“TO MAKE THE POSSIBLE HAPPEN, THEIMPOSSIBLE MUST BE ATTEMPTED.”

Gruner + Jahr AG & Co KG Druck- und Verlagshaus Hamburg I www.guj.com

Events I Facts and Figures I Prospects Annual Statement I Chronicle 1948–2002 I Portfolio

2002

2 GRUNER + JAHR EDITORIAL 2002 I GRUNER + JAHR 3

UNCONVENTIONAL: THE LAUNCH OF WOMAN

12 GOING AGAINST THE FLOW

DARING: FINANCIAL TIMES DEUTSCHLAND

16 FIRST CHOICE

INVESTIGATIVE: ON THEIR TOES AT BÖRSE ONLINE

18 NOSE FOR A SCAM

AGGRESSIVE: REPOSITIONING IN THE USA

20 CLEAR PERSPECTIVE

SHARP STUFF: GEO FOR YOUNG READERS

23 NEW ADDITION TO A SUCCESSFUL

FAMILY

FAST: G+J PRINTING FACILITIES

24 TIMING IS OF THE ESSENCE

CREATIVE: CROSS-MEDIA ADVERTISING AT G+J

26 CONCENTRATING ON THE GAME

INNOVATIVE: MARKET IDENTITY IN CHINA

27 ADVANCES INTO THE MIDDLE

KINGDOM

SUPPORTIVE: FLOOD COVERAGE AND AID

28 THE RUBBER BOOT BRIGADE

FACTS AND FIGURES

32 DR. BERND KUNDRUN:

PRESIDENT’S REPORT

36 GERMAN MAGAZINES

38 INTERNATIONAL MAGAZINES

40 NEWSPAPERS

42 PRINTING

43 CENTRAL CORPORATE DEVELOPMENT

44 CENTRAL SERVICES

46 GLOBAL BALANCE SHEET

48 NOTES TO THE GLOBAL FINANCIAL

STATEMENTS

51 PRINCIPAL SUBSIDIARY AND

ASSOCIATED UNDERTAKINGS

52 SUPERVISORY/EXECUTIVE BOARDS

53 CHRONICLE 1948–2001

57 CHRONICLE 2002

58 AUTHORS/MASTHEAD

59 ADDRESSES

The year 2002 was no easy year, especially for the media industry. However, even in difficulttimes, publishing houses – unlike classic industrial operations and service providers – need tobear in mind their special role in society and act accordingly. After all, in a democracy thepress has an important function that goes far beyond the entrepreneurial goal of profit maximi-zation. Its role is to document, inform and comment, enlighten and explain; it is a controllingbody and regulator and as such, justly known as the “fourth power in a state.” This mandateapplies all the more under tough economic conditions.

The chief maxim for a publishing house must therefore be to preserve editorial freedom andindependence and to defend these against increasing acquisitiveness. Thanks to its far-sighted strategies and international character, Gruner + Jahr is in the fortunate position ofbeing able to overcome the industry crisis raging primarily in its home country, Germany. The adverse economic situation has seriously affected us, too. Nevertheless, thanks to oureconomic strength and successful introduction of adjustment processes, we were notforced to compromise the journalistic quality of our magazines and newspapers, and wereable to push ahead with innovative products and international expansion.

Top quality for our readership and for our print, sales and advertising customers, professionalservice, the capacity for speedy adaptation and innovative ideas are all ingredients in ourrecipe for success. This has been true especially in the last two years. We are not planning tomake any compromises here in the future.

Yours,

DR. BERND KUNDRUN, PRESIDENT AND CEO OF GRUNER + JAHR

CONTENTS

COURAGEOUS PICTURES FROM INTERNATIONAL G+J PUBLICATIONS 2002 I GRUNER + JAHR 54 GRUNER + JAHR

“Innovation and tradition, success and failure, winning and losing: the one cannot exist without the other. Rising out of the armchair of familiarity to embark on a jour ney of uncertainty takes courage. Gruner + Jahr stands forcourageous content, for unsettling, sometimes even pro vocative perspectives.“

FROM: STERN 18/2002: UNEARTHLY CONSTRUCTION SITE: US ASTRONAUT JERRY ROSS HARD AT WORK IN SPACE

THE PHOTOGRAPHS ON THE FOLLOWING PAGES WERE SELECTED BY TOM JACOBI, ART DIRECTOR OF STERN MAGAZINE, HAMBURG

FROM: NATIONAL GEOGRAPHIC POLSKA, 4/2002, SHOOTING A FILM ABOUT THE PEOPLES REPUBLIC OF CHINA'S INVASION OF TIBET

COURAGEOUS PICTURES FROM INTERNATIONAL G+J PUBLICATIONS 2002 I GRUNER + JAHR 76 GRUNER + JAHR

FROM: GEO 1/2003, ON THE SUBJECT OF NEUROPHILOSOPHY: HOW FREE IS OUR WILL? FROM: FAST COMPANY, 8/2002, A STORY ABOUT IBM

COURAGEOUS PICTURES FROM INTERNATIONAL G+J PUBLICATIONS 2002 I GRUNER + JAHR 98 GRUNER + JAHR

FROM: VSD, N0.1298, JULY 2002, FRANCE, PHOTO OF THE WEEK FROM PAMPLONA

10 GRUNER + JAHR COURAGEOUS PICTURES FROM INTERNATIONAL G+J PUBLICATIONS 2002 I GRUNER + JAHR 11

UNCONVENTIONAL LAUNCH OF WOMAN I GRUNER + JAHR 13

AGAINST THE FLOWDespite the crisis enduring since 2001 in the German mediaindustry, G+J launched a new bi-monthly women’s lifestyle magazine entitled WOMAN in October2002. Diary of a magazine’s evolution.

12 GRUNER + JAHR

When times are hard, only the best survive. That’swhy new ideas are what we need now, more

than ever. Every crisis holds an opportunity forrenewal. This means developing fresh concepts,

opening up new segments, generating real mar-ket innovations. Gruner + Jahr has always had the

courage, backed by economic clout and com-bined with publishing and journalistic know-how,to stand confident – even in times when others

seem almost paralyzed. This is the only way wecan secure ourselves a timely, strong market

position for when the economy recovers. Thelaunch of WOMAN set a signal for the future.

By successfully adapting an innovative Austrianmagazine concept for the German market,

the publishing house has once again proved con-vincingly that it is wise to take an anticyclical

approach in difficult times. One might perhapseven view it as an appeal to the people in our

industry not to hang their heads, but to revitalizethe market from within. Good concepts sur-

vive – even, and especially, when times are hard.

“MAGAZINEMAKERS HAVE TO

TAKE AN ANTICYCLI-CAL APPROACH”

by Angelika Jahr-Stilcken

STATEMENT

February 2002: For four months now, there has beena women’s magazine on the Austrian newsstands thathas clocked up record circulation figures in next to notime. Its name: WOMAN. Its successful formula: thevery latest in to-the-point and service-oriented infor-mation on a wide range of topics, modeled on theAustrian news journal NEWS. Both magazines are thebrainchild of the Fellner publishing family. Uschi Fell-ner is editor-in-chief of WOMAN. At Gruner + Jahr,which holds a majority share in the publishing groupNEWS, people followed the sensational progress ofthe new launch beyond the Alps very closely. Themarket-research department in Hamburg was com-missioned to check out whether WOMAN might alsobe successful in Germany. March 2002: Women take part in group discussions ina number of cities around Germany, where they areasked to comment on the Austrian magazine. The resultsare encouraging. The wide range of topics is particu-larly well received. The test readers rate WOMAN as“neither a gossip nor a fashion mag,” but clearly assomething new. “It’s not a magazine you can pigeon-hole.” At the same time, however, it becomes evidentthat the basic idea needs to be adapted to German read-ing habits if WOMAN is also to be a success in Germany. April 2002: Rolf Wickmann, director of magazines atG+J holds talks with the Fellners about launchingWOMAN in Germany. "That was a great compliment,”says editor-in-chief, Uschi Fellner. “I was really pleasedto see an Austrian idea being taken out into the world.”In Hamburg, Karsten Flohr, most recently editor-in-chief of TV TODAY and previously deputy editor-in-chiefof BRIGITTE, puts together a project developmentteam. The mood in the industry is troubled, publicationsare folding, budgets being cut, but in Hamburg’s his-toric harbor warehouse quarter, 15 editors are busilyworking away at a new magazine which is strictly un-der wraps – code name: “Maja.” May 2002: The project development team is under ex-treme pressure. The zero edition is to be tested in Juneto see whether WOMAN can compete with the sixty orso women’s magazines currently on the German market.Only something really new will do it – a magazine fo-cusing on everything from make-up hints to politics, in-stead of just a few specialist areas. “Am besten alles”(Best of all, everything) later becomes the slogan. June 2002: At the end of an eight-week developmentmarathon, the zero edition is printed – and immediatelyput to the test.

July 2002: The overwhelming response by far exceedsthe team’s wildest expectations. “I have never knowna publication to come off so well,” says G+J marketresearcher Norbert Reyk. On July 10, the G+J seniorexecutive green-lights the project. One day later, thecreative minds of several agencies spin as they put to-gether suggestions for an entire advertising campaignwithin a single week. Flohr, meanwhile, has roundedup his team. “My art director and I now face the taskof expanding the team to make it a powerful one, notonly professionally dynamic, but also in terms of per-sonal compatibility.” Interviews with applicants be-come a permanent feature of his day.August 2002: The idea put forward by the FutureBrand agency is a hit: Pull the WOMAN logo apart and put the two words into sentences. Another fourweeks and the printing copies will have to be readyso that the first ads can be placed. One week before the first selling day, billboards throughout Germanyare to sport the WOMAN ads, large-format close-ups – “wo man lebt” (where you live/woman lives),“wo man erscheint” (where you appear/womanappears), “wo man überrascht” (where you sur-prise/woman surprises). September 2002: The editorial staff of fifty is now complete. One of hundreds of tasks to be dealt with is finding a German celebrity to appear on the cover of the first issue – not so simple for what is yet a non-existent magazine. Then TV hostBarbara Schöneberger turns up for a photo shoot –and is just perfect for the cover of WOMAN. “Like us,she was just starting out on the road to success,”says Flohr. Far from Hamburg, in Barcelona, a TVcommercial for WOMAN is shot in a record time of three days. October 2002: Now there’s only one week left until the first selling date, and signs look good: 5,000 trialsubscribers have already been signed up. WOMANgets off the ground with a “big bang,” there areposters up all over the country, advertisements in allthe major print media, and a TV commercial, under-scored with the specially composed song “I’m awoman,” airs on eight big channels. The editorialstaff add the finishing touches until the very lastminute. On October 15, 2002, the time has come:Champagne in hand and misty-eyed, Karsten Flohrstands by the printing press in Itzehoe, where thework of the past months is being transformed into amagazine before his very eyes.

PHOTO EDITING AT WOMAN:

In keeping with the written copy, thephotos give the magazine a contemporary, modern-lifestyle look

WOMAN is the women’slifestyle magazine for mod-ern women who have awide range of interests. Itprovides full and to-the-point information, adviceand entertainment in topquality and unique varietyevery two weeks.

Established: 2002Circulation: over 300,000Target group: Womenbetween 25 and 45

UNCONVENTIONAL LAUNCH OF WOMAN I GRUNER + JAHR 1514 GRUNER + JAHR

FIRST CHOICEThere was criticism, there was controversy, but this all madeno impression on the FINANCIAL TIMES DEUTSCHLAND(FTD). By editorially endorsing a candidate during the Germanfederal election campaign of 2002, the paper’s editors-in-chief, Christoph Keese and Wolfgang Münchau, broke a jour-nalistic taboo of which they are proud.

“Time for a Change” was splashed across the top of

the FTD editorial on September 16, 2002 – the first

editorial endorsement in Germany. What did it feel

like, opening up the newspaper that morning?

WOLFGANG MÜNCHAU: We were relieved. And proud that we had achieved something we hadbeen planning since the FTD was founded – despitethe controversy. Is that what you would call showing courage?

CHRISTOPH KEESE: Showing courage is doing whatyou consider to be right. The courageous thing aboutthe endorsement was introducing a journalistic formatthat didn’t exist in Germany. The editorial endorsementwas intended as a well-crafted, well-written argumentwhich could compete in the same league as theirequivalents in prominent international newspaperslike the New York Times, Financial Times, Wall StreetJournal and Washington Post. But it received hefty criticism. One journalism pro-

fessor, for instance, accused you of engaging in

“missionary work” and “patronizing readers.”

MÜNCHAU: Completely unjustly. We weren‘t patron-izing readers, we were presenting our position. We

consider ourselves less loyal to a particular side thanother supraregional papers. Many of them were clearlypartial during the electoral campaign, but unlike FTD,they didn’t come out and say it. KEESE: Nearly all major, independent newspapersaround the world make editorial endorsements duringelection campaigns – except in Germany.Was it difficult to choose a party?

MÜNCHAU: Our information was based on acomment-and-analysis series we had previouslypublished, on, say, the labor market, family pro-grams and economic policy. Then, one Friday, thetime came for a decision. We held a six-hour editorialmeeting, from nine in the morning to three in theafternoon. It was a very controversial debate. KEESE: And we couldn’t agree. The editors weredivided into four camps, each representing a politicalparty. Speaking of showing courage: Being an editor-in-chief and having to say at some point, okay, we’veexchanged ideas, now it’s time for the boss to decide– that takes courage. MÜNCHAU: There was, naturally, some protestingwhen we decided on the Christian Democrats (CDU).

But that, after all, is how our anonymous editorials aredesigned: they are discussed daily, but in the end, theyrepresent the opinion of the paper – which is deter-mined by its editors-in-chief. Were the parties you didn’t endorse annoyed?

KEESE: No, there were no complaints. We had made a very precise judgement. So far, most of what we have anticipated has also panned out,earning us respect. But your readers were torn. Some of them wrote that

they could no longer rely on the FTD to remain neutral.

KEESE: When we replied to these readers, weasked them to observe us carefully for three monthsand see if our reporting was in any way biased.Many of them wrote back to us after that period,saying they had been mistaken and we had in factremained an independent paper.MÜNCHAU: Our editorial endorsement of a politicalparty started a debate in Germany which didn’t existbefore. We will definitely continue to publish editorialendorsements in the future.KEESE: And we believe that other papers arefollowing suit.

DARING TO BE DIFFERENT:

Wolfgang Münchau (left) andChristoph Keese (right) atBaumwall station in Hamburg.

The FINANCIAL TIMESDEUTSCHLAND standsfor current, intelligentbusiness and financial jour-nalism. According to itsmotto “Select and Assess,”it combines critical reporting with clear, to-the-point discussion ofcomplex subjects everysingle trading day.

Founded: 2000Circulation: 90,433Readership: 220,000

16 GRUNER + JAHR DARING FINANCIAL TIMES DEUTSCHLAND I GRUNER + JAHR 17

The article set the share price of Comroad spinning(for a time, the company had a stock-market value ofbillion dollars). Comroad became defensive and at-tempted to silence both journalist and magazine witha preliminary injunction.

But publishing house and editorial staff refusedto be intimidated. “In that kind of situation, you haveto be able to rely on one another 100 percent,” says Jürgen Althans, the man in charge of all Gruner + Jahr business publications. “If the story is out of line, damages in the millions are the worst-case scenario.”

BÖRSE ONLINE mounted an offensive and in No-vember 2001, a court lifted the preliminary injunctionagainst Daum’s claims. But otherwise, Comroad at firstremained unchecked. “A well-written article does notconstitute grounds for suspicion” were the words ofone state prosecutor.

With the backing of editorial office and publishinghouse, the plucky journalist tirelessly continued topursue her investigations. Says Daum, “For months,I was the only one working on the story. That cost mean awful lot of time and energy.” Shortly after thecourt case, she took a vacation in Asia. Her route alsoincluded some “sights worth seeing” in connectionwith Comroad. In other countries, colleagues andfriends helped her with her research. One Comroadaddress in New Zealand soon turned out to be a Fordoutlet, and the alleged president of Telematics ASIAand Comroad business partner Jesus O. Co sold notnavigation devices, but German chainsaws. AlthoughJesus O. Co had swapped business cards with BodoSchnabel at some time, he had never actually donebusiness with him.

At the beginning of 2002, the audit companyKPMG resigned its mandate with Comroad fol-lowing publication of Daum’s findings in BÖRSEONLINE. In response to an anonymous report, thecourts also finally took action. Bodo Schnabel, who– according to Daum – had pocketed almost 30 mil-lion euros from the sale of shares, was sentencedto seven years’ imprisonment in November 2002.The scandal was over, market euphoria subsided,and BÖRSE ONLINE editor Renate Daum, the plucky“pessimist” had saved many more investors fromlosing out.

Nineteen-ninety-nine was a pretty lousy year for stock-market pessimists. Every week a couple of new cham-pagne-drenched issues sent prices rocketing sky-high.The New Economy had become synonymous withwealth and success – just like the Munich telematicscompany, Comroad. Its servers and terminals forvehicle navigation systems promised mammoth salesand accordingly hefty profits for investors.

Renate Daum, since April 2000 a business editorwith Germany’s oldest investor magazine, BÖRSEONLINE, was not, however, convinced by what theComroad Issue Prospectus promised. She had alreadyhad “a funny feeling” about the Comroad market listingwhen she profiled it for a daily newspaper in November1999. Large portions of the company’s turnover did notseem to come from the sale of the lucrative navigationsystems. Daum wrote about her misgivings, “but noone was interested.” Her fellow journalists at other pa-pers smiled indulgently over the 30-year-old. Investorssaw her as a killjoy since Comroad regularly surpassedits ambitious sales forecasts.

“I was just like a terrier that wouldn’t let go,” says Daum. "But sometimes, I also wondered whetherI was barking up the wrong tree.” She wasn’t. Withpatience and tenacity, Daum gathered all the infor-mation she could muster about Comroad AG and its CEO Bodo Schnabel. In May 2001, while attendinga business conference in Hong Kong, she took the opportunity to visit the Comroad offices there.After all, 45 percent of the company’s total turnoverwas supposed to come from Asia. The odd thing was that the manager of Comroad’s Asian office toldthe journalist his office was merely “virtual” andsuggested a meeting at her hotel. This confirmedDaum’s suspicions.

She continued her investigations and discoveredthat only two of the alleged eight business partners of Comroad in Asia actually did business with thecompany. More research followed. Telephone calls,interviews with experts and file upon file. In the sum-mer, Daum set down the results of her investigationsin an article entitled “Phantom partners in Asia.” Theessence of the story, which was the beginning of theend of the Comroad fantasies, was that although thecompany reported Asian turnover of almost 20 millioneuros, less than two million actually existed.

NOSE FOR

A SCAMA BÖRSE ONLINE

editor brings the Com-road scandal to light.Single-handedly, she

digs up invaluablebackground information

for the 600,000-oddreaders of the success-

ful, 15-year-old invest-ment magazine. Renate

Daum received theHelmut Schmidt Journa-

lists’ Award for herinvestigative reporting.

BÖRSE ONLINE is Germany’s leading investment magazine. InSeptember 2002, total net paid circulation aver-aged just under 158,000.

18 GRUNER + JAHR INVESTIGATIVE ON THEIR TOES AT BÖRSE ONLINE I GRUNER + JAHR 19

CLEAR PERSPECTIVEIn spite of the worldwide slump in advertising sales, DanBrewster has steered G+J USA back on track. The G+J CEO in America on publishing strategy, journalisticskills and plans for the future.Mr. Brewster, you have been in charge of G+J publish-

ing in the United States since the year 2000. What

changes have you observed?

In economic terms, the year 2000 was one of thestrongest years our industry has ever seen. And then, all of a sudden, economic activity dropped – likea stone falling from a cliff. This made 2001 a verydifficult year filled with challenges. In advertisingspending alone, the United States experienced itsmost serious decline in the last fifty years. The negativetrend continued through 2002. However, we did seesome improvement in the first quarter of 2003.What was G+J USA’s position on the market?

G+J’s portfolio in the United States was seen assomewhat tired and old-fashioned. We made aconcerted effort to elevate the profile of our maga-zines. Within one year, we completely revamped andrepositioned six magazines. By acquiring INC. andFAST COMPANY we entered the crucial businessmagazine category. We discontinued two publica-tions that lacked economic or publishing prospects.All of this enabled G+J USA to make a significant pro-fit in 2002. The difference between the loss in 2001

and the profit in 2002 was a hefty 80 million dollars.And what is perhaps just as important: G+J USA hasgained a far more dynamic and aggressive image inthe industry. What were your priorities when it came to switch-

ing strategies?

What is always most important to me is to aim for the best in magazine quality: That’s why the firstthing we did was to attract top talent. If you have thepeople with the best journalistic and creative abilityin the business, you can build a basis for sustainedsuccess. At the same time, we eliminated unnec-essary magazines and reduced management to justa handful of people, making certain every dollar we spend is as close to the customer as possible.When you took over G+J, your motto was “Get back

to fundamentals!” Why?

Between 1998 and 2000 there was lots of dream-ing about the Internet. Everyone wanted to extendmagazines into television. But publishing execu-tives need to focus on more fundamental things,too, like purchasing paper, testing sources of circula-tion – or simply asking ourselves: Are our magazines

20 GRUNER + JAHR AGGRESSIVE REPOSITIONING IN THE USA I GRUNER + JAHR 21

OUR MAN IN THE US:

Dan Brewster is responsiblefor Gruner + Jahr’s portfolio of magazines in theUnited States.

own identity as a lifestyle magazine, and theadvertising growth was spectacular. CHILD hasbecome a showcase title for us and it’s winning onedesign prize after the other.What are your plans for 2003?

We want to improve our profits – before develop-ment and investment spending – by another 18percent. We are focusing now more on organicgrowth than on acquisition. For example we aretesting a new women’s magazine. We are alsoconsidering adapting the German G+J celebrity magazine GALA for the US market because there’snothing like it, there.You started out working as a journalist, also for the

news channel CNN. Did this experience prepare you

for your job as a publishing executive ?

I don’t, for a fact have a degree from a business school, but I worked as a journalist for 10 years. Themost important thing I soon learned was to un-derstand what’s important, get the facts right and keep a clear focus. Those are exactly the skills you need as a CEO.

in the right stores? Are they in the right racks? Theseare the underlying management essentials, and that’swhat we focused on. Why do you consider a clear editorial voice to be so

important for market success?

Take the teen magazine YM, for example. Part of thereason for its decline was that it had no clear editorialvoice. In my opinion, a really good magazine has to have an unmistakable point of view and aunified voice. The tagline for YM is “Beauty, boys,stars and style,” and its voice should be that of a closefriend whom you would turn to for good advice. Theearlier YM sometimes sounded more like a mother ora teacher.Which American G+J magazine was particularly

successful in 2002?

PARENTS and FAMILY CIRCLE are the market leadersin their category. But the biggest growth in cir-culation and advertising occurred in FITNESS mag-azine. CHILD shouldn’t be forgotten, either. Aftercompletely separating it from PARENTS, the firstparenting magazine worldwide, we gave CHILD its

FITNESSFITNESS is a lifestylemagazine for a generationof women that valuesunity of mind, body andspirit. Incorporating lotsof practical tips everymonth, FITNESS helpsyou find just the rightbalance for your life.

Founded: 1993Circulation: 1.2 millionReadership: 6.5 million

Advertising sales: + 66 %*

NEW ADDITION FOR A SUCCESSFUL FAMILYSince fall 2002, the French publication GEO Ado has been report-ing on distant countries, animals, nature and growing up. It is anexcellent example of the diversity with which the GEO brand is in-terpreted around the world. In addition to GEOLINO in Germany,there is also a GEO publication for kids in Russia called GEOLENOK.

YMBeauty, boys, stars andstyle – YM keeps teenagegirls up to date on every-thing they need to know,every month. YM fasci-nates, motivates and ad-dresses the needs ofyoung women in a lan-guage they can understand.

Founded: 1954Circulation: 2.2 millionReadership: 9.1 million

Advertising sales: + 48 %*

CHILDEvery month, some four millionreaders choose CHILD to keepup to date on having a familyand raising kids. Filled withnew findings, current trends andimportant news, CHILD offersparents an alternative approachto child rearing as well as tried-and-true parenting tips.

Founded: 1986Circulation: 1.02 millionReadership: 3.7 million

Advertising sales: + 22 %*

22 GRUNER + JAHR SHARP STUFF GEO FOR YOUNG READERS I GRUNER + JAHR 23

Once upon a time there was a bright green GEOwizard who wanted to conjure up a brand-new maga-zine for French children and teenagers. And once upona time, there was a publishing house that… whoa, stopright there! As if GEO Ado readers still believed in fairytales! No way! They are bright kids between the agesof 10 and 15 who want interesting reports, information,and exciting photos – and they have even had a handin developing their new magazine. So let’s start all overagain with the story of how GEO Ado came into being.

Editor-in-chief Isabelle Bouillot and her team begandeveloping an editorial concept back in January 2002.The strategic consideration was that, with over 4.5 mil-lion readers, GEO was already a very strong brand inFrance. Making more of the brand coupled with newmagazine ideas – or “brand extension” in marketingjargon – seemed the obvious course. Moreover, thereaders’ offspring would poke their heads into a GEO pro-duct – and thus be introduced to the brand early on.

The French market for children’s and teen magazinesis uncommonly well developed and therefore attractive,but it is also highly competitive: There are special dailynewspapers and rival magazines such as Science et Viewhich have for years been successful with offshoots forchildren and teenagers. That is why GEO Ado had to beprepared for a tough market launch, even if there was aniche in the market for the 10 to 15-year-old age group.

“But there is one thing that only we have to offer,”says Johannes Werle, manager of the Paris publisher of the French G+J publications GEO, NATIONAL GEO-GRAPHIC and ÇA M’INTERESSE. “With us, the kids canhave a go at being reporters themselves.” In the firstedition, 13-year-old Pauline was given the task of inter-viewing the French translator of Harry Potter, while 12-year-old Charlotte visited a dolphin researcher. Everycouple of weeks, a different bunch of kids turns up at theeditorial office, where Louis, say, will test computergames and type his critique on the spot. Marie mightlisten to a stack of newly released CDs and all of themwill discuss the layout drafts for the upcoming issues.

Coaching from the kids on questions of taste was vitalduring the development stage: “As an adult, we wereoften way off course with the layout,” says Werle. “Intest groups, we noticed that often even parents don’tknow what their children like.”

GEO Ado at least is exactly what they want. Evenbefore the first edition was on the newsstands in Sep-tember 2002, 6,800 subscriptions had already beengained through the “adult GEO.” By spring 2003, therewere already 40,000 subscribers, “far more than thebusiness plan had anticipated.” And total sales at the be-ginning of 2003 totaled almost 70,000 copies. So the storyof how the youngest member of the GEO family cameinto being does sound a bit like a fairytale, after all.

“GEO has long since doneit, GEOLINO will do it, too:establish itself as an inter-national brand. The sameapplies to the children’s ma-gazines GEOLINO in Ger-many, GEO Ado in Franceand GEOLENOK in Russiaas to GEO itself: the philo-sophy is always the same,the content is tailored to itsrespective market.”

Peter-Matthias Gaede Editor-in-chief of GEO Germany

* PIB 02 versus 01 in USD

FACTS

Doing the mathThe G+J printing housein Itzehoe is one of the most efficient gravureprinters in the world.Half a billion magazinesand catalogues areprinted here each year.Laid out edge to edge,their pages would coverhalf of the French Medi-terranean island of Cor-sica. Along with STERN,BRIGITTE, GEO andother G+J publications,the Schleswig-Holsteinprinting house also pro-duces a portion of theprint run of Der Spiegelmagazine as well asmail-order catalogues forOtto, Neckermann andIkea. For the 1.5 millioncopies of every STERNissue alone, 530 tons –90 truckloads – of paper are printed with18,700 kilograms of ink. Added to this, thereare the 135 kilometers of wire used to bind themagazines. STERN hasbeen printed in Itzehoefor over half a century,ever since it was firstpublished in 1949.

TIMING IS OF THE ESSENCESince January 2003, STERN reporting has been even more up to date. That’s because the optimized interplaybetween printing house and editorial office now allows an extra night to copy deadline.

It is Monday, March 17, 2003, 8pm – the eve of anever more likely American declaration of war on Iraq.At the STERN offices of Hamburg publishing houseGruner + Jahr, the pressure is on. It’s almost copydeadline. The journalists tensely wait for PresidentGeorge W. Bush’s all-decisive speech late Mondaynight. The outcome must definitely be included inthis issue. After all, the aim is to supply readers withthe latest information on Thursday, when STERNcomes onto the newsstands.

Until December 2002, STERN’s editorial staffhad to have every issue cleared for printing byMonday evening. Since a new production proce-dure was introduced, they now additionally havethe wee hours of Tuesday to bring the magazinebang up to date. The time gain is chiefly due to theoptimized interplay between printing house andeditorial office. Whereas printing staff used to be

responsible for image processing and page makeup,today the STERN copy editors take care of thatthemselves at the computer. They put togetherpictures and copy to produce pages ready for print-ing and, shortly before printing begins, send them via data teletransmission to the G+J printing housein Itzehoe, Schleswig-Holstein, where they are cutonto gravure cylinders. State-of-the-art technologyand machinery have made an even greater timesaving possible. Sometimes even minutes countwhen it’s a question of including a story in the issueor not. "The new production concept enables theeditorial staff to make alterations right up to the lastminute,” explains Roger Gerhards, sales manager ofthe printing division of Gruner + Jahr.

Given its print run of some 1.5 million copies,producing STERN is still a challenge for everyone –including Vilmut Schwarz and his colleagues from the

STERN production department, the interface be-tween editorial office and printing house. Duringthe night of March 17, Schwarz is responsible for making sure that all data from the editorialoffice reaches the printing house in time. “Aboveall, you need to be in good shape,” he says, hurry-ing back and forth between the copy editors’ office,image processing and his own workplace. Schwarzis a trained offset printer and has been with STERNfor eleven years now. Editorial content is not soimportant to him in moments like these. It’s notwhat Bush says, but how timely he is in saying it that matters to him. If the copy deadline is post-poned, the finely tuned clockwork of editorial office,printing and distribution threatens to miss a beat.That can quickly mean extra expense. Here, timereally is money, in the truest sense of the phrase.Only when the printing presses are running can

Schwarz and his colleagues enjoy the privilege ofbeing the first to know what millions of STERN read-ers will not find out until Thursday.

Printing begins at dawn every Tuesday andcontinues through Wednesday morning. Severalmassive rotogravure presses work in unison toproduce the up-to-the-minute STERN pages in just a few hours. Then the “magazine products” are further processed in the bookbinding unit: the "main product,” fresh from the printshop, andthe "pre-product”, with topics from the health,fashion, travel and culture sections, which wasprinted over the previous weekend.

Thursday morning at the newsstand: The ultimatum has expired, the war on Iraq has begun. The cover of STERN, is absolutely topical, announc-ing: “Bush’s game with fire. War in the name of freedom.”

COPPER CYLINDER with engraved STERN page CONTROL STATION for the printers COUNTING copies bound for shipment

24 GRUNER + JAHR FAST G+J PRINTING I GRUNER + JAHR 25

CONCENTRATING ON THE GAMEIn times of shrinking budgets, advertising clients demand innovative concepts. Cross-media marketing is a new way todeliver a message to a target group faster and more efficiently.The G+J advertising department came up with an exemplary,trailblazing combination – and acquired new customers.

Blue skies, yellow sand: With a casual air, athletespowerfully spike the ball over the net. These are theGerman Beach Volleyball Championships on the Balticat Timmendorfer Strand – sponsored by Nivea.

The media went at it just as hard as the athletes.Whether it was STERN magazine advertisements,sports trailers on RTL or the weather report on VOX –Nivea blue was everywhere. And when you visitedeither of two G+J magazines online, you saw Niveabanners fluttering across the screen. STERN.DE in-structed readers in how to build their own beach courtsand BRIGITTE YOUNGMISS.DE featured the sport as a summer theme headlined “Richtig Baggern”(Good Digs).

“It’s a typical example of cross-media, this con-centrated brand advertising across several types of me-dia,” explains Stan Sugarman, chief of G+J’s advertis-ing department. “And it’s a particularly effective kindof campaign if you are able to find a suitable environ-ment for each medium, find as opposed to cre-ate.”One of the more difficult tasks is convincingclients that it’s also in their interest to separate adver-tising from editorial content. “Readers immediately get suspicious if they have the feeling articles in theirmagazine have been ‘bought’, Sugarman stresses,"and that doesn’t do anyone any good, neither theclient nor us, because the credibility of an advertisingmessage is closely linked with the credibility of themedium, the advertising expert adds.

Back to beach volleyball: When STERN magazine’sspecial Summer Sports section voted beach volleyballthe hit of the season, the story fit in perfectly with the

Nivea campaign sponsored by G+J‘s advertising client,Beiersdorf. Five pages of STERN magazine dedicatedto serves, bumps and hits; digging, setting and spiking.“A real stroke of luck – this only happens a couple oftimes a year,” Sugarman says.

The complexity of cross-media campaigns requiresa new kind of thinking. Advertising, banners, TV spotsor integrated lotteries must all be perfectly tailored totheir medium. Perfect timing is crucial for creating themaximum effect. This is why G+J put together aspecial Business Development team which didn’t justposition ads in STERN magazine according to subjectmatter, but, along with the television marketer IPDeutschland, took charge of cross-media strategy for all integrated media. Not only are cross-media cam-paigns extremely effective; they also hold a furtherbenefit for customers: dealing with a single sourcesaves both time and money.

The plan is to go one step further with this formof comprehensive service – like they do at G+J USA.In New York, chief marketing officer Cindy Spenglereven helps her clients market events. After all, G+Jhas excellent contacts to show business through Ber-telsmann. This way, Ms. Spengler can arrange eventsfeaturing well-known artists represented by Bertels-mann subsidiary BMG.

But as Cindy Spengler emphasizes, editorial inde-pendence must continue to be a top priority at G+JMedia. “The distinction between editorial content andadvertising sales is as basic as the separation of churchand state,” she says. “But that doesn’t mean there’s noadvantage in cooperating.”

INITIAL ADVANCES INTOTHE MIDDLE KINGDOMFollowing the success of the Chinese magazine CAR & MOTOR,Gruner + Jahr took the PARENTS brand to China in 2002. Inconjunction with G+J, the Beijing publishing house China LightIndustry Press launched the magazine FUMU PARENTS. The publications INC and FITNESS are to follow in 2003.

GOOD TIMING: Nivea ad in STERN Magazine –part of a comprehensive cross-media concept

FUMU PARENTS: Available inChina since March 2002.

26 GRUNER + JAHR I CREATIVE CROSS-MEDIA ADVERTISING INNOVATIVE MARKET IDENTITY IN CHINA I GRUNER + JAHR 27

A perfectly ordinary newsstand in Beijing displays agood 500 newspapers and magazines squeezed in sideby side, carefully held in place on wooden planks. Theowner only has two or three copies of most publicationsand even monthly magazines are often displayed for littlemore than a week as space is very much at a premium.

For about five years now, a magazine market hasbeen steadily growing in China – and already it’s burst-ing at the seams. Some 8,000 publications are nowavailable in China; only the United States and GreatBritain boast more. The circulation of most Chinesemagazines is only very small, however. The numberof readers is very low vis-a-vis the country’s 1.3 billionpopulace. Just a handful of people can afford theluxury of a magazine. Yet as wealth increases, so, too,grows a new stratum of buyers.

“The potential for development here is tremen-dous,” reports an enthusiastic Adrian Geiges, G+J’smanager in Beijing. For the time being, however,foreign investors are only permitted to operate on thispromising market in collaboration with the big state-run publishing houses.

It was just such a co-operation with Gruner + Jahrthat produced the successful Chinese magazine CAR & MOTOR in 1998. Since March 2002, FUMUPARENTS has also been available in Beijing. TheChinese magazine for parents takes around one-thirdof its articles from the American publication PARENTSand the German magazine ELTERN. The rest are pro-duced locally. Like the two G+J sister publications,FUMU PARENTS also provides information aboutparenting, diet, pregnancy and birth – somethingabsolutely new to China, where the role of raisingchildren traditionally falls to the grandparents. However,the magazine addresses a modern generation unwill-ing to rely solely on the experience of their elders.

Magazines providing advice and facts to help dealwith life’s daily problems is an entirely new conceptin China and one that is likely to take some time to bewidely accepted. Nonetheless, Adrian Geiges expectsto see a rapid increase in readership: “This is the idealmarket, especially for a parents’ magazine.”

The Chinese one-child policy is actually only an ob-stacle at first glance, since all parents’ hopes lie withtheir one and only child, for whom they wish the verybest of everything. Large sums are spent on the latesttoys, the best education, the nicest clothes. Not fornothing are children known as “little emperors” in theMiddle Kingdom.

THE RUBBER BOOT BRIGADEAugust 2002: The Elbe river floods its banks, inundating villages and cities. Gruner+ Jahr, STERN and SÄCHSISCHE ZEITUNG startcampaigning for aid, and in Dresden, SÄCHSISCHE ZEITUNG news paper staff fight the rising waters in their building.

DESPERATE PLIGHT:

A family waits to be rescuedfrom the ruins of

their house which has beenalmost completely

washed away by flooding.

SUPPORTIVE FLOOD COVERAGE AND AID I GRUNER + JAHR 2928 GRUNER + JAHR

SPONTANEOUS AID: Helpers build dikes against the flood and rescue people from their homes. The basement of the buildingwhich houses the SÄCHSISCHE ZEITUNG in Dresden was innundated for several days and a portion of the archives was destroyed by mud. Thanks to the tireless dedication of the staff, emergency issues were able to be published every day.

AFTER THE FLOOD: All that’s left of the GrimmaMinster (above) is the harmonium. Streets and buildings are drowning in mud.

Don’t talk, help: Everyone does their part.

The Elbe river flooded Dresden, and colleagues at the SÄCHSI-

SCHE ZEITUNG rescued computers and portions of the archive in

rubber dinghies. What was the reaction downstream at the pub-

lishing house in Hamburg harbor?

There was no question at all: We would not only run a large-scalefeature on the catastrophe, but would also help by donating oneeuro from each magazine sold to help the flood victims. Moreover,Gruner + Jahr donated 100,000 euros for blankets, medication anddrinking water to Lichtblick, a Dresden-based organization support-ed by the SÄCHSISCHE ZEITUNG.STERN magazine was even published twice during the week of

the flood...

When Dresden was inundated in the early hours of Tuesday,August 13, STERN magazine had already gone to print with aNew York fireman on the cover and without in-depth reporting of the flood. That’s why we moved the publishing date for thefollowing issue back to Monday, coming out simultaneously with Der Spiegel and Focus magazines and selling by far the best. Then, we updated the flood reports for the newsstand issueson Thursday. In other words: one magazine, two versions – a huge success. All together, we collected around 600,000 euros forthe flood victims. Was the STERN CHRONIK, which recounted the flood, a success?

Yes, we were able to show the best pictures once again. In addition,our reporters did an impressive job of retelling the story of the dis-aster. Another 1,000,000 euros from the proceeds of this specialedition of STERN went to the flood victims.

“WE JUST WANTED TOHELP“Editor-in-chief Thomas Osterkorn on STERNmagazine’s aid campaign.

INTERVIEW

THOMAS OSTERKORN

and Andreas Petzold have beeneditors-in-chief of

STERN magazine since 1999.

SUPPORTIVE FLOOD COVERAGE AND AID I GRUNER + JAHR 3130 GRUNER + JAHR

COUNTERING THE CRISISCREATIVELYPresident’s report for the fiscal year 2002

The year 2002 was marked throughout the worldby a profound unease among politicians, business-people and consumers. Sparked by the attacks ofSeptember 11, 2001, and their consequences, thatunease prevails to this day. Hopes that the generalmood and economic setting would improve have notyet been answered.

Gruner + Jahr has nonetheless succeeded in over-coming the enduring crisis in the media industry. Thepublishing house has taken advantage of the wide-spread paralysis in the global media sector to furtherexpand its market position in nearly all countries – andoptimize its operating result – by launching new titlessuch as WOMAN in Germany, GEO Ado in France, andFUMU/PARENTS in China. We also owe our successin the fiscal year 2002 to five other factors:

Firstly, the publishing house responded swiftly tothe worldwide crisis in the advertising business byreviewing and improving internal procedures and thusradically cutting costs.

Secondly, Gruner + Jahr did not depart from itspublishing principles. Unwavering commitment toquality journalism pays off, particularly in hard times.

Thirdly, our strategy of maintaining leadership incore segments of the market came up trumps.

Fourthly, Gruner + Jahr also refused to use thecrisis as a reason to stop investing in the expansion of existing publications – as in the case of STERNBIOGRAFIE – thereby actively going against thegeneral flow.

Finally and fifthly, as the world’s most interna-tional publishing house, Gruner + Jahr benefitedmore than any other from the opportunity to com-pensate elsewhere for negative developments oncertain markets.

In 2002, the varying developments on the keyGruner + Jahr markets of Germany, the United Statesand France provided convincing evidence of just how significant the strategy of internationalizationintroduced in 1978 really is. With the exception ofonline advertising, the volume of which remains limit-ed, advertising revenue in Germany fell once againacross all media genres, while France reported astable trend and there were even some initial signsof a revival of the advertising market in the UnitedStates. In all three core markets – but above all in

32 GRUNER + JAHR PRESIDENT’S REPORT 2002 I GRUNER + JAHR 33

DR. BERND KUNDRUN

has been President andCEO of Gruner + Jahrsince November 2000.

German maga-zines and

Multimedia

Internationalmagazines

Newspapers

Printing

Other

Printing revenue

Sales revenue

Advertisingrevenue

Other

EXTERNAL SALES REVENUE ACCORDING TO CORPORATE DIVISIONEUR mill. excluding joint ventures

2,7572,934

3,042 2,9732,807

EXTERNAL SALES REVENUE ACCORDING TO BUSINESS CATEGORYEUR mill.

2,7572,934

3,042 2,9732,807

1998/99 1999/2000 2000/2001 2001pro forma

2002

18% 18% 20% 20% 20%

33% 31% 29% 30% 31%

41% 42% 43% 43% 40%

8% 9% 8% 7% 9%

the United States – Gruner + Jahr developed betterthan the market in general.

The above-average market performance ofGruner + Jahr is also reflected in its profit develop-ment. In the wake of the switch from fiscal-year tocalendar-year accounts, the G+J Annual FinancialStatements were prepared for the first time for2002 on the basis of the internationally applicable ac-counting standard IAS.

Gruner + Jahr’s high proportion of internationalbusiness and consistent cost management made it possible for the publishing house to maintain profitability even in these tough economic times. Some 70 million euros were saved alone thanks to the CAP (Cost and Processes) optimization pro-gram which was introduced at the beginning of 2001. Where cost cuts failed to preserve the viability of individual undertakings, personnel adjustments were made. As a last resort, publications with no economic or strategic prospects were either dis-continued or sold.

All in all, a reduction in costs of 289 million euroswas achieved by means of all the measures out-lined – despite expenditures amounting to 135 millioneuros, of which a large portion is accounted for bydevelopment costs for new titles. Despite the largevolume of expenditure, the EBITDA figure (earningsbefore interest, taxes and depreciation) of 117 millioneuros for the proforma fiscal year 2001 doubled to233 million in 2002, representing an EBITDA operat-ing margin of 8.3 percent.

Taking special revenues into account, such as thesale of Berlin newspaper activities or the equity inthe Internet portal DAUM in Asia, the overall resulttotalled 406 million euros.

In the same period, cash flow tripled, rising by281 million euros from 114 to 395 million.

The net profit for the year amounted to 126 mil-lion euros. On December 31, 2002, Gruner + Jahremployed 11,367 people worldwide. Due to adjust-ments and the sale of the Berlin newspaper activities(approx. 920 jobs), some 1,600 fewer employeesworked for Gruner + Jahr in the year under reviewthan in 2001.

At 2.8 billion euros, external sales of Gruner + Jahrin 2002 were 2.973 billion euros down on the figure for the proforma fiscal year 2001. The 6-percent dropin sales is due largely to the sale of the Berlin publishinghouse with economic effect from July 2002, otherportfolio activities, the fall-off in German advertisingbusiness, the decline in multimedia activities and also the effects of exchange rate fluctuations.

The International Magazines division accountedfor the largest share in the sales structure accord-ing to individual segments, followed by the GermanMagazines division, Printing division and News-papers division.

The representation of the sales structure accord-ing to activity – i.e. ads, marketing, printing and others– clearly reflected the market situation already de-scribed with a decrease in advertising revenue from 43to 40 percent. The percentage of sales revenue rose

slightly from 30 to 31, while printing revenue re-mained constant at 20 percent.

Once again in 2002, Gruner + Jahr was by far the most international printing house in the world,commanding a 63-percent share of sales outside itsdomestic market, Germany. The high level of foreignturnover not only placed the publishing house in aposition to compensate for national fluctuations, but atthe same time enabled it to target its investments incountries where general market conditions promiseda particularly high return.

OUTLOOKFor Gruner + Jahr, 2001 and 2002 were a period ofconsolidation. The publishing house underwent long-term reorganization to create the basis for new growth.Over the coming years, Gruner + Jahr plans to continuegrowing by implementing a consistently innovativemanagement approach. The expansion strategy isbased on four main pillars: • Brand revitalization: Constant investment inexisting markets with a view to maintaining theirvalue and expanding them.• Brand extension: Even more is to be made in the future of the potential of strong media brands and concepts such as STERN, GEO, GALA, FITNESS,PARENTS, CAPITAL, P.M., FOCUS and LIVING AT HOME by means of line extensions andmerchandising.

• Concept and brand transfer: Existing titles and con-cepts will be expanded more systematically to includeinternational market, as was the case in 2002 withFUMU PARENTS in China and GEO Ado in France. • New Titles/Acquisitions: In addition, Gruner + Jahrwill develop new publications and new concepts, likeWOMAN, and purchase additional titles wherever thispromises to be a viable proposition.

Already in the first three months of the currentfiscal year, Gruner + Jahr has further expanded itsportfolio of 120 regular magazines and newspapers as well as the corresponding online editions in 14countries on three continents, and consolidated itsmarket position in various countries by introducingnew titles. INC. and FITNESS are now published in China, TÉLÉ LOISIRS in Belgium, GLAMOUR inPoland and GEOLENOK in Russia. SHOPPING waslaunched in May 2003 on the French market and inJune, STERN will be bringing out a new magazinetargeting 20- to 29-year-olds. Market tests are current-ly under way in the United States for a new women’smagazine, and a new women’s publication is also in thepipeline for France.

Gruner + Jahr reacted to the economic crisisfaster than its competitors and has shown greaterresolution in resetting the course for growth – growth,with which Gruner + Jahr can prove its innovativestrength and publishing power, even in the face ofadverse market conditions.

Dr. Bernd Kundrun

1998/99 1999/2000 2000/2001 2001pro forma

2002

EXTERNAL SALES 2002 ACCORDING TO REGION EUR mill.

1,047

941819

Germany Europe andother countries

USA

34 GRUNER + JAHR PRESIDENT’S REPORT 2002 I GRUNER + JAHR 35

37% 34% 29%

CULTURAL COMMITMENT

Both the publishing house and individualmagazines showed their cultural commitment

by sponsoring numerous exhibitions in 2002. A highlight was the World Press Photo Awardshow put on jointly by G+J and STERN maga-

zine. Over 18,000 visitors flocked to the G+Jfoyer at Baumwall during April and May to

view the best press photos from around theworld. In conjunction with the presentation

of the German Architecture Prize for DetachedFamily Homes, the architecture magazine

HÄUSER used models and photographs to giveexamples of trend-setting, energy-saving

building methods. And after a successful open-ing in Hamburg, GEO took the exhibition

“Die Erde von oben” (The Earth from Above) to Potsdamer Platz in Berlin.

SOCIAL RESPONSIBILITY

Despite the ongoing crisis in the advertisingmarket, Gruner + Jahr continued to demonstrate

responsibility to society. Starting in May,BRIGITTE was the very first women’s magazine

in Germany to be made accessible to the blind, joining STERN magazine, which, for many

years, has been publishing an exemplary edi-tion for the blind in conjunction with the weekly

Die Zeit. In addition, Gruner + Jahr took an active part in a number of social and non-profit

initiatives – as did STERN magazine with “Mutgegen rechte Gewalt” (Take courage against

right-wing violence) and GEO with “Schutz der Artenvielfalt” (Protecting Biodiversity).

ANNIVERSARIES

In June, CAPITAL became the first in a seriesof major German Gruner + Jahr titles to

celebrate its anniversary in style. Germany’smost widely read business magazine observed

its 40th anniversary in Berlin, attended by the German Chancellor Gerhard Schröder and

1,000 other guests. In October, the gourmetmagazine ESSEN & TRINKEN commemorated

30 years of service to German culinary cultureand BÖRSE ONLINE turned 15 in November.

HIGHLIGHTS 2002

EARTH FROM ABOVE:

This was the title of aGEO exhibition ofphotographs by YannArthus-Bertrand atPotsdamer Platz in Berlin.

ROLF WICKMANN

President of the GermanMagazines division,Hamburg.

WORLD PRESS

PHOTO AWARD 2002:

The prize-winningphotos by the world’smost celebrated pressphotographers were ex-hibited at Gruner + Jahrin Hamburg.

GERMAN MAGAZINESCompensating for a sluggish market: Europe’s largest magazine pub lisher strengthened its position inGermany with new titles, journalistic excellence and innovative ser vices for advertising clients.

In 2002, the German Magazine’s division success-fully defied the ongoing crisis in the German ad-vertising market. By judiciously improving efficien-cy, the division was able to match the results of the previous year – despite a slight dip in sales due to decreased advertising proceeds. At a timewhen German advertising business fell off by a totalof around seven percent, Gruner + Jahr performedbetter than the market and was able to expand itsposition as market leader.

The successful launch of the new bi-monthlywomen’s magazine WOMAN, which hit the news-stands on October 22, 2002, and immediately soldover 300,000 copies, sent a positive signal in a pessi-mistic climate. In the first three months, WOMAN sold265 pages of advertising space. LIVING AT HOMEproved that quality journalism can prevail, even indifficult times. The home and lifestyle magazine in-creased its gross advertising sales by 19 percent com-pared with 2001, and is already making a profit only twoyears after its launch.

STERN magazine, the topical weekly with the wid-est readership in Germany, extended its brand familyto include STERN BIOGRAFIE and STERN CHRONIK.With regard to overall sales and advertising proceeds,STERN took the lead all over German consumer pub-lications. Boasting 45 million page impressions everymonth, the STERN.DE site clearly exceeded its annualtarget to join the top ten.

Just as in 2001, the celebrity magazine GALA onceagain showed growth in the advertising market.BRIGITTE WOMAN, a quarterly for women over 40, on the market since 2001 and a member of theBRIGITTE family, continued to increase its circulationand exceeded the 200,000 mark.

G+J was also able to expand its preeminentposition in the popular-science segment. NATIONALGEOGRAPHIC, a feature of the German market since1999, had already reached the break-even point by theend of 2002. Special editions, books and DVDs wentto make up NG’s product portfolio. And GEO, whose

36 GRUNER + JAHR CORPORATE DIVISION MAGAZINES I GRUNER + JAHR 37

high circulation figures remained stable, also continuedto extend its brand family. GEOLINO, for instance, nowsells over 200,000 copies every month.

A bitter drop in the business press segment: Whenthe stock exchange fell and the Internet mood turnedsour, BIZZ magazine had to be discontinued due to lackof potential. On the other hand, the 40-year-old classicand segment leader CAPITAL increased its coverageand now boasts a readership of 1.29 million.

OUTLOOK Contrary to the ongoing negative trend, Gruner + Jahrwill continue to focus on editorial quality and expand-ing its strong magazine markets in Germany in 2003,transforming the crisis into an opportunity to increaseits market share. In the advertising and sales areas, keyaccount management and direct marketing will beintensified so as to counter the continued weaknessof the market.

ANNIVERSARIES

The French general-interest magazine VSDcelebrated its 25th anniversary in November2002 and was able to look back on a quarter

of a century of exciting and successful journa-lism. VSD was founded by the radio journalist

Maurice Siegel. The French celebrity magazineVOICI also celebrated an anniversary in No-

vember, marking 15 years in the business. Andfinally, in Italy, the science magazine FOCUS,

Italy’s largest monthly, celebrated its 10th anni-versary in December.

AWARDS

Gruner + Jahr’s constant commitment to quality journalism was reflected in countless

prizes and awards in 2002. In the USA, theparenting magazine CHILD won three prizesat the renowned Folio Awards, among them

a gold medal for “editorial design.” PARENTSreceived four National Health Information

Awards for its first-class reporting, and theeconomics magazine INC. was awarded no

less than eleven prizes by the Society ofPublication Designers. In Poland, NATIONAL

GEOGRAPHIC was nominated “Magazine of the Year.” For the jurors from the trade maga-

zine Media & Marketing Polska, it was notonly the magazine’s uniqueness and extraor-

dinarily high quality in terms of editing andlayout that were decisive, but also its positive

influence on comparable segments in thePolish magazine market.

HIGHLIGHTS 2002

AXEL GANZ President of the International Magazinedivision, Paris.

KNOWLEDGE IS FUN:

In only ten years, the sciencemagazine FOCUS became Italy’s most success-ful monthly publication.

NATIONAL GEOGRAPHIC

was not only named “Magazineof the Year“ in Poland. Its photo reportage about Polishsteam engines also won 3rdprize at the World Press PhotoAward 2003.

INTERNATIONAL MAGAZINESSelf-propelling dynamism plus growth: Rising profits abroad create a basis for more expansion and new expenditures.

Compared with all other European publishing houses,Gruner + Jahr profited most in 2002 from its interna-tional activities. The International Magazines divisionmaintained its leading position in all core marketsand/or continued to consolidate it in essential seg-ments of those markets. Today, G+J is represented in13 foreign markets with 70 titles. Its broad internation-al spread enables the publishing house to balance outmarket weaknesses in individual countries and main-tain, overall, a positive trend. All of G+J’s foreign sub-sidiaries – with the exception of China, where G+J in-vested in two new magazines – were able to improveboth performance and yield in 2002. The boost inprofit, quite significant in part, was achieved to a goodextent by careful cost management.

Prisma Presse in France performed better thanthe market in 2002 and was able to exceed its ex-cellent results of the previous year. G+J’s biggestinternational subsidiary maintained its position as thesecond largest and most profitable French magazinepublisher. Despite a slight softening of the Frenchmarket, gross advertising proceeds from Prisma Presseremained stable. A number of titles including FEMMEACTUELLE, VOICI and GALA even saw a considerablerise in advertising sales. The television guide TÉLÉ

LOISIRS even exceeded its average circulation base of two million paid copies for the first time in 2002,while the business magazine MANAGEMENT increasedsales by eight percent following its relaunch. The newlyintroduced GÉO Ado magazine, aimed at young people,sold 75,000 copies right away.

G+J USA profited impressively in 2002 from acomprehensive modernization program initiated theprevious year: a relaunch of nearly all the US titles.Gross advertising proceeds of a good 13 percent fromG+J’s American subsidiary showed an increase ofmore than twice that of the overall US market (up fivepercent). Advertising sales rose by 66 percent forFITNESS, 48 percent for YM and 22 for CHILD – a spec-tacular development. Number five in the world’s largestmagazine market, G+J USA was able to keep salesstable in spite of scrapping HOMESTYLE and ROSIEat the end of 2002. Performance and yield wereconsiderably improved.

G+J’s subsidiaries in Spain and Italy improved onalready high yields despite the weak advertisingmarket. Gruner + Jahr/Mondadori in Italy recorded itssecond best performance – since its founding – in2002. Success crowned the tenth anniversary of G+J’s

Italian information magazine, FOCUS: Italy’s best-sellingmonthly achieved a readership of well over five million.

In Poland – where G+J is third in the magazinemarket and leads the women’s magazine sector – thepublishing house was once again able to dramaticallyincrease sales and performance. Business was ex-panded in G+J’s youngest markets: Russia, China andthe Netherlands. NATIONAL GEOGRAPHIC Holland is making a profit two years after it was launched, andin China, G+J launched FUMU PARENTS this year, itssecond title in that market.

OUTLOOKThe International Magazine division is aiming to ex-haust its market potential in the current year, and bycontinuing its program of selective cost management,further increase performance in its core business inorder to create a firm basis for new growth. Success-ful new magazines in 2003 include the women’smagazine GLAMOUR in Poland, the children’s andyoung adult magazine GEOLENOK in Russia as well asINC. and FITNESS in China. Further new launches areplanned for the United States and France.

38 GRUNER + JAHR CORPORATE DIVISION INTERNATIONAL MAGAZINES I GRUNER + JAHR 39

CULT MAGAZINES:

In 2002, VOICI and VSD in France celebrated their 15th and 25th anni-versaries, respectively.

TRAILBLAZING ROLE

In January 2002, the SÄCHSISCHE ZEITUNGwas one of the first German newspapers to

come out with an E-paper edition. Since then,the completely identical, electronic equivalent

of the paper, has been available on the Internetfor downloading onto readers‘ computers as a

PDF file for 7.50 euros a month (SZ subscribers:2.50 euros). During the course of the year, the

regulatory association IVW agreed to allow E-paper versions to be included in circulation

reports as of 2003.

HELPING PEOPLE

Although Gruner + Jahr in Dresden was hardhit by the flood of the century last August,

its staff found time to help others in need. Bymaking several calls for donations to the

Lichtblick alliance, which is supported by theSÄCHSISCHE ZEITUNG, the publishing

house collected eight million euros for thevictims of the flood.

TAKING A STAND

During the German election campaign in 2002,the FINANCIAL TIMES DEUTSCHLAND

consciously broke a journalistic taboo by rec-ommending a particular candidate. This

was a first for a German newsaper. The tradi-tion of candidate endorsement, borrowed

from the world of Anglo-Saxon journalism, wasthe highpoint of a thirteen-part comment-and-

analysis series on the most important politicaldebates and their accompanying party plat-

forms. In this way, the FTD demonstrated itscommitment to offering readers a clear pic-

ture of important economic and political issues.

HIGHLIGHTS 2002

FTD IN BERLIN: A specialteam of editors reportedon the German federal elec-tions in 2002.

ACHIM TWARDY

President of theNewspapers division,Hamburg.

Turning the corner: No or-dinary campaign for anextraordinary newspaper.Good journalism helpedthe FINANCIAL TIMESDEUTSCHLAND, adver-tised on this billboard, to overcome the crisis.

NEWSPAPERSReaders appreciate quality: G+J newspapers buckthe trend in difficult economic times.

Falling circulation figures, a dramatic slump in the ad-vertising business: In 2002, the German economiccrisis hit the newspaper market even harder than it hadthe year before. The weak economy was reflectedparticularly in a severe decline in job ads as well asother classified advertising. The reader market forsubscription media continued to decline. Seen againstthis background, the fact that the FINANCIAL TIMESDEUTSCHLAND further boosted circulation figuresagainst the trend shown by supraregional daily papersin 2002 is an extraordinary achievement.

With a paid circulation of 89,000 copies (53,000subscriptions) in the fourth quarter of 2002, theFINANCIAL TIMES DEUTSCHLAND (FTD) increasedsales by 14 percent against the previous year. Reader-ship rose to just under 220,000. (source: AWA). TheFTD continued to establish itself among Germanreaders as a central journalistic medium. This wasdemonstrated by the Bonn media research institute,Medien Tenor: Among the business media most widelyquoted in Germany, the Financial Times newspapergroup ranked first.

Readership of the SÄCHSISCHE ZEITUNG and the MORGENPOST SACHSEN exceeded one millionin 2002. The same year, the average net paid circula-

tion of the SÄCHSISCHE ZEITUNG was just under325,000. During the heavy flooding in Saxony in August, 2002, the ground floor of the publisher’sbuilding was inundated for several days and some ofthe archives were destroyed. It was due wholly to the untiring commitment of the newspaper staff thatemergency issues were even published at this time.The operating results of the Dresden publishinghouse in 2002 only showed a slight decline comparedwith the previous year – a remarkable achievement insuch an unfavorable year.

In connection with a strategic reorientation pro-gram, Gruner + Jahr decided to pull out of the re-gional newspaper business in Germany. As a result,the Berlin-based newspapers BERLINER ZEITUNG,BERLINER KURIER, TIP and BERLINER ABEND-BLATT were sold to the Georg von Holtzbrinckpublishing house in the summer of 2002. Despite aclear decline in sales that year, all of the papers werein perfect economic health. BERLINER ZEITUNGcontinues to boast the highest readership of asubscription daily in the competitive Berlin market.Pending an antitrust decision and final takeover by the Georg von Holtzbrinck publishing group, G+J will act as a temporary, independent shareholder of the paper.

Thanks in part to the economic growth in theirrespective markets, the eastern European newspapersBLIC in Serbia, EVENIMENTUL ZILEI in Romania andNOVY CAS in Slovakia achieved good results in theyear under review. Further investment in the journalis-tic quality of the papers was made in all three countriesand market positions were expanded. In Romania,G+J increased its share in the publisher Expres Verlagby a quarter, and now holds 77 percent. The Sundaypaper EVENIMENTUL ZILEI DE DUMINICA wasfounded here in 2002.

OUTLOOKThe dramatic downturn in advertising and circulationfigures in the German newspaper market appears to be continuing – although at a lesser rate – into 2003.Nevertheless: Experience at G+J shows that high-quality journalism, professional market leadership andefficient management can successfully counter nega-tive market trends. The evidence speaks for itself:The paid circulation of FTD exceeded 90,000 copies forthe first time in the first quarter of 2003. In early 2003,G+J took a further step in extending its presence ineastern Europe by acquiring a majority share (74.9percent) in the Yugoslav publisher BLIC Verlag.

40 GRUNER + JAHR CORPORATE DIVISION NEWSPAPERS I GRUNER + JAHR 41

VOLKER PETERSEN

Head of the Printingdivision, Hamburg.

PRINTING Investments raise our efficiency and make usmore competitive.

A sharp fall in advertising business in 2002 caused maga-zines and newspapers all over Europe to shrink, thus al-so reducing print volume. Both in Europe and the Unit-ed States, competitive and price pressure intensified.Thanks to new contracts, the G+J Printing division – thenumber two in Germany for rotogravure printing and thenumber four in the United States for magazine printing– was able to make up for loss of volume. Despite thetough market situation, the division’s operating result for2002 fell only slightly short of that for the previous year.

The G+J printing house in Itzehoe, Schleswig-Holstein and also the print center in Dresden with itsillustration and newspaper printshop succeeded inmaintaining virtually the same high level of turnover asin the previous year because they acquired new printcontracts for both German and foreign magazines andcatalogues. At 93 percent, capacity utilization of therotogravure printshops measured up to that of theprevious year.

The commissioning of a new rotogravure press inDresden upped print volume by 17 percent. In Itzehoe,new gatherer/stitcher cylinders were taken into opera-tion in the further-processing department within theframework of a reinvestment project already underway for a few years now. These investments as wellas optimizations in the production processes once

again substantially brought down unit prices in theGerman printshops.

The print market in the United States recoveredslightly in 2002 following a drastic slump in 2001.Turnover figures rose by over three percent year onyear at the Brown Printing Company, which has print-shops in Waseca, Minnesota; East Greenville, Penn-sylvania, and Woodstock, Illinois. A sixth printing presswas commissioned at the Woodstock printshop, thusraising capacity by another 34 percent.

OUTLOOKDespite general stagnation on the markets, the Print-ing division expects to see a slight increase in its printvolume for 2003. At the same time, the aim is toconsolidate the leading position of Gruner+Jahr in theEuropean rotogravure industry by working the marketmore intensively and introducing further measures toincrease efficiency at the various printshops. In theUnited States, modernization of the East Greenvilleplant will continue with the installation of a new press.In Woodstock, preparations for taking on the large-volume contracts for Time Inc. will be completed inJanuary 2004 (producing a portion of the print run ofTime, Sports Illustrated and People) by investments inthe further-processing unit.

MARTIN STAHEL

President of the CorporateDevelopment and Strategydivision, Hamburg.

CENTRAL CORPORATE DEVELOPMENTDeveloping strategic company goals in close cooperationwith the divisions.

The Central Corporate Development division fulfillsthe task of providing internal company managementconsultancy for all divisions, both domestic and inter-national. Gruner + Jahr believes that in many instancesthis type of institution can be more effective and effi-cient than external consultants because it observes thepublisher's structures, processes, peculiarities andmarkets in detail and over the long term, and can betterassess the impact of various targets and measures onthe basis of this experience.

First and foremost, the Central Corporate Develop-ment management division develops and formulatesthe publishing house's strategic corporate goals, work-ing closely with all company divisions and their boards.The foundation for the strategic focus is an ongoingmarket analysis that is based on internal observationsas well as a variety of database-supported statisticalmarket, segment and country information. In the caseof markets outside Germany, the division takes ad-vantage of the expertise available from the company'sinternational subsidiaries. Central Corporate Develop-ment not only attempts to anticipate what the futurewill bring, but also supports the implementation ofcorporate strategy in individual projects by serving as

advisor to the corporate divisions. The developmentand implementation of corporate goals is seen as a dy-namic process performed in dialogue with the divisionsand by adjusting to new market conditions.

Central Corporate Development, however, is mosteffective wherever problems that span all divisionsneed to be solved. In 2002 in particular, the divisioncoordinated the implementation of the CAP program(Cost and Processes) across all corporate divisionsand countries. Since its introduction in early 2001,CAP has optimized workflows and cost efficiency com-panywide, and is already proving to be extraordinarilysuccessful.

OUTLOOKFor the fiscal year 2003, Central Corporate Develop-ment will make the subject of innovation one focus ofits work. Topping the agenda is the “innovationprocess,” i.e., finding out how G+J can best ensurethat the many ideas generated in the operationaldivisions are collected, evaluated and, if promising,quickly implemented.

42 GRUNER + JAHR I CORPORATE DIVISION PRINTING CORPORATE DIVISION CENTRAL CORPORATE DEVELOPMENT I GRUNER + JAHR 43

PRINTING FACILITY IN

ITZEHOE: The new gatherer-stitcher equipmentfor the processing stage is operating successfully.

DR. MARTIN SCHUSTER

President of the Central Services division,Hamburg.

CENTRAL SERVICES ENVIRONMENTAL REVIEWFor Gruner + Jahr, future-oriented

corporate activity doesn’t just meanhigh-quality newspapers and

magazines: it means producing eco-logically sound ones, too

Electronically networking and harmonizing systems optimizes work processes and enablescompany-wide cost cuts and performance improvements.

The Central Service Departments division comprisesHuman Resources, Accounting, Corporate Finance,Information Technology, Internal Administration, PaperPurchasing and the Legal Department. In 2002 im-provement measures focused on optimizing work pro-cesses and utilizing synergy to cut costs. To improvecoordination between internal and external reporting,during the fiscal year, the reporting, finance, accountsand tax functions were combined to form the new“Corporate Finance” department.

Also in 2002, Human Resources introduced an online application system by which applicants can now securely send their information via the G+J homepage. Documents and correspondenceare then forwarded and processed electronically.

Anonymous employee surveys on job satisfaction,which were conducted at many national and inter-national G+J locations, were well received in 2002. Inkeeping with a dialogue-focused corporate culture,the practice of person-to-person annual employeereviews was further established, with managementreceiving special training on the subject.

Accounting and Corporate Finance prepared the G+J annual financial statements in 2002 accordingto both German Commercial Code (HGB) and Inter-national Accounting Standards (IAS).

The SAP Center and Information Technology weregrouped together in 2002. This move enabled furtheroptimization of G+J's existing architecture and appli-cation systems to be realized companywide. Moreover,in the year under review, a special group of IT managerswas formed for the purpose of improving companywidestandards for electronic systems, processes and vendorrelationships. To date, SAP business software has beenintroduced in nearly every G+J company. IT revised thecorporate internet portal GUJ.DE and updated bothuse and appearance. An increase in hits by 100 percentconfirms the success of the revamping. The contentmanagement system was improved for the varioushomepages of G+J publications. Optimized IT solu-tions which resulted from a number of large-scale pro-jects succeeded in significantly boosting the efficiencyof a wide variety of company workflows.

Further progress was made in automation in Inter-nal Administration in 2002 as well. The G+J purchasingplatform “eB2B marketplace” which was launched at theend of 2000 and allows the company to procure officesupplies, books and other consumables electronically,proved particularly beneficial. In 2002, G+J processedan average 3,700 orders per month by means of the eB2B marketplace. A user survey in the sameyear revealed that 85 percent were satisfied with thepurchasing platform and would recommend it toothers. Accordingly, for some time now, G+J has

been increasingly expanding its marketing of thesystem platform to outside companies.

As part of a balanced scorecard system, the divi-sion conducts online customer surveys on servicequality once a year. In 2002, nearly 1,000 G+Jemployees participated, thus contributing to im-provements in processes and cooperation. At thesame time, all employees of the Central ServiceDepartments were asked to comment on their satis-faction, and make recommendations for improve-ment. Ongoing optimization is the result of thisdialoguing process.

OUTLOOKAgain in 2003, the Central Service Departments willcontinue to improve their companywide services bytaking a variety of user-friendly measures. Inparticular, electronic networking and cost-cuttingsynergy projects are to be expanded. One of manysuch projects is the fully electronic handling ofbusiness travel organization and processing. Further-more, the Central Service Departments will markettheir organizational expertise and administrativeservices – from accounting to facility management –to external customers even more intensively than inyears past.

44 GRUNER + JAHR CORPORATE DIVISION CENTRAL SERVICES I GRUNER + JAHR 45

Sustainable paper production is at the core of Gruner + Jahr‘senvironmental policy. Resource conservation, energy

efficiency, waste prevention and recycling programs furtherspell out the publisher’s corporate ecoconcept, which it

has followed since 1991. Responsibility for the environmentbecame a firm part of G+J‘s corporate principles as early

as May 1990. In March 2000, the publisher’s largest print-shop in Itzehoe received a certificate for integrated quality

and ecomanagement in accordance with international stan-dards ISO 14.001 and 9.001.

Situated as it is on the Elbe river, Gruner + Jahr has, for thepast six years, been contributing its professional expertise

to the Living Elbe project, which it runs jointly with theDeutsche Umwelthilfe environmental association. The aim

is to develop a unified preservation concept for this majorEuropean river by fostering improved networking and com-

munication between the 400-odd organizations activelycommitted to its preservation. The success of the first Inter-

national Bathing Day on July 14, 2002, organized by theLiving Elbe project, demonstrated people’s enthusiasm about

their river – just a month before the catastrophic flooding.More than 80,000 people at 55 locations in the Czech Re-

public and Germany celebrated the improved quality of the river’s water. The goal of the project is to gain recog-

nition for cultural assets and natural treasures along theElbe, and to achieve UNESCO World Heritage Landscape

status. Particularly in the wake of the negative floodimages, the idea is to create both ecological and economic

prospects for the Elbe. The UNESCO stamp holds greatpotential for the development of tourism and future-orient-

ed river management.

For details, see www.guj.de/umwelt

THE GRUNER + JAHR GROUP GLOBAL BALANCE SHEETAS OF 31 DECEMBER 2002

THE GRUNER + JAHR GROUP GLOBAL PROFIT AND LOSSACCOUNT 1 JANUARY 2002 TO 31 DECEMBER 2002

ASSETS (EUR ‘000)

Intangible assetsTangible assets Financial assets

Fixed Assets

InventoriesTrade receivablesAmounts due from affiliated undertakingsOther assetsLiquid funds

Current assets

Deferred taxation

Deferred expenses

Summary

31.12.2002

408,619662,28750,563

1,121,469

91,133329,853301,778160,15250,703

933,619

12,730

10,062

2,077,880

LIABILITES (EUR ‘000)

Partners’ shares/Subscribed capitalRetained earnings Net loss for the year

Shareholders’ equity (not incl. minority interests)Minority interests

Shareholders’ equity (incl. minority interests)

Preferred stock

Accruals for pensions and similar obligationsTax accrualsOther accruals

Accruals

Liabilities to financial institutionsLeasing liabilitiesTrade payablesAmounts due to affiliated undertakingsOther liabilities

Liabilities

Deferred taxation

Deferred income

31.12.2002

77,307108,124-53,884

131,547

104,415

235,962

40,903

532,36713,960

195,915

742,242

7,093137,931195,003441,083123,541

904,651

15,229

138,893

2,077,880

(EUR ‘000)

Sales revenueChanges in inventoriesOther operating income

Raw materials, consumables and suppliesPersonnel expensesAmortization/Depreciation of intangible and tangible assetsOther operating expensesProfit/loss on disposal of fixed assets

Operating profit

Profit/loss (-) of affiliated undertakingsShare of profit/loss (-) from joint ventures andassociated undertakingsProfit before interest and taxes

Net interestTaxes on income

Net profit (before deduction of minority interests)

Minority interests

Net earnings for the year

2002

2,806,9504,245

119,145

2,930,340

-927,587-847,816

-255,036-819,465184,976

265,412

-9,364

-9,695246,353

-62,382-58,026

125,945

22,754

148,699

46 GRUNER + JAHR ANNUAL REPORT CORPORATE DIVISION GRUNER + JAHR I GRUNER + JAHR 47

BILINDTEXT ZUM BILD I

Maritime Geschmeidigkeit in der808 Lounge: Das mehr aund virel

mehrt blindtext zum besserenverständnis

GRUNER + JAHR IN FIGURESMagazines – Newspapers – Printing facilities

(EUR mill.)

Sales revenue

Operating EBITDA

Cash flow

Total assets

Capital stock (after deduction of minority interests)Loan capital

Fixed assets

Current assets

Personnel expenses

Employees on balance sheet date

1) Including preferred stock

IAS

2002

2,807

233

395

2,078

236 1,8421)

1,121

957

848

11,367

HGB

1.7.-31.12.01

1,467

32

59

2,035

1941)

1,841

1,309

726

459

13,033

HGB

2000/2001

3,042

260

277

2,335

4611)

1,874

1,487

848

880

12,946

HGB

1998/1999

2,757

372

376

1,880

6681)

1,212

885

995

729

12,564

HGB

1999/2000

2,934

451

447

1,992

7181)

1,274

967

1,025

783

12,130

Legal backgroundBertelsmann AG owns majority interests in Gruner + Jahr AG & Co KG andDruck- und Verlagshaus Gruner + Jahr AG (Gruner + Jahr AG) and thesecompanies and their subsidiaries are included in Bertelsmann’s consolidatedannual financial statements. Gruner + Jahr AG is the managing generalpartner in Gruner + Jahr AG & Co KG with a 2% interest in that partnership.Gruner + Jahr AG possesses the powers of direction, in particular for theGruner + Jahr Group’s foreign printing and publishing activities, which are forlegal purposes largely assigned to the shareholders.

Although no legal obligation exists, the joint parent company Gruner + JahrAG & Co KG and Gruner + Jahr AG voluntarily draws up global financialstatements for the Gruner + Jahr Group, in which its German and foreignsubsidiaries are included.

The global balance sheets and income statements of the Gruner + Jahr Groupfor the fiscal year from 1 January to 31 December 2002 have been prepared inaccordance with International Financial Reporting Standards (IFRS) and with the interpretations of International Accounting Standards (IAS) issued by the

Standard Interpretations Committee (SIC). The notes to the consolidated finan-cial statements do not contain all the data required by IFRS. Consequently, theglobal financial statements of the Gruner + Jahr Group do not comply with IFRS.

The fiscal year is identical with the calendar year and runs in the presentcase from 1 January to 31 December 2002. The global financial statement ispresented in Euro rounded off to the nearest thousand Euro (EUR‘000). Forgreater clarity, individual items have been summarized in the balance sheetand income statement presentations. These items are analyzed and ex-plained in greater detail in the notes to the financial statements.

The total cost procedure has been used in the break-down of the incomestatement. Profits and losses resulting from the sale of subsidiary under-takings are significant items and are consequently shown separately.

CONSOLIDATIONPrinciples used in the consolidationAll significant subsidiary undertakings directly or indirectly controlled byGruner + Jahr AG and Gruner + Jahr AG & Co KG as defined in IAS 27 are

NOTES TO THE GLOBAL FINANCIAL STATEMENTSAS OF 31 DECEMBER 2002

included in the consolidated financial statements. Joint ventures as definedin IAS 31 are consolidated proportionately to the interest held in them.Significant associated companies are carried in the balance sheet at valuesdetermined by the equity method as stipulated in IAS 28 in those cases wheresignificant influence can be exerted. This is normally the case when between20 and 50 percent of the voting rights are held.

Uniform accounting and valuation methods are used in the preparationof the financial statements of the parent company Gruner + Jahr AG & CoKG and Gruner + Jahr AG and the subsidiary undertakings included in the consolidation.

The acquisition cost method is used for capital consolidation. This offsets the cost of acquisition of the interest in a company against the share of theequity thereby acquired. Accruals for deferred taxationon temporary dif-ferences resulting from hidden reserves and charges revealed at thetime of consolidation are created in cases where these differences havenot been recognized or will not be allowable for tax purposes.

Any remaining positive difference between acquisition cost and currentasset value is capitalized as goodwill and amortized by the straight-line me-thod over its assumed useful life. Hidden reserves and charges revealed atthe time of first consolidation are written down or written back in subse-quent fiscal years in accordance with the treatment of the relevant assetsand liabilities. Negative differences not resulting from anticipated losses arewritten back over a scheduled period in accordance with the provisions ofIAS 22. The same principles are used for the capital consolidation of par-tially consolidated undertakings.

Associated undertakings are valued by the equity method and carried at theproportion of the equity owned in them. The principles used for fully con-solidated companies are used for the calculation of differences betweenacquisition cost and value of the equity share held. Losses on associatedundertakings in excess of the book value of the relevant shareholding are notshown unless there is an obligation to make an additional contribution.

All intra-group profits and losses, sales, expenses, earnings, accountsreceivable and payable and accruals in the accounts of the companies in-cluded in the consolidation are eliminated. The same principles are used inthe case of partially consolidated undertakings.

Interim results from the supply of goods and services between the com-panies included in the consolidation have been ignored because they are of only minor significance for the group’s net worth, earnings and financialsituation and the calculation of the relevant values would have involved dis-proportionately high expense.

Companies included in the consolidation90 companies (including the parent companies) have been fully consolidated(prior year: 92).

All except 28 (prior year: 18) affiliated German and foreign companies havebeen included in the consolidation. The companies not included have nosignificant business activities and have been excluded from the globalfinancial statements because they are as a whole of only minor importancefor the group’s net worth, earnings and financial situation. There were thefollowing changes in the companies included in the consolidation during thefiscal year under review:

German Foreign TotalIncluded on December 31, 2001 61 31 92Additions 12 6 18Disposals 16 4 20Included on December 31, 2001 57 33 90The percentage interests held in 2 (prior year: 2) joint ventures are includedin the consolidated financial statements.

Of the 26 (prior year: 47) associated companies included, 11 (prior year: 13)are carried at the value determined by the equity method. The remaining onesare of only minor importance and are carried in the consolidated financialstatements at acquisition cost.

The annual financial statements of the fully consolidated companies havebeen examined by the appointed auditors in accordance with customary audit-

ing principles. The audit certificate confirms compliance with uniform valua-tion methods and correct reconciliation of the national financial statementswith IAS.Currency translation

The annual financial statements of the foreign subsidiary undertakingshave been translated into Euro in accordance with the provisions of IAS 21re-lating to functional currencies. As all subsidiary undertakings are financially,commercially and organizationally independent in the conduct of their busi-ness, the functional currency is in all cases the national currency and the mod-ified balance sheet closing date method is consequently used to determinethe exchange rates at which values are translated. Assets and liabilities aretranslated at the middle rate applying on balance sheet closing date. The ave-rage exchange rate over the fiscal year under review is used for items in theincome statement. Difference in balance sheet items arising from fluctuationsin exchange rates used in the prior year and similar differences arising for thisreason between the income statement and the balance sheet are creditedor debited to equity without affecting earnings. When companies are de-consolidated, any accumulated currency translation differences are writtenback against earnings. The following exchange rates have been used totranslate the financial statements of the companies operating in the most im-portant countries included in the global financial statements:

Average rate Rate at closing date1.1. - 12.31.02 12.31.02

US-Dollar ( USD) 0.9416 1.0487Polish Zloty (PLN) 3.8344 4.0210Russian Ruble (RUB) 29.5596 33.5109

ACCOUNTING AND VALUTION METHODSIntangible fixed assetsIntangible fixed assets created within the group are capitalized at devel-opment cost, provided that they fulfill the conditions stipulated in IAS 38.Intangible fixed assets acquired from third parties are capitalized at acqui-sition cost. Intangible fixed assets are normally amortized by the straight-line method over their useful life. Capitalized software is amortized over 3 or 4 years, licenses over the period of the relevant licensing agreementand supply rights and subscription customers over periods of not more than15 years. Goodwill arising from acquisitions is capitalized in accordance withthe provisions of IAS 22 and amortized by the straight-line method over its estimated useful life, which can vary between 5 and 15 years. Good-will from capital consolidation is translated at the exchange rate applyingat the date of first consolidation and carried in subsequent years at thehistorical exchange rate.

Tangible fixed assetsTangible fixed assets are carried at acquisition or manufacturing cost lessaccumulated depreciation. Scheduled depreciation is charged at uniformrates throughout the group and assumes the following periods of useful life:

Buildings 10 – 50 yearsMachinery and technical equipment 5 – 15 yearsOffice and factory equipment 3 – 12 years

LeasingIn cases where a group company enjoys all significant opportunities and bearsall significant risks under leasing agreements and can consequently beregarded for financial purposes as the owner of the relevant assets (financeleases), these assets are capitalized at the time of signature of the leasingagreement at the lower of market value or cash value of future leasing in-stallments. The payment obligation resulting from the finance lease is carriedat the same level under liabilities to financial institutions.

In cases where it is reasonably certain that the leased assets will pass intothe ownership of the group company, they are depreciated over their useful

48 GRUNER + JAHR ANNUAL REPORT CORPORATE DIVISION GRUNER + JAHR I GRUNER + JAHR 49

PRINCIPLE SUBSIDIARY AND ASSOCIATED UNDERTAKINGS as of 1 April 2003

WHOLLY OWNED GERMAN AFFILIATES

Gruner + Jahr AG & Co KG, HamburgBerliner Presse Vertrieb GmbH, BerlinBörse Online Verlag GmbH & Co. KG, MünchenDPV Deutscher Pressevertrieb GmbH, HamburgEhrlich & Sohn GmbH & Co. KG, HamburgG+J Corporate Media GmbH, HamburgG+J Electronic Media Service GmbH, HamburgG+J Electronic Media Sales GmbH, HamburgG+J Wirtschaftspresse Online GmbH, MünchenG+J Woman Verlag GmbH, HamburgG+J Woman New Media GmbH, HamburgG+J Zeitschriften-Verlagsgesellschaft mbH, HamburgIPV Inland Presse Vertrieb GmbH, HamburgLiving At Home Multi Media GmbH, HamburgMVF Magazin-Verlag am Fleetrand GmbH, HamburgNorddeutsche Verlagsgesellschaft mbH, HamburgPicture Press Bild- und Textagentur GmbH, Hamburgstern.de GmbH, Hamburg

GERMAN JOINT VENTURES

AND ASSOCIATED UNDERTAKINGS

Dresdner Druck- und Verlagshaus GmbH & Co.KG, Dresden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60%Financial Times Deutschland GmbH & Co.KG, Hamburg . . 50%G+J/RBA GmbH & Co.KG, Hamburg . . . . . . . . . . . . . . . . . . . 50%Hamburger Journalistenschule

Gruner + Jahr-DIE ZEIT GmbH, Hamburg . . . . . . . . . . . . . . . 95%manager magazin Verlagsgesellschaft mbH, Hamburg. . 24,9%M.C. Verlagsgesellschaft mbH, München . . . . . . . . . . . . . . . 50%SPIEGEL-Verlag Rudolf Augstein GmbH & Co.KG, Hamburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,75%travelchannel GmbH, Hamburg. . . . . . . . . . . . . . . . . . . . . . . . 50%Vereinigte Motor-Verlage GmbH & Co.KG, Stuttgart . . . 16,61%

FOREIGN AFFILIATES AND JOINT VENTURES

Blic Press d.o.o., Belgrad, Jugoslawien . . . . . . . . . . . . . . . . 74,9%Gruner + Jahr/Mondadori S.p.A., Mailand, Italien . . . . . . . . 50%Gruner + Jahr Polska Sp. z.o.o. & Co., Spolka Komandytowa, Warschau, Polen. . . . . . . . . . . . . . . . . 100%Gruner + Jahr Printing and Publishing Company,New York/Waseca, USA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%Gruner + Jahr (Schweiz) AG, Zürich, Schweiz. . . . . . . . . . . 100%Gruner + Jahr Verlagsgesellschaft m.b.H., Wien, Österreich. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%Gruner + Jahr ZAO, Moskau, Russland. . . . . . . . . . . . . . . . . 100%GyJ España Ediciones S.L., S. en C., Madrid, Spanien . . . . 100%GyJ Revistas y Communicaciones S.L., Madrid, Spanien . 100%GyJ Publicaciones Internacionales S.L. y Cia., S. en C., Madrid, Spanien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50%G+J Clip (Beijing) Publishing Consulting Co.Ltd., Peking. . 51%G+J/RBA Publishing C.V., Amsterdam, Niederlande . . . . . 100%G+J/RBA S.N.C., Paris, Frankreich. . . . . . . . . . . . . . . . . . . . . . 50%G+J RBA Sp. z.o.o. & Co., Spolka Komandytowa, Warschau, Polen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50%Prisma Presse S.N.C., Paris, Frankreich . . . . . . . . . . . . . . . . 100%S.C.Expres s.r.l., Bukarest, Rumänien . . . . . . . . . . . . . . . . 77,46%Shanghai G+J Consulting and Service Co.Ltd., Shanghai, China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%Verlagsgruppe NEWS Ges.m.b.H., Tulln, Österreich . . . . 56,03%VSD S.N.C., Paris, Frankreich . . . . . . . . . . . . . . . . . . . . . . . . . 100%Vydavatelstvo casopisov a novin spol. s.r.o., Bratislava, Slowakei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51%

life. In all other cases they are depreciated over the period of the licensingagreement. The level of installments payable by the lessee varies withfluctuations in interest rates charged by the lessor.

In addition to the aforementioned finance lease agreements, hireagreements definable as operating lease agreements have been signed insome cases. In these cases the leased assets remain the property of the les-sor and the leasing installments are treated as expenses arising during theaccounting period. Total leasing installments payable during the basic, non-terminable leasing period are shown under other financial liabilities.

Unscheduled amortization of intangible fixed assets and unscheduleddepreciation of tangible fixed assetsUnscheduled amortization/depreciation of intangible and tangible fixedassets is charged in accordance with IAS 36 in cases where the net rea-lizable value of the assets at balance sheet closing date has fallen belowthe book value. The net realizable value is calculated as the higher of thenet sales value or the cash value of the anticipated future cash flow fromthe assets.

In cases where the grounds for unscheduled amortization/depreciation nolonger apply, the assets are written up again except in the case of goodwill.The write-up in no case exceeds the amount which would have applied if theunscheduled amortization/depreciation had not been charged.

Shareholdings and securitiesSignificant holdings in associated undertakings are carried at the value deter-mined by the equity method. All other shareholdings and securities includedunder fixed or current assets are treated as securities available for sale or asfinancial investments held to maturity.

Securities available for sale are valued in accordance with IAS 39 at theirfair market value on balance sheet closing date if this can be determined. Anyresulting profit or loss is added or charged to earnings. In cases where un-scheduled amortization has been charged on grounds which no longer ap-ply, the assets are written up again. In cases where it is impossible to deter-mine a fair market value, the relevant shareholdings and securities arecarried at their ongoing historical acquisition cost.

Fixed-term financial investments yielding fixed income and listed as se-curities held to maturity are valued at ongoing historical cost using the actualinterest method.

InventoriesInventories are carried at the lower of acquisition or manufacturing cost ormarket value. Manufacturing cost includes material and direct manufacturingcosts plus manufacturing overheads attributable to the relevant productionprocess. In cases where acquisition or manufacturing cost is higher thanmarket value on balance sheet closing date, the relevant inventory items arewritten down to net realizable value.

Inventories are normally carried at acquisition or manufacturing cost.Identical inventory items are valued at either average cost or on a FIFO (firstin first out) basis.

ReceivablesMiscellaneous receivables and other assets are normally carried at either nom-inal or current market value. Unaccrued interest is deducted from long-termreceivables. Receivables denominated in foreign currencies are translatedat the exchange rates applying on balance sheet closing date. Due provisionis made for any discernible risks.

Deferred taxationIn accordance with IAS 12, deferred taxation assets or liabilities have beencreated for all timing differences between the tax balance sheet and the IASconsolidated balance sheet - except for goodwill items not deductible for taxpurposes - and also for tax losses carried forward from prior years. Deferred

taxation assets are adjusted to allow for items not expected to qualify forlater deduction. The tax rates used for calculating the amount of the de-ferrals are those expected to apply in the future on the basis of currentlyknown tax legislation. Adjustments reflecting the effect of tax rate changeson deferred taxation assets or liabilities are normally made in the account-ing period in which the relevant tax regulations are published and areadded to or deducted from earnings.

Other comprehensive incomeOther comprehensive income includes differences resulting from currencytranslation in accordance with IAS 39, unrealized profits or losses resultingfrom market valuation of securities available for sale and from financialderivatives used as cash flow hedges. It is added to or deducted from equityand does not affect earnings.

Preferred stockIn accordance with IAS, Gruner + Jahr’s preferred stock is no longer carriedas an equity item. This means that, contrary to the provisions of the GermanCommercial Code (HGB), dividends payable on the preferred stock for thefiscal year under review are shown under liabilities.

AccrualsIn accordance with IAS 19, the level of accruals for pensions and similar obli-gations is determined by the projected unit credit method. This method makesallowance not only for basic biometric statistical data but also for current long-term interest rates on the capital market and current assumptions on futuretrends in salary and pension levels. The proportion of pension expenses attrib-utable to interest is included in the net interest item.Other accruals are created in accordance with IAS 37 as from the time whenit appears probable not only that an obligation has arisen that will cause afuture cash outflow, but also that its amount can be reasonably determined.Accruals for warranties and threatening losses are created at full manu-facturing-related cost. Long-term accruals are discounted.

LiabilitiesLiabilities are carried at nominal value. Long-term liabilities are discounted.Liabilities in foreign currencies are translated at the exchange rate applyingon balance sheet closing date.

Financial derivativesIn accordance with IAS 39, all financial derivatives are carried in the balancesheet at market value. These financial instruments are taken up in the bal-ance sheet at the date on which the transaction was made and are classi-fied separately as either fair value hedges or cash flow hedges. Individual de-rivatives do not fulfill the requirements of IAS 39 for capitalization as coveringtransactions even though they do provide financial security. Changes inmarket value of financial derivatives are handled as follows:

Fair value hedgesChanges in market value of these derivatives used as hedges for assets andliabilities are included in the income statement and reflected in the contramovements in the balance sheet items covered by them.

Cash flow hedgesChanges in the current value of these derivatives used as hedges to securefuture cash flow are included in other comprehensive income and do notaffect earnings. These items are written back against the earnings on thetransactions covered by them.

Audit certificateThe auditors have issued a certificate for the present global annual financialstatements of the Gruner + Jahr Group.

50 GRUNER + JAHR ANNUAL REPORT CORPORATE DIVISION GRUNER + JAHR I GRUNER + JAHR 51

BILINDTEXT ZUM BILD I

Maritime Geschmeidigkeit in der808 Lounge: Das mehr aund virel

mehrt blindtext zum besserenverständnis

CHRONICLE 1948–2001MEMBERS OF THE SUPERVISORY BOARD

MEMBERS OF THE EXECUTIVE BOARD

1948: When the first edition ofSTERN is published by the Henri Nannen GmbH publishinghouse on August 1, with aprinted circulation of 130,735 co-pies, the Federal Republic of Germany has not yet beenfounded. Printed circulationreaches its highpoint in 1980with 2,021,115 copies.

Gerd Schulte-Hillen, Chairman, Hamburg

Klaus Unger, Deputy Chairman, Hamburg

Birgit Breuel, Hamburg

Dr. Jochen Frangen, Hamburg

Dorit Harz-Meyn, Hamburg

Dr. Tessen von Heydebreck, Frankfurt/Main

Klaus Hillmer, Itzehoe

Bernd Köhler, Dresden

Dr. Siegfried Luther, Gütersloh

Rolf Schmidt-Holtz, Gütersloh

John Vinocur, Paris

Michael Walter, Hamburg

Dr. Bernd Kundrun, President and CEO, Hamburg

Axel Ganz, President, International Magazines, Paris

Angelika Jahr-Stilcken, President, Journalism, Hamburg

Dr. Martin Schuster, President, Central Services, Hamburg

Martin Stahel, President, Corporate Development and Strategy, Hamburg

Achim Twardy, President, Newspapers, Hamburg

Rolf Wickmann, President, German Magazines, Hamburg

(Volker Petersen, Head of the Printing division, Hamburg)

1978: G+J is the first German publishing house to enter the in-ternational magazine market by taking over Cosmos DistribuidoraS.A. publishing house (DUNIA, SER PADRES HOY) in Spain.G+J acquires the Parents Magazine Enterprises Inc. publishinghouse with the PARENTS and YM magazines in the USA. The popular science magazine P.M. developed by Gerhard PeterMoosleitner is launched in Germany.The G+J School for Journalists is founded in Hamburg. In 1984,on the occasion of the 70th birthday of the founder of STERN, it isrenamed the Henri Nannen School.

1979: G+J purchases the gravure and offset printer Brown Printing Company inWaseca, Minnesota, USA. The French edition of GEO is launched inParis by the Participations Edition PresseS.A. publishing house (later Prisma PresseS.N.C.), which was founded in 1978. HÄUSER and ART are launched in Germany.

1965: The newspaper publishers John Jahr (CONSTANZE, BRIGITTE,SCHÖNER WOHNEN, CAPITAL) and Dr. Gerd Bucerius (STERN, Die Zeit,among others) merge with the printerRichard Gruner (Gruner & Sohn, GrunerDruck GmbH) to become Gruner + JahrGmbH & Co. Gruner holds 39.5 percent,Jahr 32.25 percent and Bucerius 28.25percent of the shares.

1973: Bucerius exchanges his shares in G+J against shares in Bertelsmann AG, which be-comes the majority shareholderof G+J with 60 percent. John Jahr (35 percent) and Ernst Naumann (five percent) hold the remaining shares.

1971: G+J takes a 24.75 percent parti-cipation in the Spiegel publishing house (Der Spiegel). John Jahr (born in 1900) and Dr. Gerd Bucerius (born in 1906) with-draw from active management of thebusiness. BRIGITTE reaches a paid circula-tion of 1.4 million and becomes the largest women’s magazine in Europe.

1975: John Jahr sells 9.9 per-cent of his shares to BertelsmannAG and retains 25.1 percent.

1972: G+J acquires 15 percent of Ver-einigte Motor-Verlage GmbH & Co. KG(Auto, Motor, Sport). Gruner + JahrGmbH & Co. becomes Druck- und Ver-lagshaus Gruner + Jahr AG & Co. The first edition of the monthly maga-zine ESSEN & TRINKEN appears.

1976: G+J takes a 33.3 percentparticipation in Lübeck publishing houseEhrlich & Sohn KG (FRAU IM SPIEGEL).Bertelsmann AG takes over the five percentholding from Ernst Naumann and nowholds a total of 74.9 percent of the shares.GEO appears with an initial circulation of100,000 copies. The printed circulationreaches its highpoint in 1996 with 783,386.

1969: Richard Gruner sells his shares. Theownership structure of the publishing house isreorganized: Jahr and Bucerius each hold 37.5percent. Reinhard Mohn (Bertelsmann) partici-pates with 25 percent. Gruner + Jahr takes over 90 percent of the Munich publishing house,Kindler & Schiermeyer (JASMIN, ELTERN,TWEN). The remaining 10 percent stays with theOwner-Manager, Ernst Naumann, who ex-changes it later for five percent of G+J shares.

DER STERN

Germany, 1948

SCHÖNER WOHNEN

Germany, 1975

ART

Germany, 1979

CAPITAL

Germany, 1965

BRIGITTE

Germany, 1965

52 GRUNER + JAHR CHRONICLE 1948 - 2002 I GRUNER + JAHR 53

1991: The newspaper business is expanded further: The Berliner Verlagis taken over as a part of a joint venture. The BERLINER ZEITUNG,BERLINER KURIER, WOCHENPOST and the television guide F.F. arelaunched. G+J also acquires the majority of Dresdner Druck- undVerlagshaus, where the SÄCHSISCHE ZEITUNG is published, as well as a 27.5 percent participation in the Druckhaus Friedrichshain printers.Furthermore, G+J begins activity in the metropolitan areas of East Ger-many. The original East German magazine NEUES WOHNEN appears in former West Germany as well. Directly after its launch in France, CAPITALbecomes market leader among business publications.

1992: G+J takes over the remaining 50percent of the Berliner Verlag andincreases its participation in DruckhausFriedrichshain to 55 percent. TheLEIPZIGER MORGENPOST is launched.The popular science magazine FOCUS appears in Italy and Great Britain,and quickly becomes the largestmonthly popular magazine in Italy.

1995: BRIGITTE YOUNG MISS, which has been published as aspecial edition since1990, appears as an independent magazine.LEIPZIGER MORGENPOST and TANGO are dropped. 75 percentshares of both SPORTS LIFE and WOCHENPOST are sold.With geo.de, mopo.de, pm-magazin.de, stern.de and tvtoday.de,G+J starts its first online magazines and becomes one of the first professional providers in the German language Internet.The management magazine L’ESSENTIEL DU MANAGEMENT is launched in France. The women’s magazine HALO and the cookingmagazine MOJE GOTOWANIE come onto the market in Poland.

1994: The G+J participation in the Druckhaus Friedrichshainprinting facility is raised to 100 percent. The celebrity magazineGALA, the info magazine TANGO and the television guide TVTODAY are launched in Germany. G+J takes over the investmentmagazine BÖRSE ONLINE. G+J acquires seven women’smagazines from the New York Times Company in America, includ-ing FAMILY CIRCLE and Mc CALL’s. The women’s magazineNAJ comes onto the market in Poland. G+J takes a 51 percentparticipation in the Slovakian daily newspaper NOVY CAS.

1996: FOCUS is launched in Poland; ELTERN FOR FAMILY and the children’s magazine GEOLINO, in Germany. The French G+Jsubsidiary Prisma Presse takes over the weekly glossy VSD. G+J Funk- und Fernsehproduktions GmbH is founded. The Berlinnewspapers at G+J, BERLINER ZEITUNG, BERLINER KURIER,BERLINER ABENDBLATT and TIP, go online at berlinonline.de. TheAdvertisement Division starts G+J Communication Office, anInternet service for advertisement customers. The magazine print-ing facility at the Gruner + Jahr Printing Center in Dresden and the new newspaper printing facility in Berlin-Lichtenberg begin opera-tion. Operations at Druckhaus Friedrichshain are stopped.

1993: G+J Polska is founded with its head-quarters in Warsaw. The women’s magazineCLAUDIA appears on the Polish market. G+J acquires a 49 percent holding in Nice PresseInvest (NPI), which publishes the daily news-papers DÉLMAGYARORSZÁG and DÉLVILÁG inHungary through a subsidiary company. Theprominent celebrity magazine GALA is launchedin France. G+J participates with 50 percent in the Spanish editions of MARIE CLAIRE andLA CASA DE MARIE CLAIRE.

GEOLINO

Germany, 1996

FOCUS

Italy, 1992

MARIE CLAIRE

Spain, 1993

1980: The businessmagazine IMPULSEcomes onto the market.

1989: G+J founds an Italian subsidiary inMilan. The travel magazine GEO SAISON isbrought onto the market in Germany.On November 16, one week after the fall ofthe wall, the special edition of STERN“Germany – Borderless Joy” with photos ofthe peaceful revolution in East Germanyappears. Massive sales are made, especiallyin East Germany.

1990: Start of the CHEMNITZER, DRESDNER and MECKLEN-BURGER MORGENPOST. G+J launches the women’s magazine VERAin Italy under a joint venture with Mondadori, the Milanese publish-ing house. G+J brings the German MARIE CLAIRE onto the marketin a joint venture with Marie Claire Album.G+J España receives the license for the Spanish edition of COSMO-POLITAN. The STERN-TV magazine is launched at RTL, the privatebroadcaster. G+J moves into the Press Building at Baumwall on theHamburg waterfront. The G+J Board of Management cements itsenvironmental awareness as a basic corporate principle.

1981: GEO gets an offspring: GEO SPECIAL,a magazine dedicated to travel. After thesuccessful launch of GEO in France, G+Jbrings a magazine onto the French marketbased on the concept of P.M.: the monthlymagazine ÇA M’INTÉRESSE. Spain also gets interested in popularscience and successfully launches MUYINTERESANTE.

1986: With the purchase of the HAMBUR-GER MORGENPOST, a successful foray is made into the newspaper business. Usingthe same basic concept as the Frenchmagazine, PRIMA is exported to Germanyand England. TÉLÉ LOISIRS is launched in France. The women’s magazine MIA islaunched in Spain. Through Ufa, G+J takes a participation in Radio Hamburg, one of thefirst private radio stations in Germany.

1984: Entry into electronic media with a 50-percent participation in Ufa-Film- undFernseh-GmbH. During the course of the year, G+J thereby becomes a partner ofthe private television broadcasters RTL,RTL2 and VOX, the pay TV program Premiereas well as various radio broadcasters. FEMME ACTUELLE is launched in France.

1985: G+J plans the construction of a new publishing building atBaumwall in Hamburg. The Ehrlich & Sohn publishing house is taken over 100 percent. G+J acquires a 24.9 percent participationin the Manager Magazin Verlagsgesellschaft (manager magazin)publishing company. SCHÖNER ESSEN and FLORA join the range ofmagazines. G+J founds Gruner + Jahr of the U.K. in London.

1982: PRIMA, the newly-launched wom-en’s magazine in France reaches a paid circulation of one million copieswithin one year.

1987: Purchase of the California-based printer Riverside CountyPublishing Company by the G+Jsubsidiary Brown PrintingCompany. SPORTS (later SPORTSLIFE) and GEO WISSEN come

onto the market in Germany. G+J launches the women’smagazine BEST in Great Britain and the celebrity magazineVOICI in France. GEO appears at the newsstands in Spain as well.

MUY INTERESANTE

Spain, 1981

FEMME ACTUELLE

France, 1984

TÉLÉ LOISIRS

France, 1986

COSMOPOLITAN

Spain, 1990

54 GRUNER + JAHR CHRONICLE 1948 - 2002 I GRUNER + JAHR 55

1997: Electronic Media Service GmbH (EMS) starts the German-language search engine FIREBALL.DE, while BRIGITTE also goes online. The online televisionguide TV TODAY ONLINE+ COMPUTER (ONLINETODAY now) comes onto the market in Germany. The

US printing facilities, the Riverside County Publishing Com-pany in California and the Brown Printing Division in Ken-tucky, are sold. As a countermove, Brown Printing acquiresthe PennWell and Graftek printing facilities in Wood-stock, which specialize in printing technical magazines.

CHRONICLE 2002

Thanks to its international character, efficient cost management and a couple of brand-new titles, Gruner + Jahr succeeds in over-coming the industry crisis enduring since the beginning of 2001. Thepublishing house launches the bi-monthly women’s magazineWOMAN Germany in October and STERN brings its STERN SPEZIALBIOGRAFIE onto the newsstands in the summer.

The French market sees the launch of the teen magazine GEO Ado,while the parenting journal FUMU PARENTS becomes Gruner + Jahr’ssecond step toward opening up the Chinese magazine market.

G+J USA secures a turnaround and shows twice the growth of theUS market as a whole with gross advertising income up by over 13percent. Gloomy prospects spell closure for both BIZZ and ONLINETODAY in Germany and HOME STYLE and ROSIE in the United States.

The FINANCIAL TIMES DEUTSCHLAND is the only national daily toincrease its circulation and has all but reached the 90,000 mark by theend of the year. Gruner + Jahr sells off its Berlin newspaper activitiesto the Georg von Holtzbrinck publishing group.

By commissioning a new rotogravure press in Dresden and some newgatherer-stitcher drums in Itzehoe, the publishing house further im-proves the efficiency of its printshops.

Several G+J publications celebrate anniversaries in 2002: In Ger-many, CAPITAL turns 40 and ESSEN & TRINKEN, 30. In France, VSD celebrates its 25th and VOICI its 15th anniversary. Italy see the tenth anniversary of FOCUS magazine.

In July, the first International Elbe Bathing Day, coorganized by Gruner + Jahr, draws over 100,000 people to the banks of the Elbe,from source to estuary.

STERN BIOGRAFIE

Germany, 2002

FUMU PARENTS

China, 2002

INTERNATIONAL BATHING DAY in the Elbe River, July 2002

1998: G+J brings the women’s magazine GRACJA to the newsstandsand takes over the weekly magazine MOJE MIESZKANIE in Po-land. TOP GIRL, a magazine for girls and young women follows inItaly. The weekly celebrity magazine ALLO appears in France. GEO, already a successful magazine in Germany, France and Spain,is launched in Russia. G+J brings a magazine onto the market inChina as well: CAR & MOTOR. With a 75 percent participation in the Vienna NEWS Group (NEWS,TV MEDIA), entry into the Austrian market is successful.

FORMAT, the third magazine from the NEWS Group, follows in thefall. The G+J business press is complemented by BIZZ, thebusiness magazine for a younger clientele. The Newspaper Divisionis expanded through a 50 percent participation in Expres, theBucharest publishing house. Expres publishes the national dailyshopping newspaper called EVENIMENTUL ZILEI. ELTERN goes online with ELTERN.DE, while EMS starts the daily newspapersearch engine PAPERBALL.DE. The new newspaper printing fa-cility at the Gruner + Jahr Printing Center in Dresden starts operation.

2001: G+J USA Publishing advances into theranks of the top five magazine publishers in the USA through the purchase of the FASTCOMPANY and INC business magazines aswell as the relaunch of almost all other maga-zines. The internationalization of successfulmagazines is continued with GALA in Polandand Russia and NATIONAL GEOGRAPHIC in Hungary. After its merger with the Kurier

Group and the start of the WOMAN women’smagazine, the NEWS publishing group publishes14 magazines in Austria. GEOlino, the innovative children’s magazinefrom G+J, appears monthly from January2001. GEO is 25 years old. The jubilee exhibition“The earth from above” attracts 800,000visitors. BRIGITTE WOMAN appears regularlyfour times a year.

2000: In a Joint Venture with Pearson, the London mediagroup, G+J brings the FINANCIAL TIMES DEUTSCHLANDto the newsstands. This is the first relaunch of a new inter-national daily newspaper in Germany for several decades.E-MEDIA sets a new emphasis in the segment of Inter-net magazines in Austria. The International Magazine Di-vision starts three new magazines: the business maga-zine CAPITAL in Spain, the technology-oriented consumermagazine JACK in Italy and NATIONAL GEOGRAPHIC

in the Netherlands. Activities in the English-speakingworld are concentrated in the USA: G+J successfullyenters the American business magazine segmentthrough the acquisition of INC and FAST COMPANY. G+J withdraws from the British market for strategicreasons. With the LIVING AT HOME magazine and anInternet portal of the same name, G+J starts an inte-grated multimedia platform focused on home, garden,kitchen and hospitality.

1999: After 13 years, G+J sells the HAMBURGER MOR-GENPOST to two Hamburgmedia entrepreneurs. The GEOfamily continues to grow: GEO EPOCHE, a magazine forhistory, is published. Under license from the NationalGeographic Society, G+J brings

the NATIONAL GEOGRAPHICMAGAZINE and complemen-tary products onto the marketin a joint venture with RBA, the Spanish publishing house.The magazine, which reachesthe newsstands in six countriesin French, German and Polish,is a great success from its first

issue. Prisma Presse opens anew magazine segment on the French market with the In-ternet magazine WEB MAG-AZINE. The Internet travelagency TRAVELCHANNEL.DEis launched. YOUNG MISS,ART and NATIONAL GEO-GRAPHIC go online.

FAST COMPANY

USA, 2000

LIVING AT HOME

Germany, 2000

GALA

Poland, 2001

56 GRUNER + JAHR CHRONICLE 1948 - 2002 I GRUNER + JAHR 57

PUBLISHING OFFICESAUTHORS

MASTHEAD

GERMANY

BerlinGruner + Jahr AG & Co KGKurfürstenstraße 72–74Constanze-Pressehaus10787 BerlinTelephone +49-30-25 48 06-50Telefax +49-30-25 48 06-51Email: vb.berlin@guj.de

DüsseldorfGruner + Jahr AG & Co KGPostf. 102661, 40017 DüsseldorfBesucher: Heinrichstraße 2440239 DüsseldorfTelephone +49-211-618 75-0Telefax +49-211-61 33 95Email: vb.duesseldorf@guj.de

FrankfurtGruner + Jahr AG & Co KGPostf. 900407, 60444 FrankfurtBesucher: Adalbertstr. 44–4860486 FrankfurtTelephone +49-69-79 30 07-0Telefax +49-69-77 24 60Email: vb.frankfurt@guj.de

Hamburg, HannoverGruner + Jahr AG & Co KGPostanschrift: 20444 HamburgBesucher: Stubbenhuk 320459 HamburgTelephone +49-40-37 03-23 84Telefax +49-40-37 03-56 90Email: vb.hamburg@guj.de

MunichGruner + Jahr AG & Co KGElisenstraße 3 A80335 MunichTelephone +49-89-208 05-0Telefax +49-89-208 05-200Email: vb.muenchen@guj.de

StuttgartGruner + Jahr AG & Co KGWilhelmsplatz 1170182 StuttgartTelephone +49-711-228 46-0Telefax +49-711-228 46-33Email: vb.stuttgart@guj.de

The articles in the first section of the annual report were written by graduates of the 26th course of instruction at the HENRI NANNENSCHOOL OF JOURNALISM. Named after the legendary founder of STERN magazine, the school is sponsored by publishing housesGruner + Jahr and Zeitverlag Gerd Bucerius and supported by the publisher Spiegel-Verlag Rudolf Augstein.Since 1979, youngpeople between the ages of 19 and 28 have been developing their journalistic talents in the branches magazines, newspapers,television, radio and multimedia.

Ruth Hoffmann, 29, studied ethnology, politics and history in Ham-burg, and began working for the Namibian TV station NBC while stillat university.

Dela Kienle, 26, studied German and Italian in Bonn, Rome, and Florence. She is currently working in concept development atSTERN magazine.

Verena Lugert, 29, worked for two years as a German teacher at theUniversities of Shanghai and Kuala Lumpur after studying literature.

Kerstin Moeser, 24, has a degree in fashion journalism and iscurrently working in concept development at STERN magazine.

Klaus Werle, 29, studied history, English and German in Heidelbergand Exeter. He has published articles in the news magazines STERN and Spiegel and in the newspaper Frankfurter AllgemeineSonntagszeitung.

The graduates of the Henri Nannen School of Journalism whocollaborated on the annual report joined together in January 2003 toform the journalists’ association Plan 17.

Publisher:Gruner + Jahr AG & Co KG Corporate Communications +Public AffairsAm Baumwall 11 20459 Hamburg Germany

Realization:G+J Corporate Media GmbH Griegstaße 75 22763 Hamburg GermanyTelephone +49-40-883 03 - 403

Design and Layout:Büro Hamburg

Photography:Christian Grund and Noe Flum

Printing:Appl Druck GmbH & Co. KG Senefelderstraße 3-11 86650 WemdingGermany

Photo credits:Boening/Zenit/laif (Cover); Harald Schmitt (p.4); dpa/NASA (p.4/5); Steve McCurry/National Geographic (p.6/7) Sylvia Plachy p.8; Fredrik Brodén (p.9); Desmond Boylan/ Reuters/ E-Lance Media (p.10/11); Lutz Henning (p.28/29); AP (p.30); dpa (p.30); Thomas Lehmann/ Sächsische Zeitung (p.30); Eckhard Schulz/AP (p.30); Christian Eisler/transit (p.31);Martin Jehnichen/STERN (p.31);Claudia Kempf (p. 31); Event Fotografen Berlin (p.36);Carlo Zamboni (p.37); Lutz Schmidt (p.40/41); Jürgen Herschelmann (p.57)

Cover:Quote: Hermann Hesse.Photo: Bitterfeld, August 2002

ABROAD

Asia (not including Korea and Japan)Godfrey Wu, MHI Limited1305 C.C. Wu Building302–308 Hennessy RoadWanchai, Hong KongTelephone +852-25 91 10 77Telefax +852-25 72 51 58Email: gwu@mhi.com.hk

Australia, New ZealandAnton Gruzman South Pacific Media68 Victoria StreetNorth Sydney, N.S.W. 2060Telephone +61-2-99 29 59 29Telefax +61-2-99 22 11 00Email: sthpac@ozemail.com.au

Belgium, Luxembourg,NetherlandsAnn De MunsterGruner + Jahr AG & Co KGAv. du Gén. de Gaullelaan 191050 Bruxelles/BrusselsTelephone +32-2-648 18 40Telefax +32-2-648 21 01Email: guj.benelux@guj.de

Denmark, NorwayAdbizz Danmark ApSMark HjortkildeHolte Stationsvej 14, 1st floor2840 HolteDenmarkTelephone +45-45-46 91 00Telefax +45-45-46 91 01Email: markhjortkilde@adbizz.dk

FranceYves SwartenbroekxGruner + Jahr InternationalServices Marketing et Media S.à.r.l.17, avenue Matignon75008 ParisTelephone +33-1-53 93 73 93Telefax +33-1-53 93 73 90Email: gruner.paris@guj.de

Greece, CyprusSophie PapapolyzouPublicitas Hellas S. A.32 Kifissias Ave., Atrina Center15125 Maroussi - AthensTelephone +30-210-68 51 7 90Telefax +30-210-68 53 3 57Email: publihel@hellasnet.gr

Great Britain, IrelandDavid HardyGruner + Jahr InternationalMarketing and Media Services Ltd.1 Golden SquareLondon W1F 9HWTelephone +44-207-4 37 43 77Telefax +44-207-4 37 43 78Email: hardy.david@guj.de

IndiaMarzban PatelMediascope Publicitas Pvt Ltd51, Doli ChamberArthur Bunder Road, ColabaMumbai - 400 005Telephone +91-22-22 04 88 90Telefax +91-22-22 87 57 18Email: marzban@media-scope.com

Italy (not including Southern Tyrol)Dr. Daniele BleiBlei S.p.A.Via degli Arcimboldi, 520123 MilanTelephone +39-02-72 25 11Telefax +39-02-72 25 12 51Email: blei@bleispa.it

JapanHiroshi IwaiMediahouse Inc.2-3-6, Kudankita, Chiyoda-kuTokyo, 102-0073Telephone +81-3-32 22 78 11Telefax +81-3-32 34 11 40Email:mediahouse@mediahs.com

CanadaRichard BrownVictor Brown Associates Corp.15 Zorra StreetToronto, OntarioCanada M8Z 4Z6Telephone +1-416-259 96 31Telefax +1-416-259 96 34Email: zorra@on.aibn.com

Austria and Southern TyrolErwin W. LuthwigGruner + Jahr Verlagsgesellschaft mbH.Parkring 121010 ViennaTelephone +43-1-51 25 64 70Telefax +43-1-512 57 32Email: luthwig.erwin@guj.de

PortugalJoao Carlos ReisAJE Sociedade Editorial, LDARua Baráo de Sabrosa, 165-A1900-088 LisbonTelephone +351-21-811 01 00Telefax +351-21-814 00 44Email: joao.reis@aje.pt

Sweden, FinlandKarin EngbergInterdeco Global Advertising ScandinaviaSt. Eriksplan 211393 StockholmSwedenTelephone +46-8-457 89 07Telefax +46-8-457 80 83Email: karin.engberg@interdeco.se

SwitzerlandHans H. OttoGruner + Jahr (Schweiz) AGZeltweg 158032 ZurichTelephone +41-1-269 70 70Telefax +41-1-269 70 71Email: guj.schweiz@guj.de

SpainPaul LeahuInfotrade S.A.Edificio PinarC. Pinar, 6 Bis/3F28006 MadridTelephone +34-91-411 33 14Telefax +34-91-563 21 81Email: infotrade@bitmailer.net

South KoreaJ. G. SEODoobee Inc.C. P. O. Box 4557Seoul, KoreaTelephone +82-2-37 02 17 91Telefax +82-2-72 05 459Email: dbi@doobee.com

Southern AfricaGisela AlbrechtIntern. Media Representatives Ltd.Private Bag X 18Bryanston 2021South AfricaTelephone +27-11-258 42 50Telefax +27-11-258 40 43Email: gisela@imrsa.co.za

TurkeyDr. Reha BilgeMedia Ltd.Ali Sami Yen Sk. No. 2 Kat 380290 Gayrettepe/IstanbulTelephone +90-212-275 84 33Telefax +90-212-275 92 28Email:medialtd@kablonet.com.tr

HungaryMónika LászlóNépszabadság Rt.Bécsi út 122–1241034 BudapestTelephone +36-1-436 44 55Mobile (30) 95 47 429Telefax +36-1-250 11 18Email:laszlom@nepszabadsag.hu

USAPercy FahrbachGruner + Jahr International Marketingand Media Services, Inc.1540 Broadway, 29th FloorNew York, N.Y. 10036-4094Telephone +1-212-782 12 00Telefax +1-212-782 12 11Email: gjintl@gjintl.com

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Gruner + Jahr AG & Co KGDruck- und VerlagshausHamburgGermany

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