Press release

Gruner + Jahr Successfully Counters the Crisis in Its Markets

Hamburg, 01 April 2009 – G+J defends its position as Europe's biggest magazine publisher and highest-revenue German publishing house / Revenue and profit impacted by emerging worldwide economic crisis / "Expand your Brand" revenues up

Gruner + Jahr, Europe's biggest magazine publisher and the highestrevenue publishing house in Germany, defended its market position in 2008. The company is in good economic shape, and achieved solid results though its worldwide operations were already under the negative influence of the emerging economic crisis.

Following a satisfactory first half, the 2008 financial year was distinctly marred by recessionary economic developments during the second half, which impacted all European ad sales markets, and took their toll on sales and earnings at the Gruner + Jahr publishing house as well. Overall, Gruner + Jahr recorded a 2.2-percent decline in revenues, to ;euro;2.77 billion (previous year ;euro;2.83 billion). Operating profit before special items for the period under review fell to ;euro;225 million (previous year: ;euro;264 million). G+J's return on sales amounted to 8.1 percent (previous year 9.3 percent). Because of special items resulting from the implementation of the structural measures, EBIT for fiscal 2008 remained below the previous year, at ;euro;170 million, (2007: ;euro;226 million).
During the reporting period, Gruner + Jahr continued to generate high cash flow from operations and is free of financial debt.
G+J's brands business recorded a revenue decline to ;euro;1.98 billion (previous year: ;euro;2.01 billion).
Operating EBIT dropped to ;euro;181 million (previous year: ;euro;198 million), and the operating margin was 9.1 percent (previous year: 9.9 percent). The initial effects of the recession were felt across all European publishing markets, albeit to varying degrees. Growth as a result of the successful development of the "Expand your Brand" activities, as well as gratifying growth in China and the countries of eastern Europe only partly compensated for the sometimes sharp declines in ad revenues. Compared to the economic fluctuations, sales turnover remained robust.
The "Expand your Brand" strategy initiated by the Executive Board in 2006 to expand G+J's brands to new media platforms continued to bear fruit, and resulted in an over 20-percent increase in revenues from non-print activities.
Gruner + Jahr's business holdings were also affected by the incipient economic crisis in 2008.
Sales and earnings in the printing business continued to decline, while Dresdner Druck- and Verlagshaus holding showed a positive performance. Overall, the revenues of G+J's holdings continued to decline in 2008. At ;euro;44 million (previous year: ;euro;65 million), the operating EBIT yielded a lower operating margin of 5.6 percent (previous year: 8.0 percent).

Employee numbers
G+J's worldwide employee count increased slightly year on year to 14,941 (previous year: 14,448).
"Despite the negative effects of the economic crisis, which were already felt during the second half of the year, Gruner + Jahr generated decent results in 2008. Thanks to our forward-looking, resolute countermeasures, Gruner + Jahr and its strong media brands are healthy and in good shape," declared G+J Chairman and CEO Dr. Bernd Buchholz at a press conference in Hamburg.
"We will remain committed to quality journalism and live up to our journalistic responsibility to society. In doing this, we have to respond to structural challenges with a willingness to change our structures. We see growth opportunities in the international markets, in our "Expand your Brand"process and in the further diversification of our businesses – for instance, into corporate publishing or in digital marketing," Buchholz added.
Achim Twardy, G+J Board Member and Chief Financial Officer, said: "Gruner + Jahr is very profitable and financially sound. We continue to generate high liquidity from operations, and have no financial debt. Our strategy of prudently investing our funds in the systematic expansion of our own businesses, instead of making acquisitions at sometimes astronomical purchase prices, has proven absolutely correct. We will continue to pursue this investment policy, but also have the necessary latitude to take action should opportunities arise in the marketplace." G+J Germany
Despite a drastically deteriorating ad sales market over the course of 2008, G+J Germany's turnover increased once more during the past financial year. Changes to the portfolio contributed significantly to the rise in revenues.
At the beginning of 2008, G+J Germany acquired the remaining shares in the FINANCIAL TIMES DEUTSCHLAND. A subsequent merger of G+J's business publications (CAPITAL, IMPULSE and BÖRSE ONLINE) resulted in the creation of Germany's biggest business editorial office in Hamburg, where resources can be shared while still preserving the identity and the journalistic standards of the individual titles.
G+J Germany entered the "young people" magazine segment by establishing a joint venture with Klambt-Verlag for the magazine IN – DAS STAR & STYLE MAGAZIN. The acquisition is an ideal complement to GALA, which made a gratifying contribution to earnings in 2008.
With the acquisition of Ligatus GmbH in the summer of 2008, G+J Germany expanded G+J's online ad-sales business, Electronic Media Sales (EMS), into the fast-growing segment of performance marketing. This move makes it possible for EMS to strengthen its competitive position by offering integrated solutions in the premium segment of online marketing. The marketer's development in 2008 significantly exceeded expectations in both sales and earnings. G+J EMS also delivered a compelling performance in its established display-marketing business in 2008.
With a growth rate of over 50 percent (excluding Ligatus) the company significantly outperformed the market. Growth drivers included new clients such as FTD.de, CHEFKOCH.de and mamiweb.de, alongside existing client websites (arcor.de and Vodafone live!).
The corporate publishing sector continued to grow in 2008. Corporate Media focuses on B2C customers and staff magazines in the premium sector.
Acquisitions made in 2007 under the \"Expand your Brand\" strategy, XX-WELL.com (online diet coach) and CHEFKOCH.de (online cooking community), developed favorably.
Strong and established media brands once more formed the main basis for G+J Germany's market success. Despite the very difficult situation in the German ad sales market, GALA, BRIGITTE WOMAN, DOGS, NEON, ESSEN UND TRINKEN, HEALTHY LIVING and P.M. were all able to improve their ad business year on year. G+J Germany's newsstand sales remained stable year on year, across the board. PARK AVENUE and VIVA were discontinued due to lack of prospects.
"Frau im Spiegel" magazine was sold to the WAZ Media Group.
Motor Presse Stuttgart saw a drastic downturn in sales during the year due to a collapse in the demand for automobiles and the ensuing sharp drop in ad bookings. The Telecommunications and Consumer Electronics division was sold to the Munich-based WEKA Publishing Group in 2008.

G+J France
The French magazine market was impacted by declining sales and advertising volumes. Happily, Prisma Presse was able to buck the market, keeping its newsstand sales revenues stable year on year and defending its market position. The group also grew its share of the ad sales market vis-;agrave;vis its main competitors. Nonetheless, revenues did not match the previous year's level. Vigilant cost management and successful acquisitions led to further earnings growth - despite a year-onyear rise in spending on development costs in the online sector.
With FEMMES, Prisma Presse launched the first luxury-segment French magazine for women over 40. Meanwhile, the title BIEN DANS MA VIE had to be discontinued in 2008. Motor Presse France expanded its portfolio with the acquisition of six titles from Mondadori.
Prisma Presse began building a corporate publishing division in 2008, having won a large-scale contract from the pay-TV channel CANAL+. Prisma Presse's websites doubled their reach in 2008, and online revenues increased year on year, with growth exceeding the market average. Prisma Presse is now the market leader among pure-play publishing websites.

G+J International
The countries in which the G+J International Division operates were hit to varying degrees by the global recession. After significant growth in previous years, G+J International's turnover and operating profit declined in 2008. Alongside declining ad revenues, the main cause for this was expenditure on structural and portfolio changes. GALA (Netherlands), LIFE & STYLE (Russia), and MAXI TUNING (Czech Republic) were discontinued for lack of prospects. The title MOJE MIESZKANIE (Poland) was sold.
In 2008, G+J International was confronted in particular with critical developments in Spain.
Alongside the bursting of the housing bubble, another key indicator of the economic crisis in Spain was a more than 50-percent year-on-year drop in automotive industry sales. Motorpress Ibé;rica titles consequently recorded significant declines in sales.
Developments in China, on the other hand, continued encouraging. The BODA holding delivered a splendid performance; the company had the best year in its history. Sales and earnings of the RAY LI media brand continued to increase significantly in 2008. G+J China's launch of BABY WORLD magazine rounded off the successful business year in China.
The activities of the Adria joint venture with Sanoma included, among other things, the acquisition of the wedding title VJENCANJA in Croatia as well as the parenting titles MAMA and TRUDNOCA in Serbia. The title SENSA, launched in Croatia in 2007, was rolled out to Serbia last year. STORY magazine was launched in Slovenia in October, which means it is now available in all three countries serviced by the Adria joint venture.
The Motor Presse International portfolio was expanded with the acquisition of the titles CHIP, PCGURU and MASCHINENMARKT in Hungary, and by the acquisition of H-MAGAZINE and the launch of the outdoor sports magazine OXIGENO SPORT LIFE in Spain.
The internationalization of GEO was further advanced in 2008 with new editions in countries including Finland and India. In addition, G+J launched an international online "Parenting Network," beginning with Croatia, Italy and France. Its roll-out to other countries will continue in 2009. G+J Poland was able to expand its range of online offerings in the "young adult" segment by acquiring the Polish company Pixelate Ventures, with the social networking site EPULS.pl and the websites STYLIO.pl and STORY.pl.

Newspaper Division
The holding in Dresdner Druck- und Verlagshaus, whose main titles are the SÄCHSISCHE ZEITUNG, DRESDNER MORGENPOST and CHEMNITZER MORGENPOST, recorded an overall positive development in 2008. Revenue declines in the newspaper business were successfully compensated for by developing new lines of business. One essential component of this new business is the postal business; here, DD+V was able to further enhance its market position by acquiring a customer base in Dresden. In addition, Dresdner Druck- und Verlagshaus acquired the remaining half of the Chemnitz-based WVD media group in 2008.
Print Division
Prinovis, the gravure printing joint venture between G+J, arvato and Axel Springer, had to close its Darmstadt site at the beginning of 2008. The erosion of margins in the European printing industry slowed over the course of the year. However, a decline in volumes was recorded in the gravure industry in continental European in 2008, driven by macroeconomic developments. On the other hand, Prinovis Liverpool was able to report a gratifying improvement in sales and earnings as a result of an increase in capacity utilization, according to plan.
Due to the recessionary trend in the U.S. magazine market, the utilization of plant capacity at Brown Printing fell dramatically in the second half of 2008. However, Brown Printing was able to noticeably increase its market share vis-;agrave;-vis its competitors.

Enquiries:
Alexander Adler
Vice President, Media Relations
Corporate Communications
20444 Hamburg
Phone +49-40-3703-2244
Fax +49-40-3703-5617
E-Mail: adler.alexanderguj.de

Dr. Bernd Buchholz

Digital Press Kit 2009