Digitisation Strategy CAPITAL MARKETS DAY Berlin, September 17, 2007 Dr. Jens Müffelmann Head of Electronic Media
Digitisation alongside Axel Springer core competencies Market leadership Internationalization Digitisation Digitisation alongside core competencies 1. 3. Content / brands 2. 3. Classifieds / marketplaces 3. 3. Ad sales / marketing 2
Four ways of digitisation at Axel Springer National International 1. Transformation of marketing models into business models 2. Development of existing business models 3. Creation of new business models 4. Acquisition of new business models 3
Since 2006 digitisation initiative via acquisitions 74.9% 27.4% 100%1) 100% ~45%1) 33.0%1) 75.1% 50.1% 51.0% 2006 2007 74.9% 100% 100% 60% 60% 41.4% 2007 76% 1) 20% 1) Increase of shares 4
Investment criteria Strategic fit / bilateral leverage potential Proven & scalable business model Profitability & solid revenue base Committed founders/experienced management Low to fair valuations 5
Top 3 Internet acquisitions Brand Share Incorporation EBITDA 2006 Growth 2007e 60% 2000 ++ > 80% 41.4% 1999 ++ > 80% 74.9% 2000 ++ > 40% 6
Digitisation via organic growth Nationwide crossmedia roll-out Digital newspaper in Second Life Launch newsroom Launch AS Digital TV Start growth initiative Start growth initiative Incorporation 2006 Launch Relaunch Relaunch 2007 Preparation relaunch Launch Launch Relaunch 7
Digitisation alongside Axel Springer core competencies Market leadership Internationalization Digitisation Digitisation alongside core competencies 1. 3. Content / brands 2. 3. Classifieds / marketplaces 3. 3. Ad sales / marketing 8
Core competency 1: Content / brands Infotainment Quality Regional Cars Women TV Business Electronics 9
Core competency 2: Classifieds / marketplaces Performancebasiert Jobs (CPC, CPL, CPA) Performancebasiert Real Estate (CPC, CPL, CPA) Immobilien: Crossmedia Performancebasiert Cars (CPC, CPL, CPA) Performancebasiert (CPC, CPL, Marketplaces CPA) E-Commerce 10
Real Estate: Demand / volume Source of information Market volume 2006 Real Estate portals 71% 620m Real Estate portals 70m; Share: ~ 11% Newspapers 60% Friends' advice 41% Newspapers 550m; Share: ~ 89% Source: OMD Snapshots, 06/2007 Source: AS estimate 11
Immonet: Roadmap Phase I Phase II Phase III Phase IV QIV/01 QI - QIV/02 QI - QII/03 QIII/03 - QII/04 Phase V QIII/04 - QIV/05 Phase VI QI/06 - today Significant increase of online reach Brand establishment via ad campaigns in AS Media AS AS + RDM + other Partners Crossmedia roll-out in Germany Development product and usability Acquisition Regional publishers Regional websites General interest websites Development online reach and listings Implementation crossmedia products Positioning in IVD 100% takeover by AS Exclusive partnership with IVD until 2014 Top 20 Top 10 Top 5 No. 3 No. 2 12
Immonet: Leverage potential Crosspromotion Crossmedia Don t you have a place to stay? 13
Immonet: Performance Demand (Unique Audience m) 0.4 +300% 1.6 01/06 07/07 2.1 +14% 2.4 01/06 07/07 800 700 600 500 400 300 410 6.9 Supply (Listings / Agents) Listings ( 000) Agents ( 000) Agents 610 Listings 9.3 720 12 12.1 Jan 06 Jul 06 Jan 07 Jul 07 14 10 8 6 14
Immonet: Price potential Title Format Price Title Format Price Print ad Text ad, 1 x 9mm, b/w (once, Sa) 58.05 Text ad, 1 x 9mm, b/w (once, Sa) 48.86 Online ad Online ad (30 days) 2.80 Enormous price potential Online ad (30 days) 50.46 15
Core competency 3: Ad sales / marketing Performance based Reach based CPM (Contact) CPC (Click) CPL (Lead) CPO (Order) Axel Springer Ad Sales / marketing 16
Press response Anders als in den vergangenen Jahren ist die Werbung im Internet nicht mehr nur Zukunftsphantasie, sondern echtes Geschäft. [ ] Springer, Google, Microsoft, Yahoo und WPP haben das verstanden. Frankfurter Allgemeine Zeitung, 24.5.2007 ( Contrary to the past online advertising is no longer a fantasy, but real business. [ ] Springer, Google, Microsoft, Yahoo and WPP have understood that. ) 17
Increase of reach Development Unique Visitors (m) 7.8 +129% 3.4 Growth of market: +8% Jan 06 Jul 07 18
Crossmedia potential I Bild.de / BILD Autobild.de / ASDTV / Autobild Live und in Farbe Sie wollen bewegte Bilder vom Fiat 500 sehen? Wir haben die erste Fahrt im Cinquecentro mit der Kamera begleitet. Die Videoclips und weitere Fotos dazu gibt es im Internet unter www.autobild.de/fiat500. Was bei der Premierfeier am Po los war, verrät unser Internet-Tagebuch: www.autobildblog.de 19
Crossmedia potential II Idealo.de / Hamburger Abendblatt Computerbild.de / ASDTV / Computer BILD 20
Further increase of pro forma online revenues in 2007 1) m (FY) 160 >200 105 2005 2006 2007e Share of group revenues 2007e: ~ 8% 1) Pro-forma revenues of existing online activities and newly acquired companies IDEALO, WALLSTREET:ONLINE, as well as ZANOX (at proportional rate of 60%) and aufeminin which will be consolidated as of Q3/07 21
Target 2010 Revenues > 400m EBITDA > 80m 22