tolino - a unique cooperation The continuing success story of digital reading

Agenda

1

1. The tolino alliance

2. The tolino ecosystem

3. Strong partners, strong brands

4. The tolino effect

5. tolino at Hugendubel

TOLINO ALLIANCE

The largest German booksellers and Deutsche Telekom formed an unique alliance in the eBook market

The booksellers run their own shops on tolino branded devices

Telekom provides a white label Ecosystem and the Hardware/Apps for the tolino product family

Booksellers

focus on marketing and sales

own the customer

decide on the offering and price

provide the webshop

2

BENEFITS OF AN ALLIANCE

tolino represents an investment that a single bookseller would not be able to afford

tolino is the only product developed in tight cooperation with the booksellers

The roadmap of tolino as well as the features of Apps and Clients are defined in tight cooperation among DT and the booksellers Alliance buying power enables economies of scale for device prices

3

TOLINO ROLL OUT MILESTONES

BE

tolino shine

tolino vision

tolino vision 2

tolino tab 8”

IBS

# 1 ecommerce

service in Italy

November 2014

2013 2014

DE

AT

CH

Libris

Largest Dutch chain of independent booksellers

Soft-launch December 2014

DE NL

Libri

Largest German wholesaler offering a whitelabel solution for

independent bookstores

October 2014

IT

Standaard Boekhandel

Largest retailer chain in Belgium

July 2014

tolino tab 7 ” and 9”

4

SHORT-TERM OUTLOOK

BE

Club

Largest retailer chain in French part

of Belgium (acquired by Standaard

Boekhandel)

September 2015

2015 NL IT

Emmelibri

Largest Italian wholesaler will offer a whitelabel

solution for independent bookstores

September 2015

IT

TO BE CONTINUED…

new devices for Xmas business and

more yet undisclosed tolino

partners

!

5

Libris

Official launch

June 2015

Libraccio

Independent book chain

May 2015

Agenda

6

1. The tolino alliance

2. The tolino ecosystem

3. Strong partners, strong brands

4. The tolino effect

5. tolino at Hugendubel

TOLINO ECOSYSTEM

7

Telekom Cloud

DEVICES CONTENT HUB

APPS & CLIENTS

SHOPS - FRONTEND

3

CLOUD SERVICE

8

Enables cross-device availability of

eBooks

Synchronization of last read position,

bookmarks, notes etc.

Users can upload own content into

their library via the Cloud

Upload is possible directly from the

devices and the apps

No extra login required

Even for uploaded own content Adobe

DRM is supported

3

9

TOLINO PRODUCT FAMILY

10

NEW APP GENERATION FOR ANDROID AND APPLE OS

Agenda

11

1. The tolino alliance

2. The tolino ecosystem

3. Strong partners, strong brands

4. The tolino effect

5. tolino at Hugendubel

12

BRAND MARKETING WITH HIGH RANGES

Since its market launch, there have been 6 large TV campaigns, accompanied by print ads, out of home and radio campaigns.

Within 23 month, a brand awareness in Germany was achieved by 65%

April 2013

January 2014

7.6%

65%

*Aided, Source: tolino alliance

Brand awareness*

13

TOLINO IN ALL RETAILERS‘ CHANNELS

tolino is currently sold at more than 1.500 PoS

PoS presence is one of the core differentiators traditional booksellers can leverage from

In-store presentation is a key success factor – customers can experience the product and ask questions

tolino partners benefit from the complete range of marketing materials, TV spots, product presentations, flyers and in store furniture solutions

Agenda

14

1. The tolino alliance

2. The tolino ecosystem

3. Strong partners, strong brands

4. The tolino effect

5. tolino at Hugendubel

tolino is already present in

6 countries with 20 different brands over 1.500 PoS

We serve about

3.5 mn readers with more than 1.5 mn transactions/month

TOLINO IN A NUTSHELL

well over 1.5 mn devices sold We offer a catalogue of about

1.8 mn eBooks

15

TOLINO ECOSYSTEM IS PUSHING BACK

16

Others (iBooks, Google…)

tolino Allianz

Amazon

48

30

22

43

37

20

42

38

20

45

40

15

47

38

15

100

90

80

70

60

50

40

30

20

10

0

Q2 13 37 38 40 38 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14

Source: GfK

44

39

17

GfK figures - eBook market development Germany

44

14

42

Before tolino

DOUBLE PAYOFF

17

PoS – physical

Online – physical

Online – eBook

After tolino

PoS – physical

Online – physical

Online – eBook

eBook market is yet only a fraction of online physical sales. Still eBook consumers create an uplift in online sales, too!

The existing gap between PoS market share and online sales increased steadily.

Agenda

18

1. The tolino alliance

2. The tolino ecosystem

3. Strong partners, strong brands

4. The tolino effect

5. tolino at Hugendubel

TRADITION GOES DIGITAL

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Heinrich Karl Gustav Hugendubel opens the bookstore at Salvatorplatz in Munich

Heinrich Hugendubel opens Germanys first large-scale bookstore at Marienplatz in Munich

The first store outside of Munich opens in Nürnberg

The first store outside of Bavaria opens in Frakfurt

The store in Ulm impresses with its new „Kinderwelt“

Rostock and Siegen establish the first „Bewusster-Leben-Welten“

The popular eReader tolino shine is the Stiftung Warentest Preis-Leistungs-Sieger.

The Tablets tolino tab 7“ and 8,9“ are launched

The online bookstore www.hugendubel.de is launched

Hugendubel incorporates Buch Habel, Ganghofer, Schmorl & von Seefeld und Weiland

Hugendubel celebrates its 120th anniversary

Hugendubel.de now includes over 1 Mio. eBooks

The eReader tolino vision 2 impresses with its Water Protection and tap2flip

The siblings Nina and Dr. Maximilian Hugendubel now run the family business in 5th generation

Integrated multi-channel

Symbiosis of 4 channels benefits of the

different worlds are linked to create ONE brand experience

Online benefits from physical presence and brand of stores

Online as additional infrastructure that brings customers closer and leads the customer back to store

tolino customers buy ebooks at Hug.de

Long-term customer loyalty due to offering four sales channels that fulfil every kind of reading-/shopping need

Media brand Hugendubel

Integrated B2B business with multifaceted growth directions

Profitable and strongly increasing online business

Competitive ebook solution - only alternative to amazon in DACH

Stores in nationwide top locations

20

MULTI-CHANNEL-CONCEPT BASED ON 4 SALES CHANNELS AND BRAND

90 STORES ARE ENGINE FOR DIGITAL BUSINESS

21

Strong brand in German book retail market

10 flagship stores with nationwide brand exposure

17 million customers per year

1.700 employees

Emotional store concepts due to experience worlds

Stores as most important USP for digital business:

Personal advice for tolino increasing elderly target

group gets reached

Customer knowledge very expensive big data as done

by amazon not necessary

Acquisition of new digital customers without expensive online marketing

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TOLINO IN STORES

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TOLINO IN STORES

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TOLINO IN STORES

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TOLINO IN STORES

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TOLINO IN STORES – NOBODY IS PERFECT

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TOLINO IN STORES - INTEGRATED

HUGENDUBEL‘S CHALLENGES

1. Optimal interlocking of our four “floors”/sales channels

2. Improvement of each „floor“ to stay competitive in all sales channels

3. Change Management („Tradition goes Digital“)

4. Increase sales of tolino devices in own 90 stores (focus on sale and service)

5. Convert loyal store customers in Hugendubel.de customers

6. Migration Hugendubel.de and eBook.de

7. Identify our store customers

8. Increase Multi-Channel Marketing activities

9. Increase sale of tolino devices through 3rd party partnerships

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Thank you