Press release

Gruner + Jahr raises revenues yet again while investing in its core business and the digital future of its strong brands. G+J Germany obtains a record result in 2011. G+J International expands its engagement in India.

Hamburg, 28 March 2012 –

ly organic
- Operating EBIT above pre-crisis level
- Annual net income at the same high level of the previous year
- High profitability with a double-digit return on sales
- Sale of Prinovis in autumn 2011
- Investments in India and in digital transformation
- High level of profit participation – employees participate in corporate success

Hamburg, March 29, 2012
Gruner + Jahr looks back on a good fiscal 2011: G+J recorded a slight, mainly organic growth in revenues in the period under review, with the operating result remaining high and above the level of the pre-crisis years.
Adjusted revenues reached a level of 2.29 billion Euro1 (2010: 2.26 billion Euro), operating EBIT was 233 million Euro (2010: 260 million Euro). Thus the operating result for 2011 again significantly exceeded pre-crisis levels. The anticipated decline was due to a significant increase in paper prices, higher development costs for digitization, a large number of innovative new publication titles as well as being due to weak market and business performance in Southern European markets and in the printing sector. Return on sales in the period under review reached a level of 10.2 percent, following 11.5 percent in the previous year. The number of people employed by G+J as of December 31, 2011 was 11,822 (December 31, 2010: 11,637).
In the divisions Germany and International, the trend for advertising revenues, at 725 million Euro, was one of slight decline compared to the previous year (2010: 731 million Euro). Circulation revenues, at 711 million Euro, increased slightly in comparison to the previous year (2010: 705 million Euro). Overall, revenues came to 1.80 billion Euro (2010: 1.79 billion Euro), to yield an operating profit before one-off effects of 201 million Euro, equivalent to a return on sales of 11.2 percent. Amongst other things, revenue growth is due to significant expansion in the digital sector.
EBIT of the Group amounted to 202 million Euro in fiscal 2011 (2010: 243 million Euro). The decline is among others due to a higher impact deriving from special items, particularly a one-time impairment loss recorded against the non-current assets of Brown Printing. G+J generated a net income for the year of 160 million Euro, about at the level of the previous year (2010: 160 million Euro). Gruner + Jahr continues to be free of financial debt, enjoys a comfortable cash position, is hence in a healthy financial position and fully ready to invest.
G+J Germany recorded very positive business development in 2011. The operating profit once again exceeded the strong prior year performance, setting a new record. Both advertising and circulation revenues increased slightly. In its print advertising business, G+J profited in Germany from its portfolio in the premium segment and was able to win new market shares.
The digital activities of G+J continued to develop favourably in the fiscal year. Meanwhile, many of these offers are making positive contributions to the results. CHEFKOCH.DE, the leading Food Community in Germany, has continued its strong development, growing from a high level in sales and results, and, with more than 11 million unique users, belongs meanwhile to the Top 10 of all German registered websites according to AGOF. Gruner + Jahr has continued to invest in thedigital business, having acquired in December 2011 100 percent of URBIA.COM AG, which operates URBIA.DE, the market leader among parents' and family portals in Germany. Following numerous launches in 2011, the various digital versions of the magazines of G+J are presenting a positive development. The marketing of digital content and offerings grew some 34 percent, and in the mobile area G+J EMS achieved a growth rate of roughly 69 percent.
Gruner + Jahr is pursuing the digital transformation of its core competencies, namely the creation and preparation of high quality content, its marketing and distribution. In this context, G+J initiated in spring 2011 the "House of Content" project, which is a key long-term research and development project. Its aim is to facilitate the development of innovative journalistic formats and to make content available on very different media channels with efficient processes and without incurring excessive additional expense. The changing media environment and the expectations of readers and users of media brands demand additional competencies and capabilities that are being developed through this international transformation project.
The development of the international business was varied, depending on the economic situation in the various markets. In France, notwithstanding the economic downturn, sales remained stable, and results were slightly improved. Austria recorded a decline in both sales and results. In Spain, the explanation for the sharp fall in the results compared to the previous year lies in the continuing difficult market conditions. On the other hand, developments in the Netherlands were very pleasing, with a distinct rise in sales and results. Growth in business in China continues to be sustained. In India, the acquisition of the majority shareholding in the publishing house MaXposure represented a successful entry into this strategic and growing market. With the recent acquisition of a majority share in Networkplay Ltd, one of the fastest growing digital marketers in India, G+J International is expanding this engagement and is pursuing its growth strategy – alongside that in China – in India too.
The revenue and net income development for the Dresdner Druck- und Verlagshaus group was very pleasing during fiscal 2011. Despite gaining new customers, increasing market share and raising revenues, Brown Printing was not able to hold its net income at the level of the previous year. The sustained difficult situation and the lack of perspective in the North American printing market necessitated the recognition of an impairment charge of 22 million Euro against Brown Printing's non-current assets. Autumn 2011 saw the sale to ARVATO of the Gruner + Jahr shares of 37.45 percent in the gravure printing joint venture PRINOVIS.
Dr. Bernd Buchholz, Chairman and CEO of Gruner + Jahr AG: "2011 was a good year for G+J, where we invested more in our core business, our strong contents and brands and in the expansion of our activities in Asia. In 2011 we also significantly and successfully advanced the development of our digital business. We believe in and indeed we perceive the willingness of users to pay for high quality content. We shall continue to invest steadily in the digital transformation of our core competencies."
Achim Twardy, CFO of Gruner + Jahr: "The high level of results and the largely organic sales growth show that Gruner + Jahr runs a very sustainable and indeed highly profitable business. In view of the uncertainty in the global financial markets and the possible economic instability in many countries, our forecast remains cautious. Looking ahead to the current financial year 2012, we presently assume that the development of sales and results will be largely stable."
The employees of G+J will participate worldwide in the successful corporate development of 2011. G+J will, as in 2010, distribute profit shares of well over 20 million Euro to its employees, including those in Germany, France and the USA.
Press enquiries:
Claus-Peter Schrack
Executive Vice President
Corporate Communications
20444 Hamburg
Phone +49 (0) 40 / 37 03 - 31 13
Telefax:+49 (0) 40 / 37 03 - 56 17