News | Gruner + Jahr | Hamburg, 03/28/2014

G+J Presents Its 2013 Financials

• Revenue resulting from sales of businesses (partial closures of business media, sale of G+J Poland) as well as declining advertising and sales revenues in the international division below previous year
• Operating result in Germany above previous year due to the good performance of G+J titles in the advertising market
• High investment in the transformation
• EBIT significantly above prior year
• Clear return to profitability
• Strategic direction following eight defined communities of interest
• Vitalization of big magazine brands
• Organic and acquisitive growth of the digital business
• New appointments to the management board

Hamburg, 27 March 2014 - The fiscal year 2013 at Gruner + Jahr was characterized by personnel, organizational and strategic realignment. The former printing and publishing house transforms itself into a creative house of content that stands for high quality print and digital formats. In fiscal 2013 Gruner + Jahr recorded a decline in revenue as well as operating result remaining below the level of the previous year. Adjusted revenues were € 2.07 billion (2012: € 2.22 billion), operating EBITDA was € 193 million (2012: € 213 million). The EBITDA margin was 9.3 percent after 9.6 percent in the prior year. Operating EBIT fell to € 146 million (2012: € 168 million).

The reasons for the expected decline in revenue and operating result were the partial closure of business media and other sales, increased investment in the transformation and the expansion of the digital business as well as a regressive international business operating within difficult economic parameters.

EBIT amounted to € 123 million in fiscal 2013 (2012: € 50 million). After interest and taxes G+J recorded a net profit amounting to € 81 million. After a net loss of € 11 million in 2012, G+J returned strongly to profitability. At year end the company was free of net financial debt and had a significant amount of free liquidity.

Since April 2013 Gruner + Jahr has been led by Julia Jäkel (Chief Executive Officer), Stephan Schäfer (Chief Product Officer) and Oliver Radtke (Chief Operations Officer). The board members Torsten-Jörn Klein and Achim Twardy departed from the company at that time.

G+J Germany has been able to increase revenue in comparison to the previous year. While circulation revenue declined slightly in line with market conditions the portfolio-adjusted advertising business developed positively against market trends. Working on existing G+J magazines and continuously investing in new magazines pays off: Thus, G+J Media Sales were able to gain market share in the advertising market. G+J digital marketer EMS continued to record dynamic growth as well as the performance based online marketing network LIGATUS. At G+J Germany company structures have been fundamentally changed and oriented towards eight defined Communities of Interest. G+J was able to expand its strong position on the Communities of Interest Living, Food and Family, also by investments in the interior furnishing community ROOMIDO, the delicatessen online store DELINERO and the internet store for baby and children's clothing TAUSENDKIND. The print portfolio was extended by the two innovative titles CHEFKOCH and FLOW, the first issues of both magazines have started very successfully in the reader and advertising market.

The foreign business of G+J International has developed unevenly due to diverse macroeconomic conditions, overall though it is regressive. The magazine business of Prisma Media in France was in decline overall after a good business performance in the first six months due to difficult market conditions in the second half of the year. The digital business in contrast successfully pressed forwards with its expansion, the trend in digital sales continued to develop positively - also through targeted acquisitions. Among others, MOB VALUE and P-COMME-PERFORMANCE, two digital advertising marketers, were acquired in the reporting period.

Declines were also recorded in the Verlagsgruppe News in Austria especially in the advertising business. Activities in Southern Europe continued to be affected by the difficult economic parameters in the reporting period. The business in Poland as well as parts of the business activities in South-East Europe were sold.

The activities of Gruner + Jahr in China continue to remain highly profitable, although showing declines in revenue and operating result due to the advertising market shrinking in 2013 for the first time and the reticence of large Japanese advertising customers. The business in India was expanded slightly in the areas of corporate publishing and digital marketing.

The North American market for high volume printing was again characterized by overcapacity and declining volumes among magazine customers in 2013. The US offset printer Brown Printing recorded declines in revenue and operating result due to lower capacity utilization.

The overall revenue and profitability performance of the Dresdner Druck- und Verlagshaus in fiscal 2013 was again pleasing overall and remained stable in comparison to the previous year due to the continued expansion of new business.

Julia Jäkel, Chief Executive Officer Gruner + Jahr: ‘Six months ago we began to fundamentally transform Gruner + Jahr - from a traditional magazine publisher to a creative and of course also digital house of content. That is a long journey that does not allow short-term focus on the optimization of revenues and profits but the achievement of long-term appreciation in value. Against this background business operations in 2013 conform with our expectations. The previous year was a year of investment - as the coming years will also prove to be. In 2013 we have vitalized our big magazine brands STERN, GEO, BRIGITTE and GALA, successfully launched our new magazines CHEFKOCH and FLOW and expedited the expansion of our digital activities. According to Apple three of the six best eMags in the App Store last year were ours: CAPITAL, 11FREUNDE and GEO. Our GEO APP New York was still number one last week in the download charts. I also feel confident about our international business activities: In the meantime we have made the right personnel and organizational decisions in order to drive the business forward even under difficult economic conditions.'

The number of employees as per 31 December 2013 at G+J worldwide came to 10,819 and was therefore lower than the previous year (2012: 11,585 employees). This is mainly due to the partial closure of G+J business media in Germany as well as the sale of the Polish business activities. In reference to investment in the digital area, well over 140 additional employees were engaged to increase the rate of expansion of the digital business operations. The number of apprentices in Germany amounts to 169 (2012: 176).

G+J journalists were recognized with a great number of prestigious awards for their work during the reporting period - no publisher was able to account for more awards in Germany.