INNOVATION - Gruner + Jahr

GRUNER + JAHR AG & Co KG I WWW.GUJ.COM

ANNUAL REPORT 2003

INNOVATION

COVERSearching for the New: Photo session for the Polish magazine GLAMOUR(see detailed report, p. 30)

ANNUAL REPORT 2003

05CONTENTS I GRUNER + JAHR04 GRUNER + JAHR I ANNUAL REPORT 2003

CONTENTS

10 30 36 66

06 FOREWORDDr. Bernd Kundrun: Gruner + Jahr will continue on itscourse of growth by investing in innovations

10 A GUIDE TO GROWING UPHow NEON gives insights into the lives and attitudesof the twenty-somethings

16 THE FRENCH REVOLUTIONHow TÉLÉ 2 SEMAINES became Europe’s mostsuccessful new publication

20 EXPLORING NEW TERRAINHow Gruner + Jahr works in Russia

24 “HAVE FAITH IN YOURSELF” In an interview, BRIGITTE editor-in-chief AndreasLebert explains the success of the BRIGITTE brand

28 KID’S ROOM – MELTING POT How the US magazine PARENTS is taking the Spanish-speaking community by storm

30 BEAUTY FROM WITHINHow GLAMOUR helps to create a new self-awarenessamong women in Poland

36 I SHOP, THEREFORE I AMHow a new European magazine format was bornwhen SHOPPING came onto the market

38 “INDEPENDENCE IS THE KEY TO

OUR SUCCESS”Interview with Executive Board Member Angelika Jahr-Stilcken on journalistic principles at Gruner + Jahr

52 THE LIVING ELBEHow Gruner + Jahr is committed to protecting the full stretch of the Elbe across national borders

66 THE POWER OF IMAGESHow Gruner + Jahr became an acknowledgedinstitution for exhibitions of artworks and photographs

REPORTS42 MAGAZINE DIVISION GERMANY

44 NEWSPAPER DIVISION/BUSINESS PRESS GERMANY

46 MAGAZINE DIVISION INTERNATIONAL

48 PRINT DIVISION

49 CORPORATE DEVELOPMENT

50 CENTRAL SERVICES

58 ENVIRONMENTAL REPORT 2003

62 CORPORATE RESPONSIBILITY REPORT 2003

FACTS & FIGURES72 GLOBAL BALANCE SHEET

77 PRINCIPAL SUBSIDIARY AND ASSOCIATED

UNDERTAKINGS

77 SUPERVISORY/EXECUTIVE BOARDS

78 CHRONICLE 1948 – 2003

81 MASTHEAD

83 PORTFOLIO

07FOREWORD I GRUNER + JAHR06 GRUNER + JAHR I ANNUAL REPORT 2003

Dr. Bernd Kundrun, President and CEO of Gruner + Jahr

2003 WAS A YEAR OF INNOVATIONS FOR GRUNER

+ JAHR. New projects were launched in variousparts of the world, creative concepts were devel-oped and ideas were born. This process of innova-tion was initiated in 2003, will bear its first fruits in2004 and continue in the years ahead.

Despite the difficult environment prevailing in2003, Gruner + Jahr, Europe’s largest magazine pub-lisher, once again set standards for corporate suc-cess and return on sales. Although sales revenueswere down and the slump in sales of advertisingspace continued, operative earnings rose to EUR238 million, equivalent to a 9.6 percent return onsales and 1.3 percentage points up on the previousyear. ROS would have been even higher at 12.1percent had it not been for the substantial invest-ments made in our publishing business.

We had laid the foundations for this perfor-mance in the earlier years, by taking quick action tocut costs before it was too late, and also to concen-trate Gruner + Jahr’s activities on its core businessfields. Gruner + Jahr has since pursued a well-balanced corporate strategy. We generate a healthyreturn on sales, while at the same time investing inareas destined to produce growth in the future.We also take risks because willingness to acceptmistakes is a key feature of any bold business poli-cy. Success is impossible without taking risks. Norisk, no gain.

Our core activities in Germany and other coun-tries form the broad base on which our businessstands. We made substantial investments in theexpansion and ongoing development of our strongbrands during 2003. Our established titles are thepillars that support our group’s success. When mar-ket conditions are unfavorable, they need carefulnurturing and new investment.

Quality is the watchword for G+J’s strong mag-azine brands, both in Germany and internationally.Their journalistic and technical quality is what setsthem apart from the competition. Their names standthroughout the world for journalistic competenceand credibility guaranteed by highly professionaleditorial staffs. The year 2003 saw further invest-ments in the editorial skills and creative resourcesbehind our established titles, to ensure that ourstrong magazine brands are constantly adapted tosuit the changing needs of their readership and themarket. These top brands are the basis for ourinternational growth and for the further innovativeexpansion of our brand families with which westrengthen the leading positions of these brandsin different markets.

Our innovation offensive is two-pronged – itseeks to consolidate and strengthen our core busi-ness, and is also one of the elements in our growthstrategy. Companies and publishers are locked in astruggle, not merely over price and quality, but also

GROWTH THROUGH INNOVATION Gruner + Jahr will continue to grow thanks to investments in innovativepublishing concepts. In addition to reinforcing its core business,expansion on the international growth markets is also an important itemon the agenda of the biggest magazine publishing house in Europe.

09FOREWORD I GRUNER + JAHR08 GRUNER + JAHR I ANNUAL REPORT 2003

over leadership in innovation. It is becoming moreand more important to have ideas and to use thembecause innovation is the only way to achieve the ne-cessary growth impetus in business and in societyas a whole. Because every company needs to in-troduce innovations systematically, we are workingon the introduction of the kind of changes in our cor-porate culture that will give our highly capable staffmore scope to develop their creativity.

As part of a strategic process introduced atGruner + Jahr in 2003, we are now working on pro-jects – selected from an abundance of new ideas –that will generate the growth sources of the future.Our global offensive of new titles and projects bearsthe title ”Innovation Now!”.

This innovation offensive is driven by journalisticvalues. We research the interests of our readershipand formulate solutions to satisfy them. After all,inthe final analysis it is the market, i.e. our readership,that tips the balance between success and failure.Our corporate creed is that new titles must satisfythe highest standards of quality and journalisticindependence in their respective segments. Gruner

+ Jahr’s very existence depends on the credibilityof its titles and the company must defend theseagainst increasing pressures from media agenciesand industrial advertisers, especially at times whenthe economic situation is far from favorable.

In addition to consolidating our core businessand revitalizing our main brands, our innovation of-fensive is based on three distinct strategies – first,the development of line extensions, and second thetransfer of brands and concepts from one countryto another. Exporting titles such as GEO and CAPI-TAL has always been one of Gruner + Jahr’sstrengths. Third, the development of completelynew, independent magazines. We have successesin all three of these strategies.

One of the year’s outstanding successes is de-scribed on page 16 of this report. Gruner + Jahr’sFrench subsidiary Prisma Presse achieved one ofthe most impressive European magazine launchesof the postwar period with TÉLÉ 2 SEMAINES, amagazine containing two weeks of TV programs.The first issue sold over one million copies, and themagazine promises to become a major pillar of

Gruner + Jahr’s French and European magazinebusiness, with sales now running to around 2 mil-lion per issue.

Gruner + Jahr can also report success in itsGerman domestic market, where it remains marketleader with EUR 618 million gross advertising rev-enues, EUR 88 million ahead of its nearest compet-itor. That means that one in every six euros investedin advertising in a German magazine catering to thegeneral public goes to a Gruner + Jahr title. This clear-ly confirms the quality and performance of our titlesin a bitterly competitive situation.

Although the economy in general and the ad-vertising space market in particular are expected topick up only slightly in 2004, this will nonethelesscontribute to growth. Gruner + Jahr is aiming toachieve moderate sales growth despite difficultoperating conditions and will also be prepared to ma-ke further investments in its publishing business.The solid foundations laid in 2003 will form a basisfor further growth. Gruner + Jahr has both the ide-as and the financial resources to achieve furthergrowth in 2004, in Germany and beyond. Expansion

in the international markets will be a significantgrowth factor in 2004. We plan to intensify our ac-tivities in the growth markets of Asia and EasternEurope where we are already active, and to get star-ted on developing new markets for Gruner + Jahrproducts in other countries.

Gruner + Jahr, Europe’s largest magazine pub-lisher, once again set standards for corporate suc-cess and innovation in 2003. Growth is now a prio-rity on our agenda. The foundation for continuingcommercial success in the years to come will, as inthe past, be the independence and the journalisticquality of our magazines. Read about some of theinnovations in the world of Gruner + Jahr on the fol-lowing pages. We wish you pleasant reading.

Dr. Bernd Kundrun

President of the Gruner + Jahr Executive Board

EBITA

EUR mill. EUR + 4 MILL.

117

234 238

2001pro forma

2002 2003

+ 1,3% POINTS

ROS

in %EXTERNAL SALES

EUR mill.

3.9

8.3

9.6

2001pro forma

2002 2003

37 %

25 %

38 %

930

Germany

613

United States938

Europe(and othercountries)

Other facts and figures on thefiscal year 2003: pages 72–76

11INNOVATIONS I GRUNER+JAHR10 GRUNER + JAHR I ANNUAL REPORT 2003

How STERN’s innovative youth magazine NEON illuminates the world of the twenty-something community each month.

A GUIDE TOGROWING UP

INNOVATIONS I GRUNER + JAHR 13

YOU DON’T NEED TO HANG OUT in the bars of Ber-lin, the clubs of Hamburg or even the pubs of Co-logne to find out what Germany’s twenty-some-things are thinking and feeling these days. Instead,head down to Berg am Laim, a somewhat sleepysuburb of Munich and home, since the summer of2003, to the editorial office of NEON, the mostrecent addition to the STERN magazine portfolio.Housed in an unremarkable office block, NEON andits team have earned their spurs as guides througha world of emotion and experience for an age groupthat had hitherto escaped categorization of anykind. This young general-interest magazine, sub-titled “It’s time we grew up” seems to have strucka nerve with 20 to 29-year-olds, both male and fe-male. Companies are lining up to benefit fromNEON’s insights. “We can’t keep up with all the re-quests for presentations from firms ,” says TimmKlotzek, one of NEON’s two chief editors.

A year before NEON was launched, the futuredid not look the slightest bit rosy for Klotzek or hisco-founders Michael Ebert and Mirko Borsche. InJuly 2002, the ongoing advertising and media crisisin Germany created one of its most prominent casu-alties. The Süddeutsche Zeitung announced it wasclosing downJetzt magazine, its prizewinning, high-ly praised but economically unviable youth sup-plement. All three NEON creators worked there.“We were massively disappointed, most of us had

never been unemployed before,” explains Klotzek.He was still working on the farewell edition of Jetztwhen he took a phone call from Andreas Petzold,editor-in-chief at STERN magazine. “I guessed theywanted to offer me a job or write a story on us,”Klotzek remembers.

The STERN editors and publishers wantedmore than that. For some time already, the idea ofa younger magazine to take its place alongsideSTERN had been brewing in Hamburg.

Gruner + Jahr wasted no time in drawing upacontract to develop a magazine “that can also beshown to the board of directors” with the workingtitle “NAME.” The development team moved in-to an open-plan office in the basement of the pub-lisher’s Munich branch. The three founders werejoined by another three colleagues and set towork in November 2002. Klotzek still speaks high-ly of how the publishers “gave us time and spaceto create something. We spent a lot of time goingfor walks, sitting in cafés or in the bathtub. Weknew that we wanted our magazine to appeal toyoung men and women and we were looking for thecommon denominator. If someone had come intoour editorial office back then, they would probablyhave wondered: What on earth are they doing?”

The essence of their musings materialized atthe beginning of 2003 with the leitmotif : “It’s time

Broad range

of subject matter:

Editor Oliver Stolle (left) and Art

Director GunterSchwarzmaier

launched

2003circulation

96,000published

monthlyFree and undisturbed: NEON makersMichael Ebert (left) and Timm Klotzek

we grew up.”As Klotzek explains:“Our aim was todefine the magazine in one sentence. We found outthat men and women in this age group are very pre-occupied with their future. The many topics, rang-ing from final school exams to their first job, thinkingabout starting a family and worrying about the fu-ture, were easily enough to fill a magazine.”

They set out for Hamburg armed with their singlestatement and seven rough pages outlining targetgroup, publication cycles, the general parametersfor the magazine. Without recourse to powerpointpresentations or finished layouts, they succeededin winning over STERN magazine’s chief editors aswell as publishing house executives.

“Nobody had dared to try a unisex magazine inthis age bracket before,” says STERN editor-in-chief Andreas Petzold, who, along with fellowSTERN editor Thomas Osterkorn, is NEON’s pub-lisher. In March 2003, given the magazine makers’“proximity to readers,” the brave decision wastaken to launch a pilot edition of NEON as early asJune, without the usual rigmarole of market re-search dummies.

“We could have gotten it wrong, of course. Butwe felt positive, we felt the editorial staff knew thetarget group they were writing for,” says Petzold.

“Suddenly things got serious,” Klotzek recalls.The pilot issue had to be ready in barely three

months. The core team of six in Munich workedround the clock on the concept, framework, layoutand content. They came up with unusual names forregular features: Wild World (short stories aboutpeople), Seeing (themes in politics and society), and Feeling (love, friendship, sex, psychology).The new magazine was finally given a name deri-ved from the Greek word neos, signifying “trans-parency, light and clarity.” As production pro-gressed, the magazine’s founders joined theSTERN advertising heads to visit potential adver-tisers. “In the wake of the Jetzt experience, finan-cial success was just as important to us as recog-nition,” stresses Klotzek.

150,000 copies of NEON hit the newsstands onJune 23, 2003 of at a cover price of € 2.50. Of the180 pages, 41 were taken up by advertisements.Feedback was stronger than anticipated. Dailynewspapers, press agencies, magazines and radiostations reported on the launch with detailedreviews. Within the first few weeks, the onlineguestbook had around 1,900 positive reactions.

Following a three-month trial period, Gruner +Jahr decided to put NEON into monthly produc-tion starting January 2004. Today, the productionteam consists of fifteen people – a wonderful ex-ample of how brand-new opportunities can ariseout of defeat.

14 GRUNER + JAHR I ANNUAL REPORT 2003

Close contact to

readers: Editor CorinnaTeresa Bix (left);

Graphic artists SandraEichler (left) and

Sarah Illenberger(opposite page)

STERN Editor-in-Chief

Andreas Petzold knewthe concept was good

17INNOVATIONS I GRUNER + JAHR16 GRUNER + JAHR I ANNUAL REPORT 2003

How Prisma Presse compiled a unique database and laid the foundationin November 2003 for one of Europe’s most successful launches.

THE FRENCH REVOLUTION

Success means believing in what

others consider impossible:

Rémy Pernelet, Editor-in-Chief ofTÉLÉ 2 SEMAINES in Paris

19INNOVATIONS I GRUNER + JAHR

successful bi-weekly market for over a decade, simi-lar plans in France had always failed because theprogram schedules supplied by television channelswould arrive at such short notice. The magazine mak-ers had a mere 36 hours to complete their editorialcontent for the second week of programming, aninsurmountable task in the light of some 60 to 70channels and the detailed descriptions, ratings andlayout required.

Making the impossible possible came down tothe publisher systematically improving its owndata programming. Denis Berriat, divisional headof publishing in program formats tells us how:“There was nothing on the market which matchedour needs, so in the mid-nineties we set about de-veloping our own software for our weekly TV mag-azine TÉLÉ LOISIRS.”

For every film, every series, every documentary,a wealth of detailed information was compiled in-cluding directors, actors, lead roles, countries, firstdates shown, genres, short and long reviews. Astime progressed, the database proved to be worth

its weight in gold: comprehensive information wasavailable for more than100,000 programs. “Whatmakes our database so special,” continues Berriat,“is the link to the layout program, which in turn pro-cesses the data in a print-ready format.” This is thekey to production for TÉLÉ 2 SEMAINES.

There was a lot of ground to be covered until thedatabase had “learned“ that a particularly lengthyarticle was required for the “program of the day” orthat the lead actor’s name should be in bold letter-ing or italics. Over 50,000 lines of programmingcode had to be written.Then, the ready-to-print pagescould be produced more or less by hitting a button.

The program section was initially divided intogenres, but Pernelet’s innovative concept went fur-ther, introducing various special sections, generouslayouts, double-page features and large-scale pho-tographs. Months of preparation culminated in a re-gional release of the finished item in November2003. The result in the Rhône-Alps was promising.“If more than 50 percent of the initial buyers comeback for the second issue, then we will have backed

a winner” says Berriat. “Our quota with TÉLÉ 2SEMAINES was between 60percent and 75percent.”

Not even the optimistic magazine creatorsthemselves could fail to be surprised by the per-formance of the first nationwide issue in January2004. Accompanied by a major advertising cam-paign, TÉLÉ 2 SEMAINES hit the newsstands onJanuary 5. After the lifting of the TV ban for printmedia, Prisma Presse became the first publisherto buy television advertising. “We started with aprint run of 800,000 and expected to sell 500,000.”When the first sales figures came in, the decisionwas made to print another 700,000 copies. All in all,over a million magazines were sold.

Berriat and Pernelet knew better than to reston their laurels. April 2004 saw the premiere oftheir second bi-weekly TV guide publication, TVGRANDES CHAÎNES. Prisma Presse intends todefend its market superiority indefinitely.

As the Chinese master Sun Tzu so wisely put it,“The exemplary strategist attacks while his enemyis still making plans.”


WHEN ALL THE SUCCESS STRIKES HIM as toogood to be true, Rémy Pernelet glances over at aChinese proverb hanging above his desk, “Whoeveris first in the field and awaits the coming of theenemy will be fresh for the fight; whoever is secondin the field and has to hasten to battle will arriveexhausted.”

If the Chinese master Sun Tzu, who penned TheArt of War over two and a half thousand years ago,is right, then Pernelet, the man behind France’sfirst bi-weekly TV guide TÉLÉ 2 SEMAINES, will beready for any “attack” by the competition. In fact,says the editor-in-chief, “I’m surprised that our com-petitors have been so quiet for so long.”

When Prisma Presse, the French subsidiary ofGruner + Jahr announced at the end of 2003 that itintended to launch a bi-weekly TV magazine, it sig-nalled an end to eighteen years of peace in thetelevision listings segment. “It was not a new ideaas such,” explains Pernelet, “but it had been consid-ered impossible.” While Germany had sustained TVSpielfilm, TV Movie and TV TODAY and had had a

Innovative idea:

The editorial staff use a database to auto-matically providecontent for the layout

launched

2003circulation

1,607,000published

every two weeks

21INNOVATIONS I GRUNER + JAHR20 GRUNER + JAHR I ANNUAL REPORT 2003

How an unconventional attitude and creative organizing skillsbecame Gruner + Jahr’s key to success in Russia.

EXPLORING NEW TERRAIN


yourself be intimidated, you might just as well packup shop straightaway.”

Though Moscow now has entire streets full ofexclusive boutiques and probably more luxury lim-ousines than Los Angeles, its market for mag-azines still has a long way to go before it reachesWestern standards. There is no reliable data on cir-culation or coverage, and not even a properly func-tioning distribution system. Gruner + Jahr was thefirst publisher to print a recommended retail priceon the magazine cover when it launched GEO in1998. Price recommendations were unknown inRussia at that time. “There is still no retail price fix-ing even today,” says G+J Sales Manager RomanBogolepov. But price margins have been slimmeddown quite a bit.

Creating a functioning distribution system isjust one of the many problems facing companiestrying to develop the magazine market. With a pop-ulation of around15 million, Greater Moscow alonehas 40 different magazine wholesalers supplying3,500 kiosks, plus 1,000 private dealers hawkingonly a small selection of the available titles from theirmobile stands. Because feedback from the marketis totally lacking, Bogolepov employs students tocheck whether his titles are available everywhere.

Although the market in Moscow is difficultenough, it is heaven compared with the more re-mote regions of this vast country. Russia covers anarea of over 17 million square kilometers, nearly 50 times the size of Germany, but its population of 150 million is not quite double that of Germany.A magazine takes four days to travel to Novosi-birsk. So GEO editor Vladimir Potapov is very proudof the fact that only 30 percent of each issue is nowsold in Moscow. The figure used to be 80 percent.

Despite all his problems, Hengerer would notswap jobs with any of his CEO colleagues in theWest. “I can’t imagine a more exciting job. Nothingreally seems to work here, but somehow or otherit always works out.”

YOU DON’T NEED MUCH ROOM to produce a mag-azine in Russia, and office rentals in Moscow are pri-cey. So Olga Mareeva, the editor-in-chief of GEO-LENOK, the children’s and teens’ offshoot of theRussian edition of GEO, is sqeezed into an office ofjust six square meters of together with two othereditors. A layouter and a photo editor in the next of-fice complete the team. The editorial staff of GEO-FOCUS works under similar, highly productive yetcramped conditions. Eight editors occupy a spaceof 25 square meters, working with such concentra-tion that you can almost see the mental energy buzz-ing around the room. Their editor-in-chief NadezhdaMoiseeva prefers some seclusion, so she has set upa row of plants behind her computer monitor. “But Iusually take proofs home with me in the evening tocorrect,” she says.

G+J Russia’s offices on the fifth floor of the of-fice building on Shmitovsky Prospect have been toosmall ever since the launch of the two new titlesGEOLENOK and GEOFOCUS in 2003. “350 squaremeters for four editorial staffs, plus developmentdepartments, space sales, magazine sales andadministration are simply not enough,” admits CEOOlaf Hengerer, whose own office doubles as a con-ference room. He would dearly like to rent morespace, but is making slow progress with the poten-tial landlords. “We have even considered working inshifts,” he says.

Anyone seeking success in present-day Russiahas to learn to think unconventionally. What to dowhen a whole issue of GEO printed outside Rus-sia gets stuck in customs because the customs of-ficers suddenly want to see a non-existent hygienecertificate? Where to look when a whole truckloadof magazines disappears in Belarus? How to reactwhen a PR agent suddenly arrives accompaniedby three ominous-looking heavies and suggeststhat it would be wise to accept 250,000 dollars incash in return for featuring a particular, well-knownindustrial magnate’s wife on the cover of GALA?“Making threats is still a recognized business prac-tice in Russia,”says Hengerer calmly.“But, if you let


Chief editors in Moscow: Vladimir Potapov, GEO (left top); Olga Mareeva, GEOLENOK (left)and Nadezhda Moiseeva, GEOFOCUS (right)

Improvisation and

pioneering spirit: CEO Dr. OlafHengerer with Julia Lee

Sales Manager Roman

Bogolepov by the ramp of a mobile newsstand

launched

1998circulation

100,000

launched

2001circulation

120,000

launched

2003circulation

71,500

launched

2003circulation

43,000


How BRIGITTE remains true to its philosophy despite reinventing itself everytwo weeks: The innovative strength of the BRIGITTE brand now supports anentire magazine family. An interview with Andreas Lebert.

“HAVE FAITH IN YOURSELF”

BRIGITTE celebrated its Golden Jubilee in May

2004. How does it manage to stay so young?

Magazines are ageless. BRIGITTE has to reinventitself every fortnight. It reflects the present andlooks to the future. That is why we have chosen themotto “50 years in the present” rather than a birth-day party looking back on history.

Where does this sentence come from? “Women are

warm, brave and capable, they take care of their

looks, are both lover and mother to their husbands.

His wishes are her wishes”.

Well, considering you’re asking me, I guess youread it in BRIGITTE.

Right, it’s taken from one of the first issues of

BRIGITTE and describes how women were per-

ceived in the 1950s. Could you come up with

something similarly short and unsweet for the

women of today?

I can give it a try. Today’s woman is self-confident,she embraces change, she searches tirelessly formeaning and joy in her life. Easy answers are not anoption. A job or career is no more the sole aim in life than is marriage or family. Managing a numberof tasks simultaneously is her strength, but moreimportantly, she enjoys it and finds it satisfying.

Sounds like the BRIGITTE target group …

Exactly. These are the women we are addressing.BRIGITTE’s great strength is that it respects all ways

of life, its essential message is “you are just fine theway you are, have faith in yourself, forget aboutdoing everything right all the time.” BRIGITTE helpsrelieve the pressure, offers consolation and encour-agement in this jungle we live in.

A whole range of new titles is going after the

young women’s market at the moment. Do you see

them as a threat to BRIGITTE?

BRIGITTE reaches younger women as well, but itsmain audience is more adult, as it always has been.It would not make sense for BRIGITTE to focus onthis other, much younger group. We have con-sciously targeted a younger readership with BRI-GITTE YOUNG MISS and for the more maturereaders, we have introduced BRIGITTE WOMAN.Our family of brands thus covers all stages of life, and addresses different aspects, e.g. as BRI-GITTE KULTUR BRIGITTE COOKIE and BRIGITTEBALANCE.

What is the key to BRIGITTE’s success over a per-

iod of 50 years? How has it defended its position

as the number one classic women’s magazine

since 1974?

BRIGITTE takes its readers seriously. Our editorialteam is very big, almost one hundred staff, pre-dominantly female. All of them are experiencedjournalists, both the younger ones and the moremature ones. Not the type to be ordered around.The secret to BRIGITTE’s success is this: Theycreate a magazine that they themselves like toread. This may sound a little unusual in the media

A fan from the very

beginning: Andreas Lebert ,Editor-in-Chief of BRIGITTE


business, but there is a complete absence of cyni-cism. You won’t hear anybody saying “we’d like todo this but it will have to be done differently for ourreaders.” I have never known such a strong senseof identification between an editorial staff and itsreadership. What’s more, we take great care of ourreaders. We have eight “letter editors“ dealing witha daily lot of up to 500 letters.

Are you, as editor-in-chief, the man who really

understands women? Or could one say, the man

who stands over and above women?

My personal history has a lot to do with the fact thatI hold this position. Both my parents were journa-lists, both worked for BRIGITTE. I was a depart-mental head here back in the 1980s. When AnneVolk, editor-in-chief for many years, retired a yearand a half ago, the publishers were keen to find so-meone who knew BRIGITTE inside out and what itstood for, regardless of that person’s gender.

Having developed such ambitious and innovative

publications as the magazine section of the Süd-

deutsche Zeitung and the Leben (Life) supplement

in the newspaper Die Zeit, are you not afraid of

boredom setting in as overseer of the annual

BRIGITTE diet?

Objection! Right down the line. My role here isneither boring nor unchallenging. It’s quite simple,BRIGITTE can handle any subject one can thinkof. Give me an absurd topic and I will make it fitinto BRIGITTE. Let’s take sailing ships, for example. We see themall the time on the Elbe River from our press of-fices, here on Baumwall. The theory goes as fol-lows: More and more people are buying thesevessels. We can write about that, no problem. Onlythe thread might be something like: psychology

in an eight-square-meter space. Why do people, oftheir own free will, opt for the cramped space on aboat? Hey presto, we have entered the world of BRI-GITTE, everyday drama and relationship issues.Psychology is a major player for us. Bringing theoutside world into BRIGITTE is very exciting.

What about the annual, perennial re-run of the

BRIGITTE diet?

It is far from being the same thing every year. Itsreputation is built on being the best and most reli-able. So we are at great pains to react to the latestfindings. Every year we sit down and discuss howto approach things differently. What is our centraltheme? I enjoy taking part in meetings like these. Iget a kick out of coming up with new angles. Ourrecipes taste good. That is not only a key concern,it is also the unmistakable trademark of the BRI-GITTE diet.

freundin, an acknowledged competitor, pronounc-

ed a “quality offensive” in March. Are you worried?

No. freundin has always done best when it has comecloser to BRIGITTE. They’ve realised that now. Wedon’t need a “quality offensive”, BRIGITTE has al-ways been synonymous with quality journalism andnothing is going to change that in the future.

Following BRIGITTE WOMAN, BRIGITTE YOUNG

MISS, BRIGITTE KULTUR and BRIGITTE COOKIE,

you launched a fifth offshoot entitled BRIGITTE

BALANCE. What is behind these line extensions?

The line extensions address for specific themes ina specific period of your life. BRIGITTE BALANCEworks on the premise that we all live in a world ofcontrasts. Job and children, career and leisure, re-laxation and ambition, and so on. BALANCE ad-


dresses this phenomenon in a very modern and suit-ably sensuous fashion.

Nevertheless, aren’t you afraid of losing a genera-

tion of younger women to magazines like Glamour

in the long run?

I don’t know if all young women can be won overto BRIGITTE. I do know, however, that we shouldnot give BRIGITTE a more youthful facelift forthe sake of a few readers. All in all, we still havemore young readers than any of the new women’smagazines. Our research tells us that lots of womenswitch to BRIGITTE when they leave their par-ents’ home to set up their own. They feel it is timeto leave amusing but superficial magazines behindand move on to one which is a help to them intheir daily lives.

Can you prove that?

A sociological study by the Rheingold Instituterevealed the following analysis. Newer publicationssuch as Glamour, for example, are associated witha sense of indulgence, a regressive world of girlsand fairy tales. It may be that a woman of 40 has thisfeeling once in a while as well. Young women,meanwhile, have a more grown-up wish forsomething more tangible. Interestingly enough, wefound that 30-year-olds read BRIGITTE Woman. It’sas if they want to look into the future.

Back in the 1970s and ‘80s, BRIGITTE had a greater

social and political relevance.

I don’t agree. That view really harks back to the’90s, which was a notoriously difficult time for themedia to introduce political themes, not just at BRI-GITTE. The ’90s were absolutely apolitical. Allmagazines had a hard time maintaining a political

profile. DER SPIEGEL, STERN magazine and FOCUSall had cover stories which would not have been outof place in a women’s magazine. We didn’t decideto leave politics out, it was the sign of the times.

Where does BRIGITTE stand today?

Ursula Ott’s column is quite forthright, politically.We have interviewed people like Renate Schmidtand Ulla Schmidt. There are lots of examples. Spe-cials on “Afraid of losing your job?”, specials on theenvironment like “And the world can be saved”;reports from Baghdad and Afghanistan; essays suchas “What is justice today?” or recently a conver-sation with a young Turkish woman in Berlin “Takeher headscarf away.” Elke Heidenreich was thefirst to criticize the “It’s cool to be a penny-pincher”campaign in her BRIGITTE column. We have arti-cles which, without being purely political, definite-ly have a political slant.

How do you see the future of BRIGITTE?

A magazine has to be prepared for the future, ofcourse, and we are indeed looking ahead. Any dis-cussion on BRIGITTE in the future necessarilyincludes a look at the market itself. The market forwomen’s magazines in Germany is one of the mostcompetitive at all. We are the most expensive in oursegment, but certainly also the most sophisticatedand the best in terms of quality. BRIGITTE is goingto stay that way. We will increase our expertise inthe areas which we have developed over the past50 years. In culture, for example, or society, fashion,psychology, medicine and current affairs. By cover-ing all these areas, the dynamic BRIGITTE familyof brands will remain the strongest player on theGerman market.

Thank you for taking the time to speak with us.

launched

1954circulation

800,801published

every two weeks

“BRIGITTEhas alwaysstood forquality jour-nalism andwill continueto do so.”


than quarterly. The focus on children is more or lessthe basis for attracting a wide readership. Financialadvice, health tips and the latest trends can all be found in SER PADRES, well researched and forfree. Oliva is constantly looking at ways to improvethe product. The first issue in 2004 featured a newsection entitled Money Talk, and proved an instantsuccess. “We have already received more letters on this subject than in the whole of last year,“ heenthuses.“ That’s the recipe for success: give thepeople the tools they need to solve their problemsfor themselves.“

Until now, SER PADRES has been made avail-able in doctors’ offices and in 600 branches of Mc-Donald’s. The Parents Teachers Association takescare of distributing it to its Spanish-speaking mem-bers. The official circulation figure of 500,000 loggedby the Magazine Publishers of America (MPA) putsthe magazine at the top of the heap of all Spanish-language publications in the country. And the mar-ket continues to grow. To keep pace, Andrade hasinstalled another sales representative in Miami – theregion with the third-largest Hispanic communityin the United States. The surfer’s dream wave is notgoing to break just yet.


FROM TIME TO TIME, JON ANDRADE FEELS LIKE

A SURFER on a perfect day. “We are riding the crestof a huge wave,“ he says, eyes sparkling. He maysound as if he is on a California beach, waxing lyri-cal on his latest confrontation with the natural ele-ments, but in fact he is sitting in a Manhattan officeblock, talking about work. The head of the adver-tising department for SER PADRES, the first Spa-nish-language magazine for parents in the UnitedStates, is reflecting on a quite sensational year. Hecan reel off the figures in his sleep. In 2003, adver-tising revenue increased by 51%, advertising pagesby 36%. 2004 began in similar style with a 38% in-crease in advertising revenue for the first issue ofthe year.

This was no overnight success. Gruner + Jahrwas the first to enter this highly promising nichemarket in 1990 with the Spanish version of PAR-ENTS magazine. The competition took years to fol-low suit. Editor-in-chief Alberto Oliva and Andradejoined up in 2001 and immediately set about finetuning the product to the readership’s needs.“In thebeginning, we only had around 25% original mate-rial, the rest consisted of articles translated from theexisting US magazine,“ explains Oliva. Now the bal-ance is more like 50:50 and the plan is to increasethe percentage of original Spanish material evenfurther.

The Spanish-speaking minority in the UnitedStates has its roots in Mexico, South America andthe Caribbean. They may indeed inhabit the samecountry as their neighbors of European descent,but often live in a completely different world.“Oneexcellent example of this is car seats for children,“points out editor-in-chief Oliva, going on to explainhis strategy. “No American mother needs con-vincing of their value, whereas the Hispanic popu-lation is notoriously dismissive of safety regula-tions. In cases such as this, we aim to enlighten andgive advice.“

There are no limits to the topics covered in themagazine, which now appears bi-monthly rather

Universal curiosity: Whatever their language and cultural differences, children often have very similar interests.

launched

1926circulation

2,200,000published

monthly

How the US magazine PARENTS is taking the Spanish-speaking community by storm

KIDS’ ROOM – MELTING POT

Did you know ...

• People of Hispanic origin constitute the largest minority group in the United States,numbering 39 million and amounting to 13% of the entire population

• The five most important Hispanic markets in terms of population figures are LosAngeles, New York City, Miami, San Francisco and Chicago

• Purchasing power of this population group is estimated at 428 billion dollars, withabove-average growth rates

• The average age of the Hispanic population is 25.9 years, markedly below theoverall (35.3)

• Average income of Hispanic households is $ 34.670 per annum, well below thenational average ($ 43,570 )

• The number of Hispanic households earning $ 50,000 and more is expected torise by 50% by 2005.

• According to MPA, SER PADRES heads the Top 10 of US magazines inSpanish. The second and third slots are occupied by PEOPLE EN ESPAÑOL andREADER’S DIGEST SELECCIONES

30 GRUNER + JAHR I ANNUAL REPORT 2003 31INNOVATIONS I GRUNER + JAHR

How GLAMOUR answeredpeople’s longing for theglitter of the West byimbuing them with a newself-awareness

BEAUTYFROM WITHIN

New type of woman: GLAMOUR photo shoot with the well-known actor and television host Grazyna Torbicka (see cover photo, p. 35) “You can do what you want.“ GLAMOUR’s Editor-in-Chief Grazyna Olbrych has her own personal view on Polish women


In search of personal expression:

The Fabryka Trzciny club is one of the favorite haunts ofGLAMOUR’s editor-in-chief Grazyna Olbrych

Being creative is more important than having lots of money: GLAMOUR’s head of fashion, Adam Gutowski, uses luxury brands to fire his imagination


I NEVER THOUGHT OF MYSELF AS ATTRACTIVE

or out of the ordinary.Thanks to GLAMOUR I’vecome to realize that every woman has earned the luxury of believing in her own beauty.” Politicalscience student Angnieszka, Anna for short, a 24-year-old from Warsaw, writes how GLAMOURhelped her discover “a new angle on my own fem-ininity.“ Eva, a businesswoman, feels GLAMOURis important to her for “demystifying relationshipsand their secrets“ and helping her to avoid certainpartnership pitfalls.

Polish women’s image of themselves has un-dergone constant change since the fall of the IronCurtain. This is due in no small measure to mag-azines such as GLAMOUR, launched by Gruner +Jahr in Poland in the early 2003. Nevertheless, whilePoland is close to the top of the European table interms of the number of women in senior manage-ment positions (over 30%), the image of the “Pol-ish mother“ remains a particularly resonant one insociety, says GLAMOUR’s editor-in-chief GrazynaOlbrych. Always giving, putting family and societyfirst, sacrificing one’s own interests. “We, on theother hand, tell women: Hey, you can do what youwant. You don’t always have to give, you are entitledto take as well.“

Young Polish women appear to identify withthis message and the mix of fashion, lifestyle andtips on how to live your life. Average sales of276,540 copies throughout 2003 saw GLAMOURrace to the number two position amongst qualitymagazines for women. “Poland is one of the mostdeveloped markets in Eastern Europe and wo-men are one of the most highly contested targetgroups,“ says Oliver Voigt, managing director ofG+J Poland. Fifteen monthly titles alone competefor female readers’ attention. That’s why GLAM-OUR was launched with one of the most lavishmarketing campaigns in the history of Polish pub-

lishing. Several million euros were spent on print,radio and TV advertising. And to front the cam-paign, GLAMOUR won the services of famousactress Joanna Brodzik, today’s modern, self-as-sured Polish woman personified.

The leading trade magazine Media & Market-ing Polska voted GLAMOUR “Newcomer of theYear 2003,” stating that “the publishers of GLAM-OUR have done more than introduce a new mag-azine, they have given Polish women a new leaseon life.“ Advertisers were equally enamoured, withrenowned brands such as Versace, Estée Lauder,Helena Rubinstein, Hennes + Mauritz, Nokia, Sonyand various car manufacturers all among the 460pages of advertisements sold over the first ninemonths. “A few years ago,“ Voigt points out, “suc-cess of this nature would not have been possible.The local market for high-end consumer goods didnot yet exist.“

Adam Gutowski, head of fashion at GLAMOUR,elaborates: “At GLAMOUR we made it our businessto rid our readers of their fear of major brands.Other magazines portray luxury brands as unattain-able. We prefer to show them as inspirational.“ The fashion expert rarely makes use of interna-tional photo material, preferring to shoot locally,underscoring the fact that the products on displayare available – and affordable – in Poland. Gutowskiagain: “Polish women’s creativity has always en-abled them to present themselves in the best pos-sible way, even with little money.“

Polish women’s newfound confidence andimage is of interest not only to the female popula-tion. “20 percent of our readers are male“ stressesOlbrych. This gave the editor-in-chief the idea of asupplement that would appear for the first time inearly 2004 and be dedicated to fashion and goodlooks – for men.

launched

2003circulation

276,540published

monthly

The market for vanity

is growing in Poland:

Oliver Voigt, CEO of G+J Poland with awork of art by a de-voted GLAMOUR fan


The concept of shopping while seated comfort-ably on the couch has proven a hit with the French.The first edition, initially conceived as a supplementto FEMME ACTUELLE and developed at the recordspeed of just two months by that magazine’s edi-torial staff, sold over 190,000 copies at a cover priceof € 2.50. SHOPPING established itself not just asa new magazine in its own right, but also as a com-pletely new genre on the European scene. Until then,magazines dedicated exclusively to shopping wereonly found in the United States.

The success of SHOPPING has left FrancoiseLambert with something of a problem. She now hasless time to go shopping herself. “That’s a pity be-cause I love to shop,“ she says, with a rueful smile.


WHAT LOOKS LIKE A RELAY RACE is in full swingat the editorial office of SHOPPING magazine in theRue La Condamine in Paris. One messenger bringsshoes, the next picks up clothes, and a collection ofhandbags needs delivering faster than you can say“photo studio.“ Clothing racks in the third floor show-room are crammed, and blouses, skirts, jackets,coats, tops and trousers are laid out across thegray carpet. Color, form and style are constantly re-arranged until they match just perfectly.

Presiding over this controlled chaos is FrancoiseLambert, the fashion editor of France’s biggest wo-men’s weekly magazine FEMME ACTUELLE forover 17 years and, since May 2003, also in chargeof fashion at Europe’s first shopping magazine,aptly named SHOPPING. “We aim to offer adviceon what to buy just like a good friend, especially avery professional friend,“ Lambert stresses.

The extensive range presented by the 12-personSHOPPING editorial team every two months isbeyond anything even the very best friend couldcover. Roughly 130 pages worth of the finestproducts and latest trends in fashion, jewelry,cosmetics, design and interiors are divided into six sections. “We take care to present products in all available price categories and combine ex-pensive with less expensive items in our outfits.This is exactly what most women do in their dailylives, too,“ the fashion expert explains.

Each product featured – and there are between1,000 and 1,500 products per issue – is accom-panied by a description, photograph, review and arating. There are also consumer tips and sourcedirectories. “We cannot afford to give our readerspoor advice. Our editorial team has complete controlover what goes into the magazine,“says Lambert.Photographs of the editorial team members ap-pear on the corresponding pages to enhance thesense of personal advice. Readers are encouragedto send in queries, suggestions or complaints tothe feature editors in question.

Prêt-à-porter: Expert advice can be invaluable for spotting a good buy

launched

2003circulation

189,400published

six times a year

I SHOP, THEREFORE I AMHow SHOPPING, a brand-new magazine format, was born in France and hasnow moved on to great things in other markets, too.

Loves shopping: Sophia Deslances,Fashion Service


“INDEPENDENCE IS THEKEYTOOUR SUCCESS”

What is good journalism for you?

It would really be poor journalism if I attempted togive an adequate and accurate appraisal of goodjournalism in so small a space. Although there is adefinite trend towards bullet-point summaries ofanything and everything these days, I don’t belongto the school of thought which believes that theworld can be explained or understood in three sen-tences. I am sure there is a lot of bad journalism inGermany, but you would be hard-pressed to find anyat Gruner + Jahr.

What do you mean by that? How is Gruner + Jahr

different from other publishing houses?

Gruner + Jahr is not necessarily perfect, but we donot indulge in any journalism for favors. There isn’ta company in the world that can walk in and buy thefront cover of a G+J magazine and fill it with adver-tising. The publishers encourage a certain degree of creativity when it comes to advertising design,but the line we draw is absolutely clear. Advertisingand editorial content must be kept well apart.

Are there any other noticeable differences?

Oh yes, you won’t find any trivial, yellow press stylejournalism here. Nor any fossilized journalism, which

makes a virtue of boredom. And certainly no inflam-matory journalism. You know the kind I mean.

Which brings us back to the first question:

Good journalism at Gruner + Jahr, what are its

characteristics?

In G+J magazines you can expect to find the higheststandards of reporting, words and pictures that tella story. Peter-Matthias Gaede, editor-in-chief at GEO,said features are the lifeblood of journalism. GEO is,in my book, the best photographic and featuresmagazine in the world; its reports tell a living story,cast a new light on the real world.

So a good journalist blends truth and poetry?

No, as famous 1920s reporter Egon Erwin Kisch putit, one cannot allow one’s imagination to run riot inan article. There is a fine line between fact and let-ting facts dance their own dance - a nice image.

At Gruner + Jahr you are an editor-in-chief as well

as being a publisher, head of a publishing company

and a journalist member of the board of directors.

Isn’t there a certain conflict of interests between

the journalistic leanings of the editor-in-chief and

the business interests of the publishing company

boss, or even of the board of directors?

How Gruner + Jahr stuck to its journalistic principles during adverse times. An interview with Angelika Jahr-Stilcken.

Angelika Jahr-Stilcken, Member of the Executive Board, Journalism

“Gruner +Jahr is notnecessarilyperfect, butwe do notindulge in any jour-nalism forfavors.”

JOURNALISTIC INDEPENDENCE I GRUNER + JAHR 41GRUNER + JAHR I ANNUAL REPORT 200340

I don’t see that as a problem. I come from a familyof publishers. My father, who founded Gruner + Jahralmost forty years ago with Gerd Bucerius andRichard Gruner, was a publisher with all his heartand soul. It is quite normal for a publisher to keepan eye on the journalistic content of his magazinesas well as on the business interests of the publish-ing company. Good journalism is the soul of a pub-lishing house. But good journalism can only thrivein the financially healthy environment of a strongpublishing company.

Is that enough in itself?

Another thing I learned from my father, when I wasmuch younger, was the great value of indepen-dence. Looking at it in terms of the conditions andchances of success in journalism, my father, JohnJahr, was a passionate journalist and at the sametime a publisher with good instincts. Both prior toand following the merger in 1965 which resulted inthe Gruner + Jahr printing and publishing house, itwas his style to give his chief editors free rein. Theprinciple of editorial freedom and independencehas remained one of the key elements at Gruner +Jahr to this day.

What do you see as the difference between a pub-

lishing company producing magazines and news-

papers, and a factory producing nuts and bolts or

cleaning cloths?

One cannot order journalists to be more productiveor more creative. It isn’t about the quantity of arti-cles they deliver. It’s about quality, truthfulness and,above all, will it interest the reader? Does it matchhis expectations? An editorial desk doesn’t operateon the piecework principle. It can happen that a tal-ented writer spends days working on one article,only to find that it doesn’t meet his or her own stan-dards. So he rips it up and starts again!

Not very efficient from an economic point of view.

Well, of course that would be a valid argument if wewere talking about bolts of cloths, but we in the pub-lishing business are aware of the importance of ac-curate research and well-crafted writing. We under-stand that the space we afford our journalists leadsto higher quality. The production of information can-not be rationalized in the way the production of indus-trial goods can be. I am convinced that, at the endof the day, it will be an expensive exercise to fill thespace between the maximum number of advertise-ments at the lowest possible cost. Our principal taskis to disseminate information and uphold credibility.

So the editors need freedom – both journalistic and

financial?

Yes, I can’t stress the importance of independenceenough. Many publishers around the world feel thefinancial pressure from advertising customers sostrongly that it eats away at editorial freedom. If apublication is to remain credible, then its readershave to be absolutely sure that what they are read-ing is unfiltered information.That is what Gruner +Jahr stands for, and so do our editorial desks.

How should journalists deal with the world’s

power players, in your opinion?

Most importantly, maintain a critical distance. Thegreat German journalist Kurt Tucholsky wrote: “Youdon’t need to bribe a German journalist, it’s enoughfor him to be treated as a powerful force.” Thesedays I see too many journalists on first name termswith people of influence, or at least trying to be.Perhaps it is only human, but such aspirations area misapprehension. One cannot do justice to thecause of journalism thinking like that.

That sounds very puritanical.

… and that’s exactly what I mean. A journalist, in mybook, is “merely” a journalist and nothing more. In the same way that a judge is just a judge and a

doctor only a doctor. A journalist is there for hisreaders, listeners or viewers – and now for onlineusers as well – to report facts and fill in the back-ground. The task is to relate and explain the factsin an interesting way, without being didactic. Noth-ing more and nothing less. Henri Nannen, the foun-der, publisher and editor-in-chief of STERN, a manwho had a great influence on me as a journalist,thought the same way. It was he who said “I wouldrather preach a full church than an empty cathedral.”In other words: it is important for a magazine toreach as many readers as possible. He did not pro-duce STERN for the publishers, nor for the adver-tising customers, and certainly not for himself. Hissole interest was his readers.

What fascinated you most about Henri Nannen?

Henri Nannen’s journalistic mind was matched bya wonderful gut instinct. He was also, as a journal-ist, a total perfectionist. He would study the proofsdown to the last detail, often driving his editorialteams to distraction, but, at the same time, takingthem to a whole new level of journalism.

What do you see as the pinnacle of journalism, one

generation on from Henri Nannen?

I think it is this: healthy curiosity, independence, hon-esty, thoroughness in passing on information tothe reader – providing a path through an increasinglyconfusing world, without forgetting the emotionalpotential of words and pictures. Order, analysis andbackground are more vital today than ever. Goodjournalism is not restricted to the biggest, hotteststories or major features, I should add. Whether oneis writing for stock investors, gardeners or pregnantwomen, writing on subjects such as home improve-ments or culinary delights, the same journalisticvalues apply: thorough research, credibility, andwriting in such a way that readers both understandand enjoy what they read. “The ethics of journalismare based on service,” Johannes Gross once said.

You have raised the bar rather high for special-in-

terest magazines …

Yes, the art of journalism in such magazines is to beable to research and write about diapers and chicken-pox or curtains and garden furniture with the samezest and verve as other colleagues do about earth-quakes and presidential coups.

Is that the case in your own publishing field?

I would like to think so. It’s about finding that certainsomething which adds to the reader’s pleasure.“Don’t be jealous, zebra, stripes are in” was a head-line in LIVING AT HOME which appealed to mebecause it sold its story effortlessly. Or this intro-ductory line from the food and drink magazineESSEN&TRINKEN: “She is extraordinarily pretty,extraordinarily gifted, and when we met for ourinterview, she was also extraordinarily pregnant.”

The question of good journalism still remains:

can quality print journalism prosper or will it be

crushed between the grindstones of television

and Internet?

No, I am sure that won’t happen. Well-made news-papers and magazines will not only survive, theirrelevance and role in society will become greater.

You are not worried at all about the fate of good

journalism?

“Good journalism needs a home, a place to live.”This is one of Gruner + Jahr’s mission statements.A home for something Gruner + Jahr has always be-lieved in and will continue to believe in: freedom ofexpression, honesty and journalistic independence.This is the foundation of our economic success.

Thank you for taking the time to speak with us.

“If a publi-cation is to becredible, itsreaders haveto be ab-solutely surethat whatthey are read-ing is un-filtered infor-mation.”

“The art ofjournalism isto be able to write aboutdiapers andchickenpoxwith thesame zestand verve asother col-leagues writeabout earth-quakes andpresidentialcoups.”

42 GRUNER + JAHR I ANNUAL REPORT 2003 43CORPORATE DIVISION MAGAZINES GERMANY I GRUNER + JAHR

MAGAZINE DIVISION GERMANY

IN 2003, THE MAGAZINE DIVISION GERMANY

COUNTERED THE THIRD CONSECUTIVE SLOW

YEAR IN THE GERMAN CIRCULATION AND AD

SALES MARKET with a spate of new titles: NEON,STERN SPEZIAL GESUND LEBEN, BRIGITTECOOKIE, ESSEN + TRINKEN FÜR JEDEN TAG, NGWORLD. Gruner + Jahr, the biggest magazine pub-lisher in Germany, is relying on the pull exerted by itsestablished magazine brands and the ability of itshighly professional editorial staffs to develop andlaunch innovative concepts.This strategy has beenrewarded with higher circulation figures and suc-cessful defense of the company’s undisputed lead-ership in a market where circulation and orders foradvertising space are either stagnating or showing aslight downward trend. This, together with increasesin operating efficiency at all levels, has yielded a sig-nificant year-on-year improvement in earnings.

The launch of the STERN offshoot NEON causeda major stir in the German media landscape. The slo-gan for the launch of this title aimed at the 20 to29-year-old age group was “It’s time we grew up.”Upon its appearance in the kiosks on June 23,NEON sold over 90,000 copies. The response fromboth readers and advertisers has been very positi-ve and NEON is now published monthly.

STERN SPEZIAL GESUND LEBEN is a classicexample of how socially relevant topics can be suc-cessfully exploited in magazine form. Following ahealthcare series running through several succes-sive issues of STERN, a special healthcare issuesold 130,000 copies and is now being publishedbimonthly in 2004, thereby opening up a totally newmarket segment, healthcare. STERN magazine’stotal sales and advertising revenues not only keptit at the top of the German magazine market. Sur-veys also confirm its top reader rating, with circula-tion up by 3.5 percent. One in every nine Germansreads STERN, and it’s well ahead of the competition,

with market coverage of 11.2 percent and some 1.2million readers.

G+J’s second-largest flagship title, BRIGITTE,was also able to consolidate its position with a com-bination of a stable trend in figures for the main title,plus enlargement of the brand family. 80,000 womenbought BRIGITTE KULTUR when it was launchedin spring of 2003. This was followed in Novemberby BRIGITTE COOKIE, a quarterly, pocket-sizedpublication containing recipes, tips and tricks de-signed to take the stress out of cooking. BRIGITTEWOMAN is also doing well. This magazine, aimed atwomen over 40, broke through the 300,000-copybarrier for the first time in 2003. Following its re-launch in the fall of 2003, BRIGITTE YOUNG MISSachieved circulation increases. Since its launch inOctober 2001, WOMAN has established itself in theGerman mag-azine market as a force to be reckonedwith. Steady sales averaging around 330,000 per is-

Dr. Bernd Buchholz

President, Magazine DivisionGermany since January 1, 2004

sue enabled us to increase the guaranteed print-runfigure to 300,000. The Allensbach Advertising Me-dium Analysis (AWA) reports that WOMAN gives ex-cellent service to its target group of “young, well-educated, professional women.”The only bitter pillin the women’s magazine segment is MARIE CLAI-RE, the last issue of which appeared in October2003 after intensive efforts failed to bring about anincrease in sales of advertising space.

ESSEN + TRINKEN, G+J’s classic title in the liv-ing and lifestyle segment, has also produced off-spring: ESSEN + TRINKEN FÜR JEDEN TAG, whichmade its first appearance in July 2003. This handy,pocket-sized booklet now appears ten times annu-ally with simple, quickly prepared recipes of typicallyhigh ESSEN + TRINKEN quality. It was very well re-ceived, with the first issue running to 150,000 copies.

G+J also succeeded in strengthening its supre-macy in the German market for popular sciencemagazines. GEO remains the undisputed marketleader, with AWA First Class 2003 reporting a cov-erage increase from 16.7 to 17.2 percent in the high-er target groups. GEOLINO’s circulation showeda year-on-year increase of 14 percent. NATIONALGEOGRAPHIC made further progress on the expan-sion of its brand family initiated in 2002, launchinga special issue called TRAVELLER that was followedin November by NG WORLD, a bilingual magazinefor children and teens launched in conjunction witha TV program on the children’s channel and an inter-active website. 80,000 copies of this magazine, plus15,000 subscriptions, were sold within a few weeks.

The celebrity magazine GALA continues to forgeahead. Sales of this premium title broke through the400,000-copy barrier for the first time in the thirdquarter of 2003. Space sales were also buoyant witha year-on-year increase of 14.7 percent in 2003.

After a three-year downward slide, there arenow indications that magazine and advertisingspace sales in Germany will show a slight recoveryin 2004. Gruner + Jahr is planning to continue the in-novation offensive launched in all its publishing di-visions in 2002 with further new quality titles. It willalso seek to gain market share in its core business.

Rolf Wickmann

President, Magazine DivisionGermany untilDecember 31, 2003

Rolf Wickmann headed the Magazine DivisionGermany for 20 years until December 31,2003. It is thanks to his experience and inputthat G+J’s German magazine portfolio wassteadily expanded during the 1980s and 1990s.As of January 1, 2004, Rolf Wickmann holdsthe position of President responsible for Germanassociated companies and strategic projects atGruner + Jahr AG & Co KG. In addition to assist-ing the Executive Board on important mattersrelating to key issues, Rolf Wickmann will con-tinue to chair the Advisory Board of the HenriNannen School of Journalism, and to representG+J on the Advisory Board and at the Sharehol-ders’ Meeting of Vereinigte Motor Verlage GmbHin Stuttgart and, together with the Chairman ofthe Gruner + Jahr Executive Board, at the Share-holders’ Meeting of Spiegel Verlag.

Innovation based on strong brands. A bold, creative approach to consolidateGruner + Jahr’s special position on the German magazine market

44 GRUNER + JAHR I ANNUAL REPORT 2003 45CORPORATE DIVISION FINANCIAL PRESS/NEWSPAPERS I GRUNER + JAHR

NEWSPAPER DIVISION/BUSINESS PRESS GERMANY

INITIATED IN 2002, Gruner + Jahr’s strategy of fo-cusing on its magazine business was continued in2003 with the sale of the Group’s interests in east-ern European newspapers (published in the Czechand Slovak Republics, Romania and Serbia) and thepooling of all its business publications in Germanyinto a single division. The Newspaper Division/Busi-ness Press Germany thus enlarged in October 2003includes the FINANCIAL TIMES DEUTSCHLANDand the SÄCHSISCHE ZEITUNG, and is responsiblefor all business magazines in Germany and for coord-inating all G+J business titles at global level. The aimof this regrouping into a single division was tostrengthen the business publications and createnew growth potential.

While the FTD was able to buck the generalmarket trend and succeeded in adding both circu-lation and space sales in 2003, the business mag-azines CAPITAL, IMPULSE and BÖRSE ONLINEsuffered more heavily than any other magazine seg-ment from the weak economic situation, especiallyin sales of advertising space. The plight of the finan-cial press side was compensated to a certain extentby the highly satisfactory progress achieved by the SÄCHSISCHE ZEITUNG. The Group also realizedsubstantial assets from the sale of its activities incentral and eastern Europe .

In the fourth year following its launch, the FTDcontinued to achieve growth in circulation, coverageand advertising space sales, thereby gaining marketshares. Circulation in the fourth quarter of 2003was up by 4.7 percent year-on-year at 93,527 soldcopies. Subscriptions rose 6.3 percent to around57,000, underscoring the FTD’s high reader accept-ance and loyalty rates. The increase in circulation had

a very positive effect on reach which, according toAWA, showed a disproportionately high increase of23 percent, bringing the total number of readers to265,000. According to LAE, readership in the im-portant decision-maker target group showed aneven steeper rise of 44 percent to 92,000 in 2003.

The FTD has succeeded in establishing itselfas one of the leading opinion-shaping media inGermany. This is also emphasized in a surveyconducted by Medien Tenor, which revealed thatthe FTD was the most frequently quoted businessmedium in 2003. Numerous awards for good jour-nalism, design and marketing, plus growing ad-vertiser interest, are further confirmation that theFTD is meeting the high self-imposed quality stan-

Achim Twardy

President, Newspaper Division/Business PressGermany

dards. According to AC Nielsen, its gross advertisingrevenues rose by 20 percent. The response fromreaders and advertisers to the luxury supplementHOW TO SPEND IT was also extremely satisfac-tory. The supplement will be published six timesannually as from 2004.

Although the business magazines CAPITALand IMPULSE were both able to defend their lead-ing market position in their respective segments,their advertising space sales continued to sufferfrom the weak economic situation. With 216,169sold copies (IVW IV/03) and slight increases incoverage to 2.1 percent (MA 2003/II) and to 12.2percent (LAE), CAPITAL retained its position asthe most widely read, classic business magazinewith the highest circulation in Germany. Followingredesign and restructuring in September 2003, itnow has a new look and a broader spectrum oftopics.

In a drive to increase readership, IMPULSE, Ger-many’s leading magazine for entrepreneurs and me-dium-sized companies, was also visually revampedat the end of the year and had its content expanded,especially on topics of interest to young entrepre-neurs and others founding new businesses. A sup-plement entitled “Gründerzeit” (roughly “Industri-al Expansion”), which appeared in the FTD and aspart of IMPULSE, became the magazine with thehighest coverage for this segment in Germany.

BÖRSE ONLINE has also responded to changesin investors’ needs for information. Its detailed ana-lyses of companies and shares were supplementedin the summer of 2003 by reports on alternativeforms of investment such as bonds, funds, options

and certificates. The award of the 2003 German prizefor the protection of investors in recognition of its“practice of critical journalism” is proof that this titlerefuses to abandon its clear commitment to qualityjournalism even when times are tough.

The SÄCHSISCHE ZEITUNG once again main-tained its position as one of Germany’s leadingregional newspapers and operated at a high rate of profitability. The SZ broke new ground in theregional newspaper segment by launching a sep-arate Sunday issue in fall of 2003. The share con-tributed to the overall results by new business fieldsalso steadily increased. Repair of damage to itspremises in Dresden from the disastrous floods in the summer of 2002 was completed at considerableexpense.

With signs indicating that the downturn in thebusiness media segment was bottoming out to-ward the end of 2003, Gruner + Jahr is now ex-pecting a turnaround in 2004. This will, however,very much depend on a positive trend in the over-all economy. An upswing in business activity, par-ticularly in the financial markets, would create ad-vertising potential from which the G+J titles wouldderive above-average benefits due to their leadingmarket position. Consequently, the company is ex-pecting to see a marked improvement in earningsfrom its business publications in 2004. Increasedcooperation and exchange of experience betweenall the Group’s national and international businesstitles will be key elements in the growth offensive.The FTD will achieve stable growth and gain great-er market shares. The newspapers in Saxony willimprove their market position, both journalisticallyand financially.

Consistent brand management to strengthen business publications – FTD continues on its successful course

46 GRUNER + JAHR I ANNUAL REPORT 2003 47CORPORATE DIVISION INTERNATIONAL MAGAZINES I GRUNER + JAHR

MAGAZINE DIVISIONINTERNATIONAL

THE MAGAZINE DIVISION INTERNATIONAL

LAID THE FOUNDATIONS FOR FUTURE GLOBAL

GROWTH with the launch of a large number of mag-azine titles and special issues in 2003: FITNESS(China), GEOLENOK/GEOFOCUS (Russia), FOCUSJUNIOR (Italy), GLAMOUR (Poland), SHOPPING/ TELE 2 SEMAINES (France). Although revenues tooka dip – mainly because of the discontinuance ofROSIE in the USA and the weak dollar – the divisionmade an above-average contribution to the Group’soverall earnings with a two-digit return on sales.

The driving force behind the expansion of theinternational portfolio in 2003 was France, the sec-ond-largest market for Gruner + Jahr after Ger-many. During the course of the year, Prisma Pressebrought out 41 special issues in connection withtitles such as FEMME ACTUELLE, PRIMA, VSD,CAPTIAL, CA M´INTERESSE, GALA and CUISINEACTUELLE. With the new publication, SHOPPING,launched in May, it established a new magazineconcept in Europe which was exported during thesubsequent months to other European companieswithin the Group, with WOMAN SHOPPING inGermany and also MARIE CLAIRE SHOPPINGand MIA SHOPPING in Spain. France’s first ever bi-weekly TV program magazine was launched withthe assistance of a novel program database. Follow-ing extremely positive consumer reaction duringtest marketing in November, TÉLÉ 2 SEMAINESwas launched nationally in January 2004 and soldover one million copies from the very start. The ris-ing trend in sales of the subsequent issues makesthis title one of the most successful magazinelaunches in many years.

G+J’s big US titles like FITNESS, PARENTS andCHILD maintained or slightly strengthened their mar-ket positions despite keen competition. CHILD wasonce again able to report above-average growth of29 percent in ad pages. The economic revival failedto have any significant effect on the US magazinemarket, which continues to suffer from heavy pricepressure and falling circulation.

Gruner + Jahr had a very satisfactory year in Po-land, Europe’s strongest growth market. The launchof GLAMOUR early in 2003 further enhanced itsleading market position in the women’s segment,and overall market share expressed as revenues

Axel Ganz

President, Magazine DivisionFrance and USA

from ads and sales showed a significant rise from11.8 to12.9 percent despite very keen competition.

In Russia, the Group’s leading position in thepopular science magazine segment was furtherstrengthened by the launch of GEOLENOK, an edu-cational magazine for children and teens, and GEO-FOCUS, a popular science title. The Group can re-port continuing growth in China, where it opened upa new segment with the launch of FITNESS and en-joys steadily rising revenues. The Chinese editionof INC. was discontinued at the end of the year be-cause of unsatisfactory circulation and financial pro-spects.

G+J Spain celebrated its 25th anniversary withsales well above forecasts and various line exten-sions of existing titles. It also launched a Portugueseedition of the parents’ magazine SER PADRES,which has been on the Spanish market since 1978,in a cooperation arrangement with Motorpresse inLisbon. In Italy, G+J-Mondadori published severalspecial issues and meticulously planned the launchof FOCUS JUNIOR, a magazine for children andteens, scheduled for early 2004.

Gruner + Jahr’ s Dutch subsidiary also looksback on a successful year 2003. Its team succeed-ed in bringing the operation out of the red in onlythree years.

In January 2004, the Group’s international busi-ness was split into two separate divisions, each re-porting to its own President. This underscores theimportance G+J attaches to its international activi-

ties. While the core markets of France and UnitedStates remain under the control of President AxelGanz, the Group’s growth markets China, Italy, theNetherlands, Poland, Russia, Spain and Austria havebeen regrouped in a new division under Torsten-Jörn Klein. Forecasts for 2004 in all countries inwhich the Group does business are cautiously opti-mistic. Regardless of this, Gruner + Jahr is investinglarge sums of money to achieve significant growth.The transfer of well-known magazine titles and suc-cessful design concepts to a number of other coun-tries remains a key feature of its growth strategy.

Dr. Torsten-Jörn Klein

President, Magazine DivisionInternationalas of January 1, 2004

On January 1, 2004 Torsten-Jörn Klein took overresponsibility for all G+J’s international mag-azine business with the exception of France andthe United States. His territory at present in-cludes the Group’s subsidiary operations in South-ern and Eastern Europe, the Netherlands, Aus-tria and Asia. The decision to put responsibility forthese regions in the hands of a single Presidentunderscores the importance attached to growthmarkets in G+J’s future business developmentplans. Responsibility for France and the UnitedStates at Executive Board level will remain inthe hands of Axel Ganz.

Well-established titles and successful concepts form the basis for global organicgrowth in the world’s most international publishing house

48 GRUNER + JAHR I ANNUAL REPORT 2003 49PRINT DIVISION I CENTRAL CORPORATE DEVELOPMENT I GRUNER + JAHR

PRINT DIVISIONOperational efficiency and cost management combat stronger competitivepressures plus new contracts in the United States.

ALTHOUGH THE EUROPEAN PRINTING SECTOR

once again faced strong competitive and price pres-sure during 2003, the first signs of a marketrecovery started to appear during the fourth quar-ter. New orders acquired by G+J’s German printingplants at Itzehoe and Dresden more or less compen-sated for the volume shrinkage, which had beencaused by the slump in advertising and slimmermagazines. Both facilities continued to run at thesame level of capacity as last year. Gruner + Jahrsucceeded in defending its no. 2 position in the roto-gravure sector, implementing a radical cost man-agement program to cushion the effects of per-sistently high price pressure. The Itzehoe plantlaunched an efficiency drive designed to keep itcompetitive in the long term.

The Print Division reports good results, especiallyfrom the United States, where the upward trend al-ready evident in 2002 was consolidated during theyear under review. The Brown Printing Company’sacquisition of the contracts to print the three well-known US magazines Time, People and Sports Illus-trated for Time Inc. has further strengthened its pos-ition as the fourth-largest magazine printer in theworld’s largest magazine market. A new rotary pressnow on stream at the East Greenville (PA) plant hasincreased capacity by 20 percent. The Woodstock(IL) plant has slashed unit costs even further withfour new high-performance gang stitchers. The USprinting operations maintained their return on salesand contribution to earnings at last year’s level.

The Print Division is expecting the year 2004 tobring slight volume increases as the market forprinted products gradually recovers. As the US mar-ket is generally in better shape, the recovery therewill probably be more pronounced than in Europe.The beneficial effects of upward market trends dur-ing the current year are once again being augmen-ted by cost-management and efficiency programs.In Europe, Gruner + Jahr is planning to strengthenits leading position in the rotogravure sector by in-tensifying cooperation with other market sectors.

Volker Petersen

Managing Director,Print Division

CORPORATE DEVELOPMENT

DURING THE COURSE OF 2003, most advertisingmarkets reported a slightly positive trend – but not soGermany, however. As a result, Corporate Develop-ment has brought forward its intensified analysesand programs with regard to future profit growth inexisting markets, as well as penetration and devel-opment of new markets and new business.

In 2003, Corporate Development (CD) workedclosely with the operating companies to rethinkand restructure Gruner + Jahr’s innovation process.Acting as an umbrella forum for coordination aswell as an ideas foundry, CD managed the newWIN (World Class Innovation) Program, which wasfounded in 2003. The first, impressive results we-re not long in coming. The successful introductionof a number of new titles in most markets provedthat growth is still possible in a saturated market.

Nevertheless, there are indications that thegreater potential for growth in turnover and resultslies in new market segments in Gruner + Jahr coreterritories and in new geographic markets. CD spentthe past year working on market risk and opportu-nity analyses for the operative companies. Thesestudies not only took into account the level of com-petition and specific market potential, but also thesocial, political and overall economic developmentsin the territory.

The threat to “conventional” print media posedby technological developments, particularly in theelectronic field (e.g. e-paper, online advertising etc.)– as well as the inherent opportunities – also fea-tured strongly in our work over the past year.

CD pursued a number of interesting acquistionprojects in 2003. We will quite possibly see initialgrowth results for Gruner + Jahr arising from this in2004.

Consolidation of costs and optimizing process-es, the so-called CAP Program, is something CD hasbeen involved in since the beginning of 2001. Wecontinued our solid work in this area alongside thenewer projects, but CAP grew into such an accept-ed and active “brand” throughout the whole com-pany that it is now no longer necessary for CD toplay such a large controlling and managing role.

Martin Stahel

Member of theExecutive Board,Corporate Development

Is there a formula for growth in mature markets?

50 GRUNER + JAHR I ANNUAL REPORT 2003 CENTRAL SERVICES I GRUNER + JAHR 51

CENTRAL SERVICESCreation, implementation and marketing of know-how – an internal division aswell as an external services provider

OUR AIM IS TO OPTIMIZE WORK PROCESSES, de-velop shared services, standardize systems andidentify and make use of potential synergies andopportunities for increasing operating efficiency.The Central Services Division further enlarged itsportfolio of services in 2003 – in the fields of HumanResources, Accounting, Corporate Finance, Informa-tion Technology, Internal Administration, Paper Pro-curement and Legal Services. Closer attention waspaid to identifying opportunities for marketing ac-quired know-how externally instead of confining itsapplication to the Group’s own operations. TheBusiness Service Company BSC formed for this pur-pose (and working a full 40-hour week) has mean-while acquired a number of external customers whonow use internal Group services in areas such as IT,facility management and human resources.

Activities during 2003 focused on informationtechnology. The responsibilities of the Chief Infor-mation Officer (CIO) were upgraded to global levelwith a brief to develop a new worldwide Group ITstrategy with interfaces to all countries and spe-cialist divisions. An inventory of all G+J’s interna-tional IT activities was one of the first steps towardthe creation of a reliable and efficient internationalIT infrastructure. Further standardization of systemswas achieved with the installation and startup ofSAP business software in Italy and initiation of anSAP project in Spain. The Group’s central IT functionalready provides over1,100 SAP users with services,works for seven foreign subsidiaries and managesdata on 3.5 million subscribers.

IT and Internal Administration gave an impres-sive demonstration of their efficiency when theysuccessfully installed a new telephone system withsome 3,000 telephones in a single weekend. A cus-tomer survey led to the signing of a contract with anew PC support provider. Other IT projects includedthe outsourcing of PC support to an external ser-vice company. Internal Administration created an on-line travel portal capable of handling reservationsand other business travel formalities for companyemployees, including the electronic processing of allapproval and other processes.

Dr. Martin Schuster

Member of theExecutive Board,Central Services

In addition to its old-established ManagementCollege and other career development activities,Human Resources has set up a special develop-ment program for upcoming young talent. An Intra-net-based self-service portal introduced in 2003now enables a large portion of G+J staff to retrievedata such as bank account details, addresses, vaca-tion dates etc. and make amendments to thesethemselves. Sport facilities available to G+J staffhave been enlarged to include golf, women’s row-ing, “back power” and yoga.

Corporate Finance made further progress onthe integration of internal and external reportingprocedures, and the production of reports has nowbeen more or less completely automated. Incominginvoices are registered automatically by a new multi-font reading software. An internal accounting aca-demy offering two parallel, two-semester trainingcourses for accounting staff has been formed.

Central Services Division will continue to expandits portfolio of services for the company and itsemployees during 2004. Projects now in preparationinclude systems for electronic and mobile orderprocessing and modernization of computer workstations.

Corporate Finance will make a significant con-tribution toward the improvement of corporate con-trol with the introduction of a new system for pre-paring the consolidated annual financial statementsand optimizing reporting procedures.

Gruner + Jahr is the leading journalistic player in a highlycompetitive market. It produces top quality and marketspremium brand names.This makes G+J the top name in thepublishing and media sector for people seeking to make acareer in that field. The fact that it is an attractive employermakes it essential for G+J to give high priority to the qual-ity of its activities in the areas of recruitment, basic and fur-ther training and career development (e.g. the Henri NannenSchool of Journalism, apprentices, trainees, cooperationwith Nordakademie, appraisal interviews, preliminary train-ing periods for school-leavers) in accordance with its creed‘People and Brands.’ Because the Group attaches such great importance to itsinternational activities, its objective is to ensure that thiscreed is practiced both in Germany and in its other marketsin Europe and overseas.

For more informations about Gruner + Jahr’s activities in thisarea, visit www.guj.de

AN ATTRACTIVE

EMPLOYER

ENVIRONMENT I GRUNER + JAHR 5352 GRUNER + JAHR I ANNUAL REPORT 2003

Natural and cultural treasures in Europe’s heartland

The Living Elbe

GRUNER + JAHR I ANNUAL REPORT 200354 ENVIRONMENT I GRUNER + JAHR 55

THE ANGLERS OF THE SAXONY STATE AGRICUL-

TURAL INSTITUTION landed a big one back in Octo-ber 2002 – a female salmon 94 centimeters long andweighing 6.7 kilograms. Along with 23 others of thesame species, she was making her way up the ElbeRiver to the stream where she had once hatched.One of this swarm was making the strenuous jour-ney upriver from the Atlantic for the second time.That is very unusual because adult salmon normal-ly die after mating and laying their eggs.

The salmon is only one of the creatures makinga spectacular reappearance in this river, which wasformerly polluted with heavy metals and other tox-

ic substances. Biologists are now frequently re-porting freshwater lampreys, loach and even seatrout in the Elbe tributaries in Saxony and Saxony-Anhalt. “There are now 94 species splashing aroundin the Elbe,” rejoices Heinrich Reinecke, the Headof the Committee for Prevention of Elbe Pollution.“That’s more than in the Rhine.” This is an indica-tion that the river is once again biologically intact.

It’s also something of a miracle since this east-west flowing river has long been regarded as Eu-rope’s biggest sewer. More than 200 sewage treat-ment plants now stand on the banks of the Elbe.

Many of the worst industrial polluters, like the Bit-terfeld chemical industry, have been closed down.Even in the river’s upper reaches in the Czech Re-public, chemical manufacturers that still pump theireffluent into the river are first treating it in purifica-tion plants. The success rate can be expressed infigures. Heavy metals such as mercury and toxicchlorinated hydrocarbons have more or less dis-appeared, and a wide range of fish and inverte-brate species are once again flourishing in the river.

The big cleanup has made the river more attract-ive to the people living on its banks. The First inter-national Elbe Swimmingday organized in July 2002

by Gruner + Jahr and the German Environmental AidOrganization was a huge success. Over 80,000friends of the river celebrated the Elbe’s recovery at55 locations in the Czech Republic and Germany.More than 5,000 swimmers plunged into the coolriver water. This was an encouraging experience forRoberto Epple, one of the event’s main organizers:“If you love something, you protect it.”

And there is certainly plenty to protect. From itssource in the Czech Republic to its mouth at Cux-haven, the Elbe flows through no less than fivenational parks and one biosphere reserve. Originat-

ing at a height of 1,384 meters in the granite moun-tains of the Riesengebirge in the Czech Republic atthe confluence of three tiny rivulets issuing fromsurrounding peat bogs, the official source of theLabe (as the Czechs call the Elbe) is marked by aring of stones. This is the unspoiled homeland ofthe mythical figure Rübezahl, and was declared anational park in 1963 – seven years before Ger-many’s first national park in the Bavarian Forest.

On the Czech-German frontier, the river cutsthrough the picturesque Elbsandstein mountainrange. During the course of 100 million years, theriver has gradually eaten its way through the 150

million-year-old sediments of the Jurassic Sea. TwoSwiss painters, who worked there 200 years ago,gave it its present nickname – Bohemian-SaxonSwitzerland. The painter Caspar-David Friedrich al-so found innumerable motifs in the region’s steeprock faces, limestone ridges and deep canyons.

The “Flusslandschaft Elbe” biosphere reserve onthe border between Saxony and Lauenburg in Schles-wig-Holstein is a veritable jewel of nature. A’ UNES-CO World Heritage Site, it covers an area seventimes as large as Lake Constance and includes fea-tures such as Europe’s largest alluvial forest and

22,000 free-standing oak trees. This is the only placewhere the beaver, once native to the whole of centralEurope, has survived, and it is the nursery for seve-ral species recolonization projects in other parts ofGermany.

Here, at the former frontier between Easternand Western Europe, Nature has been able to re-tain much of its charm and character. Along theline where ideological differences separated thehuman population for more than 40 years, the Elbefunctioned as a natural border and did not degene-rate into the tamed waterway that it often becameelsewhere.

The disastrous floods along the Elbe and itstributaries in the summer of 2002 once again de-monstrated that rivers today need broader floodplains than was formerly the case. At the bend in theriver nicknamed the Evil Place near the small townof Lenzen in Brandenburg, thousands of sandbagslying on the dike bear silent witness to theHerculean efforts of the hundreds of volunteerswho saved the local population from the flood wa-ters. To prevent it happening again, there are nowplans to rededicate an area of 450 hectares of theriver’s former flood plain. A new, seven-kilometer

Commerce and culture:

line the banks of the Elbe between Ham-burg’s ultramoderncontainer port and theDresden, the “Florenceof the Elbe”

Fish are biting again:

Salmon and otherspecies are back in theElbe – thanks tointensive efforts to im-prove the quality of the river’s water

“Gruner + Jahrcontributestoward pre-serving, culti-vating andcarefully de-veloping thenatural and cul-tural treasuresof the Elbe,from sourceto mouth andwithout re-gard to nation-al borders.” Angelika Jahr-Stilcken,

Member of the ExecutiveBoard, Gruner + Jahr

GRUNER + JAHR I ANNUAL REPORT 200356 ENVIRONMENT I GRUNER + JAHR 57

A wealth of significant natural and

cultural treasures are to be found

along the banks of the Elbe. How

can they be protected as effectively

as possible?

International conventions and pro-grams already provide protectionfor a number of outstanding natu-ral features as wetlands, biospherereserves and, in a few exceptionalcases, “world heritage sites.“ Thiskaleidoscope of different terms fornatural areas requiring preserva-tion, all with different legal inter-pretations and degrees of protec-tion, highlights the need for anintegrated nature conservation sys-tem for the whole Elbe valley con-sisting of nature reserves and in-terlocking areas. This would createa protected area along the wholelength of the Elbe, in which theplaces identified as part of ourworld heritage would stand out likeglittering pearls in a long chain.

How will the recognition of certain

areas by the UNESCO World Heri-

tage Convention help?

Recognition by the UNESCO WorldHeritage Convention often has amagnetic effect on tourism. Buteven more important is that theinternational community actuallyensures that the heritage is pro-tected and cared for, so that impor-tant natural and cultural assets arepreserved for future generations.Many signatory states of the WorldHeritage Convention seek to polishtheir international image by doingexemplary work to preserve theirnatural and cultural heritage. Ex-perience has shown that pressurefrom international media and theso-called “reputation factor” arehighly efficient tools for preserving

world heritage. For example, theauthorities behind a massive buil-ding project planned in Potsdam,which would have adversely affec-ted the Palace of Sanssouci, relent-ed at the last minute in order toavoid being put on the World Her-itage’s “Red List.”

The First international Elbe Swim-

mingday received an enthusiastic

welcome from the population. How

can the people living along the

banks of the Elbe be more closely in-

volved in the preservation and care

of the Elbe valley?

The First international Elbe Swim-mingday certainly confirmed theclose bond existing between theriverside population and their river,and also that the strong support foran unspoiled Elbe River is produc-ing a better quality of life. But publicappreciation of the importance ofmaintaining or regenerating eco-logical systems in the Elbe’s catch-ment area as a crucial feature ofplans for protection against flood-ing and as a long-term investmentis still too low. A lot of educationaland sensitization input will be need-ed in order to project the image ofa living Elbe as one of Europe’s fewremaining unspoiled rivers – notjust locally, but also at the natio-nal, European and internationallevel. One crucial requirement is toachieve a high degree of environ-mental awareness and commit-ment to the care of natural assetsamong younger generations. Theywill have to be educated to becometomorrow’s protectors of our worldheritage.

Parts of the valleys of some of Eu-

rope’s great rivers such as the

Danube, the Rhine and the Loire are

already on the world heritage list.

What has to be done to get the Elbe

included?

The listed regions are invariablysections of a far longer river valley.The problem is that areas of scenicbeauty in river valleys normally liealong a long corridor in which awhole host of players, especiallymunicipalities, are involved, andmay also cross state or nationalfrontiers. The natural reserve sys-tems urgently need to network andintegrate their efforts. All of thepolitical instances, from local up tonational level, must pull together.

What financial impetus can a UNES-

CO commendation bring?

It can upgrade a region consider-ably. Many tourist organizationsspecialize in marketing UNESCOWorld Heritage regions with spe-cial offers for tourists seeking uni-que travel destinations. The Elbevalley could obtain synergistic be-nefits from its blend of UNESCOCultural Heritage features and na-tural scenic beauty. This would at-tract and form durable links withpeople interested in both cultureand regions of natural beauty.

Could recognition of an area as

part of World Heritage have spin-

off effects on neighboring areas?

The case of the Dessau-Wörlitz gar-den landscape demonstrates howWorld Heritage can make a crucialcontribution to a region’s develop-ment. Culturally and ecologicallysensitive tourism can help createsecure jobs and incomes in a placerecognized by the World HeritageConvention, thus benefiting thewhole region.

overflow dike is being erected farther away from theriver and the old dike is being breached at six pointsto allow the annual floodwaters to spread out with-out causing damage. 400,000 oaks, elms and alderswill be planted on the new flood plain to restore thealluvial forest that existed here until just 300 yearsago. “It’s a sort of pilot project,” emphasizes TimSchwarzenberger, who is in charge of the refore-station. “It will be an opportunity to demonstratethat nature preservation, flood protection and revi-val of tourism can get along very well together.”

The people of Dresden know all about the dan-gers of flooding. The inhabitants of “Florence on the

Elbe” have taken great pains not to squeeze theirriver into a tight corset. Dresden’s Elbe meadowsare unique in Europe – a largely undeveloped floodplain 35 kilometers long that is flooded when highwater comes. The meadows are a favorite recrea-tion area for the people of Dresden and the habitatof rare species such as the corncrake, kingfisher andblack kite.

But it is not just the Elbe’s spectacular naturalscenery that is worth discovering. Whole chaptersof the world’s history have been written in townslying on this 1,091-kilometer river running through

Europe’s heartland. It was here that significant so-cial, cultural and architectural changes were born.Martin Luther triggered the Reformation when hestuck his theses on the doors of Wittenberg’sCastle Church in1517.The Luther Memorial in Wit-tenberg was officially recognized as the authen-tic scene of the Reformation and a cultural heri-tage of the human race by UNESCO in 1996 – as isthe Bauhaus in Dessau, erected by Walter Gropiusin 1925 and the symbol of the Bauhaus school ofarchitecture, which introduced revolutionary ideasin architecture and urban planning between 1919and 1933.

Another visionary creation on the banks of theElbe is Hamburg’s Speicherstadt, erected towardthe end of the 19th century near the city’s then newfree port. Its seven-story, red-brick, neo-Gothicbuildings remain the largest contiguous warehousecomplex in the world. Like its source, the mouth ofthe Elbe is embedded in nature reserves.Here, thewater from this great European river disperses in-to the North German coastal flats and the North Sea.The mouth of the Elbe is where the adult salmon col-lect to start their arduous journey back to the streamswhere they were born.

Nature prevails intact

along severalstretches of the Elbe

G+J launched the Liv-ing Elbe project to-gether with the GermanEnvironmental AidOrganization in 1987. Itsupports a network of more than 400 activeenvironmental organ-izations along the ElbeRiver and has devel-oped a plan for conser-vation of the river from its source to itsmouth. The long-termaim is to have parts of the Elbe valley’s uni-que areas of naturalscenic beauty includedin UNESCO’s WorldHeritage Register.

Professor Bernd von

Droste zu Hülshoff

was the first Directorof the UNESCO’sWorld Cultural HeritageCenter in Paris andnow works for UNESCOas an adviser on worldheritage

“ELBE – WORLD HERITAGE STATUS IS A MUST”An interview with Prof. Bernd von Droste zu Hülshoff

ENVIRONMENTAL REPORT 2003 I GRUNER + JAHR 5958 GRUNER + JAHR I ANNUAL REPORT 2003

ENVIRONMENTALLY CONSCIOUS OPERATION isa key corporate principle at G+J. The G+J manage-ment approved a corporate environment policy backin 1991.This called for separate waste collection andrecycling/disposal facilities, the use of environmen-tally compatible and non-injurious office materialsand economical use of energy and water resources.

The G+J printing plants at Itzehoe and Dresdenwork to the highest technical and ecological stan-dards. They are as efficient as possible in their con-sumption of energy, paper and ink. Gruner Druck inItzehoe was the first printing operation in Germanyto introduce integrated quality and environmen-tal management. Quality and environmental auditsbased on the international DIN EN ISO 9.001 and14.001 normswere performed and a process-orien-ted management system designed. This meansthat all stages in the work flow are designed to con-form to the norm requirements. Members of thecompany’s staff do not have to worry about wheth-er they are complying with the norms in their every-day work because they do this automatically whenfollowing standard procedures.

PAPER Paper is an important raw material for aprinting and publishing house like G+J. The paperused for printing must be manufactured to themost stringent environmental standards. These in-clude the use of wood pulp obtained from compa-nies practicing regenerative forest management,environmentally compatible cellulose and papermanufacturing processes, environmentally compati-ble printing inks, and paper recycling. No wood fromforests worthy of preservation may be used in themanufacture of paper for G+J.

Together with other German publishers andpaper manufacturers, G+J has drafted certificationcriteria for ecological forest management. As a mem-ber of the VDZ Environmental Work Committee,

How Gruner + Jahr helps protect the environment: with the economical use of precious resources as well astargeted campaigns and projects

ENVIRONMENTALCOMMITMENT AT G+J

G+J supports and sponsors communication andregional coordination between economic, ecologi-cal and social interest groups on matters relatingto definition of the degree of protection needed byforests. For ecological reasons, all G+J’s Germanmagazines are printed on chlorine-free bleachedpaper. The wastepaper content of our magazineshas now reached levels ranging from 15 percent(e.g. STERN) to 33 percent (GEO). G+J newspapersare printed on paper produced entirely from recycledwastepaper.

INITIATIVES The environment is also a prominenttheme in G+J magazines and newspapers. Articlesin STERN, GEO, BRIGITTE and ELTERN uncover en-vironmental scandals, support campaigns and givetips for protecting the environment. Business mag-azines like CAPITAL and IMPULSE promote out-standing environmental innovations in the businessworld. “Eco funds: not just for the sneaker-wearingset” – was the title of an article in the FINANCIALTIMES DEUTSCHLAND. G+J magazines and news-papers are constantly launching campaigns encour-aging readers to support ecological projects.

One shining example of this was the “GEO Pro-tects the Rain Forest” initiative, which has helpedto found or sponsor just under 50 environmentalprotection and development projects in the tropicssince its launch in1989. With the slogan “GEO helpsthe bean,” the association organized the import andsale of wild coffee from the Ethiopian Highlands, thecoffee plant’s natural habitat. This helped to makethe harvesting of wild coffee beans profitable onceagain for farmers in the province of Kaffa and to pre-serve the variety of plant species in the wilds ofEthiopia.

It is spreading to many other countries as thecompany expands internationally and exports itsmagazine titles. G+J gives financial support to theNatural Resources Defense Council (America’slargest nature preservation association) in the Unit-ed States. The Italian magazine FOCUS has been co-

operating with the private nature conservation as-sociation Legambiente since 2002 in a campaign forclean seaside resorts. FOCUS paid for the produc-tion and circulation of several thousand posters tomunicipalities and supported Clean Beach cam-paigns with reports and appeals to the public to re-commend extremely clean beaches and denouncedirty ones.

NATURE ON YOUR DOORSTEP G+J, which pro-duces some of its magazines and newspapers inHamburg and Dresden, both cities situated on theElbe River, has a strong commitment to this greatEuropean river and the people living on its banks.The Living Elbe project launched jointly by Gruner+ Jahr and the German Environmental AId Asso-ciation in 1997 has developed a comprehensiveplan for the preservation of the river and its valleyfrom its source in the Czech Republic to its mouthat the North Sea. The project supports more than400 environmental organizations working in variousregions along the river and promotes interest inthe Elbe valley amongst children with its “Schoolsfor a Living Elbe” campaign. Children at over 200schools are now testing water quality, preparing re-ports on pollutants and investigating how the landbordering on the river is used.

The “GEO Day of Species Diversity” founded in1999 is now an established institution. It is a projectfor exploring Nature on one’s own doorstep. Nowthe largest field research undertaking in Europe, itinvolves tens of thousands of experts and laymenwho set out each year on the first weekend in Juneto catalog the fauna and flora they find in streams,meadows and woods. The project aims to bridgethe gap frequently existing among the general pub-lic between interest in the environment on the onehand and lack of knowledge of the plant and animalkingdoms on the other. It represents an importantstep toward eradicating the misconception thatthere is no longer anything of natural interest orbeauty to be discovered in central Europe.

60 GRUNER + JAHR I ANNUAL REPORT 2003 ENVIRONMENTAL REPORT 2003 I GRUNER + JAHR 61

62 GRUNER + JAHR I ANNUAL REPORT 2003 63CORPORATE RESPONSIBILITY REPORT 2003 I GRUNER + JAHR

CORPORATE RESPONSIBILITYREPORT 2003How Gruner + Jahr takes the initiative with many projects when it comes to social,cultural and ecological issues and sponsors art, science and young talent.

Gruner + Jahr’s exhibitions are a valuable contribu-tion to cultural life, with an impact extending far be-yond the borders of Hamburg. Over 60,000 peoplevisit the G+J Press Building on Hamburg’s Baum-wall each year to see international exhibitions likethe German premiere of the World Press PhotoAwards (an event organized jointly by STERN, GEO and Deutsche Bahn) and the“ausgezeichnet”(Award Winners) exhibition. This displays the workof upcoming young talent that has won awards like the BFF (Association of Freelance PhotographicDesigners) prize, the Reinhart Wolf prize and theKodak prize for young photographers.

SPONSORSHIP OF YOUNG TALENT.

Gruner + Jahr attaches particular importance tosponsoring upcoming young photographic talent.The publishing house supplemented the photo-graphs regularly displayed in the foyer of the G+Jbuilding in 1998 by the opening of Galerie 11, andhas been providing this platform for experimentalartistic photography by young photographers forsix years now. Exhibitions here such as AutomatonPictures by photographic artist Jan Wenzel andFreckles Portraits by Michael Neugebauer havearoused great interest.

ACCEPTANCE OF SOCIAL RESPONSIBILITY

Gruner + Jahr’s magazines inform, entertain and fas-cinate the public. They also stand for top-quality jour-nalism. As an internationally active publisher, wemake a significant contribution to public debate andto the formation of global public opinion. Conse-quently, we wholeheartedly recognize the need tocomplement our entrepreneurial objectives with ac-tive social responsibility. First and foremost in thisregard come our staff because they are the key toour success. Next comes our concern for the futureof the human race and the need to promote a dia-log with the public. Modern environmental manage-ment, social commitment and the sponsorship ofart, culture and photography are important facets ofthe G+J corporate culture.

SPONSORSHIP OF ART, CULTURE AND PHOTO-

GRAPHY

“As Europe’s largest magazine publishing house,we are dedicated to sponsoring quality photo-graphy. Our magazines STERN and GEO stand forthe continuing significance and power of the pho-to throughout the world,” declared Bernd Kundrun,President and CEO of Gruner + Jahr, at the Germanpremiere of World Press Photo.

Gruner + Jahr and the Hamburg Association ofFriends of Photography also organize viewings ofthe portfolios of young photographers twice a year.

CULTURAL DIVERSITY

G+J makes an active contribution toward the diver-sity of Hamburg’s cultural scene. In addition to sup-porting the International House of Photography, thecompany has also been sponsor of the HamburgState Opera and the German Music Foundation formany years. Backing is also given to a number ofsmall neighborhood art projects and to the activitiesof the Hamburg Cultural Foundation.

ART OF AUTHORSHIP

G+J magazines have founded a host of valuable pri-zes and writers’ competitions. The spotlight switch-es once a year to journalistic reporting whenSTERN’s Egon Erwin Kisch Prize is awarded. Thisprize is Germany’s most celebrated journalisticaward and commemorates the reporter of thatname who once worked for STERN. Hundreds ofnewspaper and magazine journalists compete forthe coveted prize every year. The Bettina von Arnim

Literature Prize, awarded every two years by BRI-GITTE magazine, is another prize dedicated to thepower of the written word. (Winners of this compe-tition for German short-story writers include DorisDörrie, Christiane Krause and Markus Ramsmeier.)

SCIENCE AND EDUCATION

The women’s magazine BRIGITTE founded the ITAcademy for Women in 2001 with a view to im-proving women’s opportunities on the labor mar-ket. The academy provides IT courses for begin-ners and also women in and out of employmentseeking to improve their basic knowledge of ITand test their potential for a career in one of the jobsin this new field. The IT Academy for Women nowhas a German national network of 36 training es-tablishments offering a total of over 130 courses.The IT Academy for Women is a joint initiativewith Siegen Technology Center. It receives finan-cial support from the North-Rhine-WestphalianEconomics Ministry.

Popular with the public: Crowds flock to the G+J-exhibitions

Winner: Stefan Willeke (Die Zeit) is presented withthe Erwin Egon Kisch Prize 2003

65CORPORATE RESPONSIBILITY REPORT 2003 I GRUNER + JAHRGRUNER + JAHR I ANNUAL REPORT 200364

YOUTH RESEARCHES

“Youth researches,” an idea born by STERN, has de-veloped into the biggest scientific and technologi-cal competition in Europe. Following the project’sgreat success and the impressive scientific resultsemerging from it, the nonprofit foundation Jugendforscht e.V. was founded in1975. The prize is award-ed for unusual work, for example, a solar-poweredWalkman, a digital watchdog for computers, and anadhesive containing no solvents in 2003. The Fed-eral German Ministries of Education and Scienceand Research and Technology are involved in thisSTERN initiative, together with a large number of in-dustrial sponsors.

THE FIGHT AGAINST XENOPHOBIA

Reacting to the worrying increase in neo-Nazi acti-vities in Germany, STERN magazine launched thecampaign “Mut gegen rechte Gewalt” (roughly“Courage to Oppose Rightwing Violence”) to com-bat hate, discrimination, racism and intolerance.One very effective pilot project organized in con-nection with this campaign is EXIT, which providesindividual assistance and advice to people wish-ing to terminate their association with neo-Nazi andother rightwing groups and organizations.

ENABLING THE BLIND TO READ

Through its STERN magazine, Gruner + Jahr hasbeen engaged in work to help blind and partiallyblind persons for nearly 40 years. Henri Nannen andGerd Bucerius together developed a magazine forthe blind in 1968.This has since been used in a non-profit project under which selected articles fromSTERN and the Zeit newspaper appear in a 52-page magazine published at 14-day intervals andcirculated to some 2,500 blind and partially blindreaders, and also to several institutions for the blind. BRIGITTE and GEO now also produce pub-lications for the blind. BRIGITTE has all the textstranslated into Braille and circulates them either by e-mail or floppy disk. These can either be con-verted into Braille dots with a special PC keyboardor read out loud electronically. The “Taped News-paper for the Blind” campaign produces a monthlyaudio issue of GEO magazine.

HELPING PEOPLE

Ever since its launch in 1996, GEOLINO has pub-lished a monthly report publicizing UNICEF’s work.The UNICEF Photo of the Year competition was alsosponsored by GEOLINO in 2001 and 2002, and thesponsorship was taken over by GEO in 2003. The

winning entries in this international competition arephotographs forcefully depicting the circumstanc-es in which some children live. Gruner + Jahr alsogives assistance to people closer to home. An in-itiative entitled “Silver Lining – People Help People”was launched in 1996 by the SÄCHSISCHE ZEI-TUNG and converted into a foundation in 2003.Working with over 330 charitable organizations,this foundation now helps deserving cases in thestate of Saxony, especially victims of violence, han-dicapped and mentally or chronically ill persons.

CHARITABLE DONATIONS

In addition to its nonprofit projects, Gruner + Jahrmakes charitable donations and publishes fund-raising advertisements. Its staff also takes social re-sponsibility very seriously. The proceeds from theChristmas bazaar organized by staff members havegone to Hamburg charities for the last 25 years.

AN INTERNATIONALLY ACTIVE ORGANIZATION

HAS OBLIGATIONS

In order to enable young people to experience thebenefits of international contacts, Gruner + Jahr

sponsors international youth exchanges with itsCome on! project. Children of G+J employees canspend a summer as guests of a family in France,Italy, Spain, Poland, Russia, the United States orGermany, learn the language and experience thelocal culture while interacting with the local chil-dren. G+J also sponsors transatlantic dialog be-tween journalists by giving financial support tothe Arthur F. Burns journalist exchange program.The work of G+J’s US employees deserves spe-cial mention at international level. They go onceweekly to a primary school in Manhattan, wherethey teach dyslexic children. Another example,from the French Gruner + Jahr subsidiary, PrismaPresse, is its sponsorship of the association “Achacun son Everest,” which organizes adventuretours in the mountains for children with cancer,with both financial donations and reports publiciz-ing the association’s activities.

Courage to oppose right-wing violence: Familiesminister Schmidt supports the STERN campaign

Service: A jointly produced magazine for the blind ispublished biweekly

UNICEF photo of the year: Patron Christina Rau chatswith other exhibition visitors

Christmas bazaar: G+J boss Bernd Kundrun handsover the proceeds

CORPORATE RESPONSIBILITY REPORT 2003 I GRUNER + JAHR 6766 GRUNER + JAHR I ANNUAL REPORT 2003

An icon for the year 2003: This photo, taken in Iraq by Jean-Marc Bouju, won the World Press Photo Award

How Gruner + Jahr became anacknowledged institution for a hostof art and photo exhibitions at its Press Building on Baumwall

THE POWER OFIMAGES

69

PHOTOGRAPHS ARE AN INTEGRAL PART OF RUTH

EICHHORN’S LIFE. But an assignment involving theinspection and evaluation of some 23,000 photo-graphs in the space of five days and selecting thebest of them was a little unusual even for her, theChief Photographic Editor of the GEO family ofmagazines. “It was an emotional roller coaster ride,”says Ruth, who was appointed a member of theWorld Press Photo jury for the first time this year.World Press Photo is the biggest and most presti-gious prize awarded for photographic journalismanywhere in the world. What the nine-member,international jury of photographers, picture editorsand agency representatives gets to see and adju-dicate does not always depict the world’s prettiestside. There are plenty of pictures of war and conflict,of injured, dead and mutilated people, which areredolent of misery, pain, despair and hopelessness.“Pictures that sometimes make me want to closemy eyes,” says Ruth. Actually, the jurors only get tosee about one third of the 63,000 or so entries.40,000 fail to pass the initial screening by a prelim-inary jury, which sets high standards of technicalperfection, composition and news relevance.

The object of the prize, which has been awardedfor the last 47 years, is to acknowledge the work ofprofessional press photographers and also to giveencouragement to upcoming young talent. Gruner+ Jahr has been supporting the work of World PressPhoto in Germany for the past ten years. Photo-graphy is one of the focal points of the exhibitionsorganized and staged by Gruner + Jahr, which coop-erates on the projects with a number of its mag-azines (STERN, GEO etc.). The projects include notonly World Press Photo, but also the BFF and Rein-hart Wolff Prizes, as well as exhibitions of the workof young photographers in the so-called Galerie11.The World Press Photo prizes regularly awarded to STERN and GEO are ample proof of the highphotographic standards set by these magazines.Peter Bialobrzeski’s series Megacities of Asia tookaway first prize in the Art and Entertainment cate-gory in 2003. Pictures from this series were pub-lished in the GEO report entitled The Turbo-Cities.Also published in GEO was Horst Wackerbarth’sphoto The Red Couch: Tourist Guide Klara Sigur-dottir, which won 3rd prize in the Art and Enter-tainment category.

The countdown is on: The exhibition team has just two days to get all 200 photos of the World Press Photo Awards hung

EXHIBITIONS AT THE

PRESS BUILDING ON

BAUMWALL

(SELECTION)

A MAGIC WEB –

THE FOREST OF

BARRO COLORADO

Photographs byChristian ZieglerGalerie 11

AUTOMATON PIC-

TURES

Photographs by JanWenzel, Galerie 11

WORLD PRESS

PHOTO 2002

FRECKLES

Photographs byMichael Neugebauer Galerie 11

THE MAGIC OF THE

COUCH. INSIGHTS

INTO THE HOLY OF

HOLIES OF PSYCHO-

ANALYSIS

Photographs byClaudia Guderian Galerie 11

“TELL ME ABOUT

LIFE”

A BRIGITTE exhibi-tion with photo-graphs by Ilse Thoma

IN THE GARDEN

Photographs by Ulrike Thiele Galerie 11

FUTURE ONE

Photographs by Marcus Höhn Galerie 11

CORPORATE RESPONSIBILITY REPORT 2003 I GRUNER + JAHR

GRUNER + JAHR I ANNUAL REPORT 200370 CORPORATE RESPONSIBILITY REPORT 2003 I GRUNER + JAHR 71

While the jurors were burning the midnight oildiscussing the photographs in Amsterdam at theend of February, preparations for the big premiereof World Press Photo Award were getting underwayin Hamburg. This premiere is traditionally held inGermany at the Gruner + Jahr Press Building onHamburg’s Baumwall toward the end of April andis regularly attended by up to 1,000 invited guests.Painters, sound and light technicians, decorators,security officers and, of course, caterers have to bebriefed and coordinated. The team responsible forthe exhibition also has to send out invitations, holdmeetings with sponsors and make preparations forthe press conference. But the most difficult bit hasstill to come. Two days before the opening of theexhibition, the prizewinning photos arrive in Ham-burg by airfreight, all framed and packed in specialcrates. Along with a representative of World PressPhoto, the Gruner + Jahr setup team sets to workon hanging them. No easy task when you havesome 200 photos in a variety of formats and clas-sified into nine often widely divergent categories like Hard Facts, Everyday Life, Nature, and Art andEntertainment. Can pictures of the war in Liberia beplaced next to pictures from the world of sport? Canyou hang black-and-white next to color photos?

“If you place the pictures correctly, it’s like taking thevisitor by the hand and leading him through the ex-hibition,” Karen Fromm explains. She speaks from ex-perience. The pictures are hung at an average heightof 1.65 meters in such a way that the viewer’s gazewanders from left to right. “It’s like reading,” sheadds. The visitor’s eyes are skillfully steered toward

certain highlights of the exhibition. Before going upon the wall, the pictures are propped against thescreens, shifted around and rearranged time andagain. By the time the two curators are satisfied, itis getting close to midnight.

Work starts at the crack of dawn on the day ofthe premiere. Steeplejacks affix a 9 x 7-meter pos-ter announcing the exhibition to the wall of thePress Building facing the river. Fifty journalists and four camera teams come to the morning pressconference. The catering service starts deliveringfood and drink from midday onward. By the end ofthe evening, the guests will have consumed around5,000 snacks, 450 liters of water, 200 liters oforange juice and about the same quantity each ofbeer and wine. Rearrangement of the furniture and decoration of the foyer begins during the after-noon. At the last minute, a snap decision is madeto remove the floral decorations. “The lush bou-quets seem out of place when you look at some ofthese horrifying pictures.” The first guests arrive at7 p.m. Ruth Eichhorn is among them.

Had it been her decision, another photo wouldprobably have won. The winner at World Press Pho-to, taken in southern Iraq by French photographerJean-Marc Bouju, shows an Iraqi prisoner of warwith a sack over his head behind barbed wire,comforting his four-year-old son.Yet Ruth Eichhornbacks the jury’s decision since the important thingat World Press Photo is the picture’s significance to the observer. “The winner is an icon for the year2003. A picture that sticks in people’s minds.”

Attracted great attention: This year’s winner, Jean-Marc Bouju (right), in an interview with TV channel ZDF

AWARD WINNERS

14th BFF (Associationof Freelance Photo-graphic Designers)Prize, Reinhart WolfPrize and 15th KodakYoung Talent Award

MULTIPLE 216

Photographs byChristoph Siegert Galerie 11

WORLD PRESS

PHOTO 2003

Naked misery: The WorldPress Photo exhibitionincludes some heartrendingpictures. Foreground: Astreet kid in Mongolia (photo:Jacob Ehrbahn)

72 GRUNER + JAHR I ANNUAL REPORT 2003 73FINANCIAL STATEMENTS I GRUNER + JAHR

PROFIT AND LOSS STATEMENTGLOBAL BALANCE SHEETas of December 31, 2003 January 1, 2003 to December 31, 2003

ASSETS (EUR ‘000) 12/31/2003 12/31/2002

Intangible assets 261,619 408,619

Tangible assets 614,219 662,287

Financial assets 47,059 50,563

Fixed assets 922,897 1,121,469

Inventories 80,206 91,133

Trade receivables 287,968 329,853

Amounts due from affiliated undertakings 177,468 301,778

Other assets 200,342 160,152

Liquid funds 96,110 50,703

Current assets 842,094 933,619

Deferred taxation 13,278 12,730

Deferred expenses 8,627 10,062

1,786,896 2,077,880

(EUR ‘000) 2003 2002

Sales revenues 2,480,702 2,806,950

Changes in inventories 409 4,245

Other operating income 85,392 119,145

2,566,503 2,930,340

Raw materials, consumables and supplies -802,168 -927,587

Personnel expenses -763,586 -847,816

Amortization/Depreciation of intangible and tangible assets -187,114 -255,036

Other operating expenses -697,820 -819,465

Profit/loss on disposal of fixed assets 51,469 184,976

Operating profit 167,284 265,412

Profit/loss (-) of affiliated undertakings 3,313 -9,364

Share of profit/loss (-) from joint ventures and associated undertakings 11,018 -9,695

Profit before interest and taxes 181,615 246,353

Net interest -40,320 -62,382

Taxes on income -48,362 -58,026

Net profit (before deduction of minority interests) 92,933 125,945

Minority interests -13,055 22,754

Net earnings for the year 79,878 148,699

LIABILITIES (EUR ‘000) 12/31/2003 12/31/2002

Partners’ shares, Subscribed capital 77,307 77,307

Retained earnings 114,140 108,124

Net loss for the year -25,661 -53,884

Shareholders’ equity (not incl. minority interests) 165,786 131,547

Minority interests 62,159 104,415

Shareholders’ equity (incl. minority interests) 227,945 235,962

Preferred stock 40,903 40,903

Accruals for pensions and similar obligations 551,390 532,367

Tax accruals 1,671 13,960

Other accruals 177,788 195,915

Accruals 730,849 742,242

Liabilities to financial institutions 10,504 7,093

Leasing liabilities 132,575 137,931

Trade payables 199,142 195,003

Amounts due to affiliated undertakings 206,538 441,083

Other liabilities 98,595 123,541

Liabilities 647,354 904,651

Deferred taxation 10,356 15,229

Deferred income 129,489 138,893

1,786,896 2,077,880

75FINANCIAL STATEMENTS I GRUNER + JAHR

Co KG and Gruner + Jahr AG and the subsidiary undertakings includedin the consolidation.The acquisition method is used for capital consolidation. This offsets thecost of acquisition of the interest in a company against the share of the equity acquired. Allowance is made for deferred taxation on hiddenreserves and charges revealed at the time of first consolidation exceptin cases where the relevant tax payments or refunds are made at the timeof their revelation. Any remaining positive difference between acquisi-tion cost and current asset value is capitalized as goodwill and amortizedby the straight-line method over its assumed useful life. Hidden reservesand charges revealed at the time of first consolidation are written downor written back in subsequent fiscal years in accordance with the treat-ment of the relevant assets and liabilities. Negative differences not result-ing from anticipated losses are written back over a scheduled period inaccordance with the provisions of IAS 22. The same principles are used forthe capital consolidation of partially consolidated undertakings.Associated undertakings valued by the equity method are 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 arenot shown unless there is an obligation to make an additional contribution.All intra-group profits and losses, sales revenues, expenses, earnings, ac-counts receivable and payable and accruals in the accounts of the com-panies included in the consolidation are eliminated. The same principles areused proportionately in the 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 areof only minor significance for the Group’s net worth, earnings and financialsituation and the calculation of the relevant values would have involveddisproportionately high expense.

COMPANIES INCLUDED IN THE CONSOLIDATION

88 companies (including the parent companies) have been fully consoli-dated (prior year: 90).All except 30 (prior year: 28) affiliated German and foreign companieshave been included in the consolidation. The companies not included haveno significant business activities and have been excluded from the glo-bal financial statements because they are as a whole of only minor im-portance for the group’s net worth, earnings and financial situation.There were the following changes in the companies included in the con-solidation during the fiscal year under review:

German Foreign TotalIncluded on December 31, 2002 57 33 90Additions 4 3 7Disposals 4 5 9Included on December 31, 2003 57 31 88

The percentage interests held in 2 (prior year: 2) joint ventures are in-cluded in the consolidated financial statements. Of the 15 (prior year: 25)associated companies included, 9 (prior year: 11) are carried at the valuedetermined by the equity method. The remaining ones are of only minorimportance and are carried in the consolidated financial statements atacquisition cost.The annual financial statements of the fully consolidated companieshave been examined by the appointed auditors in accordance with the auditing principles applying in the relevant countries. Audit certificatesfor the annual financial statements prepared in accordance with govern-ing national law were available. Secondary commercial balance sheetswere also prepared by the foreign subsidiary undertakings using the uni-form IAS/IFRS accounting and valuation methods which are standardthroughout the Group. These reporting packages and the accompanying

notes were also examined by the relevant auditors, who supplied writtenconfirmation that the national financial statements had been correct re-conciled with the standard Group accounting and valuation procedures.

CURRENCY TRANSLATION

The annual financial statements of the foreign subsidiary undertakingshave been translated into Euro in accordance with the provisions of IAS21 relating to functional currencies. As all subsidiary undertakings are fi-nancially, commercially and organizationally independent in the conductof their business, the functional currency is in all cases the national cur-rency and the modified balance sheet closing date method is conse-quently used to determine the exchange rates at which values are trans-lated. Assets and liabilities are consequently translated at the middle rateapplying on balance sheet closing date. The average exchange rate over the fiscal year under review is used foritems in the income statement. Difference in balance sheet items arisingfrom fluctuations in exchange rates used in the prior year and similar dif-ferences arising for this reason between the income statement and thebalance sheet are credited or debited to equity without affecting earnings.When companies are deconsolidated, any accumulated currency trans-lation differences are written back against earnings. The following ex-change rates have been used to translate the financial statements of thecompanies operating in the most important countries included in the glo-bal financial statements (equivalent value of currency unit to one Euro):

Average rate Rate at closing day1/1-12/31/03 1/1-12/31/02 12/31/03 12/31/02

US-Dollar ( USD) 1.1312 0.9416 1.2630 1.0487Polish Zloty (PLN) 4.4053 3.8344 4.7019 4.0210

ACCOUNTING AND VALUATION METHODS

INTANGIBLE FIXED ASSETS

Intangible 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 atacquisition cost. Intangible fixed assets are normally amortized by thestraight-line method over their useful life. Capitalized software is amor-tized over three or four years, licenses over the period of the relevantlicensing agreement and supply rights and subscription customers overperiods of not more than 15 years. Goodwill arising from acquisitions is capitalized in accordance with theprovisions of IAS 22 and amortized by the straight-line method over itsestimated useful life, which can vary between 5 and 15 years. Goodwillfrom capital consolidation is translated at the exchange rate applying atthe date of first consolidation and carried in subsequent years at the his-torical exchange rate.

TANGIBLE FIXED ASSETS

Tangible fixed assets are carried at acquisition or manufacturing cost lessaccumulated depreciation. Scheduled depreciation is charged at uni-form rates throughout the group and assumes the following periods ofuseful life:

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

LEASING

In cases where a group company enjoys all significant opportunitiesand bears all significant risks under leasing agreements and can


LEGAL BACKGROUND

Bertelsmann AG owns majority interests in Gruner + Jahr AG & Co KGand Druck- und Verlagshaus Gruner + Jahr AG of Itzehoe (Gruner + JahrAG), and these companies and their subsidiaries are included in Ber-telsmann’s consolidated annual financial statements. Gruner + Jahr AGis the managing general partner in Gruner + Jahr AG & Co KG with atwo percent interest in that partnership. Gruner + Jahr AG possesses thepowers of direction, in particular for the Gruner + Jahr Group’s foreignprinting and publishing activities, which are for legal purposes largely as-signed to the shareholders. Although no legal obligation exists, the jointparent company Gruner + Jahr AG & Co KG and Gruner + Jahr AG volun-tarily draw up global financial statements for the Gruner + Jahr Group,in which its German and foreign subsidiaries are included.The global balance sheet and global income statement of the Gruner +Jahr Group for the fiscal year from January 1,to December 31, 2003 havebeen prepared in accordance with International Financial Reporting Stan-dards (IFRS) and with the interpretations issued by the Standard Inter-pretations Committee/International Financial Reporting InterpretationsCommittee (SIC/IFRIC) of the IASB.There is a statement of changes in equity as of December 31, 2003. Thenotes to the consolidated financial statements as of December 31, 2003do not however contain all the data required by IFRS. Nor has any cashflow statement been prepared. Consequently, the global financial state-ments of the Gruner + Jahr Group do not fully comply with IFRS.

The fiscal year is identical with the calendar year and runs in the pre-sent case from January 1 to December 31, 2003. The global financialstatements are presented in Euro rounded off to the nearest thousandEuro (€‘000). For greater clarity, individual items have been summarizedin the balance sheet and income statement presentations. These itemsare analyzed and explained in greater detail in the notes to the financialstatements.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.

CONSOLIDATION

PRINCIPLES USED IN THE CONSOLIDATION

All significant subsidiary undertakings directly or indirectly controlled byGruner + Jahr AG and Gruner + Jahr AG & Co KG as defined in IAS 27are included in the consolidated financial statements. Joint ventures asdefined in IAS 31 are consolidated proportionately to the interest held inthem. Significant associated companies are carried in the balance sheetat values determined by the equity method as stipulated in IAS 28 in tho-se cases where significant influence can be exerted. This is normally thecase when between 20 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 &

NOTES TO THE GLOBAL FINANCIAL STATEMENTS AS OF DECEMBER 31, 2003

GRUNER + JAHR IN FIGURESMagazines – Newspapers – Printing facilities

(EUR ‘000 000) 2003 2002

Sales revenue 2,481 2,807

Operating EBITA 238 233

Cash flow1) 236 253

Total assets 1,787 2,078

Capital stock (after deduction of minority interests) 228 236

Loan capital 1,559 1,842

Fixed assets 923 1,121

Current assets 864 957

Personnel expenses 764 848

Employees on balance sheet date 2) 11,352 11,862

1) calculated by the DVFA/SG method2) new method of calculation as from 2003, comparative figures shown for 2002

77FINANCIAL STATEMENTS I GRUNER + JAHR

WHOLLY OWNED GERMAN AFFILIATES

Gruner + Jahr AG & Co KG, HamburgBerliner Presse Vertrieb GmbH, BerlinBörse Online Verlag GmbH & Co. KG, MunicDPV 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, MunicG+J Woman Verlag 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, HamburgNeon Magazin 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 %SPIEGEL-Verlag Rudolf Augstein GmbH & Co.KG, Hamburg 24,75 %Vereinigte Motor-Verlage GmbH & Co.KG, Stuttgart 17,14 %

FOREIGN AFFILIATES AND JOINT VENTURES

Gruner + Jahr/Mondadori S.p.A., Milan, Italy 50 %Gruner + Jahr Polska Sp. z.o.o. & Co., Spolka Komandytowa, Warsaw Poland 100 %Gruner + Jahr Printing and Publishing Company, New York/Waseca, USA 100 %Gruner + Jahr (Schweiz) AG, Zurich, Switzerland 100 %Gruner + Jahr Verlagsgesellschaft m.b.H., Vienna, Austria 100 %Gruner + Jahr ZAO, Moscow, Russia 100 %GyJ España Ediciones S.L., S. en C., Madrid, Spain 100 %GyJ Revistas y Communicaciones S.L., Madrid, Spain 100 %GyJ Publicaciones Internacionales S.L. y Cia., S. en C., Madrid Spain 50 %G+J Clip (Beijing) Publishing Consulting Co.Ltd., Peking, China 51 %G+J/RBA Publishing C.V., Amsterdam, Netherlands 50,5 %G+J/RBA S.N.C., Paris, France 100 %G+J RBA Sp. z.o.o. & Co., Spolka Komandytowa, Warsaw, Poland 100 %Prisma Presse S.N.C., Paris, France 100 %Shanghai G+J Consulting and Service Co.Ltd., Shanghai, China 100 %Verlagsgruppe NEWS Ges.m.b.H., Tulln, Austria 56,03 %VSD S.N.C., Paris, France 100 %

as of April 1, 2004

SUPERVISORY BOARD EXECUTIVE BOARD

Dr. Gunter Thielen, Gütersloh, Chairman (since 10/30/2003)Gerd Schulte-Hillen, Hamburg, Chairman (until 10/30/2003)Klaus Unger, Hamburg, Deputy ChairmanBirgit Breuel, HamburgDr. Jochen Frangen, HamburgDorit Harz-Meyn, HamburgDr. Tessen von Heydebreck, Frankfurt/MainKlaus Hillmer, ItzehoeBernd Köhler, DresdenDr. Siegfried Luther, GüterslohRolf Schmidt-Holtz, GüterslohJohn Vinocur, ParisMichael Walter, Hamburg

Dr. Bernd Kundrun

President and CEODr. Bernd Buchholz

President Magazine Division GermanyAxel Ganz

President Magazine Division France and USA Angelika Jahr-Stilcken

Member of the Executive Board, JournalismDr. Torsten-Jörn Klein

President Magazine Division InternationalDr. Martin Schuster

Member of the Executive Board, Central ServicesMartin Stahel

Member of the Executive Board, Corporate DevelopmentAchim Twardy

President Newspaper Division/Business Press Germany

as of January 1, 2004


consequently be regarded for financial purposes as the owner of therelevant assets (finance leases), these assets are capitalized at thetime of signature of the leasing agreement at the lower of marketvalue or cash value of future leasing installments. The payment obliga-tion resulting from the finance lease is carried at the same level underliabilities to financial institutions.In cases where it is reasonably certain that the leased assets will passinto the ownership of the group company, they are depreciated overtheir useful life. In all other cases they are depreciated over the periodof the licensing agreement. The level of installments payable by the les-see varies with fluctuations in interest rates charged by the lessor.In addition to the aforementioned finance lease agreements, hire agree-ments definable as operating lease agreements have been signed insome cases. In these cases the leased assets remain the property of thelessor and the leasing installments are treated as expenses arising duringthe accounting 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 UNSCHEDULED DEPRECIATION OF TANGIBLE FIXED ASSETS

Unscheduled amortization/depreciation of intangible and tangible fixedassets is charged in accordance with IAS 36 in cases where the netrealizable value of the assets at balance sheet closing date has fallenbelow the book value. The net realizable value is calculated as the hig-her of the net disposal value or the cash value of the anticipated futu-re cash flow from the assets. In cases where the grounds for unscheduled amortization/depreciationno longer apply, the assets are written up again. The write-up in no caseexceeds the amount which would have applied if the unscheduled amor-tization/depreciation had not been charged

SHAREHOLDINGS AND SECURITIES

Significant holdings in associated undertakings are carried at the valuedetermined by the equity method. All other shareholdings and securitiesincluded under fixed or current assets are treated as securities availablefor sale.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.Any resulting profit or loss is added or charged to earnings. In caseswhere unscheduled amortization has been charged on grounds whichno longer apply, the assets are written up again. In cases where it isimpossible to determine a fair market value, the relevant shareholdingsand securities are carried at their ongoing historical acquisition cost.

INVENTORIES

Inventories are carried at the lower of acquisition or manufacturingcost or market value. Manufacturing cost includes material and directmanufacturing costs plus manufacturing overheads attributable to therelevant production process. In cases where acquisition or manufactu-ring cost is higher than market value on balance sheet closing date, therelevant inventory items are written 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(first in first out) basis.

RECEIVABLES

Miscellaneous receivables and other assets are normally carried at thelower of nominal or current market value. Long-term receivables arediscounted. Receivables denominated in foreign currencies are trans-lated at the exchange rates applying on balance sheet closing date.Due provision is made for any discernible risks.

DEFERRED TAXATION

In accordance with IAS 12, deferred taxation assets or liabilities havebeen created for all timing differences between the tax balance sheet andthe IAS consolidated balance sheet – except for goodwill items not de-ductible for tax purposes – and for tax-deductible losses carried forwardfrom prior years. Deferred taxation assets are adjusted to allow foritems not expected to qualify for later deduction. The tax rates used forcalculating the amount of the deferrals are those expected to apply in thefuture on the basis of currently known tax legislation. Adjustments reflec-ting the effect of tax rate changes on deferred taxation assets or liabil-ities are normally made in the accounting period in which the relevant taxregulations are published and are added to or deducted from earnings.

OTHER COMPREHENSIVE INCOME

Other comprehensive income includes differences resulting from curren-cy translation and from the calculation of the fair value of cash flow hed-ges. It is added to or deducted from equity and does not affect earnings.

ACCRUALS

In accordance with IAS 19, the level of accruals for pensions and simi-lar obligations is determined by the projected unit credit method. Thismethod makes allowance not only for basic biometric statistical databut also for current long-term interest rates on the capital market andcurrent assumptions on future trends in salary and pension levels. Theproportion of pension expenses attributable to interest is included inthe net interest item.Other accruals are created in accordance with IAS 37 as from the timewhen it appears probable not only that an obligation has arisen that willcause a future cash outflow, but also that its amount can be reasonablydetermined. Accruals for warranties and threatening losses are createdat full manufacturing-related cost. Long-term accruals are discounted.

LIABILITIES

Liabilities are carried at nominal value. Long-term liabilities are dis-counted. Liabilities in foreign currencies are normally translated at theexchange rate applying on balance sheet closing date.

FINANCIAL DERIVATIVES

In accordance with IAS 39, all financial derivatives are carried in the bal-ance sheet at market value. These financial instruments are taken up inthe balance sheet at the date on which the transaction was made andclassified separately as either fair value or cash flow hedges. Individualderivatives do not meet the requirements of IAS 39 for capitalization ascovering transactions even though they do provide financial security.Changes in market value of financial derivatives are handled as follows:

FAIR VALUE HEDGES

Changes in market value of these derivatives used as hedges for assetsand liabilities are included in the income statement and reflected in thecontra movements in the balance sheet items covered by them.

CASH FLOW HEDGES

Changes in the current value of these derivatives used as hedges tosecure future cash flow are included in other comprehensive incomeand do not affect earnings. These items are written back against theearnings on the transactions covered by them.

AUDIT CERTIFICATE

The auditors have issued a certificate for the present global annualfinancial statements of the Gruner + Jahr Group.

PRINCIPLE SUBSIDIARY AND ASSOCIATEDUNDERTAKINGS

Germany, 1965

Germany, 1975 Spain, 1990

1948: When the first edition of STERN is pub-lished by the Henri Nannen GmbH publishing houseon August 1, with a printed circulation of 130,735 co-pies, the Federal Republic of Germany has not yetbeen founded. Printed circulation reaches its high-point in 1980 with 2,021,115 copies.

1965: The newspaper publishers John Jahr(CONSTANZE, BRIGITTE, SCHÖNER WOHNEN,CAPITAL) and Dr. Gerd Bucerius (STERN, Die Zeit,among others) merge with the printer Richard Gruner(Gruner & Sohn, Gruner Druck GmbH) to becomeGruner + Jahr GmbH & Co. Gruner holds 39.5 per-cent, Jahr 32.25 percent and Bucerius 28.25 percentof the shares.

1969:Richard Gruner sells his shares. The owner-ship structure of the publishing house is reorganized:Jahr and Bucerius each hold 37.5 percent. ReinhardMohn (Bertelsmann) participates with 25 percent.Gruner + Jahr takes over 90 percent of the Munichpublishing house, Kindler & Schiermeyer (JASMIN,ELTERN, TWEN). The remaining 10 percent stayswith the Owner-Manager, Ernst Naumann, who ex-changes it later for five percent of G+J shares.

1971:G+J takes a 24.75 percent participation inthe Spiegel publishing house (Der Spiegel). JohnJahr (born in 1900) and Dr. Gerd Bucerius (born in1906) withdraw from active management of thebusiness. BRIGITTE reaches a paid circulation of 1.4million and becomes the largest women’s magazinein Europe.

1972: G+J acquires 15 percent of VereinigteMotor-Verlage GmbH & Co. KG (Auto, Motor, Sport).Gruner + Jahr GmbH & Co. becomes Druck- undVerlagshaus Gruner + Jahr AG & Co. The first edi-tion of the monthly magazine ESSEN & TRINKENappears.

1973: Bucerius exchanges his shares in G+Jagainst shares in Bertelsmann AG, which becomesthe majority shareholder of G+J with 60 percent.John Jahr (35 percent) and Ernst Naumann (five per-cent) hold the remaining shares.

1975: John Jahr sells 9.9 percent of his sharesto Bertelsmann AG and retains 25.1 percent.

1976: G+J takes a 33.3 percent participation inLübeck publishing house Ehrlich & Sohn KG (FRAUIM SPIEGEL). Bertelsmann AG takes over the fivepercent holding from Ernst Naumann and now holdsa total of 74.9 percent of the shares.GEO appears withan initial circulation of 100,000 copies. The printed cir-culation reaches its highpoint in 1996 with 783,386.

1978: G+J is the first German publishing houseto enter the international magazine market by takingover Cosmos Distribuidora S.A. publishing house(DUNIA, SER PADRES HOY) in Spain.G+J acquiresthe Parents Magazine Enterprises Inc. publishinghouse with the PARENTS and YM magazines in theUSA. The popular science magazine P.M. developedby Gerhard Peter Moosleitner is launched in Ger-many.The G+J School for Journalists is founded inHamburg. In 1984, on the occasion of the 70th birth-day of the founder of STERN, it is renamed the Hen-ri Nannen School.

1979: G+J purchases the gravure and offsetprinter Brown Printing Company in Waseca, Min-nesota, USA. The French edition of GEO is launchedin Paris by the Participations Edition Presse S.A.publishing house (later Prisma Presse S.N.C.),which was founded in 1978. HÄUSER and ART arelaunched in Germany.

1980: The business magazine IMPULSE comesonto the market.

1981: GEO gets an offspring: GEO SPECIAL, amagazine dedicated to travel. After the successfullaunch of GEO in France, G+J brings a magazine on-to the French market based on the concept of P.M.:the monthly magazine ÇA M’INTÉRESSE. Spain alsogets interested in popular science and successfullylaunches MUY INTERESANTE.

1982: PRIMA, the newly launched women’smagazine in France reaches a paid circulation of one million copies within one year.

1984: Entry into electronic media with a 50-per-cent participation in Ufa-Film- und Fernseh-GmbH.During the course of the year, G+J thereby becomesa partner of the private television broadcasters RTL,RTL2 and VOX, the pay TV program Premiere as well

Germany, 1948


CHRONICLE 1948 – 2003

79CHRONICLE I GRUNER + JAHR

as various radio broadcasters. FEMME ACTUELLE islaunched in France.

1985: G+J plans the construction of a new pub-lishing building at Baumwall in Hamburg. The Ehrlich& Sohn publishing house is taken over 100 percent.G+J acquires a 24.9 percent participation in the Man-ager Magazin Verlagsgesellschaft (manager magazin)publishing company. SCHÖNER ESSEN and FLORAjoin the range of magazines. G+J founds Gruner +Jahr of the U.K. in London.

1986: With the purchase of the HAMBURGERMORGENPOST, a successful foray is made into thenewspaper business. Using the same basic conceptas the French magazine, PRIMA is exported toGermany and England. TÉLÉ LOISIRS is launched inFrance. The women’s magazine MIA is launched inSpain. Through Ufa, G+J takes a participation inRadio Hamburg, one of the first private radio stationsin Germany.

1987:Purchase of the California-based printer Ri-verside County Publishing Company by the G+J sub-sidiary Brown Printing Company. SPORTS (laterSPORTS LIFE) and GEO WISSEN come onto themarket in Germany. G+J launches the women’smagazine BEST in Great Britain and the celebritymagazine VOICI in France. GEO appears at the news-stands in Spain as well.

1989: G+J founds an Italian subsidiary in Milan.The travel magazine GEO SAISON is brought ontothe market in Germany. On November 16, one weekafter the fall of the wall, the special edition of STERN“Germany – Borderless Joy” with photos of the peace-ful revolution in East Germany appears. Massive salesare made, especially in East Germany.

1990: Start of the CHEMNITZER, DRESDNERand MECKLENBURGER MORGENPOST. G+Jlaunches the women’s magazine VERA in Italy undera joint venture with Mondadori, the Milanese publish-ing house. G+J brings the German MARIE CLAIREonto the market in a joint venture with Marie ClaireAlbum.G+J España receives the license for theSpanish edition of COSMOPOLITAN. The STERN-TVmagazine is launched at RTL, the private broadcaster.G+J moves into the Press Building at Baumwall on

the Hamburg waterfront. The G+J Board of Manage-ment cements its environmental awareness as abasic corporate principle.

1991: The newspaper business is expanded furt-her: The Berliner Verlag is taken over as a part of ajoint venture. The BERLINER ZEITUNG, BERLINERKURIER, WOCHENPOST and the television guide F.F.are launched. G+J also acquires the majority ofDresdner Druck- und Verlagshaus, where the SÄCH-SISCHE ZEITUNG is published, as well as a 27.5 per-cent participation in the Druckhaus Friedrichshainprinters. Furthermore, G+J begins activity in themetropolitan areas of East Germany. The originalEast German magazine NEUES WOHNEN appearsin former West Germany as well. Directly after itslaunch in France, CAPITAL becomes market leaderamong business publications.

1992: G+J takes over the remaining 50 percentof the Berliner Verlag and increases its participa-tion in Druckhaus Friedrichshain to 55 percent. TheLEIPZIGER MORGENPOST is launched.The popularscience magazine FOCUS appears in Italy and GreatBritain, and quickly becomes the largest monthlypopular magazine in Italy.

1993: G+J Polska is founded with its head-quarters in Warsaw. The women’s magazine CLAU-DIA appears on the Polish market. G+J acquires a 49 percent holding in Nice Presse Invest (NPI),which publishes the daily newspapers DÉLMAG-YARORSZÁG and DÉLVILÁG in Hungary through asubsidiary company. The prominent celebrity mag-azine GALA is launched in France. G+J participateswith 50 percent in the Spanish editions of MARIECLAIRE and LA CASA DE MARIE CLAIRE.

1994: The G+J participation in the DruckhausFriedrichshain printing facility is raised to 100 percent.The celebrity magazine GALA, the info magazineTANGO and the television guide TV TODAY arelaunched in Germany. G+J takes over the investmentmagazine BÖRSE ONLINE. G+J acquires sevenwomen’s magazines from the New York Times Com-pany in America, including FAMILY CIRCLE and McCALL’s. The women’s magazine NAJ comes onto themarket in Poland. G+J takes a 51 percent participa-tion in the Slovakian daily newspaper NOV´Y ˇCAS.

Germany, 1979

France, 1984

80 GRUNER + JAHR I ANNUAL REPORT 2003 81CHRONICLE I GRUNER + JAHR

2001: G+J USA Publishing advances into theranks of the top five magazine publishers in the USAthrough the purchase of the FAST COMPANY andINC business magazines as well as the relaunch ofalmost all other magazines. The internationalization ofsuccessful magazines is continued with GALA in Po-land and Russia and NATIONAL GEOGRAPHIC in Hun-gary. After its merger with the Kurier Group and thestart of the WOMAN women’s magazine, the NEWSpublishing group publishes 14 magazines in Austria.GEOlino, the innovative children’s magazine from G+J,appears monthly from January 2001. GEO is 25 yearsold. The jubilee exhibition “The earth from above”attracts 800,000 visitors. BRIGITTE WOMAN appearsregularly four times a year.

2002: October sees the launch of WOMAN, thefortnightly women’s magazine, in Germany. A newmember of the STERN family, STERN SPEZIAL BIO-GRAPHIE / STERN BIOGRAPHY SPECIAL, is intro-duced in the summer. In France, the youth magazineGEO Ado enters the market. The second step towardsecuring the Chinese magazine market is taken in theform of FUMU PARENTS. Dwindling prospects forBIZZ and ONLINE TODAY result in them being with-drawn in Germany, with ROSIE and HOME STYLEmeeting a similar fate in the United States. German-y’s FINANCIAL TIMES DEUTSCHLAND is the onlynational daily newspaper to increase circulation fig-ures.The company’s Berlin newspaper activities are

sold to the Georg von Holtzbrinck publishing group.A number of G+J titles celebrate anniversaries in2002. In Germany, CAPITAL 40 and ESSEN & TRIN-KEN notch up their 30th anniversary. In France, VSDreaches its 25th and VOICI its 15th birthday, whilstFOCUS in Italy is ten years old this year.

2003: G+J offshoot Prisma Presse launches TÉ-LÉ 2 SEMAINES, a brand-new, fortnightly TV listingsmagazine and the first of its kind on the French mar-ket. Its innovative format reaps dividends within amatter of weeks as circulation rises swiftly to the 2million mark.TÉLÉ 2 SEMAINES is one of the mostsuccessful magazine start-ups of the past few dec-ades. The licensed title GLAMOUR becomes themost successful new magazine to hit the Polish mar-ket in 2003. With circulation around 276,000 copies,it leaps to the top spot among quality magazines forwomen. Two pilot issues of NEON are greeted withenthusiasm by teenage and young adult audiences.The innovative magazine NEON is scheduled to ap-pear eleven times a year from February 2004 on-wards. In November 2003, NATIONAL GEOGRAPH-IC WORLD is launched as a bilingual, popular sciencemagazine for children, in print, TV and online formats.G+J’s expansion in the general knowledge segmentcontinues with the launch of GEOFOCUS in Russia.For strategic reasons, Gruner + Jahr sells its news-paper interests in Eastern Europe to the Swiss pub-lisher Ringier, effective December 31, 2003.

Germany, 1996

France, 2003

1995: BRIGITTE YOUNG MISS, which has beenpublished as a special edition since1990, appears asan independent magazine. LEIPZIGER MORGEN-POST and TANGO are dropped. 75 percent shares ofboth SPORTS LIFE and WOCHENPOST are sold.With geo.de, mopo.de, pm-magazin.de, stern.de andtvtoday.de, G+J starts its first online magazines andbecomes one of the first professional providers onthe German language Internet. The managementmagazine L’ESSENTIEL DU MANAGEMENT islaunched in France. The women’s magazine HALOand the cooking magazine MOJE GOTOWANIEcome onto the market in Poland.

1996: FOCUS is launched in Poland; ELTERNFOR FAMILY and the children’s magazine GEOLINO,in Germany. The French G+J subsidiary Prisma Pres-se takes over the weekly glossy VSD. G+J Funk- undFernsehproduktions GmbH is founded. The Berlinnewspapers at G+J, BERLINER ZEITUNG, BERLIN-ER KURIER, BERLINER ABENDBLATT and TIP, goonline at berlinonline.de. The Advertisement Divisionstarts G+J Communication Office, an Internet servicefor advertising customers. The magazine printingfacility at the Gruner + Jahr Printing Center in Dres-den and the new newspaper printing facility in Ber-lin-Lichtenberg begin operation. Operations at Druck-haus Friedrichshain are stopped.

1997: Electronic Media Service GmbH (EMS)starts the German-language search engine FIRE-BALL.DE, while BRIGITTE also goes online. The on-line television guide TV TODAY ONLINE+ COM-PUTER (ONLINE TODAY now) comes onto themarket in Germany. The US printing facilities, the Ri-verside County Publishing Company in California andthe Brown Printing Division in Kentucky, are sold. Asa countermove, Brown Printing acquires the Penn-Well and Graftek printing facilities in Woodstock,which specialize in printing technical magazines.

1998: G+J brings the women’s magazineGRACJA to the newsstands and takes over theweekly magazine MOJE MIESZKANIE in Poland.TOP GIRL, a magazine for girls and young women,follows in Italy. The weekly celebrity magazine ALLOappears in France. GEO, already a successful maga-zine in Germany, France and Spain, is launched in Rus-sia. G+J brings a magazine onto the market in China

as well: CAR & MOTOR. With a 75 percent participa-tion in the Vienna NEWS Group (NEWS, TV MEDIA),entry into the Austrian market is successful. FORMAT,the third magazine from the NEWS Group, follows inthe fall. The G+J business press is complemented byBIZZ, the business magazine for a younger clientele.The Newspaper Division is expanded through a 50 per-cent participation in Expres, the Bucharest publishinghouse. Expres publishes the national daily shoppingnewspaper called EVENIMENTUL ZILEI. ELTERNgoes online with ELTERN.DE, while EMS starts thedaily newspaper search engine PAPERBALL.DE. Thenew newspaper printing facility at the Gruner + JahrPrinting Center in Dresden starts operation.

1999:After 13 years, G+J sells the HAMBURGERMORGENPOST to two Hamburg media entrepre-neurs. The GEO family continues to grow: GEOEPOCHE, a history magazine, comes out. Underlicense from the National Geographic Society, G+Jbrings the NATIONAL GEOGRAPHIC MAGAZINEand complementary products onto the market in ajoint venture with RBA, the Spanish publishing house.The magazine, which reaches the newsstands in sixcountries in French, German and Polish, is an isntantsuccess. Prisma Presse opens a new magazine seg-ment in France with the Internet magazine WEBMAGAZINE. The Internet travel agency TRAVEL-CHANNEL.DE is launched. YOUNG MISS, ART andNATIONAL GEOGRAPHIC go online.

2000: In a Joint Venture with the London mediagroup Pearson, G+J launches FINANCIAL TIMESDEUTSCHLAND . This is the first relaunch of an inter-national daily newspaper in Germany for several dec-ades.E-MEDIA set a new trend in the Austrian Inter-net magazine segment . The International MagazineDivision starts three new magazines: the businessmagazine CAPITAL in Spain, the technology-orientedconsumer magazine JACK in Italy and NATIONALGEOGRAPHIC in the Netherlands. Activities in theEnglish-speaking world are focused on the USA: G+Jsuccessfully enters the American business magazinesegment by acquiring INC and FAST COMPANY.G+J withdraws from the British market for strategicreasons. With the LIVING AT HOME magazine andan Internet portal of the same name, G+J starts anintegrated multimedia platform focused on home,garden, kitchen and hospitality. and hosPoland, 2001

Germany, 2002

Germany, 2000

Publisher:

Gruner + Jahr AG & Co. KG Corporate CommunicationsAm Baumwall 11 20459 Hamburg [email protected]

Copy:

Stefan Michalk, Kurt Otto

Final editor:

Thomas Huber

Photography:

Dirk Stewen, Hamburg

Design and Layout:

Büro Hamburg

Realization:

G+J Corporate Media GmbH Griegstaße 75 22763 Hamburg

Litho:

p.r.o. medien

Printing:

Appl Druck GmbH & Co. KG Senefelderstraße 3-11 86650 Wemding

Other Pictures:

Andreas Teichmann (p.6); Jason Todd (p. 28); Karin Rocholl (p. 42, 47); Grundund Flum (p. 43-44, 46, 48-50); AndreasFechner (p. 51); Meffert/ Stern (p. 52-55);Archiv Gruner + Jahr (p. 63-65); FrankRichter (p. 56); Odile Hain (p. 58, 60);mauritius (p. 65);

MASTHEAD


WORLDWIDE PRESENCEA staff of over 11,000 produces more than 110 magazines and newspapers in 10 countries on three continents

G+J Spain,Madrid

Prisma Presse,Paris

G+J Netherlands,Amsterdam

G+J/Mondadori, Milan

Verlagsgruppe News, Vienna

G+J Headquarters,Hamburg

G+J USA, New York

G+J China,Beijing

G+J Russia,Moscow

G+J Poland,Warsaw

INNOVATION - Gruner + Jahr

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