Press release

Innovation, Acquisition and Merger: Gruner + Jahr Lays Cornerstones for the Future in 2004

Hamburg, 17 March 2005 – G+J in 2004 launches 23 magazines in Germany and abroad against the trend / Publishing investments totaling ;euro;67 million / Operating EBIT at ;euro;215 million / Growth target for 2010: ;euro;3.5 billion in revenues

Gruner + Jahr, Europe´s largest magazinepublisher, once again delivered a gratifying performance in 2004, atthe same time forming the basis for lastingly increasing the company´svalue and for strong growth. As G+J CEO Dr. Bernd Kundrun said todayat the annual press briefing in Hamburg, the goal is to increaserevenues to roughly ;euro;3.5 billion by 2010, while raising operating ROSto over 10 percent. He is relying on "the triad of innovation,acquisition and merger" to achieve these targets. A vast number ofinnovations in the international magazine markets, the takeover of amajority stake (54.9 percent) in Motor-Presse Stuttgart, and theplanned gravure joint venture with arvato and Axel Springer already"form the cornerstones of G+J´s growth strategy for the years ahead,"Kundrun added. The acquisition and the gravure merger arepending antitrust approval.

In the past year, G+J introduced 23 innovative magazines worldwide –more than ever before in the history of the publishing company.Together, their average sold circulation already exceeds 4.5 millioncopies. Publishing investments that reduced net income by approx.;euro;67 million in 2004 underscored G+J´s long-term growth focus.

As a result of these significant publishing investments which were upconsiderably over the previous year, Operating EBIT declined to;euro;215 million (previous year: ;euro;238 million). Operating ROS amounted to8.8 percent (previous year: 9.6 percent). Adjusted for publishinginvestments, ROS was 12.1 percent – exactly on par with the previousyear´s excellent result. Revenues remained nearly constant in2004 at ;euro;2.44 billion (previous year: ;euro;2.48 billion), despite lingeringunfavorable conditions in the sales and advertising markets, and thesale of several titles. At the end of 2004, G+J had 11,567 employeesworldwide (2003: 11,351 employees).

Dr. Bernd Kundrun declared: "Gruner + Jahr looks back on a particularlyimportant and successful year. Gruner + Jahr is pursuing itsexpansionist course with a full head of steam. We have explicitlyaccelerated our efforts to lastingly increase the company´s value.The publishing investments and entrepreneurial decisions made in 2004give us the vitality needed to put our high revenue and earnings targetsfor 2010 into practice. Our aim is not to maximize profits in theshort term, but to create sustained growth in our businesses. At thesame time, we have the power to divest in areas where we haven´tachieved compelling market positions." Kundrun emphasized that theU.S. magazine business was less than satisfactory in 2004. He pointedout that the new management has initiated a restructuring programthat is already producing successful results.

G+J Chief Financial Officer (CFO) Achim Twardy said: "Gruner + Jahrmade a good profit in 2004 despite difficult market environments.Adjusted for currency effects and sales of titles, revenues actuallyincreased by 3.9 percent, or ;euro;92 million. The cash flow, which isonce again high at ;euro;229 million, gives us the financial leeway formaking our growth targets. We plan to invest between two and threepercent of our revenues in new titles again in 2005.Further resources have been earmarked for acquisitions."

G+J´s French subsidiary Prisma Presse blazed the trail for a vastnumber of innovations at Europe´s biggest magazine publisher in 2004.By launching the innovative T;Eacute;L;Eacute; 2 SEMAINES, Prisma Presse not onlydelivered the most successful French magazine debut of the pastdecades in France, but also established a whole new segment, i.e.biweekly TV guides. The title TV GRANDES CHA;Icirc;NES launched immediatelyafterwards, also became successfully established in the market aftera very short time. With total circulation of four million sold copies,Prisma Presse has taken the lead in the French TV market by a widemargin with the two innovations and the weekly TV title T;Eacute;L;Eacute; LOISIRS.Today, every third TV guide sold in France is a G+J publication.

In Germany, G+J launched GEO KOMPAKT, the ninth title in the GermanGEO family. The quarterly magazine is designed as a "Library ofKnowledge" with issues each devoted to a specific "general education"topic. Despite its high cover price of ;euro;7.50, the first issue hasalready sold over 180,000 copies. The new title BRIGITTE BALANCEoffers tips and advice for achieving a healthy equilibrium in life,and caters to readers interested in topics like fitness, nutritionand medicine. By its second issue, the magazine was selling130,000 copies. Circulation of ESSEN;TRINKEN FÜR JEDEN TAG underwentexcellent development, reaching a circulation well over 360,000 copiesby year-end, thanks in part to a collaboration with the TV channelVOX and celebrity cook Tim Mälzer. This translates to a tripling ofsold issues in just nine months, making it Germany´s biggest foodmagazine based on sales (Source: IVW). The innovative magazine NEONmade its debut as a monthly last year, and first exceeded the thresholdof 100,000 sold copies in summer. In March 2005, NEON won the GermanLeadAward in silver as "Newcomer of the Year."

Activities in the newly formed International Magazine Division (UBZI)were also marked by innovation and expansion. In all, 18 titles werelaunched in six countries, including ten magazines in the popular-science segment – among them QUEST in the Netherlands, which wonseveral awards including "Launch of the Year 2004." Of the newpopular-science titles, four cater to children and teens, includingMUY INTERESANTE JUNIOR in Spain and FOCUS JUNIOR in Italy. FOCUS JUNIORin particular – a line extension to Italy´s biggest monthly FOCUS –exceeded al expectations and attained a circulation of over250,000 copies in its first year. The launch of the people magazineGALA in Spain as part of a 50/50 joint venture with the Spanishnewspaper publisher Vocento illustrates G+J´s ambition of lancingpowerful brands in densely populated markets.

G+J´s core business also delivered good results in Germany andinternationally. In Germany, STERN enhanced its position as thelargest single contributor of revenues and earnings throughout theG+J portfolio and defended its segment market leadership despitetough competition. BRIGITTE continues to dominate the market ofbiweekly women´s magazines by a large margin. GALA achievedconsiderable growth in circulation and ad sales in its eleventh year.And CAPITAL and IMPULSE reached turnaround in 2004 after sometough years in business. CAPITAL is still Germany´s highest-circulationbusiness magazine. Thanks to a successful evolution and optimizationof the Polish magazines CLAUDIA, GALA and GLAMOUR, G+J in 2004 tookthe lead in the Polish ad sales among magazines last year. Afterseveral years of eroding circulation, the French women´s magazinePRIMA managed a reversal in 2004 and increased its sales bytwo percent. In Italy, G+J/Mondadori still publishes the country´sbiggest and most successful monthly magazine, FOCUS, prevailing overcompetition that has intensified considerably. In Russia, GEO playeda key part in the abrupt rise in G+J´s local advertising income,which topped 80 percent in the first half of the year alone.

In the Print Division, the German and American plants significantlyimproved their performance year on year. This development was theresult of successful cuts in production costs, a sales offensiveby the German printing operations, and the successful startup ofproduction of three major weekly titles for our customer Time Inc.at the Brown Printing plant in Woodstock (Illinois).The strengthening of our market position in Europe and the USAin 2004, the planned gravure joint venture with arvato andAxel Springer, and comprehensive investments in replacements atthe Waseca (Minnesota) plant all pave the path to continued growthfor our printing operations.

For further information:

Kurt Otto
Vice President, Media Relations
Gruner + Jahr AG & Co KG
Am Baumwall 11
D-20459 Hamburg
Phone: +49-40-3703-3810
Fax: +49-40-3703-5617
E-Mail: otto.kurtguj.de