Digitization – Creating value

Dr Jens Müffelmann, Head of Electronic Media

Capital Markets Day, December 10, 2010, Berlin

Dec. 10, 2010 Digitization – Creating value2

Looking back: Capital Markets Day 2007

Dec. 10, 2010 Digitization – Creating value3

How?

Audience Advertisers

Dec. 10, 2010 Digitization – Creating value4

Performance marketing

Classifieds / Marketplaces

Content portals

Clear strategy along core competencies

Core Competencies

By brand transformation as well as acquisitions / development

Dec. 10, 2010 Digitization – Creating value5

The right acquisitions of growth companies TOP 10 digital revenue contributors

Performance marketing

Classifieds / Marketplaces

Content portals#1#1

#3 #1 #1

#1 #1 #2

#1 #1

#X = market position

Dec. 10, 2010 Digitization – Creating value6

The right acquisitions of growth companies TOP 10 digital revenue contributors

#3 #1 #1

#1 #1 #2

#1 #1

#X = market position10%

12%

19%

29%

29%

34%

36%

42%

43%

108%

All acquisitions profitable EBITDA CAGR 2006 - 2010e

#1#1

Digitization – Creating value7

Price discipline at acquisition of growth companies

Dec. 10, 2010

Majority acquisitions 2006 - 2010

12×Bought at

fair valuationLeverage through

performance

8×

EBITDA-Multiplepro rata

At acquisition date 2010e

Digitization – Creating value8

Professional post acquisition management

Dec. 10, 2010

2006 2007 2008 2009 2010e

EBITDA contribution of majority acquisitions SCHEMATIC

EBITDA throughorganic growth

EBITDAthrough

acquisition

39%

61%

Dec. 10, 2010 Digitization – Creating value9

Clear digital strategy

The right acquisitions

Price discipline

Professional post acquisition management

Digital value creation @ Axel Springer

Digitization: Looking ahead

Dec. 10, 2010 Digitization – Creating value10

1) Pro forma for acquisitions

9M/2010 Our Vision2004

Print Print Print 50%24%12%DigitalDigitalDigital

Dec. 10, 2010 Digitization – Creating value11

Two brief case studies