Hamburg, 22 March 2007 – Revenues soar to ;euro;2.86 billion / Operating EBIT rises to ;euro;277 million / Profitability up for second consecutive year / STERN reports best results ever / Position in China improved considerably / Launch of the "Expand your Brand" strategy
Gruner + Jahr´s growth was faster than that of any other German major publisher for the second consecutive year, forcefully underscoring its position as Europe´s biggest magazine publisher and Germany´s highestsales publishing house. Results were the highest they have been since 2000, the year of the Internet boom. Profitability also increased for the second year running.
In the 2006 fiscal year, G+J increased its revenues by 9.1 percent to ;euro;2.86billion (2005: ;euro;2.62 billion), the biggest revenue surge seen in the pasteleven years. The revenue increase was primarily attributable to new titlesand expansion, and the first-time full-year consolidation of MotorpresseStuttgart and the Prinovis gravure operations, a joint venture with Arvatoand Axel Springer. Despite tough competition and sales markets thatcontinued sluggish, the other titles in the portfolio also made a solidcontribution to the revenue increase. G+J once again had the largestinternational revenue share of any German publisher: 53.9 percent of totalrevenue was generated outside the country.
Profitability also picked up, and results improved overproportionately torevenues. At ;euro;276.9 million Operating EBIT was up by 10.6 percent year onyear (2005: ;euro;250.3 million). Return on sales has increased steadily over thepast two years and rose to 9.7 percent (2005: 9.5 percent). In the coremarkets Germany and France, it was significantly higher, reaching doubledigits. The rise in revenues is attributable to an overall gratifyingperformance in the core business, despite a market environment thatcontinued difficult: The ad sales market underwent a favorabledevelopment, and portfolio effects and special items boosted the bottomline.
Publishing investments rose to ;euro;57 million (2005: ;euro;42 million), in addition tostart-up investments for the new PRINOVIS gravure facility in Liverpool anda print market that continues to be keenly fought. Gruner + Jahr launchedeleven new titles in 2006. This brings the worldwide total of new titleslaunched in the past three years to 57 – of the total 300 objects in thepublisher´s portfolio. The number of employees worldwide increased to14,529 (2005: 13,887).
As Dr. Bernd Kundrun, CEO of Gruner + Jahr AG, declared today at theAnnual Press Conference in Hamburg: "G+J remains on its expansionist
course. We have forcefully increased our revenues the second yearrunning, added market shares while also improving profitability. We willcontinue to pursue this strategy of profitable growth in 2007, with a focus onexploiting the potential of our major brands even more intensely– in theprint realm and beyond. Apart from participations and the print business,our "Expand your Brand" projects are the priority now.The company will be able to continue successfully realizing this strategy ofexpansion thanks to its financial strength, said Achim Twardy, ChiefFinancial Officer on the Gruner + Jahr AG Executive Board: "Gruner + Jahris in excellent financial shape. We expanded considerably by acquisitions in2006 and handled our investments, both in publishing and in the printbusiness, on our own steam. And we intend to continue this investmentstrategy in 2007 as well."
The company´s employees will also benefit from the good results of the2006 fiscal year: The Executive Board announced that this year´s profitparticipation payout would be well above that of the previous year.
The "Expand your Brand" Initiative Was LaunchedStrategically speaking, the "Expand your Brand" initiative to develop G+J´sbrands had a formative influence on the year under review. Dr. BerndKundrun said: "In these times, when new digital media keep emerging,people´s media use habits have changed dramatically. Our aim as aforward-looking media group is to adjust our branded offerings to the needsof today´s readers and users. Therefore, our editors and publishing peoplewill explore the development of editorial concepts beyond print in evengreater depth than before– both online and offline."
Some early successes of the "Expand your Brand" strategy includeaugenzeuge.de, an online picture agency for amateur photographers, andview-fotocommunity.de, the Web site of the STERN line extension, VIEW.Gratifying "offline" results include the GEO Thematic Encyclopedia, whichhad achieved total circulation of 1.2 million copies, and the popular tradefair "eat´n STYLE." By introducing this new type of trade fair, the Gruner +Jahr subsidiary G+J EME created the first-ever platform that turns the G+Jbrands into a direct experience. In two days, more than 15,000 peoplevisited the trade fair to view the offerings of over 100 exhibitors in Cologne.The fair was hosted by G+J-brands ESSEN;TRINKEN, ESSEN;TRINKENFÜR JEDEN TAG, LIVING AT HOME and VIVA, who were alsoinstrumental in realizing it.
Another "Expand your Brand" step was the recent acquisition of theENTERTAINMENT MEDIA VERLAG, Munich, the leading special-interestpublisher in Kino Film, Video/DVD, music and games. In particular, theimprint´s extensive database – and its in-depth experience with Livepapertechnology - opens up a wide range of possible uses for all of Gruner +Jahr´s divisions.
"Expand your Brand" will continue in 2007, and Bernd Kundrun announceda number of new projects: "Gruner + Jahr is changing from a puremagazine publisher into a multimedia content provider. We made this veryclear by reformulating our corporate mission: "We inform, inspire andentertain people to enrich their lives."
Gruner + Jahr´s universally acknowledged commitment to quality is thedriving force behind this development and the foundation on which it builds.In 2006, G+J magazines and imprints again won numerous prizes, andmade an impressive showing at the LEAD AWARDS 2007, after havingreceived awards for Lead Magazine of the Year and Newcomer of the Yearas recently as 2005. In Austria, VERLAGSGRUPPE NEWS won awards forthe Publishing Executive and the Journalist of the Year. In the Netherlands,G+J was voted the magazine publisher of the year.
Expansion Worldwide – G+J Considerably Improves its Position in ChinaGruner + Jahr considerably expanded its international activities last year,and now has operations in 24 countries all over the world. The growth giantChina is an especially interesting emerging market: By buying a stake inBODA/Ray Li, G+J last fall, considerably improved its position in one of theworld´s most promising magazine markets and, together with its newpartner Ray Li, became China´s second-biggest magazine publisher.BODA/Ray Li publishes four women´s and living magazines and operatesnumerous other businesses clustered around the RAY LI brand, includingAsia´s most popular Internet portal for women, which scores around eightmillion unique visits per day.
In Southeastern Europe, the joint venture established in 2006 betweenGruner + Jahr and Sanoma International is already the leading magazinepublisher in Croatia, Serbia and Slovenia. In Greece, the acquisition ofDaphne marked the group´s entry into yet another emerging market.
G+J Germany Enhanced its Leading Position
In Germany, Gruner + Jahr significantly increased its revenues and result,and further enhanced its leading position in the ad sales market. Online adsales rose strongly, and total sales from all G+J Web sites put them amongG+J Germany´s Top 10 revenue drivers. This gratifying development wasreflected in the market ranking of all German magazine publishers(Kressreport 3/2007), where, for the first time since the boom year of 2000,G+J scored top placement again.
Again, the company´s strong brands were the drivers behind this upwardtrend: STERN posted its best result ever, and remains the division´s biggestindividual contributor of revenues and profits. Revenues and earnings atBRIGITTE, GALA and GEO again showed a very gratifying development.GEO´s 30th-anniversary issue had record sales of over 600,000 copies. G+JCorporate Media scored the best result in its history.Motorpresse Stuttgart, which continues to deliver a very satisfactoryperformance, also posted record earnings..
Major, well-established G+J brands celebrated big anniversaries: AUTOMOTOR und SPORT turned sixty, ELTERN forty, and GEOLINO ten.NEON, on the market since 2003, is today regarded as one of the mostsuccessful magazine launches of the past ten years. Two new magazinesmade their market debut: EMOTION and DOGS.
G+J France Grew its Market SharesPRISMA PRESSE in France also posted a rise in revenues and earnings,despite a market that continued fiercely competitive As in past years,FEMME ACTUELLE formed the backbone of this positive development,again making a key contribution to net income in 2006. The TV guides –T;Eacute;L;Eacute; LOISIRS and the two biweekly TV magazines T;Eacute;L;Eacute; 2 SEMAINESand TV GRANDES CHA;Icirc;NES – defended their leading market positionamong TV listings magazines and improved their result considerably.Fifteen years after its establishment, CAPITAL registered the highestcirculation in its history and confidently defended its position as Europe´sbiggest business magazine. In the people segment, GALA had a historicyear in ad sales and VOICI managed to become the country´s absolutenumber one in terms of circulation. The acquisition of Axel Springer´s BIENDANS MA VIE complements the portfolio of women´s magazines by addinga title for younger female readers.
In fall, Gruner + Jahr´s joint venture with Axel Ganz premiered the weeklywomen´s magazine JASMIN in this very keenly fought market segment –the first launch of a women´s weekly in France since 1984.G+J International Improved Its Revenues and Result ConsiderablyG+J International registered a sharp increase in revenues for 2006, thanksin part to the consolidation of Motorpresse International, and theacquisitions in Greece and Serbia, Croatia and Slovenia. Results roseoverproportionately to revenues.
In Austria, VERLAGSGRUPPE NEWS further enhanced its market leadership andclosed 2006 with a record result – despite the entry of new competitors. In Spain, G+J ESPA;Ntilde;A established a joint venture MPS Spain, which will turn it into a market leader among magazine publishers this year. In the Netherlands,GLAMOUR – which was only launched in 2005 – rose to the top of the women´smagazine market last year.
The GEO family added new members in Greece and Slovenia, bringing the totalnumber of international GEO editions on the market to roughly fifteen. Many ofthem are already operating at a profit. FOCUS made its debut in China, thecountry´s first popular-science magazine.
Meanwhile, several titles were discontinued for lack of publishingprospects, including GALA in Spain and GEOFOCUS in Russia.In newspapers, the FINANCIAL TIMES DEUTSCHLAND continued its successfuldevelopment last year and has now become well established in the market. TheSÄCHSISCHE ZEITUNG and MORGENPOST again achieved outstanding results.Competition in the print business continued tough, both in Europe and inthe U.S. PRINOVIS further enhanced its leading position in the Europeangravure market and opened a state-of-the-art printing facility in Liverpool,England in September. From there, PRINOVIS is tapping importantsegments of the lucrative British market.
G+J´s American subsidiary BROWN PRINTING also had a successful year despitetough competition, and reinforced its good position in the market.
Dr. Andreas Knaut
Executive Vice President
Phone: +49-40-3703 3113