Hamburg, March 18, 2005
Gruner + Jahr, Europe´s largest magazine publisher, once again delivered a gratifying performance in 2004, at the same time forming the basis for lastingly increasing the company´s value and for strong growth. As G+J CEO Dr. Bernd Kundrun said today at the annual press briefing in Hamburg, the goal is to increase revenues to roughly €3.5 billion by 2010, while raising operating ROS to over 10 percent. He is relying on "the triad of innovation, acquisition and merger" to achieve these targets. A vast number of innovations in the international magazine markets, the takeover of a majority stake (54.9 percent) in Motor-Presse Stuttgart, and the planned gravure joint venture with arvato and Axel Springer already "form the cornerstones of G+J´s growth strategy for the years ahead," Kundrun added. The acquisition and the gravure merger are pending antitrust approval.

In the past year, G+J introduced 23 innovative magazines worldwide – more than ever before in the history of the publishing company. Together, their average sold circulation already exceeds 4.5 million copies. Publishing investments that reduced net income by approx. €67 million in 2004 underscored G+J´s long-term growth focus.

As a result of these significant publishing investments which were up considerably over the previous year, Operating EBIT declined to €215 million (previous year: €238 million). Operating ROS amounted to 8.8 percent (previous year: 9.6 percent). Adjusted for publishing investments, ROS was 12.1 percent – exactly on par with the previous year´s excellent result. Revenues remained nearly constant in 2004 at €2.44 billion (previous year: €2.48 billion), despite lingering unfavorable conditions in the sales and advertising markets, and the sale of several titles. At the end of 2004, G+J had 11,567 employees worldwide (2003: 11,351 employees).

Dr. Bernd Kundrun declared: "Gruner + Jahr looks back on a particularly important and successful year. Gruner + Jahr is pursuing its expansionist course with a full head of steam. We have explicitly accelerated our efforts to lastingly increase the company´s value. The publishing investments and entrepreneurial decisions made in 2004 give us the vitality needed to put our high revenue and earnings targets for 2010 into practice. Our aim is not to maximize profits in the short term, but to create sustained growth in our businesses. At the same time, we have the power to divest in areas where we haven´t achieved compelling market positions." Kundrun emphasized that the U.S. magazine business was less than satisfactory in 2004. He pointed out that the new management has initiated a restructuring program that is already producing successful results.

G+J Chief Financial Officer (CFO) Achim Twardy said: "Gruner + Jahr made a good profit in 2004 despite difficult market environments. Adjusted for currency effects and sales of titles, revenues actually increased by 3.9 percent, or €92 million. The cash flow, which is once again high at €229 million, gives us the financial leeway for making our growth targets. We plan to invest between two and three percent of our revenues in new titles again in 2005. Further resources have been earmarked for acquisitions."

G+J´s French subsidiary Prisma Presse blazed the trail for a vast number of innovations at Europe´s biggest magazine publisher in 2004. By launching the innovative TÉLÉ 2 SEMAINES, Prisma Presse not only delivered the most successful French magazine debut of the past decades in France, but also established a whole new segment, i.e. biweekly TV guides. The title TV GRANDES CHAÎNES launched immediately afterwards, also became successfully established in the market after a very short time. With total circulation of four million sold copies, Prisma Presse has taken the lead in the French TV market by a wide margin with the two innovations and the weekly TV title TÉLÉ LOISIRS. Today, every third TV guide sold in France is a G+J publication.

In Germany, G+J launched GEO KOMPAKT, the ninth title in the German GEO family. The quarterly magazine is designed as a "Library of Knowledge" with issues each devoted to a specific "general education" topic. Despite its high cover price of €7.50, the first issue has already sold over 180,000 copies. The new title BRIGITTE BALANCE offers tips and advice for achieving a healthy equilibrium in life, and caters to readers interested in topics like fitness, nutrition and medicine. By its second issue, the magazine was selling 130,000 copies. Circulation of ESSEN&TRINKEN FÜR JEDEN TAG underwent excellent development, reaching a circulation well over 360,000 copies by year-end, thanks in part to a collaboration with the TV channel VOX and celebrity cook Tim Mälzer. This translates to a tripling of sold issues in just nine months, making it Germany´s biggest food magazine based on sales (Source: IVW). The innovative magazine NEON made its debut as a monthly last year, and first exceeded the threshold of 100,000 sold copies in summer. In March 2005, NEON won the German LeadAward in silver as "Newcomer of the Year."

Activities in the newly formed International Magazine Division (UBZI) were also marked by innovation and expansion. In all, 18 titles were launched in six countries, including ten magazines in the popular- science segment – among them QUEST in the Netherlands, which won several awards including "Launch of the Year 2004." Of the new popular-science titles, four cater to children and teens, including MUY INTERESANTE JUNIOR in Spain and FOCUS JUNIOR in Italy. FOCUS JUNIOR in particular – a line extension to Italy´s biggest monthly FOCUS – exceeded al expectations and attained a circulation of over 250,000 copies in its first year. The launch of the people magazine GALA in Spain as part of a 50/50 joint venture with the Spanish newspaper publisher Vocento illustrates G+J´s ambition of lancing powerful brands in densely populated markets.

G+J´s core business also delivered good results in Germany and internationally. In Germany, STERN enhanced its position as the largest single contributor of revenues and earnings throughout the G+J portfolio and defended its segment market leadership despite tough competition. BRIGITTE continues to dominate the market of biweekly women´s magazines by a large margin. GALA achieved considerable growth in circulation and ad sales in its eleventh year. And CAPITAL and IMPULSE reached turnaround in 2004 after some tough years in business. CAPITAL is still Germany´s highest-circulation business magazine. Thanks to a successful evolution and optimization of the Polish magazines CLAUDIA, GALA and GLAMOUR, G+J in 2004 took the lead in the Polish ad sales among magazines last year. After several years of eroding circulation, the French women´s magazine PRIMA managed a reversal in 2004 and increased its sales by two percent. In Italy, G+J/Mondadori still publishes the country´s biggest and most successful monthly magazine, FOCUS, prevailing over competition that has intensified considerably. In Russia, GEO played a key part in the abrupt rise in G+J´s local advertising income, which topped 80 percent in the first half of the year alone.

In the Print Division, the German and American plants significantly improved their performance year on year. This development was the result of successful cuts in production costs, a sales offensive by the German printing operations, and the successful startup of production of three major weekly titles for our customer Time Inc. at the Brown Printing plant in Woodstock (Illinois). The strengthening of our market position in Europe and the USA in 2004, the planned gravure joint venture with arvato and Axel Springer, and comprehensive investments in replacements at the Waseca (Minnesota) plant all pave the path to continued growth for our printing operations.

For further information:

Kurt Otto
Vice President, Media Relations
Gruner + Jahr AG & Co KG
Am Baumwall 11
D-20459 Hamburg
Phone: +49-40-3703-3810
Fax: +49-40-3703-5617
E-Mail: otto.kurt@guj.de