegener organisation 3. The development of a Wegener HR cycle Re 1) Career As a spin-off of the development-oriented personnel policy devised in 2009, a digital mobility centre developed in-house called WiL (Wegener intra Loopbaan [career]) was introduced on 31 May It is only one of the tools that is being used to encourage staff to actively work on their ongoing employability. All staff are awarded a personal career budget that is made available on WiL through the Loopbaanwinkel (Career Shop). In 2010, over 1,700 employees signed up. The Career Shop has sold 700 products, including courses for the digital world, and social media as well as language training programmes. Re 2) Wegener Academy All of Wegener s training activities are centred at the Wegener Academy. Approximately 80% of staff took a course in The year 2010 was mostly characterised by developing expertise and skills in the area of digital and online publishing. Customised training programmes were developed and carried out for both editorial and commercial positions. For example, in 2010, the Academy developed an online sales training programme under the name Crossing Borders, which will be rolled out in the beginning of Two programmes were organised for the management target group: a leadership programme designed to support the process of transforming from a print to a content organisation and a knowledge-oriented Business Case Management programme to support decision-making on investment matters.

34 34 Report of the Management Board (Developments by activity) Re 3) Wegener HR cycle In 2010, the Central Works Council (COR) approved the implementation of a new Wegener HR cycle. During this cycle, performance interviews about the development within the current job, but even so about future possibilities will be held on average twice a year with all staff (and managers). After obtaining approval from the COR, P&O started preparing the cycle s implementation, which is scheduled for Welfare policy The policy of ensuring, together with the Achmea Vitale occupational health and safety service, that health and safety care remains focused on prevention was continued in Sick leave, excluding maternity leave, dropped to 4.45% compared to 2009 (4.9%). This improvement was due in part to additional attention being paid to prevention policy and the intensive supervision of sick employees, both by management and the occupational health and safety service. The decline in sick leave was notable also because it occurred in a period of reorganisation and uncertainty for many employees. Average annual absences due to illness, excluding maternity leave Terms of employment and collective labour agreements Following the start of negotiations on these issues in 2009, the employers and trade unions reached agreement in February 2010 on a separate collective labour agreement (CLA) for administrative staff of the daily newspaper business (CLA for the daily newspaper publishing sector). The Grafimedia CLA remained effective as the CLA for technical staff. As a result, four important CLAs were in effect at Wegener in the year under review. 1. CLA for Daily Newspaper Journalists At the end of January 2010, an agreement in principle was reached with the Dutch Union of Journalists (NVJ) on a new CLA effective until 31 December This agreement in principle was approved in early April. The key element of the new CLA for daily newspaper journalists was the fact that salaries were not increased collectively in The daily newspaper journalists did, however, receive a 1.4% benefit, as the employee s premium for the early retirement transitional scheme (1.4%) would be paid by the employer in The arrangements regarding work experience places for young journalists were also continued in the new CLA. Preparations for negotiations on a new CLA started in early Grafimedia CLA The new Grafimedia CLA came into effect on 1 February 2010 and will remain effective until 1 February During the term of the CLA, the agreed fixed gross salaries will be increased by 0.5% as of 1 July 2011 and by 0.5% as of 1 January It has been agreed that during the term of this CLA, the employer will spend 2% of the gross pay on employee training and instruction. Local agreements will be made about the distribution among individual staff. In addition, arrangements have been made about training during working hours and receiving a lump-sum diploma bonus for passing the final exam. Maintaining the definition of a normal average working week of 36 hours, options and conditions have been agreed for hours designated by the employer as hours worked less than or in excess of the 36-hour average in certain weeks. Given the actual and expected developments in the area of pensions, the CLA parties deem a study of the future-proofness of the pension scheme advisable. The Board of Consultation for the Grafimedia Sector will formulate the terms of reference for this study.

35 Report of the Management Board (Developments by activity) CLA for the Daily Newspaper Business On completing the negotiations between the CLA parties, the associated communication of trade unions and employers with their members and employees respectively, and further preparations, the new CLA for the daily newspaper publishing business came into effect on 1 February In September 2010, subsequent CLA negotiations resulted in the first agreement within this new framework. This CLA is effective from 1 February 2010 to 31 December With regard to remuneration, a lump-sum gross payment of EUR 250 as of 1 December 2010 (full-time employment) has been agreed for all staff governed by this CLA, as well as a permanent 1.0% salary increase effective as of 1 July In the year 2011, the employer will make at least 1.0% of the gross pay (for staff governed by this CLA) available for employee training. In addition, it has been agreed that as of 1 January 2011, the employer and employee can deviate from the normal 36-hour working week with mutual consent and agree on a longer working week of up to 40 hours. In addition, agreements have been reached on a reduction in the working hours scheme for older staff and procedures relating to establishing policy on flexible working hours. 4. CLA for free Door-to-door Newspaper Journalists This CLA is effective from 1 January 2010 to 31 March It has been agreed that salaries will be increased by 0.5% as of 1 April 2011 and by 0.5% as of 1 January In addition, agreements have been reached on offering journalists an annual training day. Based on the terms of reference to be formulated, a joint industrial committee will research job ratings, salary structures and appraisal criteria. In addition, the Board of Social Committee of Free Door-to-door Newspaper Publishers will contact the Dutch Association of Local Newspapers to discuss the possibilities and to reach a single collective Local Media CLA. The negotiations about a new Social Plan entered into with the trade unions in 2009 were aborted in Before the parties were able to reach agreement, their negotiations were stopped short by the management crisis that arose. It was agreed that until 1 July 2011, any reorganisations would take place in the spirit of the Delta Social Plan. Pensions On 1 January 2010, Wegener entrusted the administration of its pension scheme to the Pensioenfonds voor de Grafische Bedrijven (PGB, the Graphical Industry Pension Fund). Until the end of 2009, the pension scheme was administered by the Algemeen Pensioenfonds Wegener (APW, the Wegener General Pension Fund). As a result of the transition to the PGB as of 1 January 2010, the PGB standard pension scheme, adjusted with regard to a number of Wegener-specific elements, has become effective for non-graphical Wegener staff. This PGB Wegener Pension Scheme is largely the same as the APW scheme applicable until then, with only a few minor differences. In so far as staff are affected by any such differences, they have been personally informed in advance in writing. The transition was effected after both the APW Participants Council and the Central Works Council had given their consent. In early 2010, all staff and retired staff were informed about the background and the entire process of this transition in a special final edition of the APW magazine Pensioen in perspectief, which was entirely devoted to the transition to PGB. In the first half of 2010, the APW accounts were closed, the necessary audits performed and preparations made for the transition. Then, in Q3 2010, PGB actually took over the accounts and administration activities.

36 36 Report of the Management Board (Developments by activity) The participants were personally informed about this process in several letters. In addition, they received an APW statement of the rights transferred and confirmation from PGB regarding the fund-related rights and administration taken over by PGB. At the end of 2009, Wegener and the COR agreed to create a special COR pensions committee for the transition, which would serve as a consultation partner for adjusting any Wegener-specific elements in the PGB-administered pension scheme. To this end, consultations were held in 2010 about gradually reducing the contribution-free allowance to the level of the PGB standard pension scheme. At the end of the year under review, Wegener and the COR reached an agreement on how to go about this in the coming years. As a result, the first step in this process was taken on 1 January 2011 and the amount of the contribution-free allowance was decreased in accordance with the agreed system. Employee consultation A company in flux also means a great deal of work for the employee representation bodies. In 2010, this was most definitely true for all of Wegener s works councils. The changes to the Management Board and the ensuing commotion in particular put considerable pressure on the Central Works Council (CWC). Intensive consultation between the new director and the CWC led to a positive recommendation from the CWC on the intended appointment of the new CEO. The Management Board appreciates the CWC s constructive approach to these issues. In addition, various topics were addressed, the most important ones being: > 2010 budget and investment programme > 2009 annual report and annual accounts > 2009 Social Annual Report > HR-cycle (new HR policy) > Code of conduct for use of social media > Project Ysbrecht (cooperation on distribution with De Telegraaf) > Lowering of the franchise of the pensions Three consultative meetings were also attended by one or more members of the Supervisory Board. These meetings were primarily devoted to the half-year report and the Social Annual report as well as the resignation of Mr J.V. Munsterman as of 4 October and appointment of Mr T. Velgaard as member of the Management Board. Intensive meetings about these changes in the Management Board took place between the Central Works Council and one or more members of the Supervisory Board. The Supervisory Board experienced these discussions as very constructive, which contributed to the process of regaining trust. The implementation of the Delta plan and the ensuing formation of Wegener Media necessitated adjusting the structure of the representative consultative platform to the new situation, for which preparations were made in the final months of In proper consultation between the director and the representative consultative platform, the latter body was restructured and became effective following the April 2010 elections. The new structure comprises a single Central Works Council, under which 11 works councils and 3 subcommittees operate. Wegener is part of Mecom, which also operates in Norway, Poland, Denmark and the Netherlands (Limburg). Mecom has a European Works Council (EWC), on which three representatives from the Netherlands have a seat. Two EWC members come from the Wegener CWC.

37 Report of the Management Board (Developments by activity) 37 Acknowledgements 2010 was a particularly turbulent year for Wegener. Tailoring the organisation to suit changing market demand took the first three quarters of the year, with many staff changing workplace, job or manager. The final quarter was mainly marked by the departure of Joop Munsterman and the arrival of Truls Velgaard. The changes to the Management Board stirred up a great deal of commotion within the organisation. Many groups voiced their opinions. The Management Board understands the emotions that flared up and is grateful for the way in which they subsided. Work goes on and so must Wegener, for which motivated staff are indispensable. The Management Board is confident that we will succeed and envisages a beautiful future for our splendid company. The Management Board appreciates everyone who has contributed to this and wants to do so in the future.

38 38 Report of the Management Board Corporate social responsibility Wegener recognises that the sustainability of an enterprise and all considerations related to this goal are influenced by the policies it selects. The company has designated social responsibility as a foundation stone of the mission and objectives of the group. In this context, Wegener took concrete steps in 2005 with the introduction of the Code of Conduct for Koninklijke Wegener NV and its group companies. This code sets forth how the company seeks to behave and what is required of its employees with regard to such matters as observing legislation and regulations, integrity, openness, proper conduct with colleagues, concern for working conditions and safety, concern for the environment, and involvement with society. Social involvement is inseparable from Wegener because of the substantial and crucial impact of the media on society. As publisher of regional daily newspapers, free door-to-door newspapers and online products, Wegener operates deeply within the fabric of the regional societies to which these products are provided. Journalistic reporting entails a significant social responsibility, thus demanding a high degree of care and integrity. This is to a large extent assured by the editorial statutes of each daily newspaper, which give particular emphasis to journalistic responsibility, autonomy and unbiased independent reporting. Through the journalistic products it supplies, Wegener makes a significant contribution to the knowledge level and development of awareness within Dutch democratic society. The importance of the individual client, the Dutch citizen, is central in developing and implementing the group s strategic and operational policies. The dynamic character of the media world demands that there be constant dialogue with both readers and advertisers. Reader panels allow consumers to react to the content of the group s newspapers, and customer satisfaction surveys are conducted regularly, while periodic use and appreciation studies illuminate the wants and needs of the group s clients. To an increasing extent, readers and site users are themselves given ample opportunity to contribute to the content of the newspapers or the wide range of online products. Social involvement is also expressed via the group s publications and multimedia products, through collaborative alliances, sponsorships and the provision of editorial coverage, as well as free advertising space. Wegener s dailies and free door-to-door newspapers give coverage to innumerable regional and local initiatives and activities in fields such as culture, sport, charitable projects, public information, education, and leisuretime activities. With this perspective, Wegener became one of the founding members of Fonds Slachtofferhulp, a charitable foundation devoted to victims of crime, roadway accidents and disasters. The foundation supports and seeks to improve the circumstances of victims and their companions or survivors. Wegener s success is determined by its people. The group therefore strives to create a positive working environment, one within which each employee can develop to an optimal extent, and which offers varied and safe work. There are ample training facilities. Wegener believes that a good working environment and transparency for its employees are crucial. For this reason, the company has a code of conduct, whistleblower provisions, and a complaints procedure. The Wegener organisation works with distinct and clearly formulated guidelines for operating processes and regulations, all of which are set forth in manuals. Internal (Mecom) audits assure compliance with these mandates. Wegener also complies with Mecom policies in this respect. Every Wegener employee is expected to be familiar with all of the legal and regulatory requirements that pertain to the group s operations, as well as requirements set forth by supervisory bodies. A matter of particular emphasis stems from the requirements of the Dutch Personal Data Protection Act (WBP). Since Wegener s publishers and internet activities make use of numerous databases containing personal details, compliance with the requirements of the WBP is monitored.

39 Report of the Management Board (Corporate social responsibility) 39 Wegener strives for good, open relationships with employee organisations and representative bodies. Each year the group prepares a Social Annual Report, which is sent to all employees and is also available on the corporate website, The group s involvement in careful attention to the environment has been embedded in daily operations for many years. This encompasses preventing pollution, reducing the volume of waste materials, and minimising the consumption of energy. Wegener first issued an environmental declaration in 1994, and then renewed and updated it in a new declaration set forth in January This policy was worked out yet further during As part of the Mecom group, there was also attention to improving the sustainability of the production process and the use of raw materials. Priorities of this policy are reducing CO2 emissions, reducing the volume of waste, energy usage and sustainable purchase of newsprint. In these respects, Wegener follows the Mecom policy. In 2010, steps were taken to reduce energy consumption by closing down offices and making more efficient use of the remaining offices. In line with this, the latest energy-saving technologies were used in the renovation and new construction of the offices in Best. All Wegener printing plants have obtained the Sustainable Procurement certificate, thereby guaranteeing that the raw materials Wegener purchases for the primary process meet the Sustainable Procurement criteria. Key examples are the K4 non-solvent detergents and the paper used. Wegener s aim is to ensure that at least 75% of the paper used for printing newspapers is either recycled paper or paper produced in accordance with sustainable forest management. In 2010, Wegener NieuwsDruk Twente obtained FSC/PEFS (Programme for the Endorsement of Forest Certification) certification, following Wegener NieuwsDruk Gelderland s example in All Wegener printing plants meet the ISO 14001:2004 standard.

40 40 Declaration of the Management Board According to 5:25 sub c of the Wft (Financial Compliance Law) the Management Board declares that, to the best of its knowledge: 1. the Annual accounts present a true and fair view of the assets, liabilities, financial position and profits or losses of the company and the companies jointly included in the consolidation; and, 2. the Annual report presents a true and fair view of the situation on the balance sheet date, the course of business in the financial year of the company and of the companies affiliated with it, the details of which are included in its annual accounts, and that the fundamental risks with which the company is confronted are described in the Annual report. This management statement has not been signed by Management Board member Mr W. Cornelisse because of his long-term absence due to sickness. Apeldoorn, The Netherlands, 14 March 2011 T. Velgaard Chairman, Management Board (CEO)

41 Financial statements (Consolidated balance sheet) Financial Statements 2010 Consolidated financial statements of Koninklijke Wegener NV 2010 Company financial statements of Koninklijke Wegener NV

42 42 Financial statements 2010 Consolidated financial statements of Koninklijke Wegener NV Consolidated balance sheet At 31 December (in thousands of euros) Assets notes Non-current assets Intangible assets 1 505, ,105 Property, plant and equipment 2 83,001 88,608 Investments in associates 3 5,134 4,561 Deferred tax assets 4 15,489 10,837 Other financial assets , , ,259 Current assets 6 Inventories 1,945 2,219 Amounts owed by group companies 1, Trade and other receivables 44,177 54,622 Cash and cash equivalents 2,129 3,500 49,385 61, , ,522

43 Financial statements (Consolidated balance sheet) 43 Equity and liabilities notes Total equity Equity attributable to equity holders of Koninklijke Wegener NV 7 278, , , ,704 Non-current liabilities Pensions 8 27,994 33,010 Provisions 9 59,190 33,179 Interest-bearing loans 10 75, ,780 Interest rate swaps , , ,224 Current liabilities Pensions 8 5,899 6,275 Provisions 9 22,256 24,444 Interest-bearing loans 10 14,887 7,737 Interest rate swaps ,447 Debts to group companies 1,973 2,816 Trade payables 19,674 25,253 Prepaid subscriptions 54,435 52,996 Other current liabilities 11 96,391 86, , , , ,522

44 44 Financial statements Consolidated income statement (in thousands of euros) notes Revenue , ,334 Other income Revenue and other income 531, ,244 Raw materials and stores 17 36,968 55,591 Work subcontracted and other external charges , ,756 Staff costs , ,868 Amortisation of intangible assets 20 7,372 5,499 Depreciation of property, plant and equipment 21 11,284 15,292 Impairment of publishing rights 1 14,694 - Other operating expense , ,006 Operating expense 559, ,012 Operating result (27,776) 18,232 Share of profit of associates 3 1, Finance income Finance expense 24 (11,365) (13,907) Financial income and expense (9,680) (12,454) Loss/ profit before tax (37,456) 5,778 Taxes (gain) 25 4,900 2,075 Loss / profit for the year (32,556) 7,853 Attributable to: - equity holders of Koninklijke Wegener NV (32,556) 7,853 (32,556) 7,853 Earnings per share (in euros) 26 - basic and diluted, for profit for the year attributable to holders of ordinary shares in Koninklijke Wegener NV (0.76) 0.14

45 Financial statements 45 Consolidated comprehensive income statement (in thousands of euros) Result for the year (32,556) 7,853 Value changes in effective hedging interest rate swaps 12 1,001 (1,013) Tax (255) (755) Comprehensive income (31,810) 7,098 Attributable to: - equity holders of Koninklijke Wegener NV (31,810) 7,098 (31,810) 7,098

46 46 Financial statements Consolidated statement of changes in equity Equity attributable to equity holders of Koninklijke Wegener NV 2010 Issued share capital Share premium Cash flow hedge reserve Retained earnings Profit for the year Total equity At 1 January , ,458 (2,089) 123,719 7, ,704 Comprehensive income 746 (32,556) (31,810) Appropriation of profit for previous year 7,853 (7,853) - Dividend paid on cumulative financing preference shares for 2009 (1,567) (1,567) At 31 December , ,458 (1,343) 130,005 (32,556) 278,327 This relates to: - ordinary shares 13, ,317 (1,343) 130,005 (34,123) 247,359 - cumulative financing preference shares 1,260 28,141 1,567 30,968 At 31 December , ,458 (1,343) 130,005 (32,556) 278,327 The proposed decision to pay out dividend for 2010 to the shareholders of cumulative financing preference shares has already been incorporated into the overview above. Equity attributable to equity holders of Koninklijke Wegener NV 2009 Issued share capital Share premium Cash flow hedge reserve Retained earnings Profit for the year Total Minority interest Total equity At 1 January , ,458 (1,334) 113,938 11, , ,178 Comprehensive income (755) 7,853 7,098 7,098 Appropriation of profit for previous year 11,348 (11,348) - - Dividend paid on cumulative financing preference shares for 2008 (1,567) (1,567) (1,567) In connection with divestment of group companies - (5) (5) At 31 December , ,458 (2,089) 123,719 7, , ,704 This relates to: - ordinary shares 13, ,317 (2,089) 123,719 6, ,736 - cumulative financing preference shares 1,260 28,141 1,567 30,968 At 31 December , ,458 (2,089) 123,719 7, ,704 The decision to pay out dividend for 2009 to the shareholders of cumulative financing preference shares has already been incorporated into the overview above.

47 Financial statements 47 Consolidated cash flow statement (in thousands of euros) notes Cash flows from operating activities Revenue and other income 531, ,244 Total expense 559, ,012 Operating result (27,776) 18,232 Adjustments for: - book results / value changes of non-current assets - (910) - amortisation of intangible assets 7,372 5,499 - depreciation of property, plant and equipment 11,284 15,292 - impairment of publishing rights 14, changes in working capital 2,555 4,622 - liability NMa fine regarding Zeeuws-Vlaanderen 19, taken to the income statement regarding provisions 55,457 38,092 Withdrawals from provisions (40,034) (39,671) Cash flows from operations 42,652 41,156 Dividend received from associates Finance income received Finance expense paid (8,034) (9,960) Tax paid (7) - Cash flows from operating activities 30 35,563 32,518 Cash flows used in investing activities Acquisition of group companies Sale of group companies - 3,973 Proceeds received from sale of AD NieuwsMedia BV and assets/liabilities of Wegener NieuwsDruk West - 14,543 Received redemption loan AD NieuwsMedia BV 15,374 - Capital contribution to associates (291) (392) Purchase of intangible assets (13,339) (9,819) Purchase of property, plant and equipment (7,155) (16,767) Sale of property, plant and equipment Cash flows used in investing activities 31 (5,323) (7,392) Cash flows used in financing activities Repayment of interest-bearing loans (30,044) (51,176) Dividends paid to holders of cumulative financing preference shares of Koninklijke Wegener NV (1,567) (1,567) Cash flows used in financing activities 32 (31,611) (52,743) Net cash flows (1,371) (27,617) At 1 January 3,500 31,117 At 31 December 6 2,129 3,500

48 48 Financial statements Notes to the consolidated financial statements General The 2010 consolidated financial statements of Koninklijke Wegener NV were approved by the Supervisory Board at its meeting of 14 March A press release was issued about the annual figures for the year 2010, before start of business on 16 March Koninklijke Wegener NV has its registered office in Apeldoorn, the Netherlands; the depository receipts for ordinary shares are listed on Euronext Amsterdam. The activities of Koninklijke Wegener NV and its group companies include publishing regional newspapers and free door-to-door newspapers, developing and exploiting Internet products, and providing graphic products and services. These activities are carried out in the Netherlands. The 2010 financial statements still need to be adopted by the shareholders. This adoption will be on the agenda of the General Meeting of Shareholders to be held on 18 May Since the end of October 2007 Mecom Group plc, based in London, has been majority shareholder in Wegener through its subsidiary Mecom Media Holland Holding BV. Mecom acquired 86.44% of the (depository receipts for) ordinary shares. Mecom also acquired all (depository receipts for) cumulative financing preference shares (in so far as not held by Wegener). Intra-group balances Koninklijke Wegener NV is part of the Mecom Group, which is headed by Mecom Group plc, London. Mecom Group plc is a public limited company with its registered office in the United Kingdom. The ordinary shares in Mecom are listed on the London Stock Exchange (UK: MEC). The financial statements of Koninklijke Wegener NV are incorporated into the consolidated financial statements of Mecom Group plc, London. Basis of consolidation The group companies in which Koninklijke Wegener NV has a direct or indirect interest and control are included in the consolidation. The assets and liabilities and the income and expenses are included in full. Minority interests in equity and profit are shown separately. The financial statements of the group companies are prepared for the same reporting year and based on the same accounting policies as those of Koninklijke Wegener NV. Joint ventures are consolidated proportionately using the same accounting policies as used by Koninklijke Wegener NV. A joint venture is deemed to exist if the participants in a collaboration agreement have joint control over the resulting activities. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions are eliminated in full. The results of acquired group companies are consolidated as from the acquisition date, being the date on which formal control was acquired of the party being taken over. Consolidation is continued until the date on which formal control ceases to exist. A list of consolidated group companies and associates is included at the end of the notes to these consolidated financial statements (page 97). Koninklijke Wegener NV has directly or indirectly issued statements of joint and several liabilities for most of its Dutch group companies in accordance with Section 403 of Part 9 of Book 2 of the Dutch Civil Code. The list includes the group companies for which such statements of liability have been issued. In 2010 there were no significant changes in the consolidation circle. The most important changes in the consolidation circle in 2009 include the deconsolidation of AD NieuwsMedia BV on 31 July 2009 and the consolidation of Wegener PLM BV on 15 July In addition, the consolidated figures are influenced by the sale of the printing plant in The Hague, which was closely related with the sale of AD NieuwsMedia BV. The most important change in associates is the sale of Deutsche Post Selekt Mail Nederland CV in February Since the results of Koninklijke Wegener NV are included in the consolidation, the company income statement is drawn up in condensed form (under application of Section 402 of Part 9 of Book 2 of the Dutch Civil Code).

49 Financial statements (Notes to the consolidated financial statements) 49 Accounting policies Statement of compliance The financial statements have been drawn up in accordance with the International Financial Reporting Standards (IFRS) as approved by the European Union. The financial statements have been prepared under the historical cost convention, with the exception of interest rate swaps, which are carried at fair value in the balance sheet. Financial year The financial year coincides with the calendar year. The consolidated financial statements have been drawn up in euros, and all amounts have been rounded off to the nearest thousand unless stated otherwise. Effect of new financial reporting standards The financial reporting standards are consistent with previous year. The following standards and interpretations, which have been effective since 1 January 2010, did not have a material effect on the financial statements of Wegener. > IFRS 2 - Share-based payment: Group cash-settled share-based payment transactions > IFRS 3 - Business combinations (Revised) > IAS 27 - Consolidated and separate financial statements > IAS 39 - Financial instruments: Recognition and measurement Eligible hedged items > IFRIC 9 - Remeasurement of embedded derivatives > IFRIC 12 Service concession arrangements > IFRIC 15 Agreements for the construction of real estate > IFRIC 16 Hedging of a net investment in a foreign company > IFRIC 17 - Distributions of non-cash assets to owners > IFRIC 18 - Transfers of assets from customers Wegener decided against an early implementation of the new standards, amendments to standards, and new interpretations for which the application was mandatory for financial years beginning on or after 1 July 2010 or subsequent years. The following standards and interpretations have been published but do not yet apply to the 2010 financial statements: > IFRS 9 - Financial Instruments: Classification and measurement. This standard is the first step in the process towards replacement of IAS 39. It is expected to come into effect as from 1 January 2013 but will not have any consequences for Wegener. > IAS 24 - Related party disclosures (revised). This standard will be effective as from 1 January > IAS 32 - Classification of rights issue. This standard, which entered into effect on 1 February 2010, does not apply to Wegener. > IFRIC 14 - Prepayments of a minimum funding requirement. This standard, which will be effective as from 1 January 2011, does not apply to Wegener. > IFRIC 19 - Extinguishing financial liabilities with equity instruments. This standard, which came into effect on 1 July 2010, does not apply to Wegener. Application of the above standards and interpretations is not expected to have any material impact on the financial statements for Significant accounting judgements and estimates When applying Wegener's accounting policies, the management has made judgements which have important consequences for the amounts recognised in the financial statements and the notes thereto. Furthermore, in some areas estimates have been made of future developments which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in any following financial year. When forming these judgements and making the estimates referred to, use was also made of the opinions and advice of (external) experts in the relevant areas.

50 50 Financial statements (Notes to the consolidated financial statements) These judgements and estimates are explained in more detail below. For more details about how the items referred to are shown in the financial statements, please see the notes to the financial statements. Judgements Goodwill (former) VNU Dagbladen group Wegener acquired the VNU Dagbladen group in The activities of the VNU Dagbladen group primarily related to the publishing of regional newspapers, free door-to-door newspapers, and related graphic production. These activities have since been extensively integrated with the same type of activities already run by Wegener. The integration process started immediately in 2000 in order to realise maximum synergies through economies of scale. The integration took place across all levels: merging of titles, graphic production and organisations, including the reorganisation of management and the centralisation of the back offices. As a result, the goodwill can no longer be attributed to the original cash-generating units, and the whole newspaper organisation of Wegener is now seen as one single cash-generating unit. PGB Pension Fund As from 1 January 2010, Wegener voluntarily joined the Graphic Sector Pension Fund (PGB), based on an agreement signed in December 2009 which also covers the transfer of the capital, the pension entitlements and pensions in payment of APW to the sector pension fund PGB. Owing to the transfer to the PGB, the PGB plan will apply, plus a number of Wegener-specific adjustments, as from 1 January This adapted pension plan is largely similar to the former APW pension plan. According to Wegener, it qualifies as a collective defined contribution plan. Sale of shares in AD NieuwsMedia BV and assets/liabilities of Wegener NieuwsDruk West (only relevant to 2009 figures) At the end of July 2009, the shares in AD NieuwsMedia BV were sold to de Persgroep Nederland. The 37% interest in AD NieuwsMedia BV has since that date been derecognised from Wegener s consolidated balance sheet. At the same time, Wegener s printing plant in The Hague (Wegener NieuwsDruk West) was transferred to de Persgroep Nederland. According to Wegener, these two transactions are interrelated to such an extent that they are recognised in the financial statements as a single transaction (and as a single gain) so as to provide a better insight into the balance sheet, the income statement and the cash flows in the comparative figures. Recognition of long-term collaboration with Dagblad De Pers In 2009 Wegener made arrangements for long-term cooperation with the Dagblad De Pers newspaper. The relevant contractual agreements run through March 2022, and provide for the right of Wegener to sell advertisements in Dagblad De Pers in return for an annual fee payable by Wegener during the term of the agreement. In addition, Wegener will be responsible for Dagblad De Pers being printed and distributed. Furthermore, various back-office activities will be performed for Dagblad De Pers. The ensuing advertising revenue will accrue in full to Wegener. In view of the nature of the specific arrangements involved in the collaboration, it has been recognised as an executory contract in the comparative figures. Processing of the NMa fine On 14 July 2010, the Netherlands Competition Authority (NMa) issued its decision on the investigation it had conducted of alleged violations, by Wegener, of the conditions imposed by the NMa when it gave its permission for Wegener to the acquisition of VNU Dagbladen by Wegener in The NMa decided to impose a fine of EUR 19.1 million on the company, and also to impose a fine to five former and present executive and/or supervisory board members totalling EUR 1.3 million. Pursuant to IFRS rules the fine was recognised in full as a debt on the balance sheet. Wegener wishes to emphasise that this does not mean that Wegener admits it has committed the alleged violation. On the contrary: Wegener has filed an appeal against the NMa's decision. The obligation to pay the fine is suspended for the duration of the objection and appeal proceedings. However, when

51 Financial statements (Notes to the consolidated financial statements) 51 and if a fine is finally determined, the amount is interest-bearing for the period of appeal. The fine imposed on Wegener is not deductible for corporate income tax purposes. Estimates Impairment of goodwill At least once a year Wegener determines whether goodwill has been impaired. This requires an estimate of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires Wegener to make an estimate of the expected future cash flows from the cash-generating unit and determine an appropriate discount rate in order to calculate the present value of those cash flows. Impairment of Dagblad De Pers publishing rights At least once a year, Wegener assesses whether the Dagblad De Pers publishing rights have been subject to impairment. This requires an estimate of the value in use of Dagblad De Pers. To estimate the value in use Wegener has to make an estimate of Dagblad De Pers expected future cash flows and at the same time establish an appropriate discount rate in order to calculate the present value of those cash flows. The 2010 impairment test resulted in a full impairment of the publishing rights. Provisions for reorganisations In previous years estimates of reorganisation costs were made of average salaries, ages and service years. This means that the actual restructuring costs can be higher or lower than anticipated in preceding years. Provision for onerous contracts The provision for onerous contracts relates, on the one hand, to the provision for vacated office space and, on the other, to the provision relating to the onerous contract with Dagblad De Pers. As regards the provision for vacancy, in recent years estimates have been made on the basis of the projected vacant floor area and the expected price per square metre. This means that the actual vacancy-related costs may turn out to be higher or lower than provided for. As regards the provision for the onerous contract with Dagblad De Pers, an estimate is made of the expected future cash flows. In addition, an appropriate discount rate is determined for calculating the present value of those cash flows. Foreign currency The consolidated financial statements are presented in euros, which is the group's functional and presentation currency. All Wegener companies operate in the Euro zone. Transactions in foreign currencies are translated into euros at the exchange rates applicable on the transaction date. The cash flows generated by the settlement of transactions are translated at the exchange rate applicable on the date of settlement. The exchange rate differences resulting from this are taken to the income statement. Monetary assets and liabilities (resulting from unsettled transactions) in foreign currency are translated at the exchange rates applicable on the balance sheet date. Exchange differences arising from this are also taken to the income statement. AD NieuwsMedia BV joint venture (only relevant to 2009 figures) AD NieuwsMedia BV was a joint venture of Wegener (37% share) and de Persgroep Nederland (63% share). The control of the company was shared on a 50/50 basis. All the assets and liabilities and the income and expenses of the joint venture were allocated proportionally, i.e., for 37%, in the consolidation. At the end of July 2009, the 37% share in AD NieuwsMedia BV was sold to de Persgroep Nederland. Since that date, the figures of AD NieuwsMedia BV have been derecognised from Wegener s balance sheet. At the same time, Wegener s printing plant in The Hague (Wegener NieuwsDruk West) was sold to de Persgroep Nederland.

52 52 Financial statements (Notes to the consolidated financial statements) Other joint ventures As from the date of acquisition, these interests are treated as joint ventures and, hence, consolidated proportionally. These joint ventures are included in the list of consolidated group companies and associates. The notes to the consolidated balance sheet include a summary of information relating to the balance sheet, income statement and cash flows of the total joint ventures (page 84). Cash flow statement The indirect method was used to prepare the cash flow statement. The cash resources in the cash flow statement consist of cash and cash equivalents. Interest paid and received, dividends received and income tax are included in the cash flows from operating activities. Dividends paid are included in the cash flows from financing activities. Criteria for non-current/current and long-term/short-term Assets and liabilities are carried as non-current or long-term items if their settlement is not expected to occur within 12 months of the end of the financial year. Assets and liabilities that are expected to be settled within 12 months of the end of the financial year will be classified as current or short-term items. Non-current assets Intangible assets Intangible assets consist of: - goodwill - publishing rights Dagblad De Pers and other publishing rights - software Goodwill represents the surplus value paid on the date of acquisition of group companies, joint ventures, and associates above the fair value of the acquired assets and liabilities and contingent liabilities, increased by the expenses involved in an acquisition. From 2010 acquisition costs are no longer counted towards the acquisition costs, but directly recognised in the consolidated profit and loss account. An annual assessment is made to see whether the carrying amount of the goodwill is in line with the value of the activities for which the goodwill has been paid, in light of the actual and expected result developments of those activities. If the value determined in this way is expected to be lower than the carrying amount, then the carrying amount is written down and charged to the income statement. Impairments relating to goodwill cannot be reversed in subsequent years. The goodwill paid between 1 January 1999 and 1 January 2004 was valued at acquisition cost and amortised straight-line over the economic life, or valued at net realisable value if lower. The expected economic life was calculated differently depending on the nature of the acquired associate or business activity. The goodwill paid for VNU Dagbladen was amortised over 30 years and for the other acquired companies over 3 to 10 years. The carrying amount of the goodwill determined in this way at 31 December 2003 was carried to the opening balance sheet under the IFRS accounting policies as from 1 January Goodwill paid before 1 January 1999 was taken to equity. The publishing rights concern the publishing rights Dagblad De Pers and other smaller publishing rights. As a result of the sale of AD NieuwsMedia BV in 2009 these publishing rights are no longer included in the consolidated balance sheet of Wegener. In 2009 Wegener reached agreement on a long-term collaboration with the daily Dagblad De Pers to extend its printed product footprint, especially in the Randstad area. The relevant contractual agreements will be effective through March In addition to the arrangements regarding long-term collaboration, Wegener acquired the

53 Financial statements (Notes to the consolidated financial statements) 53 publishing rights with respect to Dagblad De Pers through March Such publishing rights offer Wegener maximum leeway and the authority to determine the distribution pattern and the number of copies of Dagblad De Pers according to demand, taking account of regional and marketing-related circumstances. The publishing rights will be amortised on a straight-line basis annually through March 2022, starting from the effective date of the rights (i.e. 1 January 2010). Annual tests are performed to check whether the level of the publishing rights and the amortisation method are still appropriate. In 2010 this resulted in a full impairment of the publishing rights. The other publishing rights mainly relate to the acquisition of local free door-to-door newspapers, and will be amortised proportionally in 10 years. Annual tests are performed to check whether the level of the publishing rights and the amortisation method are still appropriate. Any impairment is charged to the income statement. Software is valued at cost and amortised straight-line over its economic life, or valued at the net realisable value if lower. The core applications for the newspaper activities (systems for advertisement management, print production, and news editing) are amortised in seven years. All other software is amortised in three to five years. Software and websites are purchased from external parties. These external costs are capitalised. Internal hours spent are not capitalised and are charged to the income statement. The remaining economic life is assessed and adjusted where necessary each year. Any result arising from the derecognition of the asset (to be calculated as the difference between the net proceeds upon disposal and the carrying amount of the asset) is taken to the income statement in the year of derecognition. Property, plant and equipment Property, plant and equipment is stated at cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the expected useful economic lives of the relevant assets. The following depreciation rates apply: Buildings 2 1/2% - 10% Plant and equipment: - rotary newspaper presses 6 2/3% - other plant and equipment 10% - 20% Other 10% /3% Land and buildings in the course of construction are carried at cost. The carrying amounts of property, plant, and equipment are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. Property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any result arising on derecognition of the asset (to be calculated as the difference between the net proceeds upon disposal and the carrying amount of the asset) is taken to the income statement in the year the asset is derecognised. The residual value of the property, plant, and equipment, the expected useful lives and the valuation methods are reviewed, and adjusted if necessary, at the end of each financial year. Only for qualifying investments are the finance costs of investments during construction included in the cost price. At Wegener this concerns investments in rotary newspaper presses and printing plants. These finance costs are allocated based on the specific source of finance (for example, finance lease for the relevant object) or on a capitalisation rate to be applied in line with the weighted average finance costs applicable to the loans of the company.

54 54 Financial statements (Notes to the consolidated financial statements) Investments in associates Associates are companies in which Wegener has a significant influence on the commercial and financial policy, without having a controlling interest in those companies. Associates are not group companies or joint ventures, and are not consolidated. The valuation is carried out in accordance with the equity method. According to this method, the investment is initially carried at cost and then adjusted to take into account the change of the interest of Wegener in the net assets of the associate after the acquisition. Wegener s interest in the net profit of the associate is recognised in the income statement. Deferred tax assets In principle, deferred tax assets are recognised for all temporary differences available for set-off, unused tax facilities or carry-forward tax losses, but only insofar as a settlement or utilisation can probably be realised. The carrying amount is assessed at the balance sheet date, and reduced if the settlement or utilisation cannot be wholly or partially realised. Non-recognised deferred tax assets are reviewed at the balance sheet date, and only recognised to the extent it is probable that a settlement or utilisation can be realised. Deferred tax assets are measured at the tax rates that are expected to apply to the period in which the asset is realised in accordance with the tax rates set by law and the applicable tax legislation. Other financial assets Other financial assets relates to loans to (former) associates and shares in other companies on whose commercial and financial policy Wegener does not exercise any significant influence. The shareholdings in other companies are not group companies, joint ventures, or investments in associates, and are not consolidated. The loans to (former) associates are carried at amortised cost using the effective interest method, less any provisions deemed necessary. The shares in other companies are valued at fair value, which is based on the financial statements of the relevant companies. The changes in fair value are allocated to the income statement. Impairment of financial assets If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective interest rate. The asset s carrying amount will be lowered by the amount of the loss, and the loss will be recognised in the income statement. Current assets Inventories The inventories of raw materials and stores are valued at cost (using the Fifo principle) or the realisable value if lower. Trade and other receivables Trade receivables are carried at the original invoice amount less a provision for doubtful debts. Other receivables are valued at amortised cost using the effective interest method. Cash and cash equivalents Cash and cash equivalents in the balance sheet consist of cash at banks and cash in hand. Equity In the financial statements, the balance sheet is presented before the proposed profit appropriation.

55 Financial statements (Notes to the consolidated financial statements) 55 Cumulative financing preference shares The cumulative financing preference shares are initially carried at the fair value of the consideration received less the directly attributable transaction costs. Pensions Wegener has pension commitments under several plans: 1. Wegener pension plan at PGB (Graphic Sector Pension Fund). As from 1 January 2010 the company pension fund was transferred, voluntarily, to the Graphic Sector Pension Fund. 2. Graphic Sector Pension Fund at PGB, mandatory sectoral pension plan 3. Moratorium shortfall pension plan at PGB 4. Supplementary pension commitments (past-service) 5. Early retirement and pre-pension plans 6. Health insurance contributions during retirement 7. Several individual pension plans 8. Pension plan for members and former members of the Management Board Plans 1, 2 and 8 qualify as collective contribution plans in the Wegener accounts. The contributions owed for the financial year are recognised in the income statement. The other plans qualify as conditional defined benefit plans. Wegener has created provisions in the balance sheet for all these pension plans. The provision for conditional defined benefit plans is determined on the date the commitment is made. The actuarial profits and losses associated with the (conditional) defined benefit plans mentioned above are added or charged, respectively, to the income statement. The plans mentioned above are discussed in further detail on page 71 and further. Deferred tax liabilities A provision for deferred tax liabilities is formed on the basis of the temporary differences at the balance sheet date between the taxable carrying amount of assets and liabilities, and their carrying amount as recognised in these financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax liabilities are measured at the tax rates that are expected to apply for the period in which the liability is settled, based on the current or future tax rates set by law or under applicable tax legislation. Deferred tax assets and liabilities are netted if a legally enforceable right exists to set off current tax assets against current tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority. In 2009, in connection with temporary differences the deferred tax liabilities were allocated to a deferred tax asset and recognised accordingly in both 2010 as well as 2009 figures. Provisions Provisions are formed if Wegener has a current (legal or constructive) obligation as a result of an event in the past. A provision will only be formed insofar as a reliable estimate can be made of the amount of the obligation, and if it is likely that such an obligation will also actually have to be paid. If it is expected that (part of) a provision might be reimbursed, the reimbursement is recognised as a separate asset as long as the receipt of the reimbursement is a reasonable certainty. This type of reimbursement might, for example, be possible under an insurance contract. The expense associated with a provision is presented in the income statement less any reimbursement. If the effect of the time value of money is significant, the provisions are discounted to their present value using a current pre-tax discount rate. The increase in a discounted provision due to the passage of time is recognised as a finance cost in the income statement.

56 56 Financial statements (Notes to the consolidated financial statements) Interest-bearing loans All loans are initially recognised at the fair value of the consideration received less the directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Finance leases Finance leases, which transfer to Wegener substantially all the risks and benefits associated with the ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are taken directly to the income statement. Leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term, if there is no reasonable certainty that Wegener will obtain ownership at the end of the lease term. Derecognition of financial assets and liabilities in the balance sheet A financial asset is derecognised if Wegener is no longer entitled to the cash flows from this asset. If no cash flows are received, but there is a continuing involvement in the asset, this is taken into account in the valuation. A financial liability is derecognised when the obligation under the liability is discharged (or is cancelled or expires). Where an existing financial liability is replaced by another from the same lender on substantially the same terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the income statement. Remuneration linked to shares Mecom option plan Mecom granted options on shares in Mecom Group plc to the former members of the Management Board and to a small and select group of other employees. In 2009 this took place under the Mecom Executive Share Option Plan (ESOP), and in 2010 under the Senior Executive Share Plan (SESP). Both plans are subject to a three-year conditionality period and cannot be exercised until the conditions described below have been met. As regards the ESOP, a specified profitability target for 2011 must be achieved. If the profitability level remains under a certain threshold, no options will be granted; if the target is met in full, 100% of the options will be granted. As regards the SESP, the primary criterion is the highest price of Mecom shares during a period of three years following the moment of the grant, on the understanding that the price must have remained at that highest level for 20 consecutive trading days. The second condition is the earnings per share in the year Both conditions include a threshold under which no options are granted at all, and a provision that all options are granted if the target is met in full. Partial allocation of share options applies in cases where the profitability level is anywhere in between the threshold and the target, and is effected through straight-line interpolation between threshold and target. These option plans qualify as remuneration linked to shares and are settled using equity instruments of Mecom Group plc. Wegener settles the plan annually with Mecom on a cash basis, which is why the costs are recognised in the income statement and no changes take place in equity. The costs are recognised in the income statement under staff costs. Derivative financial instruments Wegener uses interest rate swaps to hedge interest rate risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently

57 Financial statements (Notes to the consolidated financial statements) 57 remeasured at fair value. Interest rate swaps are carried as assets if the fair value is positive, and as liabilities if the fair value is negative. The fair value of interest rate swaps is determined by reference to market values for similar instruments. The changes in fair value of effective hedging interest rate swaps are taken to equity (cash flow hedge reserve). Any gains or losses arising from changes in the fair value of interest rate swaps that do not or no longer hedge the risks effectively are recognised directly in the income statement (finance income and finance expense respectively). Income and expenses recognition Revenue Revenue relates to the net turnover of goods supplied or services provided to third parties, net of any discounts and VAT. Revenue is recognised to the extent that it is probable that the economic benefits will flow to Wegener and the revenue can be measured reliably. Revenue is recognised for each revenue category as follows: - advertisements in daily newspapers, free door-to-door newspapers, special editions and news magazines: on the date they are placed; - internet advertisements: relating to the period in which the advertisement is published; - subscriptions to daily newspapers, weeklies and internet sites: for the period the subscriptions relate to; - graphic products: on the date of delivery. Other income relates to profit realised on the sale of group companies, joint ventures or associates, the sale of plant, property, and equipment and the sale of business units. Barter transactions A barter (exchange transaction providing advertising services) is an agreement between parties, of which one party sell goods or services without receiving a financial settlement. There are dissimilar and similar barter transactions. In case of a dissimilar barter transaction the exchange will be recognised as a revenue-generating transaction. If advertising space is bartered or exchanged for advertising space that is similar in terms of its nature, fair value and target group, such an exchange will not be regarded as a revenue-generating transaction. Yields resulting from transfers in advertising services are measured on the basis of comparable advertising services provided to other parties than those with whom the transfer was performed or by exchanging for assets for which reliable measurement of the real value is possible. Government grants Government grants are recognised at fair value if there is a reasonable certainty that the grants will be received, and if the criteria and other conditional terms for the awarding of the grants have been satisfied. Subsidies relating to costs are systematically recognised as income in the same period as that in which the relevant costs are recognised. In the event of grants relating to property, the fair value of the grants will be deducted from the carrying amount of the property, and annually an item of income will be recognised in the income statement pro rata the useful life of the relevant property. Financial income and expense The profits of associates relate to the proportional part of the profit for the year using the equity method. Finance income and expense are recognised based on the effective interest income and expense respectively, including attributable transaction costs. Dividends on the shares in other companies included under other financial assets are recognised when Wegener's right to receive the payment is established.

58 58 Financial statements (Notes to the consolidated financial statements) Taxes The tax expense is calculated based on the profit before tax, taking into account non-deductible impairment of goodwill, the participation exemption, and other tax facilities. Furthermore, changes to deferred tax assets and liabilities resulting from changes in the tax rates applicable to such are also taken into account. Segment reporting The application of IFRS 8 does not result in information on separate segments, given that the various activities within Wegener all have similar risk profiles and are interrelated to such an extent that operational and strategic decisions on resources to be allocated are made exclusively at the aggregate level. Wegener does not have a single customer who makes a single contribution to revenue of more than 10%.

59 Financial statements 59 Disposal and acquisition of companies Disposal of companies Wegener did not sell any companies in The comparative figures for 2009 include the sale of AD NieuwsMedia BV and of the assets and liabilities of Wegener NieuwsDruk West to de Persgroep Nederland. In June 2010 a revised agreement was agreed with de Persgroep Nederland concerning the sale of AD NieuwsMedia. The result of this revised agreement was that AD NieuwsMedia accelerated the repayment of the interest-free loan (EUR 15.4 million), that the printing contract of NRC Handelsblad was extended for Wegener NieuwsDruk and that the obligation for de Persgroep Nederland for the lease contract on a building was released. As a consequence of the release of the lease obligation for de Persgroep Nederland, Wegener increased its onerous lease provision for vacated office space for an amount of EUR 1.7 million. On 31 July 2009 Wegener sold its 37% share in AD NieuwsMedia BV and the assets and liabilities of Wegener NieuwsDruk West to de Persgroep Nederland. These transactions are interrelated to such an extent that they were both recognised in the financial statements as a single transaction. The gain realised on the sale amounted to EUR 0.9 million, based on the carrying amount of the net identifiable assets and liabilities and the proceeds and costs related to the sale. Effect of disposal of companies on 2009 figures: 2009 Intangible assets 31,107 Property, plant and equipment 28,478 Inventories 626 Receivables 4,398 Cash and cash equivalents 694 Pensions (4,329) Provisions (5,741) Deferred tax liabilities (7,456) Finance lease liabilities (9,874) Other current liabilities (13,908) Net assets and liabilities 23,995 Plus: the new liabilities recognised in respect of onerous lease contracts and guarantees on subcontracted printing 4,858 Plus: transaction related costs 291 Less: receivable on loan granted (fair value) 1 ) (14,526) Disposed assets and liabilities, adjusted for provisions, transaction costs and loan to be repaid 14,618 Sale proceeds 15,528 Profit on disposal of AD NieuwsMedia BV and assets/liabilities of Wegener Nieuwsdruk West 910 Consisting of: Profit on disposal of shares in AD NieuwsMedia BV 13,343 Loss on disposal of assets and liabilities Wegener NieuwsDruk West (12,433) Sale proceeds 15,528 Less: cash and cash equivalents sold 694 Less: transaction costs paid 291 Net cash flow according to cash flow statement 14,543 1 ) See notes loan page 66 and 67

60 60 Financial statements (Disposal and acquisition of companies Acquisition of companies Wegener did not acquire any companies in The comparative figures for 2009 include the acquisition of PCM Lokale Media BV. On 15 July 2009, Wegener acquired 100% of the shares in PCM Lokale Media BV (now Wegener PLM BV). The fair value of the assets was EUR 4.0 million and the fair value of the liabilities was EUR 2.5 million. The difference between the fair value of assets and liabilities and the purchase price was EUR 0.0 million (net of costs). On 1 January 2010 Wegener PLM BV was legally merged with Wegener Media BV.

61 Financial statements 61 Notes to the consolidated balance sheet (in thousands of euros) 1 Intangible assets 2010 Goodwill Publishing rights Software Total 2010 Cost 568,069 17,521 49, ,289 Accumulated amortisation (75,862) (36,322) (112,184) Carrying amount at 1 January ,207 17,521 13, ,105 Change in carrying amount: At 1 January 492,207 17,521 13, ,105 Investments 975 3,214 4,189 Amortisation (2,444) (4,928) (7,372) Impairment (14,694) (14,694) Disposals (67) (67) At 31 December 492,207 1,358 11, ,161 Cost 568,069 18,496 51, ,800 Accumulated amortisation (75,862) (17,138) (39,639) (132,639) Carrying amount at 31 December ,207 1,358 11, , Goodwill Publishing rights Software Total 2009 Cost 579,828 20,028 48, ,708 Accumulated amortisation (76,229) - (31,834) (108,063) Carrying amount at 1 January ,599 20,028 17, ,645 Change in carrying amount: At 1 January 503,599 20,028 17, ,645 Reclassification (1,203) 1,203 - Investments 16,318 2,651 18,969 Acquisition of group companies Deconsolidation of AD NieuwsMedia (10,189) (20,028) (890) (31,107) Amortisation (5,499) (5,499) At 31 December 492,207 17,521 13, ,105 Cost 568,069 17,521 49, ,289 Accumulated amortisation (75,862) - (36,322) (112,184) Carrying amount at 31 December ,207 17,521 13, ,105

62 62 Financial statements (Notes to the consolidated balance sheet) Of the goodwill, EUR million (year-end 2009: EUR million) relates to the acquisition of the former VNU Dagbladengroep in As explained before, the activities of the former VNU Dagbladen group are integrated within the total Wegener newspaper activities in such a way as to create a single cash-generating unit. After the sale of AD NieuwsMedia BV only this goodwill remains. The goodwill impairment test is based on the net realisable value of the goodwill of newspaper activities which is determined with reference to the value in use calculated on the basis of cash flow projections for a five-year period. Up to 2007, the cash flow was forecast over a ten-year period. Due to uncertainty in the market, the normal cycle on which the ten-year period is based was no longer reliable. The period was therefore reduced to five years. These cash flow forecasts are based on the budgets for 2011 and 2010 respectively and recent long-term forecasts. After five years account has been taken of a perpetual cash flow based on the cash flow of the fifth year. In view of the current economic developments, the future cash flows and the perpetual cash flow were calculated with reference to a scenario that provides for a steady downward trend, in addition to the assumptions in long-term forecasts. These cash flows were discounted using a pre-tax discount rate of 10.0% (2009: 9.1%). As the discount rate cannot be derived from current market transactions for comparable assets, it was decided to determine the weighted average cost of capital of Wegener. To determine the sensitivity of a possible impairment of the goodwill, an analysis was made from the assumptions underlying the assessment of the future cash flows and the discount rate. The key assumptions are the development of the operating result and the weighted average cost of capital. However, limited changes in the assumptions for the development of the operating result will not cause the net realisable value to fall below the carrying amount. Regarding the weighted average cost of capital a strong increase of this rate will not lead to a lower net realisable value than the carrying amount. The reclassification from goodwill to publishing rights in 2009 concerns the surplus value of purchased assets paid upon the acquisition of, in particular, local free door-to-door newspapers. In 2009 Wegener capitalised the publishing rights (concerning circulation and distribution) of Dagblad De Pers newspaper (which is owned by Mountain Media BV) for an amount of EUR 16 million. The publishing rights are amortised on a straight-line basis from the effective date (1 January 2010) and are amortised to zero; amortisation stops on the date the contract ends (March 2022). In the course of 2010 it was known that the actual advertising revenues for Dagblad De Pers have fallen considerably behind the previous expectations of management, with the result that Wegener expects to incur a loss over the life of the contract (see page 77). As a consequence, Wegener has recorded a provision for onerous contracts of EUR 48 million which relates to the present value of future cash losses over the remaining years of the contract. Besides the common amortisation of EUR 1.3 million an impairment of EUR 14.7 has been made regarding the publishing rights of Dagblad De Pers (cumulative impairment at year end 2010: EUR 14.7 million; 2009: EUR nil). The net realisable value of the contract of Dagblad De Pers is determined with reference to the value in use calculated on the basis of cash flow projections for the remaining years of the arrangement. The cash flow forecast is based on the budget for 2011 and recent long-term forecasts. The future pre-cash flows were calculated with reference to a scenario that provides for a modest increase of the revenue. These cash flows were discounted using a pre-tax discount rate of 6.0%, which is equal to the discount rate used on calculating the provisions at net present value with premium loading. Other investments in publishing rights made in 2010 as well as in 2009 relate to acquisitions and collaborative ventures in connection with the exploitation of local door-to-door newspapers.

63 Financial statements (Notes to the consolidated balance sheet) 63 2 Property, plant and equipment 2010 Land and buildings Plant and equipment Other fixed assets Fixed assets under construction Total 2010 Cost 46, ,260 40,898 1, ,193 Accumulated depreciation (23,274) (78,296) (34,015) (135,585) Carrying amount at 1 January ,165 56,964 6,883 1,596 88,608 Change in carrying amount: At 1 January 23,165 56,964 6,883 1,596 88,608 Additions 3, ,687 5,698 Disposals (21) (21) Depreciation (2,321) (6,460) (2,503) (11,284) Reclassification between categories 7 (253) Realised projects under construction 1, (2,725) - At 31 December 25,864 50,335 6, ,001 Cost 51, ,092 41, ,324 Accumulated depreciation (25,742) (84,757) (34,824) (145,323) Carrying amount at 31 December ,864 50,335 6, , Land and buildings Plant and equipment Other fixed assets Fixed assets under construction Total 2009 Cost 57, ,617 47,831 14, ,934 Accumulated depreciation (27,730) (143,622) (38,091) - (209,443) Carrying amount at 1 January ,055 64,995 9,740 14, ,491 Change in carrying amount: At 1 January 30,055 64,995 9,740 14, ,491 Acquired group companies Additions ,481 13,042 Deconsolidation of AD NieuwsMedia BV and Wegener NieuwsDruk West (15,814) (11,567) (1,054) (43) (28,478) Disposals (103) (105) (208) Depreciation (2,821) (9,724) (2,747) (15,292) Realised projects under construction 11,742 13, (25,543) - At 31 December 23,165 56,964 6,883 1,596 88,608 Cost 46, ,260 40,898 1, ,193 Accumulated depreciation (23,274) (78,296) (34,015) (135,585) Carrying amount at 31 December ,165 56,964 6,883 1,596 88,608

64 64 Financial statements (Notes to the consolidated balance sheet) In 2007, preparations were launched with regard to renewal of the newspaper presses in the printing plant at Best (the Netherlands). During 2009 all three presses were in operation, the first two already in In 2010 further work was carried out to improve the presses and renovate the associated buildings. The total investment in the new presses in Best and the associated accommodation amounts to EUR 3.2 million in 2010, the capitalised construction interest costs were nil (2009: EUR 11.9 million, including capitalised construction period interest costs of EUR 0.2 million). At the end of 2010, EUR 4.0 million of the investment was recognised under investment creditors (2009: EUR 5.5 million). Property, plant and equipment include assets financed with a finance lease. The carrying amount of the relevant assets at the balance sheet date was: Plant and equipment 4,742 5,733 4,742 5,733 Property, plant and equipment largely relates to printing plants, rotary newspaper presses, and ICT equipment. Office buildings are often leased. In light of the specific character of property, plant and equipment, it is estimated that the fair value does not differ significantly from the carrying amount. 3 Investments in associates At 1 January 4,561 4,465 Plus: share in net profits 1, capital contributions ,048 5,555 Less: dividend received At 31 December 5,134 4,561 During 2010 as well as 2009 no associates were acquired or divested.

65 Financial statements (Notes to the consolidated balance sheet) 65 The following summarised financial information can be given on the associates recognised in the balance sheet (total amounts for all combined associates, pro rata to the proprietary rights held): At 31 December Current assets 10,065 9,244 Non-current assets 822 1,058 Total assets 10,887 10,302 Current liabilities 5,753 5,738 Non-current liabilities - 3 Total liabilities 5,753 5,741 Revenue 7,646 7,081 Operating expenses (5,919) (6,106) Financial income and expenses Result before tax 1,744 1,047 Tax (548) (349) Net profit 1, Deferred tax assets At 1 January 10, Transfer to current tax receivables 7 - Acquired group company Deconsolidation of AD NieuwsMedia BV - 7,456 Taken to the income statement 4,900 2,075 Withdrawn / taken to equity (255) ,489 10,837

66 66 Financial statements (Notes to the consolidated balance sheet) The deferred tax asset relates to: 2010 Intangible assets Property plant and equipment Pensions Provisions Other assets and liabilities Subtotal Capitalised carry forward losses Total At 1 January (144) 2, (1,937) 1,368 9,469 10,837 Reclass to current liabilities Taken to the income statement (27) 438 2,177 7, ,076 (5,176) 4,900 Withdrawn to equity (255) (255) (255) At 31 December ,643 2,011 (1,847) 11,189 4,300 15, Intangible assets Property plant and equipment Pensions Provisions Other assets and liabilities Subtotal Capitalised carry forward losses Total At 1 January 2009 (7,456) (2,774) 3, (3,074) (8,867) 9, Deconsolidation of AD NieuwsMedia BV and Wegener NieuwsDruk West and acquired group companies 7, ,717 7,717 Taken to the income statement (29) 2,630 (1,422) ,262 (187) 2,075 Taken to equity At 31 December (144) 2, (1,937) 1,368 9,469 10,837 5 Other financial assets Loans to associates At 1 January Plus: granted Less: received At 31 December In 2010, Punt Uit Media BV and Peel en Maas repaid part of the loan. In 2009 two loans were granted and Punt Uit Media BV repaid a part of its loan. Loan to AD NieuwsMedia BV At 1 January 10,863 - Plus: granted - 10,563 interest on discounted loan Less: received repayment 11,193 - At 31 December - 10,863

67 Financial statements (Notes to the consolidated balance sheet) 67 On 29 June 2010 there was the early repayment amounting to EUR 15.4 million, by Persgroep Nederland, of the non-interest-bearing loan to AD NieuwsMedia BV. Upon the sale of the shares at the end of July 2009, the shareholders loan to AD NieuwsMedia BV was converted into a non-interest-bearing loan. That loan was discounted to its present value on the basis of the market interest rate (end of July 2009: 5.9%) and was to be increased by annual interest. At year-end 2009 this loan had a fair value of EUR 14.5 million. The nominal value of the loan was EUR 16.7 million. Part of it was recognised as a short-term receivable. De Persgroep NV (Belgium) offered security for its repayment. Shares in other companies At 1 January Less: due to liquidation 9 - At 31 December The liquidation in 2010 concerns ING Lease Starprint & Polaris Marketing BV. No changes occurred in Receivables from personnel under pension plans At 1 January - 2,775 Plus: interest on discounted receivable ,805 Less: income deconsolidation of AD NieuwsMedia BV - 1,086 reclassification receivables personnel - 1,570 At 31 December - - As a result of the sale of AD NieuwsMedia BV, the receivable with respect to the PGB-PCM pension plan was derecognised. The reclassification relates to the receivable from personnel regarding supplementary pension commitments. The receivable is netted against the pension provision. 6 Current assets Inventories Rotary newsprint 1,247 1,393 Other ,945 2,219 Other inventories mostly relate to graphic materials such as ink and plates.

68 68 Financial statements (Notes to the consolidated balance sheet) Trade and other receivables Trade receivables 39,809 42,177 Prepaid pension premiums Receivables from associates - 35 Other receivables, prepayments and accrued income 3,698 11,892 44,177 54,622 Other receivables, prepayments and accrued income includes year-end 2009 the current portion of the loan to AD NieuwsMedia BV in the amount of EUR 4.1 million. The age structure of trade receivables as at the balance sheet date is as follows: receivables provision receivables provision Not due 35,000 (900) 30,697 (729) Due 0-90 days 8,448 (795) 15,823 (867) Due days 271 (72) 304 (93) Due days 536 (220) 303 (108) Due more than 180 days 1,770 (1,463) 1,117 (987) 46,025 (3,450) 48,244 (2,784) Bad debt provision (3,450) (2,784) Credit note provision (2,766) (3,283) Total trade receivables 39,809 42,177 The trade receivables item includes a write-down for an amount of EUR 3.5 million (2009: EUR 2.8 million). The provision for credit notes relates to complaints, quantity bonuses to be settled and contract positions to be set off. Movements in the bad debt provision are as follows: At 1 January 2,784 2,696 Plus: taken to income statement 1,250 1,229 acquisition of group company ,034 4,058 Less: deconsolidation of AD NieuwsMedia BV withdrawal 584 1,099 At 31 December 3,450 2,784 The provision has been determined almost entirely on a collective basis. An assessment based on individual items was also carried out. Due to the persistent economic crisis and the resulting rise in bad debt risk, a provision has also been created for the items that are not overdue.

69 Financial statements (Notes to the consolidated balance sheet) 69 Cash and cash equivalents Cash at bank 2,096 3,465 Cash in hand ,129 3,500 Cash and cash equivalents are freely available. 7 Equity At year-end 2010, the authorised share capital consisted of: > 65,000,000 ordinary shares with a nominal value of EUR 0.30 each > 15,000,000 cumulative financing preference shares with a nominal value of EUR 0.30 each Cumulative financing preference shares Relating to cumulative financing preference shares, the following is of importance. Voting rights on cumulative financing preference shares depend on the fair value of the capital contribution relating to the value of the ordinary shares in the capital of Koninklijke Wegener NV, whereby no more than one vote per cumulative financing preference share can be cast. The value of the ordinary shares is calculated annually at 31 December as the arithmetic average of the share price for the previous twenty stock exchange trading days. The value calculated accordingly amounted to EUR 5.69 per ordinary share at year-end 2010 (2009: EUR 3.89). Based on a capital contribution of EUR 7.00 per cumulative financing preference share, the voting rights attached to these latter shares are equal to 100% of ordinary shares. Consequently, the voting rights satisfy the relevant provision of the Dutch Corporate Governance Code. The Management Board (with the approval of the Supervisory Board) can decide to reserve the profit before a preference dividend is paid. The payment of dividends on ordinary shares will only take place after the dividend on the cumulative financing preference shares has been paid. If in any particular year the profit is not sufficient to pay the dividend on the cumulative financing preference shares, or to add such to the dividend reserves relating to the cumulative financing preference shares, the deficit can be made up in the following financial years (accumulation provision). A payment is owed on a dividend reserve in subsequent financial years equal to the dividend percentage on the cumulative financing preference shares. Despite the losses incurred in 2010, the Management Board proposes, in accordance with Article 45 of the Article of Association of Koninklijke Wegener NV, dividend on cumulative financing preference shares. From 1 January 2006 to 31 December 2010, a coupon rate of 5.33% of the issue price of EUR 7.00 applies. The coupon rate for the period from 1 January 2011 to 31 December 2015 inclusive has been set at 5.53%. At year-end 2010, all (depository receipts for) cumulative financing preference shares not held by Wegener were held (indirectly) by Mecom Group plc. On initial issue in 2001, 8,089,718 cumulative financing preference shares were issued at an issue price of EUR 7.00 and a nominal value of EUR 0.30 per share. On 2 January 2006, 3,889,545 depository receipts for cumulative financing preference shares were purchased, but these have not been cancelled since then. The relevant depository receipts are therefore held by Koninklijke Wegener NV. In 2009 and 2010, no changes occurred in the number of cumulative financing preference shares. Hence, at 31 December 2010 there were 4,200,173 shares. At year-end 2010, depository receipts for shares had been issued for all cumulative preference shares. In 2010 EUR 1.6 million in dividend was distributed on cumulative financing preference shares from the 2009 profit appropriation (2009: EUR 1.6 million for 2008).

70 70 Financial statements (Notes to the consolidated balance sheet) Ordinary shares Movements during the financial year were as follows: Number of shares Issued capital Share premium At 1 January ,008,842 13, ,317 Changes during the financial year At 31 December ,008,842 13, ,317 The nominal value of the ordinary shares at year-end 2010 was EUR 13,502,653 (year-end 2009: EUR 13,502,653). At year-end 2010, depository receipts for shares had been issued for an amount of EUR 1,838,240 (year-end 2009: EUR 1,838,240). In 2010 and 2009 no dividend on ordinary shares was distributed. Reserves The equity attributable to equity holders of Koninklijke Wegener NV consists of the issued share capital, reserves, and the result for the current year. The share premium was created on the issue of ordinary and cumulative financing preference shares being the difference between the issue price and the nominal value. The transaction costs for the issue of shares were charged to the share premium account. The cash flow hedge reserve consists of the changes in fair value of effective hedging interest swaps. Reference is made to the accounting policies, under Derivative financial instruments. Retained earnings relate to the balance of profits achieved in the past that was not distributed to shareholders and goodwill being written off to the extent it was paid before 1 January With reference to the latter, please see the accounting policies, under Intangible assets. The results for the year are at the free disposal of the shareholders of Koninklijke Wegener NV. For the policy relating to dividends on cumulative financing preference shares, please see the above notes on the cumulative financing preference shares. Reference is also made to the notes under the section Dividends paid and proposed.

71 Financial statements (Notes to the consolidated balance sheet) 71 8 Pensions Early retirement and (pre-)pension plans 11,489 13,557 Moratorium shortfall funding commitment 22,109 25,411 Individual plans ,893 39,285 At 1 January 39,285 24,410 Plus: taken to the income statement 3,358 26,372 acquired group companies change in discount rate *) interest 1, ,070 52,769 Less: withdrawals 7,714 5,870 deconsolidation of AD NieuwsMedia and Wegener NieuwsDruk West - 4,329 early retirement commitments released to the income statement *) 2,320 1,515 change in discount rate 143 reclassification from receivables from personnel and other receivables - 1,770 At 31 December 33,893 39,285 *) This related to the actuarial gains and losses resulting from the reduction of the obligations, including premium adjustments. Non-current 27,994 33,010 Current 5,899 6,275 33,893 39,285 Of the non-current portion, EUR 11.9 million relates to the period after five years (year-end 2009: EUR 15.7 million). Wegener has pension commitments under several plans: 1. Wegener pension plan at PGB (Graphic Sector Pension Fund). As from 1 January 2010 the company pension fund was transferred, voluntarily, to the Graphic Sector Pension Fund. 2. Graphic Sector Pension Fund at PGB, mandatory sectoral pension plan 3. Moratorium shortfall pension plan at PGB 4. Supplementary pension commitments (past-service) 5. Early retirement and pre-pension plans 6. Health insurance contributions during retirement 7. Several individual pension plans 8. Pension plan for members and former members of the Management Board

72 72 Financial statements (Notes to the consolidated balance sheet) This means that as from 1 January 2010 Wegener has accommodated the following plans with the PGB: > the Wegener pension plan (voluntary participation after transition from APW) > the Graphic Sector Pension Fund (compulsory participation Grafimedia graphics industry) > the pension plan to fund the moratorium shortfall > the supplementary pension commitments 1. Wegener pension plan at PGB Wegener joined the PGB on a voluntary basis on 1 January As a result of the transition to the PGB, the PGB plan (see below) has applied since 1 January 2010, subject to a number of Wegener-specific amendments. The amended pension plan is largely identical to the former APW pension plan. Since the transition, all of Wegener s major pension plans have been accommodated with the PGB. In the opinion of Wegener, the plan qualifies as a defined contribution plan. Up to and including 2009, the Wegener pension plan was administered by the company pension fund Algemeen Pensioenfonds Wegener (APW). The financing agreements, which were introduced on 1 January 2005, relating to this plan between the company pension fund, APW, and the employer, Wegener, were valid for a period of five years. The new pension plan was a collective defined contribution plan. During the term of the agreement, the employer and the employee paid the pension fund a total fixed contribution of 25.7% of the pension entitlement per year. The fixed pension contribution of 25.7% was agreed in light of the collective labour agreement on pensions applicable at the time, which included a maximum pension contribution of 24%, to be supplemented with 1.7% for a dependant s pension. The Wegener General Pension Fund (APW) used the funds (such as contribution revenue, investment earnings and capital) to administer the pension plan on the basis of group solidarity. Pension entitlements were accrued on the basis of the conditional average salary system, with indexation of the accrued entitlements and indexation of pensions in payment. These pension entitlements were only accrued and indexed if the pension fund had sufficient funds available, and under certain circumstances the entitlements already accrued could even be cut back. With respect to the APW, Wegener made an estimate of the costs of the pension accrual of active participants, taking into account a mark-up for future collection and administrative expenses, risk of employment disability contribution exemption, solvency mark-ups, long-life risk, and future indexation of the pension accrual. It was established that the paid pension contributions did not cover the financing of (increases in) conditional entitlements or benefits which are attributable to the period of employment already served, and therefore entailed adjustments over that past period. 2. Graphic Sector Pension Fund at PGB The PGB plan applies to (the majority of) the staff of Wegener NieuwsDruk (compulsory participation). The pension plan is an average salary plan. The PGB does not provide further details for the purpose of preparing the IFRS financial statements of Wegener. Given that the PGB is unable to allocate a proportional part of investments and liabilities to the participating companies, the plan qualifies as a collective defined contribution plan. Also the companies participating in it are only required to pay a premium fixed in advance, and there is no obligation to top-up any deficits, nor is there any entitlement to any accrued surpluses. There is no financing agreement between Wegener and the PGB. Wegener has not received any figures from the PGB on the basis of which a reliable estimate could be made of Wegener's share in the assets and liabilities of the PGB. As a result of the above, the paid pension contributions have been taken to the income statement. According to Wegener, if information had been received from PGB, this would not have had any material impact on the income statement.

73 Financial statements (Notes to the consolidated balance sheet) Moratorium shortfall pension plan at PGB On 1 January 2010 all assets and liabilities of Wegener General Pension Fund (APW) were transferred to the Graphic Sector Pension Fund (PGB), which, as from that date, took over from APW the responsibility for administering the provisionally indexed average salary plan. The transfer was agreed at the moment APW, relative to the PGB, had a historically high funding ratio, enabling the transfer to be finalised on conditions that were acceptable to both parties. APW administered a final salary plan until the first years of this millennium. Owing to substantial past-service commitments in connection with rising wages, combined with a decline in the value of investments due to falling share prices, APW s financial position was no longer sufficient at the time. In response, after a period of investigation and consultation the parties involved (the APW board and the employer and employees) decided to terminate the final pay plan and introduce the contingent indexed average salary system that still applies today. During that period of investigation and consultation (which lasted from 1 July 2002 until 31 December 2004) a moratorium applied during which no past-service commitments were allocated. This is referred to within Wegener as the moratorium shortfall. Neither APW nor Wegener were under an obligation to compensate for the rights that had not been granted after all, which is why these rights were not included in the balance sheet. Nevertheless, the APW board had expressed its ambition to grant the past-service after all, funds permitting, to groups of employees that had retired in the year concerned. At the end of 2009, as part of the transfer from APW to the PGB the parties committed to compensating all (former) Wegener employees for the moratorium shortfall under the PGB. The moratorium shortfall will be funded from an annual 4.2% contribution (of which an average of 75% is for the employer s account) paid to the PGB until the shortfall has been eliminated. Due to this contribution towards the moratorium shortfall, the total PGB contribution for 2010 will amount to 25.7% (2009: 25.7%). It is expected that the moratorium shortfall can be eliminated in full in around ten years. This commitment (employer s contribution) was included in the balance sheet as a pension provision at year end 2009 based on actuarial principles. The relevant plan qualifies as a defined conditional pension plan. In November 2010 the first past-service purchase was effected from the earmarked part (4.2%) of the contributions up to and including 1 July The retirees concerned have received a corresponding subsequent pension payment retroactive to 1 July The next purchase will be effected on 1 July Supplementary pension commitments A select group of employees has been granted entitlements to a conditional past-service plan in the form of an intended old age and dependant s pension. This plan only applies to the group of employees born in or after 1950 who were employed by Wegener at year-end 2005 (and are still employed by Wegener on their retirement date) and who were subject to the Grafimedia collective labour agreement at the time. The pension base is determined with reference to the number of past years of service as at 31 December 2005 and the fixed pensionable salary that applied as at 31 December This plan, which took effect in 2006, was administered by PGB on the strength of an additional agreement. Both the employer and the employees contribute to the required funds. The employees contributions are transferred to a fund specifically created for this plan. For the employer s contribution to the required capital a provision has been formed in Wegener s consolidated balance sheet. The pension is purchased and funded on 31 December 2020 or on the day preceding the retirement date of the employee concerned if that date is earlier than 1 January The plan qualifies as a conditional defined benefit plan.

74 74 Financial statements (Notes to the consolidated balance sheet) 5. Early retirement and pre-pension plans An early retirement transition plan on a pay-as-you-go basis is in place for staff or former staff born before 1950 and employed by Wegener Media (with the exception of newspaper journalists, who are covered by a separate plan) and Wegener NieuwsDruk. These early retirement and pre-pension plans are conditional defined benefit plans. Wegener has formed a provision for the present value of future contributions payable up to and including This was calculated based on the annual accrual for participating employees who will still be entitled to benefit from the existing transition plans over the coming years (until 2012). These costs are allocated to the period in which the employees were actively working. The existing benefits are financed by the annual contributions. The early retirement plans have a maximum income limit on which early retirement pension benefits are paid. For certain groups of employees with higher incomes, Wegener has made a commitment to supplement the sector early retirement pension plan (supplementary pension). Provisions have been formed for these commitments. Costs of supplementary pensions and the costs of pension accrual during the early retirement period are determined using the projected unit credit method. 6. Health insurance contributions during retirement Commitments were made to certain groups of employees relating to health insurance contributions during retirement. In connection with the introduction of the standard insurance cover for healthcare expenses on 1 January 2006 and the associated new regulations relating to employee and employer contributions, the existing commitments have been adjusted accordingly. These adjustments entail that for active members the plan has been abolished, and for inactive (retired) members the plan will gradually be phased out over several years (up to and including 2010). The (remaining) provision formed for this purpose is calculated using the projected unit credit method. 7. Several individual pension plans There are non-reinsured pension commitments for a very limited number of individual current and former employees. A provision has been formed for the associated cost, which was determined actuarially using the projected unit credit method. The relevant plan qualifies as a defined conditional pension plan. 8. Pension plan for members and former members of the Management Board A defined contribution plan is in place for the current and former members of the Management Board. This is an average salary system with an accrual percentage of 2.25% on the pensionable salary to be determined annually. The plan includes supplementary indexation irrespective of the employment contract and dependent on the surplus interest realised in this plan with the pension insurer, with an annual mark-up of up to 1.5%, funds permitting.

75 Financial statements (Notes to the consolidated balance sheet) 75 Below is an overview of the main principles and assumptions applied in the calculation of the pension commitments: Mortality tables GBM/GBV with age adjustment for both men and women of -2 year GBM/GBV with age adjustment for both men and women of -2 year Discount rate* 3.6% 3.5% General pay rise 2.25% 2.25% Career-related pay rise < age 45: 3% from age 45: 0% < age 45: 3% from age 45: 0% Chance of dismissal < age 26: 10% from age 26: linear decrease to 0% at age 60 < age 26: 10% from age 26: linear decrease to 0% at age 60 Mortality trend mark-up 1.0% 1.0% * For the purpose of calculating the present value of the commitment arising from the moratorium shortfall, in 2009 a discount rate of 4.25% has been applied. With respect to the calculation of the early retirement premium, a contraction of the sector of 2.5% per annum has specifically been taken into account (2009: 2.5%). The discount rate used for the actuarial provisions referred to above is determined on the basis of the weighted average terms of the various plans and the associated interest rates of corporate bonds with a high credit rating (AA-rating). At year-end 2010 this was 3.6% (2009: 3.5%) Pension commitments at 31 December 33,893 39,285 24,110 32,868 40,219 Experience adjustments on commitments 2, ,621 3,339 (6,253) There were no plan assets in this period. 9 Provisions Reorganisations 8,807 17,516 Onerous contracts 44,425 9,292 Anniversary and leaving benefits 5,958 6,371 Recognised under non-current liabilities 59,190 33,179 The provision for onerous contracts is presented as a separate provision in the 2010 financial statements. The comparative figures for 2009 have been restated accordingly.

76 76 Financial statements (Notes to the consolidated balance sheet) Reorganisations At 1 January 39,335 65,240 Plus: taken to the income statement 6,529 19,826 change in discount rate interest 982 2,115 acquired group companies ,846 88,139 Less: released to the income statement 34 10,500 withdrawals 29,502 33,249 change in discount rate 17 - deconsolidation of AD NieuwsMedia BV - 5,055 At 31 December 17,293 39,335 Non-current 8,807 17,516 Current 8,486 21,819 17,293 39,335 At year-end 2010 and 2009 the non-current portion had a term of less than five years. The provision for reorganisations concerns the costs relating to the agreed social plan. In particular, it includes the cost of redundancy plans, outplacement, supplementary unemployment benefits, and senior staff benefits. The costs of senior staff benefits comprise the continued payment of salary until the age of 60, and the payment of supplementary benefits in addition to existing (transition) benefits for early retirement and prepension between the age of 60 and 65. The project to amalgamate the three publishing companies Wegener NieuwsMedia, Wegener Huis-aan-huis Media and Wegener MediaVentions into a single company, and the associated integration of all group staff services, was largely completed in 2009 and took partly place in Of the addition to the income statement, EUR 6.5 million (2009: EUR 19.8 million) was charged to staff costs. The addition in 2010 concerned a supplement to current reorganisations (especially Delta) and a few smaller new reorganisations. The release to the income statement in 2009 is due to higher natural staff turnover and lower average salaries than originally estimated. The provision is shown at present value, using a discount rate of 3.6% (2009: 3.5%), based on the duration of the various plans and the associated interest rates for corporate bonds with a high credit rating (AA-rating).

77 Financial statements (Notes to the consolidated balance sheet) 77 Onerous contracts At 1 January 11,258 4,850 Plus: taken to the income statement 49,700 6,002 change in discount rate interest ,318 11,508 Less: released to the income statement withdrawals 2, change in discount rate At 31 December 57,735 11,258 Non-current 44,425 9,292 Current 13,310 1,966 57,735 11,258 Of the non-current portion, EUR 13.3 million relates to the period after five years (2009: EUR 2.5 million). The provision for onerous contracts concerns the provision for the onerous contract with Dagblad De Pers and provisions for vacated office space. Of the addition in 2010, EUR 48.0 million concerned the onerous contract with Dagblad De Pers and EUR 1.7 million concerned vacated office space. The addition was charged to other operating expenses. In 2009 Wegener entered into a long-term agreement under which it became entitled to sell advertisements in Dagblad De Pers newspaper, subject to payment of an annual fee, by Wegener, to the publisher of Dagblad De Pers. The actual revenue of Dagblad De Pers is considerably lower than previously expected, which means that Wegener, in all probability, will operate at a loss throughout the term of this agreement. This is why a provision was formed in 2010 to cover the expected future net losses of Dagblad De Pers during the remaining term of the agreement. A discount rate of 6% has been taken into account in the calculation of the provision. The addition in 2009 concerned vacated office space (EUR 6.0 million). Provision for anniversary and leaving benefits A one-time payment is made to employees reaching an anniversary year (certain number of years of service) or in the event of (early) retirement. The calculation of this payment takes into account the chances of employees remaining with the company based on historical averages. The provision is shown at present value, using a discount rate of 3.6% (2009: 3.5%), based on the weighted average terms of the various plans and the associated interest rates for corporate bonds with a high credit rating (AA-rating).

78 78 Financial statements (Notes to the consolidated balance sheet) At 1 January 7,030 7,978 Plus: taken to the income statement change in discount rate interest acquired group companies ,430 9,559 Less: withdrawals release 423 1,542 change in discount rate 50 - deconsolidation of AD NieuwsMedia BV and Wegener Nieuwsdruk West At 31 December 6,418 7,030 Non-current part 5,958 6,371 Current part ,418 7,030 Of the non-current portion, at year-end 2010 EUR 4.1 million relates to the period after five years (year-end 2009: EUR 3.8 million). In 2010 the workforce decreased, as it did in This resulted in a release of EUR 0.4 million (2009: EUR 1.5 million). 10 Long-term interest-bearing loans Loans from credit institutions 74, ,000 Finance lease liabilities 776 2,780 75, ,780 Loans from credit institutions Credit facility In October 2007, Mecom Group plc concluded a five-year syndicated credit facility of EUR 1.0 billion for its international group. The facility was to be reduced annually in two instalments totalling EUR 60 million, the first one being payable on 31 December The credit facility concluded in 2007 served to replace several loans and facilities of the Mecom group. On 22 May 2009, Mecom Group plc agreed a number of changes to the group facility referred to above concluded with the banking syndicate. The key changes pertained to a new mark-up percentage, a new maximum facility limit and a revised repayment schedule. Year-end 2009 the total maximum facility was EUR million, existing of term loans for an amount of EUR million and revolving credit facility of EUR 200 million. In the course of 2010 the term loans were decreased by EUR 51.7 million and now amount to EUR million. The revolving credit facility amounts to EUR 200 million, which brings the total maximum facility to EUR million.

79 Financial statements (Notes to the consolidated balance sheet) 79 The repayment schedule for the term loans will be quarterly payments of EUR 5.0 million through September 2013 and the final repayment of EUR million due in October Furthermore, there is a repayment due for an amount of EUR 0.8 million in October However, in January 2011 this was repaid in full. Wegener uses the group facility managed by Mecom. Year-end 2010 Wegener drew EUR 74.8 million of the term loan (2009: EUR 96.5 million) and nil (2009: EUR 13.5 million) under the revolving credit facility, which makes for a total of EUR 74.8 million (2009: EUR million). EUR 35 million of the total Mecom group facility is available to Wegener as a seasonal credit facility. Such seasonal credit is used by means of short-term bank loans, which amounted to EUR 12.2 million at year-end 2010 (2009: EUR 5.6 million). The terms of the seasonal facility are virtually equal to those that apply to the revolving credit facility. The unused portions of the credit facilities for the individual Mecom group companies are inter-related. The drawing of tranches by Wegener is, in general, for brief periods. By the end of the term of a tranche the required financial scope is considered and, depending on the outcome, it is decided whether the tranche will be increased, decreased, repaid in full or rolled over unchanged. Wegener classified the financing drawn as a longterm liability in both 2010 as well as 2009, because the facility is long-term. Wegener was given permission by Mecom Group plc to extend each tranche beyond year-end The interest rate is Euribor plus a mark-up, which is calculated according to an agreed price structure and which can be revised, depending on the net interest-bearing debt/ebitda (adjusted for exceptional items). A commitment fee is owed by each relevant group company of Mecom in respect of the unused portion of the credit facility. The major group companies (including Wegener) within the Mecom group guarantee the facility according to specific criteria, each group company guaranteeing the entire facility. At year-end 2010, Mecom group s total liability in respect of this facility amounted to EUR million (2009: EUR million). Furthermore, Wegener did not provide any security. It has been agreed with the banking syndicate that any such security will not be provided to third parties either (negative pledge). At year-end 2010, the average effective interest rate was 5.0% (year-end 2009: 5.3%). Finance lease liabilities In both 2010 as well as 2009 these liabilities relate to the finance lease agreements for rotary newspaper presses, including peripheral equipment in Apeldoorn and computer-to-plate equipment. The finance lease contracts for rotary newspaper presses run until 2012 (printing presses) and 2010 (peripheral equipment) respectively. There is an annuity facility. In 2009 Wegener exercised its right to acquire the ownership of the collective assets after the contract had expired, at the residual value at that time. The interest has been fixed for the term of the contract at 6.2%. In 2009, 2008 and 2007, new computer-to-plate lease contracts were signed with a term of five years. The last contract runs until 2013 at the latest. The average interest on these contracts is 4.0%. At 31 December 3,511 4,896 Less: repayment commitments for the coming year recognised under current liabilities 2,735 2,116 Non-current liabilities at 31 December 776 2,780 The repayment commitments after five years are nil (2009: nil).

80 80 Financial statements (Notes to the consolidated balance sheet) The minimum lease payments and their present values are as follows: Minimum Present Minimum payments value payments Present value < 1 year 2,813 2,735 2,169 2,116 > 1 year and < 5 years ,934 2,780 3,625 3,511 5,103 4,896 Less: discount Present value 3,511 3,511 4,896 4, Current liabilities Provisions Reorganisations 8,486 21,819 Onerous contracts 13,310 1,966 Anniversary and leaving benefits Recognised under current liabilities 22,256 24,444 Please see the notes on page 76 up to 78. Current interest-bearing liabilities Finance lease repayment liabilities 2,735 2,116 Bank credit facilities 12,152 5,621 14,887 7,737 For further details on loans from credit institutions, please refer to Long-term interest-bearing loans (page 78). The bank credits shown here were drawn under the seasonal credit facility. Other current liabilities Accrued staff costs 36,109 36,872 Other tax and social security costs 16,974 16,316 Payable to associates - 19 Payable pension contributions 2, Other payable costs and accrued liabilities 41,142 33,372 96,391 86,626 The accrued staff costs include payable holiday allowances, holiday entitlements and profit-sharing. Payable to associates relates to trade debts. Other payable costs and accrued liabilities include, among other things, the fine imposed by the NMa to Wegener and to the (former) directors and Supervisory Board members plus associated costs (EUR 22.2 million). The portion of the publishing rights Dagblad De Pers (EUR 10.7 million), paid in January 2010 is part of the amount in 2009.

81 Financial statements (Notes to the consolidated balance sheet) Financial instruments General The principal financial instruments of Wegener include the group facility, finance lease agreements, and cash and cash equivalents. The main purpose of the financial instruments is to finance the business operations of Wegener. Wegener has various other financial assets and liabilities, such as trade receivables and trade payables, which arise directly from its operations. Wegener uses interest rate swaps to hedge the risk of cash flow fluctuations due to changes in market interest rates. There are no other derivatives. Wegener does not use or issue financial instruments for trading purposes. Wegener incurs market risks, interest rate risks and credit and liquidity risks in the ordinary course of its business. In addition, trends in paper prices potentially have an impact on the operating result. Financial instruments are used to cover part of the risk of interest rate fluctuations. Wegener s policy is to hedge interest rate risk by taking out interest instruments. Market risk Market risk relates to the risk of the fair value of the future cash flows of a financial instrument being adversely impacted by changes in market prices, such as interest rates, exchange rates and share prices. Financial instruments susceptible to market risk include loans, deposits, investments in associates and financial derivatives. The paragraphs below explain the exposure of Wegener to these risks and how they are mitigated. Interest rate risk The credit facility available to Wegener is characterised by a variable interest structure. Within certain limits and in coordination with Mecom, Wegener is able to choose the term of a drawing. The use of interest rate derivatives limits the resulting interest rate risk. As at the balance sheet date, there are two interest rate swaps with a combined principal amount of EUR 55 million. In December 2010 an interest rate swap for an amount of EUR 20 million was terminated. The first interest rate swap of EUR 40 million has a term of 5 years and the second of EUR 15 million a term of 2.5 years. The swaps were concluded with a reputable counterparty with high credit ratings. The interest rate swaps classify as cash flow hedges. The same reference interest rate applies to the group facility and the swaps. A drawing under the group facility in 2010 in the amount of EUR 74 million has the same term and interest rate fixing date as the interest rate swaps. This means the hedges are effective up to a total amount of EUR 74 million, and hedge accounting is allowed in In 2009 the change in the value of the interest rate swap concerning the part that relates to the remaining EUR 1 million was charged directly to the profit and loss account as interest result. The fair value of interest rate swaps is determined by reference to market values for similar instruments. Changes in the fair value of effective interest rate swaps are taken to equity (cash flow hedge reserve) after deduction of deferred taxes. At year-end, the position with regard to interest rate swaps is as follows: Amount Average interest Amount Average interest , % 40, % , % , % 15, % Total 55,000 75,000

82 82 Financial statements (Notes to the consolidated balance sheet) Non-current 40,000 55,000 Current 15,000 20,000 Total 55,000 75,000 The following table shows the sensitivity of equity in the event of changes in the interest rates for the (net) bank debts while all other variables remain unchanged. Increase / decrease in basis points +/ /- 100 Impact on result before tax -/ /+ 0.4 Impact directly on equity +/ /- 1.4 Total impact on equity +/ /- 1.0 In the event of a different change in basis points, the impact on the result before tax and on equity is directly proportional. Foreign currency risk Virtually all activities of Wegener are carried out in the same currency as the currency of the financial statements. This means that Wegener does not incur any foreign currency risk. Credit risk The credit risk concerns a counterparty s failure to meet its payment obligations, or a change in the estimated chance of such a failure. This mainly concerns trade receivables. The trade receivables mainly consist of media agencies, companies and subscribers. For both items the maximum credit risk equals the carrying amount as reported in the balance sheet. Wegener has procedures and guidelines in place to limit credit risks for each contract party or market. These procedures, and the spread across so many customers, limit Wegener's exposure to risks associated with credit concentrations and market risks. Furthermore, subscriptions to newspapers are payable in advance. Liquidity risk Liquidity risk relates to the risk of Wegener being unable to fulfil its financial obligations on time. Liquidity risk management is based on the principle that sufficient cash is held, insofar as possible, to be able to meet current and future financial obligations. To cover liquidity risk, Wegener has the following facilities at its disposal: > Credit facilities as part of the Mecom group facilities > A seasonal credit facility of EUR 35 million For further details regarding the Mecom group facility and the seasonal credit facility of EUR 35 million, see loans from credit institutions.

83 Financial statements (Notes to the consolidated balance sheet) 83 The table below gives an overview of the terms of the financial obligations at 31 December, based on contractual nominal amounts and the corresponding interest payable. 31 December 2010 < 3 months 3-12 months 1-5 years Total Bookvalue Interest-bearing loans 12,836 6,672 77,035 96,542 74,810 Interest rate swaps ,047 2,195 1,769 Trade payables and other short-term debts 83,185 34, , ,038 96,308 42,386 78, , , December 2009 < 3 months 3-12 months 1-5 years Total Bookvalue Interest-bearing loans 19,780 5, , , ,000 Interest rate swaps 568 1,702 2,336 4,606 2,702 Trade payables to suppliers and other short-term debts 79,146 35, , ,695 99,494 42, , , ,397 Capital management Wegener s primary capital management objective is to provide optimum support to its business operations so as to ensure their effectiveness, efficiency and profitability, creating shareholder value as a result. Wegener uses the group facility managed by Mecom. This means that Wegener does not report to banks independently on leverage rates achieved. The capital management policy is geared to the applicable group policy. As regards the group facility, Wegener guarantees for the entire debt of Mecom with respect to this facility, which amounted to EUR million at year-end 2010 (year-end 2009: EUR million). For further details, please refer to loans from credit institutions (page 78 and 79). Fair value IFRS 7 uses a three-level hierarchy for determining the fair value of financial instruments. Valuation at level one is done on the basis of quoted market prices; valuation at level two involves the use of models with input variables based on identifiable market values, and level three concerns valuation in cases in which the value of financial instruments cannot be derived from market values. At Wegener this principally occurs in the valuation of the fair value of interest rate swaps. The method selected for the valuation of interest rate swaps comes under level two. The fair value of the loans from credit institutions is equal to the carrying amount, as they are subject to variable interest rates. The fair value of the finance lease liabilities at year-end 2010 was EUR 3.6 million (2009: EUR 5.3 million). The fair value of the lease obligations is determined by recalculating the annuities payable by Wegener at the market interest rate plus a mark-up applicable to Wegener. The fair value of interest rate swaps is determined by reference to market values for similar instruments (level 2). On balance, the fair value of the interest rate swaps at year-end 2010 was EUR 1.8 million negative (2009: EUR 2.7 million negative).

84 84 Financial statements (Notes to the consolidated balance sheet) The loans to associates recognised under financial assets are limited in scope and subject to interest rates that only slightly differ from the current variable market interest rates. The year-end 2009 loan to former associates recognised under financial assets is the original shareholders loan to AD NieuwsMedia BV. This interest-free shareholders loan in the amount of EUR 16.7 million was granted to AD NieuwsMedia BV upon the sale of its shares at the end of July In 2010 de Persgroep Nederland effected the early repayment of this loan. In light of their short term, the fair value of cash and cash equivalents, current receivables, and current liabilities is almost identical to their carrying amount. 13 Information on joint ventures The balance sheets, income statements and cash flow statements of all joint ventures are recognised proportionately. Year-end 2010 and 2009 there were only joint ventures in connection with the operation of free door-to-door newspapers. The total of the proportional shares in the balance sheets items is as follows: Non-current assets Current assets 1, ,190 1,150 Non-current liabilities Current liabilities 1,339 1,547 1,692 1,982 The total of the proportional shares in the income statement items is as follows: Revenue and other income 3,631 41,216 Expenses 3,798 43,021 Result before tax (167) (1,805) Tax (6) 8 Result for the year (173) (1,797) The total of the proportional shares in the cash flows is as follows: Cash flows used in operating activities 199 (4,746) Cash flows used in investing activities (5) (216) Cash flows from financing activities - 4,689 Net cash flows 194 (273)

85 Financial statements (Notes to the consolidated balance sheet) Contingent liabilities Commitments relating to non-current assets on order At 31 December 2010, the investment commitments for non-current assets on order amounted to EUR nil (2009: EUR nil). Other financial commitments At 31 December 2010, Wegener had significant long-term commitments relating to the lease of office buildings, cars, ICT services, and other services. All long-term commitments were concluded at terms and conditions in line with the market. < 1 year 37,000 53,000 > 1 year and < 5 years 45,000 60,000 > 5 years 3,000 7,000 85, ,000 Of the overall liabilities at year-end 2010, EUR 9.7 million (2009: EUR 11.3 million) was accounted for in the balance sheet as a provision for onerous contracts. Security has been provided for part of the above commitments in the form of bank guarantees provided to the contract parties involved. Koninklijke Wegener NV forms a fiscal unit with most of the Dutch group companies for corporate income tax and VAT purposes and, as such, is jointly and severally liable for the tax liabilities of all companies that are part of the fiscal unit. Publishing collaboration commitments In 2009 Wegener entered into a long-term collaboration agreement with Dagblad De Pers to extend its printed product footprint, especially in the Randstad area. Under this agreement Wegener has a commitment to pay, after a starting-up period, a fixed annual fee of EUR 15.9 million in exchange for advertising revenue, sold by Wegener, in Dagblad De Pers. The collaboration agreement lasts until March The total obligation under this contract is EUR million. Of the non-current portion, EUR million relates to the period after five years. At year-end 2010 Wegener formed a provision of EUR 48 million to cover the expected future net losses of the contract during the remaining term of the agreement. Financing guarantee The major group companies within Mecom Group (including Wegener) guarantee the facility according to specific criteria, each group company guaranteeing the entire facility. At year-end 2010, Mecom Group s total liability with respect to this facility amounted to EUR million (year-end 2009: EUR million). The Wegener Management Board does not consider it likely that under the guarantee discussed above Wegener will be called upon to pay a higher amount than what is put forth in Wegener s financial statements as debt as from year-end 2010.

86 86 Financial statements Notes to the consolidated income statement (in thousands of euros) 15 Revenue Publishing activities - advertisements in newspapers 116, ,557 - advertisements in AD NieuwsMedia - 10,705 - advertisements in free door-to-door newspapers 145, ,371 - subscriptions to Wegener daily newspapers 207, ,224 - subscriptions to AD NieuwsMedia - 22,870 - graphic products 20,183 34,788 - internet products 22,521 18,252 - other revenue from newspaper activities 19,718 18, , ,334 Other revenue from newspaper activities relates to ICT services supplied to (former) joint ventures and to Media Groep Limburg (which is also part of Mecom), arranging the distribution of printed matter and the sale of products and services for third parties through newspapers and websites. 16 Other income No other income was recorded in Other income in 2009 relates to the profit on disposal realised on the sale of the shares in AD NieuwsMedia BV and the sale of Wegener NieuwsDruk West (page 59). 17 Raw materials and stores Newsprint 30,358 47,434 Other 6,610 8,157 36,968 55, Work subcontracted and other external charges Transport and distribution 70,063 78,311 Outsourced printing work and technical production 24,095 25,711 Subcontract 19,228 22,142 Other 22,509 14, , ,756 "Other" includes the cost of paid commissions, electricity and other direct costs.

87 Financial statements (Notes to the consolidated income statement) Staff costs Salaries 160, ,372 Social security costs 20,475 22,056 Pension costs 16,656 46,129 Costs of Mecom share option plan , ,868 These amounts include additions to and releases from the provisions for pensions, reorganisations and anniversary and leaving benefits. Further details relating to (the additions to) these provisions can be found in the notes to the consolidated balance sheet (pages 71 and 76). See remuneration of Management Board members for details on the costs of the Mecom share option plan and the share plan. In 2010, subsidies received for training costs (EUR 0.4 million) were deducted from the staff costs (2009: EUR 1.4 million). The breakdown of pension costs was as follows: Contributions to Graphic Sector Pension Fund 13,019 1,976 Share in cost of the PGB-PCM pension plan of AD NieuwsMedia Contributions to Wegener General Pension Fund (APW) - 14,892 Subtotal of pension costs for (collective) defined contribution plans 13,019 17,599 Contributions to early retirement (VUT) and pre-pension plans 3,847 2,980 Release of provision for VUT commitments (432) (1,515) Costs of funding the moratorium shortfall (employers contribution) - 25,411 Other pension contributions Subtotal of pension costs for defined benefit plans 3,637 27,030 Non-recurring settlement in connection with transition from APW to PGB to allow for difference in pension cover ratio - 1,500 16,656 46,129 As a consequence of the voluntarily transfer from the Wegener General Pension Fund (APW) to the Graphic Sector Pension Fund (PGB) the contributions to PGB in 2010 is higher than in previous year. The contribution to APW has expired due to this transfer. Further details relating to the additions to, and release from the provision for pension liabilities can be found in the notes to the balance sheet (page 71). Average staffing levels on fulltime basis Publishing activities 2,881 3,281 Central services ,881 3,346

88 88 Financial statements (Notes to the consolidated income statement) The fall in the average number of full-time staff members is the result of the Delta reorganisation project, which involved the integration of the central services into the back-office activities and the sale of AD NieuwsMedia and the printing plant in The Hague, in the second half of July Remuneration of current and former Management Board and Supervisory Board members The following amounts for remuneration of Management Board members were charged to the income statement (in euros): Regular salary Performance related bonuses Costs of pre-pension and pension Severance payments Costs of option plan T. Velgaard J.V. Munsterman 2 454,669 99, ,771 2,300,000 (13,844) 2,963,496 C.G. Boot 3 344, ,902 84, ,200 (7,816) 1,029,961 W. Cornelisse 344, ,902 89,638-17, ,624 J.C. Houwert 4 277, , ,141 Totaal ,421, , ,326 2,786,200 (3,600) 4,982,837 Totaal ,428, , ,558-27,610 2,489,448 Total 1 As of 22 December Until 4 October 2010 Management Board member, contract ended at the end of the year 3 Until 1 September 2010 Management Board member, contract ended at the end of the year 4 From May 2008 former Board member The remuneration for Mr T. Velgaard is not included, because of his appointment on 22 December As of 1 January 2011 the remuneration will be paid by Wegener. The performance-related bonuses partly depend on the return on capital employed, the earnings per share after preference dividend, and certain performance targets. If the performance is below a certain level, no bonuses are granted; above a certain level, the plan provides for maximum bonuses. In addition, performance-related bonuses include the costs of the long-term conditional bonus plan that was converted as of 1 November 2007 and involves payment in cash rather than in shares. The granting of the bonus of 2007 was conditional upon achievement of a target with respect to the trend in results in As that target was not met, the plan came to an end in Hence, no bonuses for 2009 and 2008 were granted under this plan and no costs under this item were recognised in the income statement for these years. The pre-pension and pension costs include an amount of EUR 0.4 million (2009: EUR 0.4 million) in pension costs relating to (collective) defined contribution plans. As regards the severance payments, part of the payment (EUR 0.8 million) awarded to Mr J.V. Munsterman is conditional. If the relevant conditions are met, the amount concerned will be paid out in 2012 and In addition to the costs included in the remuneration table for Management Board members, an amount of EUR 1.4 million (including payroll tax effect) has been taken to the income statement in connection with NMa penalties imposed on two former managing directors of Wegener who were also managing directors of PZC and BN/De Stem. These managing directors are indemnified with respect to their directors and officers liability. Wegener has filed an appeal against the NMa's decision and the fine. The costs of the option plan include the costs of options granted on Mecom shares. The members of the Management Board and a very small number of other employees will be entitled to options on Mecom shares. The value, as calculated by Mecom, of the conditionally granted share options is charged by Mecom Group plc.

89 Financial statements (Notes to the consolidated income statement) 89 The table below presents the numbers of contingent granted share options: Conditionally granted options at 1 January 280,501 32,028 Plus: conditionally granted in the financial year 159, ,501 current options T. Velgaard 162,357 - Less: exercised in the financial year - - expired in the financial year (308,341) (32,028) Conditionally granted options at 31 December 294, ,501 The numbers of contingent granted share options and the share options per board member recognised in the final statement are as follows: T. Velgaard 162,357 and W. Cornelisse 132,084. The current options of T. Velgaard will not be debited to the company. The options that expired in the financial year are the result of termination of the employment contract with two Management Board members. All options give entitlement to 1 ordinary share in Mecom Group plc with a nominal value of (rounded). The conditionally granted options have a weighted average exercise price of Once all conditions have been met, the options can be exercised between three and ten years after they were granted. No options became unconditional on 31 December 2010 (2009: none). The conditionally granted options are non-transferable and expire upon termination of employment, except in the event of special circumstances. The value of the options as shown in the management remuneration table was calculated using an option valuation model based on the same starting points as those used by Mecom Group plc. The following remuneration for the members of the Supervisory Board was charged to the income statement: Periodic remuneration paid D.J. Montgomery, chairman 40,000 E.A. van Amerongen 35,000 S.M. van der Heijden 35,000 Total ,000 Total ,410 The remuneration of members of the Supervisory Board is determined by the General Meeting of Shareholders, and is not dependent on the performance of Wegener. No share or option rights on shares in Wegener have been granted to the members of the Supervisory Board. 20 Amortisation of intangible assets Software 7,372 5,499 7,372 5,499

90 90 Financial statements (Notes to the consolidated income statement) 21 Depreciation of property, plant and equipment Buildings 2,321 2,821 Plant and equipment 6,460 9,724 Other 2,503 2,747 11,284 15, Other operating expenses Contract staff 10,106 10,243 Other staff costs 4,027 4,024 Hotel, travelling, and business entertainment expenses 5,655 6,888 Car costs 6,380 6,664 Accommodation costs 12,135 14,278 Office expenses 8,163 10,114 Promotional costs 14,389 14,992 Services of third parties 26,516 29,489 Other costs 68,499 4, , ,006 Other operating expenses include the NMa fine of EUR 19.1 million and the costs associated with the provision for onerous contracts for Dagblad De Pers in the amount of EUR 48.0 million. 23 Finance income Interest on loans to associates Interest on discounted loan to AD NieuwsMedia BV Interest on discounted PGB-PCM receivable from AD NieuwsMedia BV s staff - 30 Interest on cash at bank Finance expense Interest on interest-bearing loans 8,021 9,218 Less: capitalised construction period interest costs ,021 9,067 Interest on finance lease agreements Interest on provisions discounted to present value 3,005 3,550 Interest fine NMa Amortisation of transaction costs current credit facilities ,365 13,907 The interest rate for the calcution of the interest on the NMa fine is equal to the legal interest. The average interest rate for the calculation of the capitalised construction period interest costs was 6.8% in 2009.

91 Financial statements (Notes to the consolidated income statement) Tax The applicable tax rate is the weighted average of the current rates. For 2010 this rate was 25.5% (2009: 25.5%). The reconciliation of the tax expense based on the applicable rate for the result before tax and the tax expense recognised in the income statement is as follows: Tax based on the applicable tax rate (9,551) 1,473 Non deductible fine NMa 4,903 - Domestic-source losses not yet available for set-off 255 1,317 Participation exemption (418) (5,042) Other changes (89) 177 Tax expense according to income statement (4,900) (2,075) Recognised under deferred tax assets (4,900) (2,075) Recognised under deferred tax liabilities - - Recognised under current liabilities - - (4,900) (2,075) Effective tax rate 13.1 (35.9) 26 Earnings per share Earnings per share are calculated by: - The basic earnings for the financial year attributable to the holders of ordinary shares, divided by: - The weighted average number of outstanding ordinary shares during the year. Earnings per share net of the preference dividend on cumulative financing preference shares will accrue to the holders of ordinary shares in Koninklijke Wegener NV. At year-end 2010 and 2009 respectively, there were no equity instruments that may dilute the earnings per share. In the following tables, the figures for earnings on shares are given that were used to calculate the basic earnings per share (in thousands of euros and thousands of shares): Result for the year attributable to equity holders of Koninklijke Wegener NV (32,556) 7,853 Preference dividend (1,567) (1,567) Result for the year attributable to holders of ordinary shares Koninklijke Wegener NV (34,123) 6,286 Weighted average number of ordinary shares 45,009 45,009

92 92 Financial statements (Notes to the consolidated income statement) 27 Related parties As the holder of 86.44% of (depository receipts for) ordinary shares in Koninklijke Wegener NV, Mecom Group plc has had a significant influence on Wegener since 25 October 2007 and, for that reason, qualifies as a related party. In 2010, various transactions with Mecom were carried out: recharging of holding costs by Mecom for an amount of EUR 1.8 million (2009: EUR 1.0 million) and recharging of costs connected to activities performed by Wegener for the group for an amount of EUR 0.4 million (2009: EUR 0.5 million). In addition, Limburg Media Groep (LMG), which also forms part of Mecom group, uses some Wegener services. These include ICT services and the outsourcing of accounting tasks. These services are laid down in contracts based on terms and conditions in line with the market. In all, a total of EUR 1.5 million in services was recharged to Limburg Media Groep (2009: EUR 1.7 million). Wegener uses LMG printing services. Owing to press renovation work on the printing plant in Best, printing orders within Wegener have shifted, resulting in the transfer of part of the orders to NieuwsDruk Limburg (part of LMG). In 2010, NieuwsDruk Limburg charged EUR 6.2 million in connection with these services (2009: EUR 5.5 million). Wegener also has, in addition to its shareholdings, a business relationship with some of its associates, whereby services and/or products are purchased from or supplied to such associates. These services are provided under normal contractual terms based on terms and conditions in line with the market. The extent and the number of these transactions are very limited. At year-end 2010, Wegener recorded receivables from Mecom Group plc totalling EUR 1.5 million (2009: EUR 0.6 million) and payables to Mecom Group plc for an amount of EUR 0.7 million (2009: 0.4 million). Remuneration of the Management Board and the Supervisory Board is explained separately. There are no other key management personnel as referred to in IAS Wegener profit concepts Each year, non-recurring exceptional items may have an effect on the income statement, making comparison of performance for a number of years less transparent. In addition to the profit definitions used in legislation, Wegener therefore also uses the following concepts: - Profit before exceptional items ( adjusted EBIT ). - Net profit after preference dividend before exceptional items after tax ( cash earnings ) and per ordinary share ( cash earnings per share ). Net profit is the profit after appropriation to minority interests. This also allows a better insight into the financial performance of the group.

93 Financial statements (Notes to the consolidated income statement) 93 Exceptional items An overview of the impact of exceptional items on the income statement is given below: Financial statements 2010 Excluding exceptional items Financial statements 2009 Revenue and other income 531, , , ,244 Raw materials and stores 36,968 36,968 55,591 55,591 Work subcontracted and other external charges 135, , , ,756 Staff costs 197, , , ,868 Depreciation 18,656 18,656 20,791 20,791 Impairment of publishing rights 14, Other operating expenses 155,870 87,374 96, ,006 Operating result (27,776) 62,346 57,328 18,232 Share of profit of associates 1,196 1, Finance income/expense (10,876) (10,748) (12,585) (13,152) Tax 4,900 (13,211) (12,832) 2,075 Loss / profit (32,556) 39,583 32,609 7,853 Attributable to: - equity holders of Koninklijke Wegener NV (32,556) 39,583 32,609 7,853 (32,556) 39,583 32,609 7,853 The exceptional items detailed above relate to the following non-recurring earnings: Other income in 2009 relates to the profit on disposal of the shares in AD NieuwsMedia BV and the assets and liabilities of Wegener NieuwsDruk West. Staff costs in 2010 as well as 2009 relate to additions to reorganisation provisions. In addition, in 2010 the fine imposed on the (former) directors and Supervisory Board members by the NMa was recognised under staff costs. Furthermore, there was a release of the pension provision due to actuarial recalculations. In 2009 a nonrecurrent contribution was made in connection with the transition to the PGB to compensate for the difference in pension cover ratio with APW. Furthermore, new pension commitments were made in 2009 to fund the moratorium shortfall. The impairment of publishing rights relates to Dagblad De Pers. Other operating expenses in 2010 concern the NMa fine, the costs associated with the forming of the provision for the onerous contract with Dagblad De Pers and the additions with respect to the provision for vacated office space. The addition to the onerous contract for vacated office space, on balance, relates to a grant as a result of the revised agreement with de Persgroep Nederland on the sale of AD NieuwsMedia (see page 59) and a release resulting from new lease agreements. Other operating expenses in 2009 include additions to the onerous contract provision regarding vacated office space. Within the finance income/expense is recorded in 2010 the interest with respect to the NMa fine. In 2009 this related to an increased amortisation of prepaid financing costs due to the lower credit facility.

94 94 Financial statements (Notes to the consolidated income statement) Tax relates to the tax effects on the above-mentioned exceptional items insofar as the participation exemption is not applicable. Cash earnings The net profit after preference dividend before exceptional items after tax is calculated as follows: Loss/profit for the year attributable to shareholders of Koninklijke Wegener NV (32,556) 7,853 Exceptional items after tax 72,139 24,756 39,583 32,609 Preference dividend (1,567) (1,567) 38,016 31,042 Earnings per share after preference dividend and before exceptional items after tax (in EUR) - Earnings per share after preference dividend and before exceptional items after tax attributable to holders of ordinary shares Koninklijke Wegener NV The calculation of the earnings per share after preference dividend and before exceptional items after tax is based on the weighted average number of ordinary shares. 29 Dividends paid and proposed Declared and paid during the year: - preference dividend on cumulative financing preference shares for 2008: 5.33% (EUR 0.37) per share of EUR ,567 - preference dividend on cumulative financing preference shares for 2009: 5.33% (EUR 0.37) per share of EUR ,567 Proposed by the Management Board and approved by the Supervisory Board on 15 March 2010 and 14 March 2011 respectively (not recognised as a liability at 31 December) - preference dividend on cumulative financing preference shares for 2009: 5.33% (EUR 0.37) per share of EUR ,567 - preference dividend on cumulative financing preference shares for 2010: 5.33% (EUR 0.37) per share of EUR ,567 Proposed for approval at the General Meeting of Shareholders - no dividend payment on ordinary shares for Despite the losses incurred in 2010, the Management Board proposes, in accordance with Article 45 of the Article of Association of Koninklijke Wegener NV, dividend on cumulative financing preference shares.

95 Financial statements 95 Notes to the consolidated cash flow statement 30 Cash flows from operating activities The cash flows of group companies acquired and disposed of during the year are recognised as from, or up to, the transaction date. 31 Cash flows from investing activities For the items acquisition of group companies and acquisition of associates, the cash and cash equivalents held by the group companies and associates are net of outgoing cash flows connected with the acquisitions. For the items sale of group companies and proceeds from sale of AD NieuwsMedia BV and assets and liabilities of Wegener NieuwsDruk West, the cash and cash equivalents held by those group companies and associates are net of incoming cash flows connected with the disposal. 32 Cash flows from financing activities Wegener uses the group facility managed by Mecom. In the cash flow statement the changes in the credit facility have been recognised on a net basis under use of credit facility interest-bearing loans.

96 96 Financial statements Events after the balance sheet date No events have taken place after the balance sheet date that are relevant in connection with the 2010 financial statements.

97 Financial statements 97 Consolidated group companies and associates Country of establishment % interest at Koninklijke Wegener NV The Netherlands Wegener Nederland BV 1) The Netherlands Wegener Media BV (former Wegener NieuwsMedia) 1) The Netherlands Uitgeverij BN/De Stem BV 1) The Netherlands Uitgeverij Provinciale Zeeuwse Courant BV 1) The Netherlands Wegener Narrowcasting Arnhem Nijmegen BV The Netherlands Wegener MediaVentions BV 1) The Netherlands Wegener Jobtrack BV 1) The Netherlands Mensenlinq BV 4) The Netherlands Duinpan BV (former CareerdID Netherlands BV) 5) The Netherlands Spot A Job BV The Netherlands Wegener Huis-aan-huisMedia BV 1) The Netherlands Wegener PLM BV (as from 15 July 2009) 1) 6) The Netherlands Mediahaus Wegener GmbH (as from 1 January 2009) Germany Uitgeversmaatschappij De Bossche Omroep / De Waalwijker BV 1) The Netherlands Beekman Media BV The Netherlands Peel en Maas Uitgevers BV The Netherlands Punt Uit Media BV The Netherlands Wegener NieuwsDruk BV 1) The Netherlands Wegener ICT Media BV 1) The Netherlands Wegener Facilitair Bedrijf BV 1) The Netherlands Associates De Nationale Regiopers CV 2) The Netherlands De Nationale Regiopers Beheer BV 2) The Netherlands Funda NV 3) The Netherlands Zeeuws Vlaams Mediabedrijf BV The Netherlands Other interests in companies Spin in t Veld BV The Netherlands Group companies without business activities or intermediate holding companies Audet Nieuwe Media BV 1) The Netherlands Autotrust BV 7) The Netherlands Imatra BV 1) The Netherlands Oostelijke Weekbladpers BV 1) The Netherlands Racon Sales BVBA Belgium Rondo BV The Netherlands Stadsnieuws BV 1) The Netherlands Uitgeversmaatschappij Gelderlander Weekbladpers BV 1) The Netherlands Utrechts Nieuwsblad Haagsche Courant BV 1) The Netherlands Wegener International BV 1) The Netherlands Wegener Regio Partners BV 1) The Netherlands Wegener Speciale Uitgaven BV 1) The Netherlands Wegener (UK) BV The Netherlands Wegener Transport BV The Netherlands

98 98 Financial statements (Consolidated group companies and associates) 1) Liability statements have been issued by Koninklijke Wegener NV for these companies. 2) The share of voting rights in Nationale Regiopers is 50%; the collaboration has ended as of 1/1/ ) The share of voting rights in Funda is 13%. 4) The share of voting rights in Mensenlinq BV is 50%. 5) Dissolved as of 13/12/ ) Merger with Wegener Media as of 1 January ) Dissolved on 10/2/2011.

99 Financial statements 99

100 100 Financial statements 2010 Company financial statements of Koninklijke Wegener NV Company balance sheet At 31 December (in thousands of euros) Assets notes Non-current assets 33 Financial non-current assets Interests in group companies - 13,727 Loans to group companies 450, ,090 Deferred tax assets 15,481 10, , ,654 Current assets Trade and other receivables Cash and cash equivalents 643-1, , ,273

101 Financial statements (Consolidated balance sheet) 101 Equity and liabilities notes Equity 34 Issued share capital 14,763 14,763 Share premium 167, ,458 Cash flow hedge reserve (1,343) (2,089) Retained earnings 130, ,719 Result for the year (32,556) 7, , ,704 Non-current liabilities Loans from credit institutions 10 74, ,000 Interest rate swaps 850 1,255 75, ,255 Current liabilities Loans from credit institutions 11 10,710 5,030 Interest rate swaps 919 1,447 Other current liabilities ,311 94, , , , ,273 Company income statement (in thousands of euros) Profit/(loss) from interests in group companies after tax (37,102) (4,951) Other income and expenses after tax 4,546 12,804 Profit/(loss) for the year (32,556) 7,853

102 102 Financial statements Notes to the company balance sheet (in thousands of euros) Accounting policies The company financial statements have been drawn up in accordance with Dutch reporting requirements. Use was made of the facility offered under the law to apply the same principles for company financial statements as for consolidated financial statements (Section 362 (8) of Part 9 of Book 2 of the Dutch Civil Code). For the accounting policies, please see the notes to the consolidated financial statements. Interests in group companies are recognised at net asset value according to the relevant IFRS referred to in the consolidated financial statements. The loans to group companies are recognised at face value. General Explanatory notes are only given below for those items that differ from the consolidated balance sheet. 33 Non-current assets Financial assets Interests in group companies Net asset value at 1 January 13,727 16,163 Profit/(loss) of group companies (37,102) (4,951) Transfer from loans to group companies 23,375 2,515 Net asset value at 31 December - 13,727 Loans to group companies At 1 January 499, ,605 Repayment (25,642) (36,000) Transfer to interest in group companies (23,375) (2,515) At 31 December 450, ,090 Loans to group companies have a variable interest rate using Euribor as reference. The Euribor rate is increased by a mark-up that is linked to the mark-up that Koninklijke Wegener NV owes for its financing. No repayment schedules have been agreed.

103 Financial statements (Notes to the company balance sheet) Equity The equity recognised in the company financial statements is equal to the equity that is attributable to the equity holders of Koninklijke Wegener NV recognised in the consolidated financial statements. Changes in equity in 2010 were as follows: Issued share capital Share remium Cash flow hedge reserve Retained earnings Result for the year Total At 1 January , ,458 (2,089) 123,719 7, ,704 Profit for the year 746 (32,556) (31,810) Appropriation of profit for previous year 7,853 (7,853) - Preference dividend paid on cumulative financing preference shares for 2009 (1,567) (1,567) At 31 December , ,458 (1,343) 130,005 (32,556) 278,327 The cash flow hedge reserve is a statutory reserve. Retained earnings are not distributable if the value of this reserve is negative. 35 Current liabilities Other liabilities Debts to group companies 101,086 93,831 Other liabilities 225 1, ,311 94,837 Debts to group companies relate to intercompany transfers for settlements of costs. In addition, at year-end 2010, bank balances held by wholly-owned group companies were granted as short-term loans to Koninklijke Wegener NV. Amounts owed to credit institutions of Koninklijke Wegener NV fell as a result. Other liabilities relate to interest charges.

104 104 Financial statements Notes to the company income statement Since the results of Koninklijke Wegener NV are included in the consolidation, the company income statement is drawn up in condensed form (in accordance with Section 402 of Part 9 of Book 2 of the Dutch Civil Code). Result for the year is the result attributable to equity holders of Koninklijke Wegener NV. The notes to the remuneration of the Management Board and the Supervisory Board are included in the consolidated financial statements. Ernst & Young Accountants LLP incurred the following costs on behalf of the company and its group companies in respect of the financial year: Audit of the financial statements Other audit engagements Total Ernst & Young Accountants LLP Tax advisory services Other work Total Ernst & Young network 763 1,058

105 Financial statements 105 Independent auditor s report To the General Meeting of Shareholders and Supervisory Board of Koninklijke Wegener N.V. Report on the financial statements We have audited the financial statements of Koninklijke Wegener NV, Apeldoorn, The Netherlands, for the year 2010 as included in this report. The financial statements consist of the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2010, the consolidated income statement, consolidated comprehensive income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. The company financial statements comprise the company balance sheet as at 31 December 2010 and the company income statement for the year then ended and the notes. Management's responsibility The Management Board of Koninklijke Wegener NV is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore the Management Board is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of Koninklijke Wegener NV as at 31 December 2010 its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code. Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of Koninklijke Wegener NV as at 31 December 2010 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

106 106 Financial statements Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the management board report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code. Zwolle, 14 March 2011 Ernst & Young Accountants LLP, Signed by P.J.T.A. van Kleef

107 Financial statements 107 Apeldoorn, The Netherlands 14 March 2011 The Supervisory Board: S.M. van der Heijden, chairman E.A. van Amerongen The Management Board: T. Velgaard, chairman The 2010 Financial statements have not been signed by Management Board member Mr W. Cornelisse because of his long-term absence due to sickness.

108 108 Other information Other information Corporate Governance Structure of Koninklijke Wegener NV Koninklijke Wegener NV (Wegener) is a company incorporated under Dutch law, and to which the mitigated two-tier board system has applied since 1 November Wegener subscribes to the principles and best practice provisions stated in the Dutch Corporate Governance Code (the Code ) as published in the Government Gazette No dated 3 December Since 25 October 2007 Mecom Group plc (Mecom) has held 86.4% of the issued capital in the form of ordinary shares in Wegener. Since that date, Wegener has been a member of the group of legal entities headed by Mecom (the Mecom Group). Management Board Wegener s Management Board is responsible for developing objectives and strategy and for implementing the company s strategic and operational policies, as well as the policies with regard to corporate social responsibility, compliance with legislation and regulations, risk management, and financing. The Management Board normally consists of three members, but in 2010 as of September it consisted of fewer than three members due to resignations. Headed by the chairman, the Management Board forms a collegial team. The members of the Management Board are appointed and dismissed by the General Meeting of Shareholders. All three members of the Management Board have been appointed for a membership term of four years. The Supervisory Board annually appraises the performance of the members of the Management Board. In carrying out its duties, the Management Board of Royal Wegener is guided by the interests of the company and of the undertaking connected with it. As a consequence, consideration is given to the interests of all parties involved with the company (stakeholders). In accordance with the provisions of Article 20 (2) of the company s articles of association, certain decisions proposed by the Management Board are subject to the approval of the General Meeting of Shareholders. The Management Board must also receive approval from the Supervisory Board for a variety of significant corporate decisions as set forth in Article 20 (1). The remuneration policy for the Management Board is established by the General Meeting of Shareholders. The remuneration of the respective Management Board members is established by the Supervisory Board, subject to the remuneration policy adopted by the General Meeting of Shareholders. In 2010, an option programme for Mecom shares applied for members of the Management Board. Under this plan, some members of the Management Board were awarded options to Mecom shares, under certain conditions, in No transactions took place in the financial year of 2010 involving conflicting interests of material consequence for Wegener or the respective board members. This complies with Best Practice provisions II.3.2-II.3.4 of the Code. Supervisory Board Wegener s Supervisory Board supervises and provides advice and support to the Management Board. The Supervisory Board consists of three members. However in January 2011, Mr Montgomery resigned from the Supervisory Board. The resulting vacant Supervisory Board seat has not yet been filled, but the Board intends to do so shortly The Board conducts its activities on behalf of the company and the undertaking connected to it, and the interests of all stakeholders are taken into account in the board s decisions. On a monthly basis, the Supervisory Board receives a report from the Management Board concerning the financial affairs of the company. In meetings with the Supervisory Board, the Management Board provides information on developments within the undertaking and on all topics relevant to Wegener.

109 Other information (Corporate Governance) 109 Members of the Supervisory Board are appointed by the General Meeting of Shareholders. For this purpose, the Board puts forward one name per vacancy. The General Meeting of Shareholders and the Central Works Council have the right to make recommendations. In addition, the Central Works Council has an enhanced right of recommendation with respect to appointment of one-third of the board members. The terms of office of supervisory directors expire after four years of service, in accordance with a schedule determined by the board. Reappointment is possible. The total term of service as a director is limited to twelve years. All members of the present Supervisory Board were appointed on 26 March 2009 for a period of four years. In making these appointments, consideration was given to the aim of optimising the composition of the board with regard to aspects such as diversity. The remuneration of the Supervisory Board is established by the General Meeting of Shareholders. During the 2010 financial year there were no transactions involving conflicting interests of supervisory directors that are of material significance for Wegener and/or the supervisory directors. This means that Best Practice provision III.6 of the Code was met. General Meeting of Shareholders A General Meeting of Wegener Shareholders is held on an annual basis. The agenda for this meeting always includes approval of the previous year s accounts, proposals concerning the reserves and dividend policies, any proposal for distributions of dividend, the proposal for the granting of discharge for the conduct of their duties in the previous year to members of the Management Board, the proposal to grant comparable discharge to members of the Supervisory Board and, as appropriate, the appointment of an external auditor. Among the rights of the General Meeting is approving recommendations by the Management Board that would lead to a significant change in the identity or character of the company, such as a decision to transfer most or all of its business to a third party. Requests to place items on the agenda for a General Meeting are honoured when made by holders of shares or depository receipts who alone or jointly represent at least one-hundredth (1/100) part of the issued capital, or whose holding amounts to a value of at least EUR 50 million (EUR 50,000,000) according to the official price publication of Euronext Amsterdam. Such a request must be received by the Management Board or the chairman of the Supervisory Board at least sixty days prior to the meeting, and may not be incompatible with a substantial interest of the company. Wegener has an outline policy with regard to bilateral contacts with shareholders. This policy is set forth on the company s website ( Amendments to the Articles of Association Since the amendment to the Articles of Association that was implemented on 1 November 2007, Article 49 (1) of the Articles of Association of Koninklijke Wegener NV has included the following stipulation regarding amendments: The General Meeting of Shareholders is authorised to amend the Articles of Association and to dissolve the company. Without the approval of holders of cumulative financing preference shares, no change may be made to the rights attaching to such shares. The Annual General Meeting of Shareholders of 18 May 2011 will be proposed to amend the Articles of Association of the company, pertaining amongst others to an amendment of the authority to represent the company.

110 110 Other information (Corporate Governance) Code of conduct Wegener works with a customised risk management and control system as meant in Best Practice provision II.1.3 of the Code. Consequently, Wegener has a Code of Conduct which formulates the way in which Wegener deals with clients, readers, advertisers, shareholders, and other parties directly or indirectly involved with the company. An important element of the Code of Conduct is the whistleblower provision, which states that employees have the opportunity to report suspected irregularities of a general, operational or financial nature that take place within Wegener without endangering their own legal position. There is also a complaints programme and procedure, which describes the safeguards in place for a fair and effective handling of complaints made by individual Wegener employees. These provisions are among those set forth on the company s website ( and each new employee gets these when entering his/her job. Share administration foundation The depository receipts for ordinary shares in Wegener that have been issued with the cooperation of the company are listed on the stock exchange. The share administration foundation of Wegener now holds 13.6% of the share capital issued in ordinary shares. The articles of association of the Stichting Administratiekantoor Koninklijke Wegener (the share administration foundation) as well as the Provisions for Administration were amended on 5 May The amended articles of association and provisions specifically state that the foundation will exercise the rights attaching to the shares in Koninklijke Wegener NV in such a way that the interests of holders of depository receipts are guaranteed as well as possible. Moreover, voting proxies will be granted without any restrictions and under all circumstances. Shareholders have the right to attend the General Meeting, to take the floor, and to exercise their vote. Holders of depository receipts have the right to attend the meeting and to take the floor. Under current statutory regulations, holders of depository receipts may apply to the foundation for a proxy authorising them to vote at a general meeting. In deviation from Best Practice provision IV.2.2. of the Code, holders of depository receipts for shares are not authorised to nominate persons for appointment as directors of the foundation. The foundation report for 2010 is provided on page 119 of this Annual report. The board of the foundation currently consists of one member. This member is independent. Financing preference share administration foundation The cumulative financing preference shares in the capital of the company have been converted into depository receipts and are held by the financing preference share administration foundation. The depository receipts for these shares are not exchange-listed. The articles of association of the financing share administration foundation were amended on 5 May 2008 in a manner similar to that of the amendment of the articles of association of the share administration foundation. The purpose of the foundation is to acquire and administer registered cumulative financing preference shares issued as part of Wegener s share capital with limited exchangeability, and to exercise all rights associated with these shares, such as voting rights. The board of the foundation is the same as the board of the share administration foundation. All outstanding depository receipts for cumulative financing preference shares that have not been redeemed are presently held by Mecom Group plc.

111 Other information (Corporate Governance) 111 Takeover Directive Information as meant in the Decree of 5 April 2006 implementing Article 10 of Directive 2004/25/EC of the European Parliament and the Council of the European Union regarding the public takeover bid to the extent applicable is stated in this section and in the Wegener Shares section (page 118) and elsewhere under the Other Information heading (pages 107 ff.). Transactions with shareholders As the holder of 86.44% of the ordinary shares and associated depository receipts in Koninklijke Wegener NV, since 25 October 2007 Mecom Group plc has had a significant influence on Wegener and on this basis is deemed to be a related party. Various transactions took place with Mecom and/or its subsidiaries in 2010 for which the reader is referred to the section entitled Related Parties on page 92 of the annual accounts. These transactions are concluded under conditions customary in the group s sector. Since the Supervisory Board gave its approval to these transactions, Best Practice provision III.6.4 has been met. Transparency Directive The annual financial reporting includes: A. the audited annual accounts; B. the Annual report; and C. statements by persons designated by Wegener as those responsible, clearly giving their names and positions, that, to the best of their knowledge, 1. the annual accounts give a true and fair view of the assets, the liabilities, the financial position and the result (profit or loss) of Wegener and the businesses jointly included in the consolidated figures; and 2. the Annual report gives a true and fair view of the situation on the balance sheet date, the course of business in the past year of Wegener and of the businesses affiliated with it, the details of which are included in Wegener s annual accounts, and that the Annual report contains a description of the fundamental risks with which Wegener is confronted. For the application of this article, annual accounts and Annual report have the following meaning: > the annual accounts as referred to in Section 361 of Book 2 of the Dutch Civil Code as well as the information to be added pursuant to Section 392 (1) of Book 2 of the Dutch Civil Code; > the Annual report as referred to in Section 391 of Book 2 of the Dutch Civil Code. Non-conformance with Code provisions The introduction to the Code explicitly states that non-conformance with its provisions may be necessary and justified under certain circumstances. The application of all the provisions of the Code is, in the final analysis, dependent on the specific situation of an enterprise and its shareholders. It is a result of the circumstance that Wegener is a member of Mecom Group plc that it is unable to comply with a number of principles and best practice provisions in the Code. The following are specific exceptions from the provisions of the Code: a. The powers as meant in Best Practice provisions II.2.10 and II.2.11 do not accrue to the Supervisory Board. b. In deviation from Best Practice provision IV.2.2 of the Code, the meeting of holders of depository receipts for shares is not authorised to nominate persons for appointment as director of the share administration foundation. This is because the share administration foundation grants voting proxies to holders of depository receipts for shares that are not subject to any limitations.

112 112 Other information (Corporate Governance) Statement regarding corporate governance pursuant to Article 2a of the decree of 23 December 2004 setting forth further regulations for the contents of the Annual report (the "Decree") 1. The principles and best practice provisions as meant in Article 3(1) of the Decree, which addresses the Management Board or the Supervisory Board, are met and will be met, unless stated otherwise in this section. 2. No other code of conduct or practices as meant in Article 3(2) of the Decree is observed by Wegener, whether voluntarily or otherwise. 3. The characteristics of the monitoring system indicated in Article 3a (a) of the Decree are given in this Annual report on pages 24 and The information regarding the functioning of the shareholders meeting and the other information meant in Article 3a (b) of the Decree are given above in this section. 5. The information regarding the composition and the functioning of the Management Board and the Supervisory Board indicated in Article 3a (c) of the Decree are given above in this section. 6. This section refers to the information to be furnished pursuant to the Decree implementing Article 10 of the Takeover Directive. There are no persons to whom a special right of control of Wegener accrues under the articles of association as meant in Article 392 (1) (e) of Book 2 of the Dutch Civil Code.

113 Other information 113 Remuneration report Remuneration of the Management Board in 2010 In general, the remuneration of the Management Board is based on the provisions of the Dutch Corporate Governance Code, market comparisons, and the remuneration policy that applies within Mecom. Remuneration policy is established by the General Meeting of Shareholders, while each individual director s remuneration and other terms of employment are established by the Supervisory Board. The aim of Wegener s remuneration policy is to attract, motivate and retain talented, capable board members. The basic tenets of the remuneration policy for 2010 and subsequent periods are: > The remuneration level for the Management Board must be in accordance with general standards for remuneration levels in the Dutch employment market for directors. > The remuneration levels for board members are to be identical, except as when a transition period is required. The chairman receives a supplement to the level of remuneration of the other members of the board. > Performance standards are linked to short- and long-term variable remuneration and are linked to both the results for the financial year in question and to the creation of long-term value. In determining the amount and the structure of the remuneration of directors, aspects given consideration include developments in the result, financial and non-financial indicators that are relevant for the company s long-term objectives, with due observance of the risks to the company that may be entailed by variable remuneration. Remuneration structure in 2010 The total remuneration package for members of the Management Board consists of: 1. Base annual salary 2. Annual results-related bonus 3. Long-term remuneration 4. Pension provisions 5. Other perquisites Re 1 Base annual salary The base salaries for the members of the Management Board in 2010 were in line with the level established a number of years ago. Due to his special (expatriate) status, different agreements that have yet to be negotiated may apply to the chairman of the Management Board appointed as of 22 December Re 2 Bonus The annual bonus is based partly on quantitative financial objectives and partly on qualitative objectives set down in advance. In 2010, these criteria were result development and cash flows. The amount of the bonus is expressed as a percentage of the fixed annual salary and determined within the framework of the Mecom international remuneration structure. Payment of the cash flow-related part of the bonus depends in part on cash flows in the next year. If next year s objective is achieved, this part of the original bonus will be increased. If next year s objective is not reached, this part of the original bonus will not be paid out. Re 3 Long-term remuneration Each year, the board of Mecom Group plc decides whether the members of the Management Board are entitled to options in Mecom shares in that year. In 2010, options were granted in that context giving entitlement to ordinary shares in Mecom Group plc with a nominal value of pence. The options granted have a weighted average exercise price of The options can be exercised between three and ten years after they were granted, depending on whether the performance conditions set in advance were met. The exercisement with respect to the in 2010 granted options is dependent on the achievement of performance conditions set in advance.

114 114 Other information (Remuneration report) No options were exercisable on 31 December The options are non-transferable and they expire upon termination of employment, unless there are exceptional circumstances. Re 4 Pension The pension for members of the Management Board is based on the following principles: > Retirement age is 65. > The retirement pension to be attained is based on an average wage system with an accrual rate of 2.25% of the pensionable salary base. The pensionable salary base is the fixed salary less the fixed deductible for Dutch old age pension (AOW). > A survivor s pension is 70% of the retirement pension plus (to the extent allowed by tax laws) a temporary survivor s benefit of 20% of the attainable retirement pension until the age of 65. > The employee s contribution is 9.6% of the pensionable salary base. Part of this programme is accommodated in the Pensioenfonds voor de Grafische Bedrijven (PGB). That portion is index-linked in accordance with the indexation policy of the executive board of PGB. The other, supplementary, part has been placed with pension insurer Aegon. For that portion, independent of the term of service, a supplementary cost-of-living increase is paid, depending on the surplus interest earned in this scheme. For the duration of a person s membership of the pension fund, each year an indexation supplement is awarded to a maximum of 1.5%, insofar as the financial funds in the deposit fund are adequate for this purpose. Due to his special (expatriate) status, different agreements that have yet to be negotiated may apply to the chairman of the Management Board appointed as of 22 December Re 5 Other perquisites In addition to the remuneration elements set out above, the members of the Management Board are entitled to a hotel expenses allowance, as well as the use of a company car. Due to his special (expatriate) status, the chairman of the Management Board, appointed as of 22 December 2010, will also receive allowances for travelling and accommodation expenses. Early retirement and pre-pension Members of the Management Board, who were employed with (one of the companies of) Wegener before 1 January 2006 are subject to the Conditional Back-Service Programme as agreed within Wegener. This provides compensation for the fact that early retirement and pre-pension plans no longer exist. The compensation consists of an increase in the pension entitlements when a participant retires directly from employment with Koninklijke Wegener and expires when a participant resigns before their retirement age. Loans No loans, guarantees or similar dispensations were furnished to the members of Wegener s Management Board. Employment contracts All members of the Management Board have been appointed for a period of four years. The chairman was appointed to serve until 22 December 2014 and one other member of the Management Board was appointed to serve until 8 May The present contracts of the members of the Management Board who were employed with Wegener before 1 January 2010 provide for a period of notice of three months in the event of termination by the board member and a period of notice of six months if the company terminates the agreement. For all newly appointed members of the Management Board this is 6 months respectively 12 months.

115 Other information (Remuneration report) 115 It has been agreed with all members of the Management Board that they will be paid compensation if their employment is terminated through a cause beyond their personal control. Furthermore, it has been agreed with one member of the Management Board that he will also be paid compensation if the employment is terminated by this member because he no longer wishes, or is no longer able, to perform his duties solely on the basis of a change in circumstances to such a degree that as a result of a merger, acquisition, fundamental change of policy or internal reorganisation, or as a result of Wegener s hiring a director or some other official who is his superior by law and/or in fact he can no longer carry out his duties at the desired level at which he most recently did so. At such time, all relevant circumstances will be considered in determining the amount of the compensation. In accordance with the above, two departing directors were paid compensation in the year under review. Remuneration structure 2011 In principle, the remuneration policy as it applied in 2010 will be continued in Changes to it may possibly be made on the basis of Mecom s remuneration policy.

116 116 Other information Profit distribution thousands of euros Result for 2010 attributable to equity holders of Koninklijke Wegener NV (32,556) On 14 March 2011, the Management Board decided, and the Supervisory Board concurred to make the following distribution: Dividend on cumulative financing preference shares 1,567 Withdrawal from the general reserves 34,123 Despite the loss incurred in 2010, the Supervisory Board and the Management Board proposes, in accordance with article 45 of the Articles of Association of Koninklijke Wegener NV, dividend on cumulative financing preference shares. The dividend on cumulative financing preference shares will be payable beginning 1 June Article 45 of the Articles of Association of Koninklijke Wegener NV, which pertains to the distribution of profits, consists of the following stipulations: 45.1 In addition to other reserves, the company has a dividend reserve for financing preference shares and a share premium reserve for financing preference shares, to which reserves only the preference shares are entitled. If the company acquires (depository receipts for) preference shares, an amount equal to the portion of the balance to be attributed to those (depository receipts for) preference shares in the share premium reserve for financing preference shares, and respectively in the dividend reserve for financing preference shares, will be charged to the share premium reserve for financing preference shares and respectively the dividend reserve for financing preference shares From the profit obtained in a financial year first of all, if possible -- and this at the discretion of the Management Board and with the approval of the Supervisory Board -- either an amount will be added to the dividend reserve for financing preference shares as primary dividend, or an amount will be paid out as primary dividend on the preference shares. The amount of these additions or distributions is equal to the dividend percentage as defined in paragraph 5, calculated on the average balance, weighted for passage of time, of the dividend reserve for financing preference shares during that financial year 45.3 If profit in a financial year is not sufficient to make the additions or the distributions referred to in paragraph 2, in subsequent financial years the stipulations contained in paragraph 2 will only be applied once the deficit has been made up The Management Board is authorised, with the approval of the Supervisory Board, to decide to pay out on the preference shares an amount equal to the deficit as referred to in the preceding paragraph or to add it to the dividend reserve for financing preference shares charged to reserves, with the exception of the share premium reserve for financing preference shares and the dividend reserve for financing preference shares Of the profit remaining after application of the provisions contained in the preceding paragraphs, if possible, a dividend will be paid out on the preference shares equal to a percentage calculated on the sum of the nominal amount of the issued preference shares, increased by the average balance, weighted over time, of the share premium reserve for financing preference shares, and which percentage is fixed at five and thirty-three hundredths of one per cent (5.33%). As of the first of January of the year two thousand and eleven and subsequently once every five (5) years, the dividend percentage of the preference shares will be adjusted to the arithmetic average to be calculated of the five (5) year euro denominated interest rate swap as published by Reuters on page ISDAFIX2, calculated on the average of the last five (5) working days of the year prior to the dividend revision date, and this at eleven o clock in the morning Central European Time, increased by a possible increment, which is to be determined by the Management Board with the approval of the Supervisory Board, of a maximum of three hundred (300) basis points, depending on the market circumstances prevailing at that time. In the event that the prices on the aforementioned Reuters page are not available and that therefore no dividend percentage can be calculated as described herein above, the dividend percentage will be determined by taking the arithmetic average of the mean interests of the fixed euro denominated SWAP interest rate, rounded up to the nearest basis point, as issued on the last five (5) working days of the year prior to the dividend revision date by three banks, which banks issue quotes against receipt of a variable interest rate on the basis

117 Other information (Profit distribution) 117 of six months Euribor, increased by an increment as described above. For the quotes, in principle reference is made to publications of the banks cited previously, to wit: (i) ABN AMRO Reuters page AABIRSEU01, (ii) UBS Reuters page WDREURSWAP1 and (iii) Barclays Bloomberg page BXSW01, or other pages of comparable European banks for which such quotes are available. If one of the aforementioned pages is not available, the bank in question will be requested to issue a direct quote for the day in question If profit in a financial year is not sufficient to make the payments as referred to in paragraph 5, in subsequent financial years the provisions stated in paragraph 5 will only be applied after the deficit has been made up The Management Board is authorised, with the approval of the General Meeting, to decide to distribute an amount equal to the deficit referred to in the preceding paragraph and to charge it to reserves, with the exception of the share premium reserve for financing preference shares and the dividend reserve for financing preference shares At the proposal of the Management Board and with the approval of the Supervisory Board, the General Meeting may decide to reserve a part of the profit remaining after application of the provisions stated in the preceding paragraphs. That which is not reserved of this profit will be distributed to the holders of (depository receipts for) ordinary shares, on the proviso that no dividend payment can take place as long as, at the time of the dividend payment, the balance of the dividend reserve for financing preference shares is positive The Management Board may decide, with the approval of the Supervisory Board, to make distributions charged to the share premium and dividend reserves for financing preference shares The Management Board may, with the approval of the general meeting, pay out an interim dividend, if and to the extent that profit so allows. Interim dividend can also be paid out solely on one type of share. Interim dividend cannot be paid out on the ordinary shares if at the time of the dividend payment the balance of the dividend reserve for financing preference shares is positive. paragraphs 2, 3, 5 or 6 of this article was most recently made until the day of repayment. Moreover, an amount will be paid out equal to the difference between: (I) the cash value of the dividend that would have to be paid out on the shares in question until the next dividend revision date as meant in paragraph 5 of this article if withdrawal had not taken place, and (II) the cash value of the return, calculated for the same period, if the above determined amount that was paid out were to be reinvested in state loans with a remaining term lasting until the next dividend revision date Payments may only be made up to a maximum of the amount of the distributable portion of shareholders equity Distribution of profit takes place after adoption of the annual accounts showing that this is permissible Decisions to pay out interim dividend pursuant to this article are only possible if the condition stated in paragraph 12 has been satisfied as revealed in an interim statement of assets and liabilities. This refers to the state of the assets and liabilities at the earliest on the first day of the third month before the month in which the decision to pay out interim dividend is announced. The statement must be drawn up with due observance of generally accepted accounting principles. The statement of assets and liabilities will include the amounts to be reserved pursuant to the law. It will be signed by the directors; if one or more of their signatures is missing, the reason for this omission will be stated. The statement of assets and liabilities will be deposited at the offices of the trade register within eight days after the day on which the decision to pay out is announced Decisions to make interim and other distributions shall be announced without delay In the calculation of the profit appropriation, the shares held by the company in its own capital are not included In the event of the withdrawal and repayment of preference shares, in addition to the repayment of the nominal amount and the portion of the balance of the share premium and dividend reserves for financing preference shares to be attributed to those shares, a distribution will be made on the preference shares to be withdrawn, which distribution is calculated as much as possible in accordance with the provisions contained in paragraphs 2, 3, 5 and 6 of this article, including the amount of a deficit, and this to be calculated on a proportionate basis over the period from the day on which a distribution of dividend or an addition of dividend as meant in

118 118 Other information Wegener shares Share capital The depository receipts for the ordinary shares of Koninklijke Wegener NV are listed on Euronext Amsterdam Exchange. The nominal value of both the ordinary shares and the cumulative financing preference shares is EUR 0.30 per share. Issued share capital at 31 December 2010 was EUR 15,929,568, consisting of 45,008,842 ordinary shares and 8,089,718 cumulative financing preference shares. Of the ordinary shares, depository receipts have been issued for 6,127,467 of the total, while depository receipts have been issued for all of the cumulative financing preference shares. There were no changes in issued share capital during Shareholders There were no changes to the share ownership during Mecom Media Holding Holland BV (a subsidiary of Mecom Group plc) holds 38,880,948 ordinary shares (not converted into depository receipts). This is 86.4% of the ordinary shares. In addition, Mecom holds 4,200,173 depository receipts for cumulative financing preference shares. The total Mecom holding as of 31 December 2010 was 81.13% of the total capital of Koninklijke Wegener NV. No reports were received in 2010 of a change to a substantial shareholding. According to reports in 2008, Governance for Owners holds 13.28% of the (depository receipts for) ordinary shares. The total Governance for Owners holding as of 31 December 2010 was 11.26% of the total capital of Koninklijke Wegener NV. As of 31 December 2010, Koninklijke Wegener NV still held a package of 3,889,545 depository receipts for cumulative financing preference shares purchased in 2006, representing 7.3% of the total capital. Important dates 18 May 2011 Annual General Meeting of Shareholders 27 July Half-year report (before trading)

119 Other information 119 Share administration foundation report Financing preference share administration foundation report As required by Article 18 Provisions for Administration of ordinary shares and cumulative financing preference shares of Koninklijke Wegener NV, we offer this report to holders of depository receipts. As was explained at the Extraordinary General Meeting of Shareholders of 26 March 2009, the issue of depository receipts for shares will be continued for purely economic reasons. The Board of both foundations was present at the General Meeting of Shareholders, held on 18 May 2010 and at the Extraordinary General Meeting of Shareholders, held on 22 December Holders of depository receipts who had announced they would attend these meetings and who were present were automatically granted voting rights in accordance with the provisions of administration. At both meetings, the board cast its vote for all shares under administration for which no proxy had been given. The board of both foundations is the administrator: > Administration office of the Algemeen Administratie- en Trustkantoor BV in Amsterdam As of 31 December 2010, a total of 6,127,467 ordinary shares of EUR 0.30 nominal value, representing a total nominal value of EUR 1,838,240.10, were in administration by the share administration foundation, and against which bearer depository receipts had been issued in an identical nominal value. This is unchanged since 31 December The total number of outstanding depository receipts for cumulative financing preference shares remaining under administration at year-end 2010 was unchanged at 4,200,173, representing a total nominal value of EUR 1,260, The activities involved in the administration of the shares were conducted by the administrator of the foundation: Administration office of the Algemeen Administratie- en Trustkantoor BV. The annual remuneration for administration for both foundations together is EUR 7,500 (excl. VAT). Apeldoorn, The Netherlands, 18 January 2011 The Board

120 120 Other information Group companies and their activities, and important associated companies (as of March 2011) Wegener Management Board Truls Velgaard (CEO) Chairman Executive Board Wil Cornelisse (COO) Member Executive Board Fieneke v.d. Brink Proposed member Executive Board (18 May) Arnoud Lippinkhof (CFO) Director Finance & Control Rob de Spa Director Content & Editorial Development Gerda Bastet Director Region East Marco Paans Director Region South Hans Zantkuijl (a.i.) Director Region West/North Eilko Bronsema Director IM & ICT Wegener Media BV General manager: T. Velgaard Region East Regional managing director: Gerda Bastet DAILY NEWSPAPERS De Gelderlander Director/publisher: Stef Rietbergen Editor-in-chief: Kees Pijnappels de Stentor Director/publisher: Gerda Bastet (a.i.) Editor-in-chief: Alex Engbers De Twentsche Courant Tubantia Director/publisher: Angelina Schoonewille (a.i.) (per 16 April 2011) Editor-in-chief: André Vis FREE DOOR-TO-DOOR NEWSPAPERS 87 local free door-to-door newspapers Region South Regional managing director: Marco Paans DAILY NEWSPAPERS BN/DeStem Director/publisher: Ad Verrest Editor-in-chief: Johan van Uffelen Brabants Dagblad Director/publisher: Annemieke Besseling (a.i.) (per 1 April) Editor-in-chief: vacancy Eindhovens Dagblad Director/publisher: Annemieke Besseling (a.i.) (per 1 April) Editor-in-chief: John van de Oetelaar (a.i.) Provinciale Zeeuwse Courant Director/publisher: Ad Verrest Editor-in-chief: Peter Jansen FREE DOOR-TO-DOOR NEWSPAPERS 35 local free door-to-door newspapers Region West/North Regional managing director: Hans Zantkuijl (a.i.) DAILY NEWSPAPERS Dagblad De Pers (free) Operational director: Hans Zantkuijl (a.i.) FREE DOOR-TO-DOOR NEWSPAPERS 66 local free door-to-door newspapers Digital products 250 websites national, regional, local and hyperlocal Centrally organised front offices Editorial department free door-to-door newspapers Editor-in-chief: Mart Jochemsen Central editorial department daily newspapers Manager: Rob de Spa Editor-in-chief: Louis van de Geijn National ad sales Manager director: Fred van Domburg Scipio Consumer marketing Manager: Tialde Postma Advertising marketing & Communication Manager: André Kooij Enterprises Manager: Marieke Meijer Call centers Manager: Robert Dijkhuis Sweetdeal Manager: Dirk Renders Wegener SpeciaalMedia Manager: Jan ten Vaarwerk Business unit specializing in services to third parties related to preparation of newspapers, magazines, brochures, annual reports, books, and other printed products. The unit consists of specialists in design and production, project -co ordination, editing, ad sales and distribution.

121 Other information (Group companies and their activities, and important associated companies) 121 Wegener Media Backoffices IM & ICT Manager: Eilko Bronsema Human Resource Management Manager: Heinz Reinink Finance & Control Manager: Arnoud Lippinkhof Operations Manager: Bert Ribbink Procurement & Facilities Manager: Han Daals Central department distribution daily newspapers Manager: Frits Boekhoff Central department distribution free door-to-door newspapers Managers: Gerard Kockmann / Daan van Ee Staff departments Legal affairs Head: Onno Kuit Tax affairs Head: Christiaan van Waalwijk Doorn Corporate affairs & Communication Manager: Han van den Berg Wegener MediaVentions BV AutoTrack.nl Manager: Sander van den Hout National online platform for information about and sale of new and used cars, co-operated by BOVAG and ANWB JobTrack.nl Manager: Elton Habits National online platform for vacancies Wegener NieuwsDruk BV General managerr: Wil Cornelisse Operating manager: Emiel Hagens Printing Plants Wegener NieuwsDruk Brabant, Best Wegener NieuwsDruk Gelderland, Apeldoorn Wegener NieuwsDruk Twente, Enschede Extensive, comprehensive graphic production services related to newspaper-type products such as daily newspapers, free door-to-door newspapers, magazines, periodicals, special publications and directories. Includes concept development and conducting prepress and -printing operations, plus a full range of afterpress and bindery services, addressing and -distribution (including personalized mailings Important associated companies Funda NV 30% Complete listing of residential properties and services via the internet. (voting rights 13%) Mediahaus Wegener GmbH 50% Advertising agent for German advertisess in Wegener products (A complete list of associated companies is provided on page 97 of this report)

122 122 Colophon Editor Han van den Berg, Royal Wegener, Apeldoorn, The Netherlands Graphic design and realisation Studio Wegener Media Paper Cover Contents 300 grams Tom & Otto 135 grams Tom & Otto Printing Drukkerij Roelofs, Enschede, The Netherlands

123 123