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Capgemini Consulting is the strategyand transformation consulting brand

of Capgemini Group

16 May 2012

Johnston Press

Discussion Document

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2Copyright 2009 Capgemini. All rights reserved.Johnston Press 2009 .PPT

16 May 2012

Our understanding of Johnston Press challenges and context

Lessons from other industries

Applicability to Johnston Press

Contents
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1

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16 May 2012

During 2008 alone, Johnston Press total revenue decreased by 75.6m

(12.4%), while digital revenues went up 4.7m (31.1%)

519.3 520.2

602.2 607.5

531.9

2004 2005 2006 2007 2008

Total Revenue, m, 2004-2008

6.3

8.3

11.3

15.1

19.8

2004 2005 2006 2007 2008

Digital Revenues, m, 2004-2008

1.6%% of totalrevenues

2.5% 3.7%1.2% 1.9%

Source: Company website and press releases.

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Operating profit on ordinary activites was also down in 2008

Operating Profit on Ordinary Activites*,m, 2004-2008

EBIT**, m, 2004-2008

178.2 180.2186.8

178.1

128.4

2004 2005 2006 2007 2008

177.6 177.7 171.7 165.5

-399.6

2004 2005 2006 2007 2008

Source: Company website and press releases.*Before share of associates' operating profit and non-recurring itemse.g. fundamental reorganisation of existing business, write down of Northampton press, impairment of goodwill andpublishing titles, etc.

**After non-recurring items

34.6%

Op.margin 29.3% 24.1%34.4% 31.0%

After interest and taxation, Johnston Press registered a loss of 365.5m for 2008.
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1

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16 May 2012

Johnston Press attributes the decrease in operating profit to the collapsein ad revenues resulting from recession

0.3

80.0

5.5

11.4

4.7

9.0128.4

178.1

2007

Operating

Profit

Advertising Other

Revenue

Digital

Publishing

Newsprint Production

Costs

Other Costs 2008

Operating

Profit

m


-

-

Operating Profit, m, 2007-2008

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16 May 2012

as print ad sales remain its largest source of revenue, accounting for

66% in 2008

Digital

Advertising/

Services,

4%

Contract

Printing, 7%

Print

Advertising,

66%

Sale ofNewspapers

, 19%

Other sales,

5%


2008 Revenue Breakdown by Revenue Stream

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16 May 2012

Although both Johnston Press and the wider TME industry cannot relyon advertising spend when the economic situation deteriorates

Source: Capgemini TME Strategy Lab analysis; US Bureau of Economic Analysis

Advertising Expenditure per Capita, GDP Per Capita, YoY Growth, US, 1984-2007,%, Real Terms

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

YoY growth GDP per capita YOY Change in Ad Spend Per Capita (%)

US FinancialRecession(1990-1991)

Bursting of theDotcom Bubble

(2000-2001)

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ad revenues in traditional media are also suffering due to a structural

shift online and declining circulation

0.0%

0.3%

0.6%

0.9%

1.2%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Print ad spend as % of GDP

0.0%

0.2%

0.4%

0.6%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

TV ad spend as % of GDP

0.00%

0.02%

0.04%

0.06%

0.08%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Radio ad spend as % of GDP

TV advertising revenues as% of GDP, UK, 1991-2007

Radio advertising revenuesas % of GDP, UK, 1991-2007

Print advertising revenuesas% of GDP, UK, 1991-2007

Advertising Revenues for Various Media as % of GDP, UK, 1991-2007

Source: Capgemini TME Strategy Lab analysis; Annual reports of ITV and Trinity Mirror,2006; Economic History Services, UK GDP,2006; IPA ,Resource centre-Total UK AdvertisingExpenditure,2006 , UK TV and display advertising outlook, Enders Analysis, November 2008, Preliminary estimate of Gross Domestic Product briefing note: 2008 Q3, National StatisticsUK, November 2008

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InteractiveWebContent

Gaming

This is a reflection of consumption: while the consumption of news inthe UK is declining, that of interactive web content is on the rise

4%

-3%

-6%

26%

97%

News

Audio/Music

TV

Estimated Time Spent on Media, Hours per Week per User, UK,1975-2008

Breakdown of Growth in MediaUsage, 2006- 20091, UK (%)

x2.7

0

10

20

30

40

50

60

70

1975 1980 1985 1990 1995 2000 2006 2008

Notes : 1. Data till May 2009.Source: Capgemini TME Strategy Lab Analysis; Forrester: The Impact Of The Internet On UK Consumers' Media Behavior; Brand Republic; Ofcom 2008; Nielsen Netview; OEC; EuropeanInteractive Advertising Association Media Scope Surveys; BBC, Gamers in the UK, December 2005

Music is a similar industry in which consumption of traditional audio content is in decline.
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1

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16 May 2012

Convergence lowers barriers to entry enabling news companies to moveinto new services (e.g. blogs, podcasts) and markets (e.g. broadcast)

Video

Music

News

Pictures

Blogs

Podcasts

DeviceDeliveryContent

Horizontal Convergence

Vertical

Convergence

Advertising

TraditionalMedia

WebContent

Mobile

Broadcast

Fixed

Pay TV

PortableMediaPlayer

HomeGateways

Handsets

PC/Laptop

TV

Source: Capgemini TME Strategy Lab analysis

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16 May 2012

Contents

Our understanding of Johnston Press challenges and context

Lessons from other industries

Applicability to Johnston Press

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Traditional media players are taking steps to address market challenges andgrow audiences and revenues

Audience segmentation

Identifying key segments to target

Shaping the service offering by segment

Developing and monetising online properties

Integrating traditional and online propositions for consumers andadvertisers

Diversifying revenues by leveraging assets to move into adjacentbusinesses e.g. events , radio

Key Strategies By Media Players

Audienceunderstanding

Monetisingassets across

platforms

Diversifyinginto adjacentbusinesses

Source: Capgemini TME Strategy Lab analysis.

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16 May 2012

and players can strive to create compelling customer experiences,

with multiple revenue streams to maximise these opportunities

Source: Capgemini analysis.

Example of a Potential Future Music Experience

Synchronised DRM-freedownloads to multiple devices

Capture userprofile and

Insights

Ad-Funded Fixed Online andMobile Discovery

Targeted Up-Selling and Cross-Selling

Proactively Contact FanCommunities with targeted

communications

U2 Greatest Hits

TrackSampling

Artist bios andmetadata

Videos, interviewsand mobisodes

Recommendations and reviews

1

2

3

4

SMS/MMS ads Direct e-mails

Dear James,

Just to let you know,the new NIN album isout next week.

Clickherefor more

Digital albums,

bundles andbonusmaterials

Merchandise and

music-relatedentertainmentcontent

Live events

leveragingplayerbrands

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We have also worked with the BBC to create an integrated customerexperience around a specific theme, enhancing the proposition to advertisers

Event attendance

Example of a Multiplatform Food Proposition

Magazine Readership

Online

Recipes

Cooking advice

E-commerce

Quick & Easy HealthyEat ing Dinner Part ies In Season OnTV

Entersearch SEARCH M yR ecipe B o x Sig n In

Quick Meals

In Season Now

Chef Recipes

1. I wantto make:

2. With:

3. Readyin

Dinner

Pork

4hours

CookShop

Cookware

Bakeware

Utensils

RecipeBooks

ThisweeksSpecial

Hand madeoakchopping board,

only35

JamieSaves our Bacon 9pm

ReadySteadyCook 6pmGreat FoodExhibition 25-28February,Nearyou,Only14

Food

Emporium

Snacksforthe FACupFinal

Year of the Ox

Makechicken sesamenoodles, spring rollsand more for happinessand prosperity.Good-Luck Dishes

INSPIRED IDEASOurTopClicks

EasyMeals,Good DealsMadeHealthy

Ultimate Recipe ShowdownWinners

Simple Snacks and Small Bites

YourRecipe inFN Magazine

IN SEASON NOW

Guacof theDayDip into Rachael's

quick and easyversionof 7 layerdipwithripe avocados.100+MoreOur#1 Recipe

Quick & Easy HealthyEat ing Dinner Part ies In Season OnTV

Entersearch SEARCH M yR ecipe B o x Sig n In

Quick Meals

In Season Now

Chef Recipes

1. I wantto make:

2. With:

3. Readyin

Dinner

Pork

4hours

CookShop

Cookware

Bakeware

Utensils

RecipeBooks

ThisweeksSpecial

Hand madeoakchopping board,

only35

JamieSaves our Bacon 9pm

ReadySteadyCook 6pmGreat FoodExhibition 25-28February,Nearyou,Only14

Food

EmporiumFood

Emporium

Snacksforthe FACupFinal

Year of the Ox

Makechicken sesamenoodles, spring rollsand more for happinessand prosperity.Good-Luck Dishes

INSPIRED IDEASOurTopClicks

EasyMeals,Good DealsMadeHealthy

Ultimate Recipe ShowdownWinners

Simple Snacks and Small Bites

YourRecipe inFN Magazine

IN SEASON NOW

Guacof theDayDip into Rachael's

quick and easyversionof 7 layerdipwithripe avocados.100+MoreOur#1 Recipe

Catch up TV

Linear TV

Surrounding the consumerwith a full passion areaaround a theme/ genre/talent

Cross promotion betweenplatforms and services

Operating multiple revenuestreams

Attractive propositions toadvertisers

Extension beyond corebusiness

Full leverage of content/ IP

Principles

Providing a compelling consumer experience to a passionate audience drives stickiness andincreases the revenue potential
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1

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The music industry is in the process of re-inventing monetisation models in achallenging industry through diversification into adjacent businesses

10-year deal worth $120m

Three studio albums, concerttours, merchandising andbranding

21 concert dates in London 3m copies of the latest album given

away for free with the Mail on Sunday

Recorded Music: Broader Monetisationthrough Diversification into Adjacent

Businesses

Expanding into the growth areas of Liveand Merchandising

Tapping into related areas of consumerexpenditure (subscriptions, devices,games)

Enterprise funded music (brands,advertising, ISPs, mobile players)

Services to artists and other 3rd parties

More exciting propositions (integrationwith other media, engagement withartists, enhanced discoveryexperience)

One-off, device related charge forall-you-can eat music service

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16 May 2012

Capgemini Consulting is the strategyand transformation consulting brandof Capgemini Group

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16 May 2012

Appendix Contents

Background

- Johnston Press profile

- Competitive analysis

- Market trends

Online monetisation best practice

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16 May 2012

Scotland

North

North West

Midlands

South

Northern Ireland

Republic of Ireland

Johnston Press print and digital operations comprise 50 publishing

companies within 7 geographical divisions

Johnston Press employsapproximately 7,000 people

Of these, 2,500 are localjournalists

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Dinnigton Sunderland Caledonian Mortons (Carn) Limerick Kilkenny Isle of Man

It operates a range of local newspapers and Internet sites in the UK andIreland

Johnston Press publishes 300 local and regionalnewspapers across the UK and RoI:- These include 18 daily, 164 paid- for weekly titles, 118 free-

weekly and 2 Sunday titles- It also has a range of other publications, such as lifestyle- magazines and classified directories

The groups Digital Publishing Division operates 319

local websites:- These offer news coverage as well as classified advertising

sites (e.g. Jobstoday.co.uk, Motorstoday.co.uk. etc).

Publishing Division Websites

Prints JPs 300+

titles Undertakes contract

work 10 printing centres:

Leeds Peterborough Portsmouth

Johnston Press stated mission is to serve local communities in terms of news, information and

advertising; its main sectors include Employment, Property and Motoring.


Johnston Printing

Johnston Press

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Online, Johnston Press also operates at a national level offering arange of classifieds websites

Website Type

Letterbox direct Door Drop marketing

Equestrian today Horse racing information & classifieds

Going out today

Jobs today Employment classifieds

Motors today Motoring classifieds

Photos todayOnline store for photos from JPpublications

Property today Property classifieds

World of property Overseas property classifieds

cvmatch

Free-ads todayWebsite of weekly fee ad supplementfeaturing bargain classifieds

Local pagestoday

Business directory

Students today Student information & classifieds

emigrate2Overseas emigration information &classifieds

National Websites

Johnston Press operates 319 localwebsites to extend the content andreach of our print products:

- These websites reach an estimated monthlyaudience of about 8 million

It also operates classifieds websites ata national level across the UK andIreland

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16 May 2012

Johnston Press most recent Interim Management Statement reflects itskey concerns surrounding costs and debt

Source: Press releases.

Key Issues

Advertising Revenues

Costs

Profit

Debt

Over the 19 weeks to 9 May 2009, total advertising revenues were down34.4% compared to the same period last year:

- Johnston Press had reported on 11 March 2009 that total advertising revenues for the first 9weeks of the year were down 35.9% on the same period in the prior year

The Group continues to reduce costs to offset the impact of lower

revenues:- Year- on - year costs are expected to reduce by over GBP30m, despite the increased cost

of newsprint, and these cost savings will mean that non-recurring and redundancy costs forthe year will be in the region of GBP8.0m

- These cost savings will be not be sufficient to offset the fall in advertising revenues

Operating profit for 2009 is likely to be towards the lower end of currentmarket expectations

There is a strong likelihood of a breach of a financial covenant in theGroup's debt facilities during 2009:

- It has begun discussions with its debt providers to obtain a relaxation in the debt covenants

- Net debt at the end of April 2009 was GBP448m, down GBP29m from the start of the year

- GBP13m of this reduction was due to the strengthening of Sterling against the Euro, andGBP16m was cash generated from operations

Highlights of Interim Management Statement covering 19 weeks of 2009 to 9 May

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16 May 2012

Johnston Press Board - Executive Directors

John Fry

Chief Executive OfficerJohn Fry was the former Chief Executive of the Norwichbased regional media group, Archant. Prior to moving intothe regional media sector in 2002, he was for nine yearsPresident of the information company Dun & Bradstreet forUK, Europe, Middle East and Africa, after four years as aconsultant with Bain & Company. He started his career withProcter & Gamble. John is a graduate of Jesus College,Cambridge (MA Physics and Mathematics). He also holdsan MBA from INSEAD where he won the Ford Prize for thetop student in his year.

D Cammiade

Chief Operating OfficerJoined the Board in 2005. Joined the Group in 1992 throughits acquisition of TR Beckett Ltd. Appointed ManagingDirector of West Sussex County Times Ltd in 1994 and held

various Divisional Managing Director roles until appointedDirector of Operations in 2001. Chairman of the NewspaperSociety Marketing Committee.

S R Paterson, MA, CA

Chief Financial OfficerJoined the Board in 2001. Chartered Accountant. FormerFinance Director of Aggreko plc. Non-Executive Director ofDevro plc and Mirago plc.

P R Cooper, ACA

Company SecretaryAppointed Company Secretary in 1996. CharteredAccountant. Former Finance Director of Yorkshire WeeklyNewspaper Group Limited.


Appointed as new CEO on 5 January 2009

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Johnston Press Board - Non-Executive Directors

I S M Russell, CBE, ChairmanJoined the Board in 2007. Chairman of the Audit Committee until 11

March 2009. Chairman elect and Chairman of the NominationCommittee from 12 March 2009. Chairman of Advanced Power AGand of Remploy Ltd, Non-Executive Director of the Mercantile Trustplc and British Assets plc, adviser to Bergemann Power Group andChairman of the campaign board for the University of Edinburgh.

Mark Pain, FCA, Chairman of the Audit CommitteeJoined the board in 2009. Since 2007 Mark has been a NonExecutive Director and Audit Committee member of Punch Tavernsplc, one of the UK's leading pub groups, and from 2006 Mark hasbeen Group Finance Director of Barratt Developments Plc ('Barratt'),

the UK's largest housebuilder.

M A King, Non-ExecutiveJoined the Board in 2003. Member of the Remuneration, Audit andNomination Committees. Former Managing Director, CountryOperations Europe, at Yahoo! UK Ltd. Non-Executive Director ofCapita Group plc and IMD plc.

P E B Cawdron, Non-ExecutiveJoined the Board in 1998. Senior Independent Director. Chairman of

Remuneration Committee from 30 January 2009. Member of theAudit and Nomination Committee. Former Group StrategyDevelopment Director of Grand Metropolitan PLC. Chairman ofPunch Taverns plc and Spice plc. Non-Executive Director of GCapMedia plc, Capita Group plc, BUPA and Prostrakan Group plc.

.

F P M Johnston, CBE, Non-ExecutiveJoined the Board in 1959. Former Managing Director and Chairmanof the Group. Former Non-Executive Director of the ScottishMortgage Investment Trust plc and Lloyds TSB Scotland plc. FormerPresident of the Newspaper Society.

Ralph Marshall, Non-ExecutiveJoined the Board in 2008. Executive Director of Usaha Tegas Sdn.Bhd. Serves on the Boards of several companies listed on the BursaMalaysia Securities Berhad including Astro All Asia Networks plc asExecutive Deputy Chairman.

Camilla Rhodes, Non-ExecutiveJoined the Board in July 2009. Camilla is a very experienced mediaexecutive who has held a number of senior positions during a 28 yearcareer at News International ('News'). Among her senior roles atNews, she was Managing Director of Times Newspapers and wenton to become Managing Director of News Group Newspapers,publisher of the Sun and the News of the World.

Appointed as new Chairman on 12 March 2009


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Permanently Reducing the Cost Base


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Debt Re-Financing


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Contents

Background

- Johnston Press profile- Competitive analysis

- Market trends


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These players have been ramping up their digital initiatives in 2009

Trinity Mirror

5 national newspapers 120 regional newspapers 400 digital products

Newsquest

17 local daily paid-fortitles

200 weekly newspapers,magazines & tradepublications

180 local websites

Company 2009 Digital Activities

Northcliffe

113 local daily, weeklyand free newspapers

155 local websites

Trinity Mirror is embarking on the second phase of its mobile network

rollout- Thirteen m-sites (websites accessible from mobile phones) were unveiled last year with the

final two, Birmingham Mail and Coventry Telegraph, going live in December

It also revamped its network of local recruitment websites- These include new features such as mini-sites, enhanced recruiter branding, keyword

sponsorship and a CV database

Newsquest Media Group has launched a network of 148 mobile websites

to accompany its newspapers and online sites- The mobile websites will feature news, sport, traffic, travel, entertainment and weather

information from the publishers newspapers

The companys digital network for Scotland has launched a "no sale, no

fee" advertising service for motors dealerships- Ad space on www.s1cars.com is free but dealers pay a commission when a sale is made to a

buyer who has seen advertising on The Herald and Times Group website

Northcliffe Media, a division of Daily Mail & General Trust (DMGT),

launched a pilot of its Local People network in January 2009- This began with the launch of an initial twenty-three local community websites in the South-

West of England; a further twenty plus sites are due to launch in the South-West of Englandthroughout 2009

- These cover areas with 10,000 to 50,000 inhabitants that typically do not have a dedicated localonline proposition, and are designed to encourage the local community to interact


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Online, Johnston Press contends with digital classified market leadersAuto Trader, Jobsite and Right move

The growing reach of national brands like Rightmove and AutoTrader means that local papers havelost their grip on property and car advertising.

UK automotive website featuring cars as wellas bikes, caravans, and trucks for sale

Its lists over 360,000 vehicles at any one time The website had a 38% share of the

automotive classified market in 2008 Associated to Guardian Media Groups print

magazine, published weekly in 12 regions

UK property website Advertisers include over 20,000 estate agents,

letting (rental) agents, new homes developersand overseas agents who offer propertiesabroad for UK-based home hunters

Owned by Right move plc

UK online recruitment site featuring vacanciesfrom a range of sectors including IT, Sales,

Engineering and Construction It has a total of 3,500,000 registeredcandidates

Jobsite is part of Northcliffe and the Daily Mail& General Trust (DMGT) group of companies

Website Description

Source: Company website and press releases; ABC

10.32

1.392.59

AutoTrader Jobsite Rightmove

Monthly Unique Users, millions, 2008

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In 2008, regional recruitment advertising for both print and online grew to594m and accounted for 48% of all recruitment advertising

Sources: The Newspaper Society Intelligence Unit, Advertising Association Yearbook 2009

Regional press recruitment advertising wasworth 505m in 2008, while regional online

recruitment was 89m

Online recruitment advertising in the regionalpress grew by 17.1% in 2008

Regional Online Recruitment AdvertisingSpend 2002-2008, m, 2008

Online

Specialists,

16%

Business

magazines,

25%

Regional

New spapers, 48%

National

New spapers

, 11%

Online

Specialists,

62%

Regional

New spapers

, 29%

National

New spapers

, 9%

Shares of Total Recruitment Market, 2008

Shares of Online Recruitment Market, 2008

89.2

76.1

52.2

41.532.7

23.616.0

2002 2003 2004 2005 2006 2007 2008

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Ofcoms recent consultation has implication for Johnston Press as it would

allow it to diversify into radio and/or TV

At the end of 2008 there were 305 local commercialstations in the UK broadcasting on analogue:- 59 on AM and 246 on FM- Of these 305 stations 41% served a population of over

500,000, 17% served a population of between 250,000 and500,000 and 42% served a population of less than 250,000

- Many of these stations, particularly those serving largerpopulations, are also broadcast on DAB.

- Most are streamed on the internet and a few are available via

digital television 30 years ago each commercial radio station was

independently owned, but today, consolidation hasmeant that the sector is dominated by threecompanies which command a 77% share of allcommercial radio listening

Total listening to the radio has remained broadlyflat over the last decade both in terms of thenumber of listeners reached and the total number

of hours spent listening still in excess of 1 billionhours per week

Ofcoms proposes to allow regional stations to

merge to become quasi-national stations in returnfor a commitment to broadcast on DAB.

It is also encouraging the launch of new radiostations

Lord Carter's Digital Britain report proposed usingabout 130m a year from the licence fee from 2013to fund a series of independent consortia toprovide local TV news

On July 16th, the Conservatives proposed insteadthat local newspaper companies could step in toproduce local and regional TV news on ITV, as an

alternative to 'top-slicing' funding from BBC licencefee

- They propose creating a range of about 80 local mediacompanies - delivering TV, print and online services toregional and local communities

- These entities, known as LMCs, would obtain income fromclassified ads, mainly from print and online media, anddisplay ads across all media including TV

- The local media companies could also look to sell video newsmaterial to regional broadcasters.

The Conservatives proposals, produced byoutgoing Johnston Press chairman Roger Parry asof a review of creative industries, draws on the USand Canada where local TV companies succeedwithout the need for public subsidy

- The report also highlights Channel M, part of the GuardianMedia Group, publisher of MediaGuardian.co.uk as the mostsuccessful example of local television in the UK

Radio TV

C

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Contents

Background


L i li i i f i l

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Levers to improve online monetisation range from operationalimprovements to monetisation of new services

Expand distribution of video content tomaximise audience reach

Strategic Levers Examples

Enhancing the proposition to advertisers

Develop innovative advertising models

Introduce sticky and monetisable newservices and content

Tap into passion areas by offering a fullexperience across platforms and services

Fully exploit existing content online

Offer payment options alongsideadvertising

Enhance user experience andpersonalisation

1

2

Open up platforms to developers andpartners

Enhance value of

existing users

Increase volumeof users
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