Kepler Capital Markets Media Advertising Conference Paris, December 16, 2011 Daniel Fard-Yazdani, Deputy Head of IR Marco Horn, IR
Disclaimer This document, which has been issued by Axel Springer Aktiengesellschaft (the "Company"), comprises the written materials/slides for a presentation of the management. Whilst all reasonable care has been taken to ensure that the information and facts stated herein are accurate and that the opinions and expectations contained herein are fair and reasonable no representation or warranty, express or implied, is given by or on behalf of the Company, any of its directors, or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability is accepted for any such information or opinions. This document contains forward looking statements which involves risks and uncertainties. These forward looking statements speak only as of the date of this document and are based on numerous assumptions which may or may not prove to be correct. The actual performance and results of the business of the Company could differ materially from the performance and results discussed in this document. The Company undertakes no obligation to publicly update or revise any forward looking statements or other information contained herein whether as a result of new information, future events or otherwise. This document does not constitute or form any part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. 2
Axel Springer: Successful transition to digital Axel Springer in 2004 Axel Springer in 9M/2011 Our Vision Digital 2% Digital 30% 1) Europe s leading integrated multimedia company Print 98% Print 70% 50% digital 50% print Strong brands Digital activities represent 30% 1) of revenues and 25% of EBITDA in 9M/2011 1) Pro forma for acquisitions 3
9M/2011: digital advertising revenues higher than German print advertising revenues Advertising revenues in m Advertising revenues in % of group revenues + 335m 600-32m 500 400 300 497 486 388 465 556 26% 23% 19% 24% 20% 200 221 12% 100 0 9M/09 9M/10 9M/11 9M/09 9M/10 9M/11 Newspapers & magazines Digital Newspapers & magazines Digital 4
Germany represents a unique newspaper market Key themes in German market BILD reach vs TV shows 3) Strong circulation revenues in Germany Higher proportion of total revenues than in other countries (reach in m) Navy CIS 21.1 More resilient than in the UK and the US Potential for regular cover price increases Higher share of younger readers No free sheets 12.1 Wetten, dass? 8.9 Les restos du coeur 12.3 7.8 The X Factor 13.7 Strong position of BILD with 80% 1) market share Newspapers with higher share of advertising spend than TV as opposed to US 2) BILD 2.3 L Equipe 3.5 WSJ The Sun 1) Including Berlin newsstand newspaper B.Z.; market share based on paid circulation of newsstand newspapers 2) Source: ZenithOptimedia October 2011 3) UK: TV reach for The X Factor RESULTS 10.2010, BARB (BroadcastersAudience Research Board); average reach of Sun between Apr.09 to Mar. 10 NRS (National Readership Survey), USA: USA Reader Brand Research; MRI Spring 2010, Nielsen Television - TV Ratings for Primetime 2010-11: Season-to-Date, France: Daily newspapers: EPIQ-Studie 2009/2010, TV: Viewers 4J.+ Mediametrie 2009 Mediamat annuel; Germany: Average for Wetten, dass? 2010 (23.01-02.10.2010), Viewers age 14+, AGF/GFK-TV Panel, ma 2011 Pressemedien II (German speaking population) 5 5
Axel Springer is Germany s leading print publisher German newspaper market Print category Axel Springer core brands Axel Springer market share 1) 1.9% Newsstand papers No. 1 80% 7.4% National Sunday newspapers No. 1 84% 19.5% 71.3% National quality papers No. 3 17% Regional subscription papers 2) No. 1 92% No. 1 34% Regional subscription papers Newsstand papers National Sunday papers National quality papers Magazines No. 3 13% 1) Based on paid circulation IVW I-III 2011 2) Figures based on regional markets accordingly (Hamburg: no regional newspapers besides AS titles, Berlin: N 2 Tagesspiegel, N 3 Berliner Zeitung) 6 6
Strong platform for international expansion Ringier Axel Springer Media Individual countries Digital Czech Republic Poland Switzerland Spain France Slovakia Serbia Hungary 1) Combining reach of No. 1 tabloid positions in all JV countries Goal: Further growth and digitization in CEE Russia India Country-by-country approach Strong media portfolios and market positions in each country International roll-out of successful digital business models (partly without physical presence) Making use of network effects and economies of scale 1) Filing of cartel authorization withdrawn in May 2011, further options regarding new filing currently under evaluation. 7
Digital strategy along core competencies Core Competencies A Content portals Audience Advertisers B Classifieds / Marketplaces C Performance marketing Cross-synergies between core competencies increase revenues and profitability 8
A BILD example of our successful transition to digital channels News 1) Site visits (in m) 200m 150m 100m 50m Jan 08 Jun 08 Nov 08 Apr 09 Sep 09 Feb 10 Jul 10 Dec 10 May 11 Oct 11 2) 2) 2) Sport Automotive Computer Site visits (in m) 80.7 80,7 36.1 36,1 31.6 31,6 Site visits (in m) 7.0 7,0 3.7 3,7 0.3 0,3 Site visits (in m) 54.4 54,4 31.7 31,7 9.5 9,5 3) /sport Kicker Online Sport1.de Auto Motor und Sport Auto News Chip.de Pcwelt.de 1) Source: IVW, October 2011 2) Source: IVW, Jan October 2011 (monthly average) 3) Axel Springer s sport sites include: sportbild.de, Bild.de/Sport and Transfermarkt; Source: IVW (Transfermarkt), Webtrekk (sportbild, Bild.de/Sport) 9
A Premium content initiative: Successful on different channels Smartphones Tablets News Portals ikiosk 134,000 digital sales per issue and almost 200,000 digital customers already* * Status: Press information, August 3, 2011 10
B Market leading French real estate portal SeLoger.com Key facts No. 1 real estate classifieds portal in France More than 1.1m offers September 2010: Acquisition of 12.4% from founders April 2011: Public tender offer and squeeze-out successfully completed Purchase price: approx. 633m June 2011: SeLoger acquires 9.4% stake in Asia's No 1 network of online portal sites (iproperty); Stakeholding increased to 16.1% in November 2011 Financials in m 73 37 2009 2010 * Company information SeLoger.com 83 44 Revenues EBITDA Average time on site in minutes Clear market leadership 16 14 12 10 8 6 4 2 0 0.0 Logic-immo.com Explorimmo Refleximmo A Vendre A Louer Acheter-Louer.fr 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Unique Visitors in m Source: Médiamétrie/NetRatings January 2011 11
C Online Performance Marketing Axel Springer shapes zanox as European market leader Highlights Acquisition of continental European market leader zanox in 2007 Expanding market leadership by add-on acquisitions of digital window and buy.at (UK) and M4N (Netherlands) Resilient business maintaining organic growth during the crisis Peers outperformed achieving market share gains Acquired 02/2010 08/2009 06/2011 NL 2 UK DACH F IT ES 1 #1 #1 #1/2 #2 #2 #5 #1 1) incl. Portugal, Latin America 2) incl. BE, LUX 12
Execution of digital strategy: international add-on acquisitions as well as organic expansion Content Classifieds Marketing Acquisition in 6/11 Minority stake in leading South-East Asian real estate portal Acquisition in 8/11 Launch in 7/11 as satellite of BILD.de Acquisition in 9/11 Shareholding increased in 11/11 Acquisition in 6/11 New offices in: Secures No. 1 market position in combination with sofeminin.co.uk Among Top 10 of German women portals one month after launch (IVW) No. 2 position in French car classifieds market Acquisition in 10/11 A-Gites (holiday home rentals) Secures No. 1 market position in combination with existing zanox business in Benelux Turkey (5/11) Poland (5/11) Switzerland (6/11) Brazil (12/11) Offices in 13 countries 13
Financial performance
9M/2011: Axel Springer with EBITDA on all-time high Revenues in m EBITDA in m 2,075 2,318 386 446 18.6% 19.3% 9M/10 9M/11 9M/10 9M/11 Digital Print EBITDA margin EBITDA 15
Operating segments show strong margins, international and digital growing (in m) Newspapers National Magazines National Print International Digital Media 9M/11 9M/10 yoy 9M/11 9M/10 yoy 9M/11 9M/10 yoy 9M/11 9M/10 yoy Revenues 854.1 874.3-2.3% 353.1 354.4-0.4% 350.0 268.5 +30.4% 677.7 504.3 +34.4% Circulation 464.5 463.0 +0.3% 240.4 241.5-0.4% 204.1 162.5 +25.5% - - - Advertising 369.8 389.5-5.0% 95.0 96.4-1.5% 124.2 91.7 +35.4% 556.2 388.3 +43.2% Other 19.8 21.8-9.2% 17.7 16.5 +7.3% 21.7 14.2 +52.6% 121.5 116.0 +4.7% EBITDA 203.6 230.3-11.6% 82.1 78.6 +4.4% 56.8 34.8 +63.2% 111.9 56.1 +99.6% EBITDA margin 23.8% 26.3% 23.2% 22.2% 16.2% 13.0% 16.5% 11.1% 16
Strong cash flow generation and high dividend payments Free cash flow (ltm 1), in m) Dividend payments (in m) 400 350 300 287 299 356 355 336 Dividend payments 2) ( /share) 0.40 0.48 0.57 1.17 1.33 1.47 1.47 1.60 157 250 200 243246 233 231 220 199 209206 177175 107 122 131 131 150 100 50 37 45 52 0 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 2003 2004 2005 2006 2007 2008 2009 2010 1) Last twelve months 2) Based on new number of shares after 3 for 1 share split in June 2011 17
Full-year guidance 2011 confirmed: All-time high in EBITDA, main growth driver digital Group outlook 2011 Revenues EBITDA High single digit increase yoy Low double digit increase yoy Revenue categories Circulation Advertising Other > 2010 > 2010 > 2010 Segment outlook 2011 Newspapers National Magazines National Print International Digital Media Services/ Holding Revenues < 2010 < 2010 > 2010 > 2010 ~ 2010 EBITDA < 2010 ~ 2010 > 2010 > 2010 > 2010 Mid term margin targets EBITDA 25% 20% 15% 20% - 18
Key investment highlights No. 1 publisher in Germany, leading market positions across Europe CEE JV creates the leading platform in the region Proven digitization strategy: Already 30% 1) of revenues digital Additional monetization through paid content, growth potential in mobile Added value through cross-media benefits across the portfolio Strong profitability, healthy balance sheet, and high dividend 1) Pro forma for acquisitions 19
Backup - Financials 9M/2011
9M/2011: Axel Springer with EBITDA on all-time high in m Revenues Circulation Advertising Other EBITDA Margin 9M/11 2,318.2 908.9 1,145.2 264.1 446.3 19.3% yoy +11.7% +4.8% +18.6% +9.0% +15.7% +0.7pp Q3/11 792.6 320.5 382.8 89.3 157.6 19.9% yoy +11.5% +3.1% +18.4% +15.9% +26.5% +2.4pp Revenues up 11.7% yoy in 9M/11, adjusted for consolidation effects +5.3% Circulation revenues up 4.8%, adjusted stable (+0.5%) Advertising growth (+18.6%) driven by organic growth (+8.5%) and acquisitions; digital as main growth driver Strong profitability with EBITDA margin of 19.9% in Q3/11 21
Cost increase driven by organic revenue growth and acquisition effects in m 9M/11 yoy Q3/11 Personnel Purchased goods and services Other operating 622.4 763.2 562.5 +7.5% +12.3% +5.3% 212.9 259.9 190.8 yoy +12.0% +8.0% +8.5% Total Costs 1,948.0 +8.6% 663.5 +9.4% Total costs up by 155.1m, mainly due to consolidation effects and in line with organic revenue development Total costs ex consolidation effects +5.5% mainly due to organic revenue growth of digital media and increased paper and marketing costs Personnel costs up: build-up in international and digital business 22
Newspapers National: EBITDA margin still strong despite higher cost base and lower revenues in m Revenues 9M/11 854.1 yoy -2.3% Q3/11 289.0 yoy -0.3% Circulation revenues stable in 9M/11, supported by BILD copy price increase in May Circulation Advertising 464.5 369.8 +0.3% -5.0% 165.1 117.7 +1.3% -1.1% Ad revenues down yoy in line with expectations Other EBITDA Margin 19.8 203.6 23.8% -9.2% -11.6% -2.5pp 6.2 75.0 26.0% -22.1% +0.4% +0.2pp EBITDA down yoy mainly due to revenue decrease and higher paper costs 23
Magazines National maintains strong margin level above prior year in m Revenues 9M/11 353.1 yoy -0.4% Q3/11 119.8 yoy +7.5% Total revenues slightly down by 0.4%, adjusted for portfolio changes up by 2.3% Circulation Advertising Other EBITDA Margin 240.4 95.0 17.7 82.1 23.2% -0.4% -1.5% +7.3% +4.4% +1.1pp 85.9 29.0 5.0 26.8 22.4% +9.6% +6.7% -16.2% +29.0% +3.7pp Circulation revenues stable (-0.4%), adjusted up by 2.2%; Q3/11 (+9.6%) benefitted from calendar effects Advertising revenues down by 1.5%, adjusted up by 0.5% Strong EBITDA margin in 9M/11 (23.2%) and Q3/11 (22.4%) 24
Print International: Revenue and EBITDA increase driven by CEE JV consolidation in m Revenues 9M/11 350.0 yoy +30.4% yoy adjusted 1) -3.7% Q3/11 113.4 yoy -0.7% yoy adjusted 1) -3.3% Revenue growth of 30.4% in 9M/11 driven by consolidation effects (CEE JV) in H1/11 Circulation Advertising 204.1 124.2 +25.5% +35.4% -4.9% -2.4% 69.5 37.0 +0.1% -4.8% -2.8% -7.3% Adjusted circulation revenues down by 4.9% in 9M/11 Other EBITDA Margin 21.7 56.8 16.2% +52.6% +63.2% +3.3pp +1.6% 6.9 +16.4% +17.7% 16.3-6.7% -13.3% -16.3% 14.4% -2.1pp Adjusted advertising revenues down by 2.4% in 9M/11, Switzerland and Russia still growing in Q3/11 EBITDA up by 63.2%, mainly due to the CEE JV consolidation 1) Adjusted for consolidation and foreign exchange effects 25
Digital Media: Continued organic growth at 22%, EBITDA significantly up in m 9M/11 yoy Q3/11 yoy Revenue growth of 34.4% in 9M/11 Revenues Advertising Other 677.7 556.2 121.5 +34.4% +43.2% +4.7% 242.6 199.1 43.5 +42.4% +44.1% +35.1% Organic growth of 21.8% in 9M/11 (based on pro forma revenues of 700.3m in 9M/11 versus 574.7m in 9M/10) EBITDA Margin 111.9 16.5% +99.6% +5.4pp 40.5 16.7% >100% +7.4pp Pro forma revenues Digital Media at 29.9% of pro forma total revenues (9M/10: 26.8%) EBITDA doubled, margin up from 11.1% to 16.5% 26
Adjusted eps increases by 1.3% in 9M/11 Net income 9M/11 233.2 9M/10 H1/10 Q3/11 Q3/10 H1/10 257.6 82.0 87.3 Non recurring-effects 1) 1.5-35.2 0.3 0.3 Effects of purchase price allocations 35.4 24.5 Taxes attributable to these effects -10.5-5.9 11.9-3.0 9.2-2.4 Adjusted net income 259.5 241.0 91.1 94.4 Thereof attributable to non-controlling interests 32.2 16.6 10.3 10.1 Adjusted net income attributable to shareholders of Axel Springer AG 227.4 224.4 80.8 84.3 Weighted average number of shares outstanding (in m) 2) 98.5 98.5 98.5 98.5 Adjusted eps (in ) 2.31 2.28 0.82 0.86 1) Previous year: Non-recurring effects and other non-operating effects. 2) Based on weighted average number of shares outstanding in 2011. 27
Free cash flow/net financial position in m Free cash flow Net financial debt / liquidity 1) 204.9 260.7 79.6 12/31/10 09/30/11 9M/2010 9M/2011-446.4 Credit line of 1.5bn secured until 2012, 1bn thereof extended until 2013 1) Excl. pension liabilities (12/31/10: - 389m; 09/30/11: - 351m) and treasury shares (12/31/10: 0.6m shares; 09/30/11: 0.3m shares) 28
Investor Relations contacts Claudia Thomé Head of Investor Relations Phone: +49 30 2591 77421 Mobile: +49 160 90445035 claudia.thome@axelspringer.de Daniel Fard-Yazdani Deputy Head of Investor Relations Phone: +49 30 2591 77425 Mobile: +49 151 52844459 daniel.fard-yazdani@axelspringer.de Axel Springer AG Axel-Springer-Str. 65 10888 Berlin / Germany Fax: +49 30 2591 77422 29