Press release

Gruner + Jahr Executive Board adopts new strategic orientation – withdrawal from the regional newspaper business and sale of the Berlin newspaper activities to the Holtzbrinck publishing group

Hamburg, 25 June 2002 –

Gruner + Jahr’s Executive Board has set a new course for the group as a result of a strategy process. In the future, Gruner + Jahr’s priority will be to concentrate on expanding and enhancing its market position in the traditional markets for the magazines business and the associated printing companies. To this end, extensive investment is planned in the next few years with the emphasis on the core markets of Germany, France and the US. This will include both the introduction of new titles and also targeted acquisitions. Gruner + Jahr is already the leading international publishing house today and achieves more than 60 percent of its sales outside Germany. The priorities for the market activities of the coming years were defined in the context of an intensive analysis of the market segments.

Operative excellence and strategic decisions will enable Gruner + Jahr to generate the means necessary for the implementation of this strategy. In the business segments, this means the continuous and sustained improvement of results quality. Because of an adjustment program introduced a year ago Gruner + Jahr achieved significant income improvement in 2002 compared with many other publishing companies, despite declining sales in an advertising market that continues to be strongly recessive.

Furthermore, strategic portfolio measures are pursued which will expand Gruner + Jahr‘s investment scope for the tasks ahead and enable further management focussing strategies. Against this backdrop, it was also decided that the company would withdraw from the German regional newspaper business. The FINANCIAL TIMES DEUTSCHLAND, as a national newspaper, is not affected by this decision.

The Berlin newspaper activities will be sold off to the Georg von Holtzbrinck publishing group. This decision is subject to the approval of the Gruner + Jahr committees. Gruner + Jahr will hold discussions about the options for the regional newspaper group in Dresden (SÄCHSISCHE ZEITUNG, SÄCHSISCHE MORGENPOST) at its leisure. And the results of those discussions will also be submitted to the committees for a decision within the coming months.

The regional newspaper business has only a few links to Gruner + Jahr’s magazine business and a further expansion of the newspaper business would also tie up huge financial resources which are needed both for the international expansion and the extension of the core business.

Gruner + Jahr’s regional newspapers are all in a good market position. The BERLINER ZEITUNG is journalistically successful and is highly respected far beyond the Berlin metropolis market. The BERLINER ZEITUNG is still the subscribed newspaper with the widest coverage in the strongly contested Berlin market. The newspaper activities overall (BERLINER KURIER, TIP, BERLINER ABENDBLATT and BERLIN ONLINE) are financially sound despite clear slumps in sales. Unchallenged in its regional market, the SÄCHSISCHE ZEITUNG is the most frequently quoted regional newspaper in the new German states and it continues to return strong profits.

Gruner + Jahr CEO, Dr. Bernd Kundrun, on the new priorities: To achieve our ambitious goals for the Gruner + Jahr core markets and segments we have to concentrate on the essentials. Following an intensive strategy discussion in the Executive Board of Gruner + Jahr, we concluded that the decision to withdraw from the German regional newspaper business was the right step for us. Because of the constant exchange with the Gruner + Jahr shareholders, we expect that this new direction and the individual steps to be taken in order to achieve this will be supported. Nonetheless, the decision was not an easy one for us, since with this comprehensive change in strategy comes the farewell to titles and activities to which the Executive Board and all employees have been strongly committed for many years. I am deeply grateful for the tremendous commitment of our colleagues in the regional newspapers.

Achim Twardy, Gruner + Jahr Newspaper Managing Director said: Gruner + Jahr’s regional newspapers are in good shape. Their staff and contributors in editorial offices and publishing companies understood the need to further develop the papers from a journalistic viewpoint and to maintain market sales and earnings at a very good level despite the worsening market conditions. For this, you all have my highest praise and acknowledgement. In the past number of months we examined all possible cooperation approaches with other publishing groups and expansion opportunities for our regional newspapers. These approaches were not practicable. That is why selling this considerable asset is the right move. The FINANCIAL TIMES DEUTSCHLAND is not affected by this decision. As a national newspaper in the business press, the FTD is firmly anchored as one of Gruner + Jahr’s core segments. As the only German newspaper with national importance, it shows continued and sustained circulation increases and it supports Gruner + Jahr’s segment strategy in the business press area.

Kurt Otto
Press spokesman
Gruner + Jahr AG & Co
Am Baumwall 11
20459 Hamburg
Telefon: +49-40-3703-3810
Telefax: +49-40-3703-5617