Annual Report
17 Foreword
82
Report of the Supervisory Board
Executive Board
90 Consolidated Financial Statements
Contents
4
6
8
The Axel Springer share
10 Combined Management Report
12
22
39
42
56
61
Fundamentals of the Axel Springer Group
Economic Report
Economic Position of Axel Springer SE
Report on risks and opportunities
Forecast Report
Disclosures and explanatory report on the
Executive Board pursuant to takeover law
65
Corporate Governance Report
91
93
93
94
95
96
97
Consolidated Statement of
Financial Position
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Cash Flows
Consolidated Statement of
Changes in Equity
Consolidated Segment Report
Notes to the Consolidated Financial
Statements
166 Responsibility Statement
167
Independent Auditor’s Report
175 Boards
2
Group Key Figures
in € millions
Group
Revenues
Digital media revenues share 1)
EBITDA, adjusted2)
EBITDA margin, adjusted 2)
Digital media EBITDA share1)
EBIT, adjusted2)
Net income3)
Net income, adjusted2) 3)
Segments4)
Revenues
Classifieds Media
News Media
Marketing Media
Services/Holding
EBITDA, adjusted2)
Classifieds Media
News Media
Marketing Media
Services/Holding
Liquidity and financial position
Free cash flow (FCF)2)
FCF excl. effects from headquarter real estate transactions2) 5)
Capex6)
Capex excl. effects from headquarter real estate transactions5) 6)
Total assets7)
Equity ratio 2) 7)
Net liquidity/debt2) 7)
Share-related key figures8)
Earnings per share, adjusted (in €)2) 3) 9)
Earnings per share (in €)3) 9)
Dividend (in €)10)
Closing price (in €)
Market capitalization11)
Change yoy
2017
2016
8.3 %
3,562.7
3,290.2
71.5 %
67.4 %
8.5 %
645.8
595.5
18.1 %
18.1 %
80.0 %
72.5 %
504.0
378.0
327.5
471.1
450.0
299.9
1,007.7
1,509.8
984.5
60.7
413.2
218.8
95.6
– 81.7
497.4
341.1
– 200.9
– 152.5
879.5
1,481.6
856.2
72.9
354.6
214.4
82.2
– 55.7
270.5
229.7
– 156.8
– 130.4
7.0 %
– 16.0 %
9.2 %
14.6 %
1.9 %
15.0 %
– 16.8 %
16.5 %
2.0 %
16.3 %
−
83.9 %
48.5 %
−
−
– 0.3 %
6,435.6
6,456.2
43.5 %
40.9 %
−
– 1,020.2
– 1,035.2
8.1 %
– 19.1 %
5.3 %
41.2 %
41.2 %
2.60
3.19
2.00
2.41
3.94
1.90
65.13
46.13
7,027.2
4,977.2
Average number of employees
3.3 %
15,836
15,323
1) Based on the operating business (without the segment Services/Holding).
2) Explanations regarding relevant key performance indicators on page 33.
3) Continuing operations, for the portion attributable to discontinued operations see notes to the consolidated financial statements under note (2d).
4) Adaption of segment names to Classifieds Media (Classified Ad Models), News Media (Paid Models) and Marketing Media (Marketing Models), cf. page 12.
5) Referring to the new headquarter building in Berlin as well as the sale of the office building complex in Hamburg.
6) Cash flow from operating activities minus capital expenditures, plus cash inflows from disposals of intangible assets and property, plant and equipment.
7) As of December 31, 2017 and December 31, 2016, respectively.
8) Quotations based on XETRA closing prices.
9) Calculation based on average weighted shares outstanding in the reporting period (107.9 million; PY: 107.9 million).
10) The dividend for the financial year 2017 is subject to the condition of approval by the annual shareholders’ meeting.
11) Based on shares outstanding at the closing price, excluding treasury shares (107.9 million; PY: 107.9 million).
Foreword
Annual Report 2017
Axel Springer SE
Foreword
We have consistently implemented these messages.
A winning formula that has been better understood, even
outside of Axel Springer. As well as the fact that in the
digital world we rely on both journalism and classifieds
offerings: We give our customers more and more exactly
what they need – precise information for important life
decisions, for example when looking for a job or a flat.
Therefore, the Axel Springer share benefited from signifi-
cant valuation premiums. The price increase of 41.2 %
and the clear outperformance of all benchmark indices
confirm this. In the second half of 2017 in particular, the
share reached new all-time highs several times.
Axel Springer owns one of the world's largest portfolios
of online classifieds companies, including brands such
as StepStone, SeLoger and Yad2. This business is
perceived much more by analysts and investors than
ever before. For many of them, it now accounts for the
majority of the company value. These classifieds again
saw outstanding organic growth - stronger than we
expected. Here, in addition to outstanding market
positions and excellent management, we benefit from
the continuing trend from print to online. As announced,
this year we have introduced a new transparency with
regard to our classifieds business. At two capital market
days in London and New York, we gave analysts and
investors a detailed insight into the business models.
The result in News Media was not only stable, it even
increased slightly. Our strong media brands are seen
by many people as a trusted source of information and
entertainment, both in print and in the growing digital
environment. This is reflected in the business: The
subscription numbers in the digital sector continue to
grow, advertising revenues have risen. Here again it
shows that print as a business model is more stable
than is often claimed.
In the past year, the world has changed even faster than
in previous years. Politically, economically, socially and
technologically. The media market is affected by all four
dimensions. The change happens quickly and profoundly.
The end is not to be foreseen. Axel Springer was and is
very well prepared for this. That's why we can look back
on a very successful year together with you. We are more
digital than ever before and therefore grow stronger.
At the beginning of the year 2017, we have positioned
four key messages on the capital market:
1.
In the Classifieds Media segment, we now regularly
publish more information about our most important
businesses. This enables our shareholders to better
understand the good development.
2. For the News Media segment, we have given a
stable outlook (adjusted EBITDA) for the year 2019.
3.
In terms of our digital journalistic offerings, we want
to show that these business models can be profita-
ble before we make further significant acquisitions in
this area.
4. Our focus is on Classifieds Media and News Media.
4
Annual Report 2017
Axel Springer SE
Foreword
Also noteworthy is the development of Business Insider.
Our colleagues use the considerable reach of their
content, e. g. videos, more and more to achieve higher
revenues. Overall, Business Insider's growth in 2017 was
over 45 %. And thus above the expected average growth
that we had envisaged in the acquisition. In addition, we
accelerated the internationalization of Business Insider
through new country editions. Reach and user intensity
of our offer for users of Samsung mobile phones, Upday,
continue to be very good.
On the publishing side, we have tackled the reorganiza-
tion of the national publishing units (WELT, BILD). With
this modification, we want to further strengthen the
brands, align our publications more closely to print and
digital target groups, leverage synergies between the
brands and thus further improve the overall economic
prospects. Editorial departments that have already
integrated print and digital are not affected.
With these measures we will not only live up to our
economic responsibility. Especially in the area of "News
Media" this was particularly challenging - and important
in this year. "Fake News" and populist trends on the
net are countered by our media with critical, profoundly
researched journalism. This, too, was the key to
success in 2017 for Axel Springer.
There were also important developments in the portfolio
of our Marketing Media segment: In January 2018 we
concluded an agreement for the sale of our shareholding
in aufeminin at a very attractive price, subject to approval
by the responsible competition authorities. In addition,
we created a good starting position for further develop-
ment with the merger between Awin and affilinet.
Our Supervisory Board appointed Dr. Stephanie Caspar
to the Executive Board as of March 1, 2018. She
assumes group-wide responsibility for a newly created
division for technology and data. We have thus firmly
established a paramount technology and data strategy
at Axel Springer at the Executive Board level.
In addition to the major strategic lines, Axel Springer was
strengthened by a series of individual projects. These
include, among others, successful real estate trans-
actions in Berlin. In this way, we reduce our capital tied
up in real estate and achieve high level profits. Adjacent
to our company headquarters, our new building is
currently under construction. I am happy that we will
build it together with Rem Koolhaas. It will match our
idea of modern, digital work. The cultural change of Axel
Springer is also evident in the Tuesday Townhall Talk.
The regular event introduced last year enables all
employees of all companies of Axel Springer to have
discussions with the Executive Board. And with the
expansion of the share participation program to other
companies within the Group, we have enabled even
more employees to participate in the economic success.
Many employees take part in it and thus strengthen their
ties to Axel Springer.
I am particularly happy that we have reached a goal in
2017 that is personally important to me: As of December
31, 2017, Axel Springer employed a proportion of 32 %
women in management positions. We achieved this goal
without quota. It is part of our cultural change. Diversity
will continue to play a key role at Axel Springer, and the
proportion of women should continue to rise.
My joy over the commercial success of the year 2017
is only surpassed by one other message. Since 16th
February our employee Deniz Yücel is free. For over a
year he was detained in Turkey, without being charged.
His freedom makes us all very happy.
Many heartfelt regards
Mathias Döpfner
5
Executive Board
Dr. Mathias Döpfner
Jan Bayer
Chairman
President News Media
Born 1963, journalist.
Career milestones:
Born 1970, Master’s degree in
media studies. Career mile stones:
Frankfurter Allgemeine Zeitung,
Süddeutsche Zeitung; Publisher
Gruner+Jahr; Chief Editor Wochen-
Volksstimme, Magdeburg; Publisher
post, Hamburger Morgenpost,
Süddeutsche Zeitung; Chairman of
and DIE WELT. Member of the
the Executive Board of the WELT
Executive Board since 2000,
Group. Member of the Executive
Chairman since 2002.
Board since 2012.
6
Executive Board
Dr. Julian Deutz
Dr. Andreas Wiele
Dr. Stephanie Caspar
Chief Financial Officer
President Classifieds Media
Since March 2018
President Technology and Data
Born 1968, Master’s degree in
Born 1962, lawyer.
*1973, Master’s degree in business
business administration. Career
Career milestones: Editor,
administration. Career milestones:
milestones: OC&C Strategy
Hamburger Morgenpost; Head
Engagement Manager McKinsey;
Consultants; head of M&A/Investor
of Publishing Capital and Geo,
Director Consumer Categories eBay;
Relations Pixelpark AG; CFO
Gruner+Jahr, Paris/France;
Member of the Management Team/
Venturepark AG; CFO Steilmann-
Execu tive Vice President and Chief
Leiterin UX Immobilien Scout; CEO
Gruppe; Axel Springer International;
Operating Officer of Gruner+Jahr
Mirapodo; Managing Director
Head of Group Controlling/Corporate
USA Publishing, New York.
WeltN24; Managing Director Spring
Development Axel Springer SE.
Member of the Executive Board
GmbH. Member of the Executive
Member of the Executive Board
since 2000.
Board since 2018.
since 2014.
7
The Axel Springer share
Annual Report 2017
Axel Springer SE
The Axel Springer share
Successful stock market year 2017
Performance Axel Springer Share in €
The stock exchanges can look back on a good year.
The leading German index, the DAX (price index), closed
the reporting year with growth of 9.6 %, while the MDAX
(price index), which also includes the Axel Springer
share, increased by 15.5 %. At the end of the year, the
European media sector index DJ EuroStoxx Media was
up 4.3 % on the previous year-end. The Axel Springer
share gained 41.2 % for the full year, thus outperforming
the benchmark indices. Market capitalization at the end
of 2017 was around € 7.0 billion.
70
60
50
40
Axel Springer
1)
DAX
MDAX
1)
DJ EuroStoxx Media
1)
Closing price: € 65.13
Share Information1)
€
2017
2016
Change
Earnings per share, adjusted2) 3) 4)
Earnings per share3) 4)
Dividend5)
Total dividend payout
(€ millions)5)
Year-end share price
Highest price
Lowest price
Market capitalization
(€ millions)6)
Daily traded volume
(Ø, € thousands)
2.60
3.19
2.00
215.8
65.13
68.10
46.34
2.41
8.1 %
3.94
– 19.1 %
1.90
5.3 %
205.0
5.3 %
46.13
41.2 %
51.34
32.6 %
39.91
16.1 %
7,027.2
4,977.2
41.2 %
01/01/17
12/31/17
1)
Indexed on the year-end share price of Axel Springer SE as of December 31, 2016.
Analyst Coverage
The number of analysts publishing ratings of the Axel
Springer share increased from 17 to 18 in the 2017
financial year. At the time of preparation of the annual
financial statements, eight brokers recommend our share
for purchase, eight classify it as "hold/neutral" and two
recommend our share for sale. You can find the latest
recommendations and share price targets in the Investor
Relations section on our website at www.axelspringer.de.
9,371.7
6,799.2
37.8 %
Investor Relations
Dividend yield5) 6)
3.1 %
4.1 %
Dividend yield per share
per year7)
45.3 %
– 6.6 %
-
-
1) Quotations based on XETRA closing prices.
2) Explanations with respect to the relevant key performance indicators on page 33.
3) Continuing operations, for the portion attributable to discontinued operations see
notes to the consolidated financial statements under note (2d).
4) Calculation based on average weighted shares outstanding in the reporting period
(107.9 million; PY: 107.9 million).
5) The dividend for the financial year 2017 is subject to the condition of approval by
the annual shareholders’ meeting.
6) Based on shares outstanding at the closing price, excluding treasury shares
(107.9 million; PY: 107.9 million).
7) Share price development plus dividend payment.
The company's Management and Investor Relations
team presented the company and its strategy at investor
conferences and road shows in Europe and the United
States on a total of 19 days. In addition, we held regular
dialogues with investors, analysts and other capital mar-
ket participants in numerous discussions and telephone
conferences throughout the year. As usual, the tele-
phone conferences held in connection with the publica-
tion of our financial reports were broadcasted live on the
Internet as audio webcasts and will continue to be avail-
able on our website.
At the end of June, we also held two Capital Market
Days in London and New York for the first time, which
were dedicated exclusively to the classifieds business of
Axel Springer. Almost all companies in the Classifieds
8
Annual Report 2017
Axel Springer SE
The Axel Springer share
Media segment were represented by presentations from
top management. For the first time, revenues and earn-
ings of the individual companies were presented for
these companies in addition to detailed operating figures.
We will continue to maintain our high level of transparen-
cy in the future and provide semi-annual information
about the developments in our classified offers. Both
events enjoyed great interest: A total of around 100
analysts and investors accepted the invitation on site. In
addition, many market participants watched the event
live as a webcast. A video recording of the event can be
found on our website www.axelspringer.de/cmd2017.
Shareholder Structure
Axel Springer Gesellschaft für Publizistik
Dr. h.c. Friede Springer
Dr. Mathias Döpfner
Other shareholdings
Share participation program
In recent years, employees and executives have benefited
from the company's performance through a share par-
ticipation program. So far, participation was only possible
for employees of Axel Springer SE and its domestic sub-
sidiaries. The existing share participation program was
fundamentally revised, inter alia with the aim of extending
the circle of eligible persons to a larger number of com-
panies belonging to the Group. The new share partici-
pation program started in July 2017, initially with a six-
month pilot phase for Axel Springer SE and all 100 %
(subsidiary) companies in Germany, France, the UK and
Belgium. Since January 2018, the program takes place
with the regular attendance period of twelve months each.
Eligible employees determine an amount of their basic
salary, with which the corresponding number of shares
are acquired each month. At the end of the year, employ-
ees receive a share grant of 30 % of the converted base
salary. The subsequent holding period is two years.
44.8 %
2.8 %
5.1 %
47.3 %
Information on Listing
Share type
Registered share with restricted
transferability
Stock exchange
Germany (Prime Standard)
Status: December, 2017
Security Identification
Number
ISIN
Capital stock
it Juli 2017, z
DE0005501357, DE0005754238
€ 107,895,311.00 / divided up into
107,895,311 registered shares with no
par value
Thomson Reuters
SPRGn.DE
Annual shareholders‘ meeting
The annual shareholders' meeting of Axel Springer SE
took place in Berlin on April 26, 2017. Around 410
shareholders or 87.5 % of capital carrying voting rights
participated. All resolutions proposed by the Manage-
ment - including the proposal to increase the dividend by
5.6 % to € 1.90 (PY: € 1.80) per qualifying share - were
approved by majorities of at least 93.8 %. Based on the
2016 year-end price, our share achieved a dividend yield
of 4.1 %. A total of € 205.0 million (PY: € 194.2 million)
was distributed to our shareholders.
9
Annual Report 2017
Axel Springer SE
Combined Management
Report
Combined Management Report
12 Fundamentals of the Axel Springer Group
22 Economic report
39 Economic Position of Axel Springer SE
42 Report on risks and opportunities
56 Forecast Report
61 Disclosures and explanatory report on the
Executive Board pursuant to takeover law
65 Corporate Governance Report
10
Annual Report 2017
Axel Springer SE
Combined Management Report
Summary of business performance and
operating results in 2017
Axel Springer has had a very successful conclusion to the
2017 financial year. The forecast published in March 2017
and partially raised in August was met (see page 58).
In the reporting year, revenues of € 3,562.7 million were
8.3 % higher than the prior-year figure (€ 3,290.2 million).
This increase was mainly due to the good operational
development. In addition, consolidation effects also
contributed, while currency effects had a negative impact
overall. Organically, i.e. adjusted for consolidation and
currency effects, sales revenues were 6.3 % higher than
in the previous year. All operating segments contributed
to this revenue growth.
The transformation towards an increasingly digital
company is reflected in the share of digital business in
our key figures: In 2017, we generated 71.5 % of our
revenues and 87.1 % of our advertising revenue in the
digital field.
Compared with the prior year, adjusted EBITDA in-
creased by 8.5 % to € 645.8 million (PY: € 595.5 million).
The return remained stable at 18.1 % (PY: 18.1 %). The
partially significant increase in earnings in the operating
segments was only opposed by a deterioration in
earnings in the Services/Holding segment. Overall, we
generated 80.0 % of our operating result in the past
financial year with digital activities.
Adjusted earnings per share from continuing opera-
tions of € 2.60 were 8.1 % above the prior year's figure
of € 2.41.
At the annual shareholders' meeting to be held on
Wednesday, April 18, 2018, the Executive Board and
Supervisory Board will propose a dividend of € 2.00
(PY: € 1.90) per qualifying share.
Outlook 2018
For the financial year 2018, we expect Group revenues
to increase by an amount in the low to mid single-digit
percentage range. Organically, we also anticipate an
increase in the low to mid single-digit percentage range.
For adjusted EBITDA, we expect a rise in the lower
double-digit percentage range. For the organic growth in
EBITDA, we expect an increase in the mid to high single-
digit percentage range.
For the adjusted EBIT, due to higher depreciation, we
expect an increase in the lower single-digit percentage
range, organically a rise in the lower to mid single-digit
percentage range.
For the adjusted earnings per share, we expect an
increase in the lower to mid single-digit percentage
range. For the organic development, we anticipate an
increase in the mid to high single-digit percentage range.
You can find detailed information on our forecasts on
page 58.
Introductory remarks
The combined management report for Axel Springer SE
and the Group are summarized. The information contained
in this combined management report relates to the
economic situation and business performance of the
Axel Springer Group. These statements are also largely
applicable to Axel Springer SE. Additional information
on the economic situation of the parent company Axel
Springer SE is provided in a separate chapter on page 39.
For explanations of the key performance indicators used
and the adjustments of our operating results, please refer
to page 33 of the combined management report and the
notes to the consolidated financial statements section (31).
11
Annual Report 2017
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Fundamentals of the Axel Springer Group
Segments
Axel Springer Group
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
Jobs
National
Real Estate
International
General/
Other
Reach Based
Marketing
Performance
Marketing
Business model
Segments of the Axel Springer Group
Axel Springer is a leading digital publisher with an em-
phasis on digital classifieds and journalism. Already today,
71.5 % of total revenues and 80.0 % of adjusted EBITDA
are generated by digital activities. Axel Springer operates
one of the world's largest portfolios of digital classifieds.
From an economic point of view, these offers are the
most important pillar in the Group, particularly those in
the subsegment Jobs and Real Estate. In addition, the
offers in the News Media segment include a broad-
based portfolio of successfully established brands such
as the BILD and WELT Group in Germany or Business
Insider in the USA. The Marketing Media segment com-
prises all business models that generate revenues pre-
dominantly through reach-based or performance-based
forms of advertising.
Legal structure, locations
Axel Springer SE, as the holding company of the Axel
Springer Group, is a listed stock corporation with its
registered head office in Berlin. The Group also maintains
offices at other locations in Germany. In addition, the
Group comprises numerous companies abroad. The
consolidated shareholdings of the Group are listed in
section (42) in the notes to the consolidated financial
statements.
Axel Springer's business activities are bundled in three
operating segments: Classifieds Media, News Media and
Marketing Media. In addition, there is the Services/-
Holding segment.
As part of the publication of the nine-month figures for
2017, we have adjusted the names of our segments.
The former Classified Ad Models have been renamed
Classifieds Media, the Paid Models have become News
Media and the segment previously called Marketing
Models has been changed to Marketing Media.
The content composition of the segments remained
unchanged.
Classifieds Media
The Classifieds Media segment encompasses all busi-
ness models that generate their revenues primarily
through advertisers paying for advertising of jobs,
real estate, cars, etc.
Portfolio and market position
Axel Springer has established one of the world's largest
portfolios of leading online classifieds portals over the
last few years. The activities of the Classifieds Media
12
Annual Report 2017
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
segment are divided into three subsegments: Jobs,
Real Estate and General/Other.
The following graph gives an overview of the main
brands in the Classifieds Media portfolio.
Portfolio Classifieds Media
Jobs
Real Estate
StepStone
Totaljobs/Jobsite
Saongroup
SeLoger
Immowelt
Immoweb
1) As of 2018 part of the subsegment Jobs.
General/
Other
LaCentrale
Yad2
@Leisure
meinestadt.de1)
Jobs comprises the StepStone Group and its subsidiar-
ies, the leading company among the private-sector job
boards in Germany, the UK, Ireland, South Africa and
other countries. With its portals specialized in expert and
managerial staff, according to the market research insti-
tute TNS, StepStone delivers around two and a half
times more applications than its nearest competitor in
Germany. The Totaljobs Group and the Jobsite Group,
which alongside the general main brands, also include
among others the specialist portals Caterer.com,
CWJobs.co.uk, CityJobs.com and eMedcareers.com,
together deliver significantly more applications in the UK
than their competitors.
In Real Estate, Axel Springer is the leading provider in
France and Belgium with SeLoger and Immoweb.
SeLoger is the largest company in France in the field of
specialized real estate classifieds in France and has been
able to increase its average revenue per agent through
price measures as well as an expansion of its offering in
recent years, reaching an average value of € 724 in 2017
(PY: € 676) per month. The SeLoger's portfolio also
includes some highly specialized niche portals such as:
bellesdemeures.com for luxury real estate. Since the first
quarter of 2018, Logic-Immo.com is also part of the
portfolio (see page 24). In Belgium, Immoweb achieved
an average revenue per agent of € 514 per month
(PY: € 460). The Real Estate subsegment also includes
the German Immowelt Group, which was created in
2015 from the merger of Immowelt and Immonet and is
the clear number two of the German real estate portals.
In the year 2017, the focus of the Immowelt Group was
again on the marketing of the DUO offer, which enables
agents to place their properties on both portals. This
resulted in another significant increase in average reve-
nue per agent. In 2017, this averaged € 294 per month
(PY: € 252).
General/ Other includes Car&Boat Media, based in
Paris. The company operates LaCentrale, the leading
specialist classifieds portal for used cars in France as
well as other portals related to cars and boats. LaCen-
trale's average revenue per agent in 2017 was € 410 per
month. The Yad2 Group includes the leading generalist
classifieds portal in Israel for real estate, cars and classi-
fieds, as well as a leading job board (Drushim). The sub-
segment also includes @Leisure, a leading operator of
online holiday property rental portals. The group of com-
panies based in Amsterdam includes, among others, the
portals belvilla and casamundo as well as the company
TraumFerienwohnungen and the DanCenter Group
(previously Land & Leisure Group), which, among others,
operates the portal DanCenter. The German regional
portal meinestadt.de generates the majority of its
revenues through digital classifieds.
Business model and key factors
The offers in the Classifieds Media segment generate
revenues mainly through sales of classified ads. A certain
price per ad is paid by HR departments for placing job
ads, by estate agents for advertising real estate, and by
car dealerships for publishing car ads. In addition,
revenues are generated by marketing online advertising
spaces and cooperations as well as through the provision
of software functionalities for customers. Long-term
growth drivers are, among others, the continuing reloca-
tion of classified ads to the Internet, the acquisition of
new customers and the increasing monetization of the
offer. Moreover, business developments are significantly
determined by the economic environment in the respec-
tive market segments, the market position in the respec-
tive segment, and online usage behavior of advertisers
and seekers.
13
Annual Report 2017
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Within Jobs, ads are sold to job providers and logins
are offered to online CV databases that belong to the
respective portals in which the job advertisers can actively
search for suitable candidates.
Real Estate primarily generates revenues by selling
advertising and display space to agents, project develop-
ers, housing agencies, or private individuals.
Within General/Other, revenues are based on the focus
of the relevant portal. These include, among others, com-
mercial automobile retailers, landlords of vacation homes,
real estate agents and project developers. The portals
are also partially aimed at private individuals who predomi-
nantly sell second-hand goods via this marketplace.
News Media
The News Media segment includes primarily business
models that are based on content creation and funded
by paying readers and/or advertisers.
Portfolio and market position
The News Media segment is sub-divided into national
and international offerings. The main activities in the News
Media segment are illustrated in the following chart.
Portfolio News Media
National
International
The digital portfolio in News Media National mainly
comprises BILD.de and WELT.de, including affiliated
online portals such as Stylebook and Gründerszene,
as well as the digital apps of magazines (including
Autobild.de). In addition, with WELT (previously N24) a
TV news channel belongs to the WELT Group. N24 was
renamed WELT on January 18, 2018.
In terms of reach BILD.de is Germany's strongest
news and entertainment portal with a digital subscription
model. In addition, BILD.de has the widest reach of
journalistic mobile offers in Germany. BILD.de is also
distributed via mobile channels, with apps for nearly all
kinds of smartphones, tablet PC and smart TV, not to
mention the mobile portal. In 2017, in addition to our
portal Upday, it was one of the two most-visited mobile
media brands in Germany ("digital facts 2017 12“, AGOF -
Working Group for Online Research). BILD.de also offers
other products such as fitbook.de and travebook.de.
WELT digital products are some of the most successful
stationary and mobile Internet sites in the segment of
German quality media. The offering is also available on
PC tablet, smartphones and e-readers as well as a digital
subscription. WELT (previously N24) is leading in the TV
news channel segment and maintained its 1.4 % market
share in 2017 among the 14- to 49-year-old advertising-
relevant audience group.
BILD-Group
WELT-Group
Ringier Axel Springer Media
Business Insider
eMarketer
upday
Politico
The print portfolio in the News Media National seg-
ment comprises the newspapers of the umbrella brands
BILD and WELT, as well as our magazines.
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BILD is Europe's biggest daily newspaper with the wid-
est reach, as well as the unchallenged number one in
Germany with a share of 79.4 % of newsstand sales (all
figures for the German newspapers and magazines are
based on paid circulation as per German Audit Bureau of
Circulation, (IVW - Informationsgemeinschaft zur
Feststellung der Verbreitung von Werbeträgern) as at
December 31, 2017). BILD am SONNTAG is Germany's
best-selling nationwide Sunday newspaper in 2017, with
a share of 59.8 %. B.Z. is one of Berlin's biggest news-
papers. The automotive, computer and sports media of
the BILD brand family make up a magazine portfolio built
on the core brands of AUTO BILD, COMPUTER BILD
and SPORT BILD.
The WELT AM SONNTAG is the clear number one in the
area of supraregional quality Sunday newspapers based
on circulation. DIE WELT (including WELT KOMPAKT) is
the third-biggest quality newspaper in Germany based
on paid circulation.
The subsegment News Media International comprises
the international digital and print media offers.
In Eastern Europe, Axel Springer is active with Ringier
Axel Springer Media in the markets of Poland, Hungary,
Serbia, Slovakia and, since 2017, also in the Baltic
States. The portfolio includes leading digital and print
offerings. With the digital offerings, we reach 77.7 % of
the country's Internet users with the leading Polish online
group Onet. In Hungary the leading job portal, profes-
sion.hu, belongs to the portfolio. In Slovakia, azet.sk is
the leading online portal, reaching 80.7 % of Internet
users. Since the acquisition in the financial year 2017 of
the CV Keskus Group, which operates the leading job
portals in Estonia, Latvia and Lithuania, Ringier Axel
Springer Media is also represented in the Baltic States. In
Slovakia, the inclusion of the existing classifieds business
in a joint venture with the Penta Group has created the
leading classified portals in the Real Estate and Auto
segments. Print offers include the largest Polish news-
paper FAKT, the leading tabloid BLIKK in Hungary and
the leading tabloid NOVY CAS in Slovakia, as well as
other newspapers and magazines. In Slovakia, the sale
of the print business, already agreed upon in 2017, is to
take place in the middle of the year 2018 (see page 25).
The Europe Joint Venture with POLITICO in Brussels
continued its growth course in 2017 and has strength-
ened its position as the most widely read and influential
EU media brand. In 2017, 62 % of EU decisionmakers
read POLITICO at least once a week. The website politi-
co.eu, the printed weekly newspaper, the conference
business and the digital payment offers continued to
contribute to the growth course.
In the US, Axel Springer is represented by the leading
digital business and financial news provider Business
Insider. In addition to businessinsider.com, the company
also operates other services such as: for example, the
INSIDER portal in the US and Business Insider UK in the
UK. In 2017 Business Insider reached over 300 million
monthly readers and viewers. In cooperation with finan-
zen.net, Business Insider has been running a German
portal since November 2015 and the Markets Insider
since October 2016 in the USA. Business Insider also
launched another digital subscription offering with Busi-
ness Insider Prime in 2017 and is expanding its B2C
offering to include the paid business customer product
BI Intelligence.
eMarketer complements the portfolio of innovative paid
digital offerings in English-speaking countries and
strengthens Axel Springer's position in business news
and information. Based in New York, the company is a
leading provider of analytics, studies and digital market
data to companies and institutions.
The mobile news aggregator Upday, developed in partner-
ship with Samsung and initially launched in four countries,
has been represented in 16 European countries since
April 2017. Since then, Upday has become the largest
mobile news offering in Europe. In December 2017, the
platform reached a total of 498.4 million visits (IVW) in 16
countries, a quarter of them in Germany. Upday aggre-
gates content from more than 3,500 different sources.
In addition to "Top News" selected and summarized by
journalist, news is displayed by algorithm that reflect the
individual interests of users in the "My News".
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Fundamentals of the Axel Springer Group
Business model and key factors
Revenues in the News Media segment mainly comprise
circulation and advertising revenues. The circulation
revenues come from the sale of classic print products
and digital subscriptions. Advertising revenues are gener-
ated by marketing the reach of our online and print media.
The value chain is, however, aligned across media. It
encompasses all the essential processes for the creation
of information, entertainment and moving image content,
ranging from conception, editorial work and production to
sales and marketing. All journalism content is collected in
integrated newsrooms, some of which are used for more
than one publication, and processed there in accordance
with the demands of our print and online media.
News Media is marketed predominantly centrally in
Germany via Media Impact, the leading cross media
marketer (measured by gross market shares). The digital
marketing portfolio also includes content produced by
external companies. The cross-media approach to
marketing enables optimal use of synergies,
competencies and reach.
The print business continues to face the challenge of
falling print circulations. For advertisers, in addition to
the circulation development, the reach is particularly
important. In particular, BILD continues to benefit from
the fact that, with just under 10 million daily readers, it
has by far the largest reach among daily newspapers in
Germany.
We produce our newspapers, among others, in the three
offset print shops in Hamburg-Ahrensburg, Essen-
Kettwig and Berlin-Spandau. We therefore carry out all
steps in the value chain ourselves, from production to
monitoring dispatch logistics. The print media are
distributed nationally and internationally above all by
press wholesale companies, station book trade and
press import companies. In Germany there are over
100 thousand retail shops where our newspapers and
magazines are sold.
In the digital business, industry's circulation revenues are
still much smaller than in the print business, but are
recording strong growth. The willingness to pay for digi-
tal journalism is increasing and success stories of digital
subscription models like the New York Times in the US
illustrate this. Digital advertising revenues continue to be
highly competitive due to the reach-based market power
of Facebook and Google. For example, Facebook and
Google already absorb two-thirds of the digital advertis-
ing market in the US today. A key driver of this develop-
ment is the shift in user behavior from desktop to mobile.
However, we see the secure brand environment that
publishers can guarantee by editing content as a great
opportunity. Against the background of the often viral
distribution of fake news, social media platforms have
increasingly come under fire in 2017- exposing the
brands of advertising customers to a reputation damag-
ing environment.
The production process of digital news media involves
the journalistic preparation of content with subsequent
provision on websites or other digital resources such as
smartphones, tablets or smart TVs, or the processing
and aggregation of information in databases. Distribution
of digital products takes place predominantly via our own
Internet pages or download platforms such as the app
stores of Apple and Google.
Cross-media, the segment is influenced by the political
situation in the relevant markets, the economic environ-
ment and, in particular, the development of the advertis-
ing markets. In addition to the general market cycle,
seasonal aspects and one-off effects such as special
editions play a role.
Marketing Media
In the Marketing Media segment, all business models
are summarized, the proceeds of which are generated
predominantly by advertisers in reach-based or
performance-based marketing.
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Fundamentals of the Axel Springer Group
Portfolio and market position
The Marketing Media segment is divided into reach
based and performance based offers. The principal
activities are summarized in the graph below.
Portfolio Marketing Media
Reach Based Marketing
Performance Marketing
idealo
aufeminin1)
Bonial
finanzen.net
Awin
1) Sale envisaged for the second quarter of 2018.
Reach Based Marketing includes idealo.de, Germany's
leading and in terms of reach strongest portal for product
search and price comparison. idealo accesses around 2.2
million products with more than 333 million offers from
online retailers (status: average December 2017) and is
also represented internationally with numerous offers. The
product comparison portal ladenzeile.de is also part of the
idealo Group.
aufeminin and its affiliates provide online portals, forums
and product subscriptions for predominantly female
audiences. In addition to the internationally represented
aufeminin portals, these include Marmiton, France's largest
digital offering on the subject of cooking, the lifestyle brand
My Little Paris with leisure tips, local recommendations and
subscriptions, the UK parent portal netmums, the health
portal Onmeda in Germany, France and Spain, and the
Californian company Livingly Media with its four lifestyle
portals Livingly, Zimbio, StyleBistro and Lonny. In
December 2017, Axel Springer announced the signing of
an option agreement for the sale of its stake in aufeminin to
Télévision Française 1 (TF1). The sales agreement was
concluded in January 2018 (see page 25).
kaufDA.de and MeinProspekt.de operate under the
umbrella of the Bonial International Group as Germany's
leading consumer information portals regarding local
shopping. The offerings distribute digitized advertising
retail leaflets predominantly via mobile Internet at a re-
gional level. The services are offered under local brands
also in France, Sweden, Norway, Denmark (all Bonial),
Spain, Mexico, Chile and Colombia (all Ofertia). In De-
cember, Bonial announced the closure of US activities
under the Retale brand, as profitability targets were not
met (see page 24).
finanzen.net, the financial portal with the highest reach in
Germany, offers its users data on the latest develop-
ments in the financial markets on a daily basis. The portal
is part of its internationalization strategy, among others,
also represented with an offer in Switzerland, Russia,
Austria and the Netherlands. In addition, finanzen.net
operates two portals in cooperation with Business
Insider, the German edition of Business Insider and
Markets Insider, a US stock exchange portal.
In the field of TV and radio, Axel Springer is directly and
indirectly involved in leading private radio stations and
thus holds one of the biggest private radio portfolios in
Germany. Further, Axel Springer also holds a minority
interest in Do⁄an TV Holding, one of the leading private
television and radio companies in Turkey.
The Performance Marketing activities are bundled
within the Awin Group (previously: Zanox group). The
leading provider of success-based online marketing in
Europe brings advertisers and publishers together, giving
advertisers an efficient way to market their products and
services on the Internet. Since January 2017, the US
company ShareASale has also been part of the Awin
Group. In October 2017, the merger of Awin and affilinet
took effect. Axel Springer and United Internet, which had
brought affilinet into the AWIN AG, thus strengthen their
competitive position in the affiliate marketing area and lay
the foundations for accelerated international growth. This
also serves to prepare for a possible subsequent IPO of
the Awin Group (see page 24).
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Fundamentals of the Axel Springer Group
Business model and key factors
In our Reach Based Marketing, advertising spaces are
marketed to advertising customers and charged based
on the reach generated by the given media offerings
(number of users or listeners) or the interaction generat-
ed by the reach. Attractive content generates high reach
values and topic-specific environments enable advertis-
ers to precisely reach the desired target groups.
In the course of the rising use of online media, reach
based marketing particularly on the Internet is a major
business. Besides display ads like banners, layer ads,
and wallpaper, videos are also increasingly being used
as online advertising formats. In addition, marketing
collaborations and innovative forms of advertising such
as native advertising, sponsoring and marketing via
social media channels are used. Due to the increased
automatic purchase and sale of advertising space
(programmatic advertising) and the progressive spread
of mobile devices, the forms of reach marketing are
constantly changing.
Through Performance Marketing, advertisers can
promote their products and offerings on publisher web-
sites through advertising such as text links, banner ads,
or online videos. Advertisers pay only a performance fee
to publishers if the ad has actually been used and led to
the transaction requested by the advertiser. Our plat-
forms provide the infrastructure for this efficient form of
marketing, record data traffic and transactions, and
facilitate a variety of services to advertisers and
publishers.
The business segment is benefiting from the growth of
stationary and mobile Internet usage and the increasing
number of relocation of purchases to the Internet.
Through the Awin Group, Axel Springer is benefiting
from growing demand from advertising companies for
success-based advertising and marketing models.
Services/Holding
Group services, which also include the three domestic
printing plants, as well as the holding functions are report-
ed within the Services/Holding segment. Group services
are purchased by in-house customers at standard market
prices.
Management and Control
Executive Board divisions
During the reporting year, the Executive Board of Axel
Springer SE consisted of four members; from March 1,
2018 there will be five members. In its management of
the company, the Executive Board is advised and
supervised by a Supervisory Board composed of nine
members.
Axel Springer Executive Board Divisions
Chairman and Chief Executive Officer
Dr. Mathias Döpfner
Chief Financial Officer
Dr. Julian Deutz
Executive
Board
Divisions
News Media
Jan Bayer
Classifieds and Marketing Media
Dr. Andreas Wiele (since March 2018
Classifieds Media)
Technology and Data
Dr. Stephanie Caspar (since March 2018)
Executive Board responsibilities are divided as follows:
Dr. Mathias Döpfner is Chairman and Chief Executive
Officer of Axel Springer SE. All editors-in-chief and the
corporate staff divisions Corporate Communications,
Public Affairs, Strategy, Executive Personnel as well as
the Axel Springer Academy report to him.
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Fundamentals of the Axel Springer Group
passing both group-wide targets and division targets are
adopted every year anew. With regard to the Group
targets for 2017, variable compensation is based primarily
on the adjusted financial indicators EBITDA and EBIT.
A presentation of the remuneration of the Executive
Board can be found in the chapter "Corporate Govern-
ance" under "Compensation Report" (from page 76).
We also provide information on the remuneration of our
Supervisory Board members (from page 80).
Goals and Strategies
Axel Springer is pursuing a strategy of profitable growth
with the ultimate goal of becoming the leading digital
publisher. This goal is considered to be achieved when
the Group is the leader in its respective market segments
and in the countries in which it operates.
Segment strategies
In the Classifieds Media segment, Axel Springer intends
to further expand its position as a leading international
provider of digital classified portals. In addition to organic
development, additional acquisitions should contribute
to growth, depending on acquisition opportunities.
Synergies within the group are used consistently.
In addition, early-stage activities were launched in the
Classifieds Media segment in order to identify innovative
business models and providers at an early stage.
In the News Media segment, Axel Springer intends to
exploit the potential of the strong BILD and WELT brands
in the digital and printed as well as the international
brands (e. g. Business Insider and eMarketer).
At the beginning of 2018, Axel Springer has rebuilt the so
far brand-based organization of the News Media National
product portfolio and organized the publishing area
across print and digital. The editors continue to work
together brand-linked and cross-medially.
Dr. Julian Deutz is responsible for the Finance and
Personnel Executive Board division. In addition to the
commercial departments, his division also includes,
among others, Personnel, Law and Compliance, Group
Purchasing, Group Security, as well as Corporate Audit &
Risk Management.
Jan Bayer is President News Media. In addition to the
journalistic product portfolio, this division also includes
Media Impact (Marketing), Sales Impact (sales), IT, and
the printing plants are also assigned to this segment. In
addition, from March 1, 2018, Jan Bayer will take over the
responsibility from Dr. Andreas Wiele for the reach based
offers of the Marketing Media segment.
Dr. Andreas Wiele is President Classifieds and Marketing
Media (from March 1, 2018: President Classifieds Media)
and is responsible for the corresponding segments, in-
cluding the associated investments. From March 1, 2018
he is responsible for the classifieds and performance-
based marketing activities.
From March 1, 2018, Dr. Stephanie Caspar will be re-
sponsible for the overall technology and data strategy and
the national digital media business as Executive Board
member for Technology and Data.
Corporate governance principles
Axel Springer’s corporate governance principles are
aligned with our core values of creativity, entrepreneur-
ship, and integrity. There are also five principles, the "es-
sentials", which are laid down in a separate Axel Springer
corporate constitution. For more information on our inter-
nal rules, see the section entitled "Important Management
Practices" in the declaration of corporate governance law
pursuant to Section 289f HGB (commercial law) on page
67 of this Annual Report.
Basic principles of the compensation system
The compensation of our employees, all the way up to
senior management level, consists of a fixed component,
and – for qualifying employees - an additional variable
component. Variable compensation is determined on the
basis of individual performance and the company’s suc-
cess. To this end, individual target agreements encom-
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Fundamentals of the Axel Springer Group
In this way, the very different requirements in the publish-
ing area of the print and digital business should be taken
into account. The print area is about limiting the circula-
tion decline and aligning our products even more consist-
ently with the readers in order to consolidate the strong
market position of our titles. The digital sector, on the
other hand, requires greater investments across brands in
technological innovations in the future. Axel Springer is
aiming for a sustained positive development of digital
subscription models in the context of readers' increasing
willingness to pay for journalistic quality. Another focus is
the expansion of the video content in the digital offers of
BILD and WELT. The BILD Group achieves a superior
reading and usage time compared to other competitors
thanks to the ever-closer integration of print, online and
mobile offerings and increases its share, especially
among young and high-income readers. With the digital
brand subscription BILDplus, the basis of paying readers
on the Internet is established and expanded.
The WELT Group wants to become the leading multi-
media provider of quality journalism that can optimally
serve print, digital, TV and out of home. For this the
respective strengths are used: The print and digital offer-
ings of the WELT Group use the moving image inventory
of the TV news channel WELT (previously N24), while the
quality news channel in conjunction with the other offers
of the WELT Group serve to further expand its market
position and better exploit its online potential. Further-
more, the WELT Group will use its digital subscription
model to further increase the base of paying readers on
the Internet.
Via the central marketer Media Impact, the segment offers
advertisers an attractive, cross-media and strong reach
based platform for campaigns. As one of the leading
cross-media marketing firms (based on gross market
shares), Media Impact will continue to expand its external
marketing portfolio in the print and digital segments. The
TV portfolio, together with Viacom's portfolio, will be mar-
keted in the video image marketer Visoon Video Impact.
The strategy of sustainable growth in the Marketing
Media segment extends to reach based marketing
and performance based marketing alike. In reach based
marketing, the strategy focuses on financial and consum-
er information portals. It is important to increase the range
and use of offers, increase advertising utilization and
develop new advertising, pricing and business models.
Furthermore, innovative products and business models
are promoted, developed and, if successful, expanded
further via capital expenditures in early-stage activities.
In the area of Performance Marketing, there is stronger
integration of the activities bundled in the Awin Group;
essentially by standardizing the technical platform and
expanding services and the publisher network.
Organic and acquisition-driven growth
Furthermore, innovative products and business models
are promoted, developed and, if successful, expanded
further via capital expenditures in early-stage activities.
This is complemented by inorganic growth.
In all segments, Axel Springer seizes opportunities to
expand the business model by investing in companies
with innovative business ideas which are still in an early
phase of their development. Alongside the indirect partic-
ipations in start-ups as part of our investments in early
phase funds, Project A Ventures, in particular, forms part
of the Start-up Accelerator recently founded together with
Porsche, which supports digital business ideas with high
market potential. Furthermore, Axel Springer has an equi-
ty stake in LAKESTAR II. The investment fund concen-
trates on digital companies with a focus on Europe and
the USA. A number of direct minority interests are also
assigned on a selective basis to these indirect interests in
startups. Over the past few years, Axel Springer has also
established an early-phase portfolio in the USA that fo-
cuses on digital journalism.
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Fundamentals of the Axel Springer Group
Above all, when the opportunities arise, companies that
are well-established in the market will be acquired. We
select suitable investments according to their appropriate
strategic orientation, the quality of the management, the
profitability and the scalability of the company business
model.
adjusted EBITDA and the adjusted EBIT are the basis for
the performance-related compensation of executives
(more about our compensation system can be found
starting on page 76). These performance indicators and
the adjusted EBITDA margin are anchored in our internal
planning and control system.
Among other things, we assess the profitability of
investments in new or existing business segments using
approved capital value methods that take business and
country specific risks into consideration.
Internal management system
We have aligned our internal control system along our
corporate strategy, defining financial performance indica-
tors (which are also our performance measures) and
non-financial performance indicators that measure the
success of our strategy.
Detailed monthly reports are an important element of
our internal management and control system. These
reports contain the monthly results of our most important
activities, along with a consolidated statement of financial
position, income statement, and cash flow statement. We
use these reports to compare actual values with budget
values. When variances arise, we investigate further or
initiate suitable corrective measures.
These reports are supplemented by regular forecasts of
expected advertising revenues over the coming weeks
and months, as well as forecasts of the likely develop-
ment of earnings.
Financial performance indicators
Our focus is on sustainably increasing both our profitabil-
ity and our corporate value. The most important target
and performance indicators in terms of profitability are
revenues, EBITDA and EBIT. At the same time, the
Financial Control Parameters
Selected financial control
parameters on the Group level,
€ millions
Revenues
EBITDA, adjusted1)
2017
2016
3,562.7
3,290.2
645.8
595.5
EBITDA margin, adjusted 1)
18.1 %
18.1 %
EBIT, adjusted1)
504.0
471.1
1) Explanations with respect to the relevant key performance indicators on page 33.
Non-financial performance indicators
In addition to the financial performance indicators, the
following non-financial performance indicators are rele-
vant for assessing our customer, market and supply-
related performance, even if the entity as a whole is not
controlled by it:
Unique Users/Visitors as well as business model-
related key figures of our online media and the
resulting market position
Reach of our media in the advertising market as well
as key figures on brand and advertising awareness
Average circulation of all major newspapers and mag-
azines sold
Digital subscriptions
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Economic Report
Economic Report
General economic conditions and business development
General economic conditions
According to the International Monetary Fund (IMF),
global economic growth in 2017 was + 3.7 % in real
terms, slightly higher than expected. The main driving
forces included the national economies of Europe and
Asia.
According to calculations by the Federal Statistical Office,
the economy in Germany in the course of 2017 was
characterized by strong economic growth. Price-
adjusted gross domestic product rose by 2.2 % com-
pared to the previous year. The German economy has
thus grown for the eighth year in a row. Positive impulses
for growth came mainly from the domestic market in
2017. Private consumption rose by 2.0 % in real terms.
Investments increased by 3.0 % in 2017, which is above
average. German exports also developed positively.
Price-adjusted exports of goods and services were 4.7 %
higher than in the previous year. Imports increased even
more strongly at 5.2 % over the same period.
The ifo Business Climate Index moved upwards in 2017.
This applies both to the assessment of the business
situation and to business expectations. Consumers were
in high spirits, especially in the second half of 2017. This
applies above all to the economic expectations of con-
sumers.
According to calculations by the Federal Statistical Office,
consumer prices increased significantly in 2017 com-
pared to the previous year by 1.8 %. The Federal Em-
ployment Agency recorded 2.5 million unemployed on an
annual average in 2017. The number thus decreased by
5.9 % compared to the previous year, the annual aver-
age unemployment rate in 2017 was 5.7 %.
According to estimates by the German Institute for Eco-
nomic Research (DIW), the British economy grew by
1.5 % in real terms in 2017. The recession, partly ex-
pected as a result of the Brexit vote, has so far failed to
materialize. Private consumption increased more strongly
in the third quarter of 2017 than at the beginning of 2017,
and corporate investment also gave a stronger boost.
At the same time, the foreign trade contribution was
negative due to significantly increased imports. Accord-
ing to the DIW estimate, inflation in the United Kingdom
rose noticeably to 2.7 %.
For France, the DIW expects price-adjusted economic
growth in 2017 of 1.8 %. The inflation rate is likely to be
below average relative to the euro area (1.4 %) at 1.1 %.
In Central and Eastern Europe, the dynamic develop-
ment accelerated in the third quarter of 2017 according
to the DIW estimate. Overall, the region should have
achieved real growth of 4.6 %. The main driver in most
countries was private consumption.
According to the DIW study, the USA achieved real
economic growth of 2.3 % in 2017. In the third quarter of
2017, both private consumption and business invest-
ment increased significantly. Foreign trade also provided
positive impulses.
Industry-specific environment
Advertising Market
According to the latest advertising market forecast of
ZenithOptimedia (“Advertising Expenditure Forecast“,
December 2017), the advertising market in Germany in
2017 grew by 0.9 % over the prior-year figure.
According to these surveys, net revenues of the total
advertising market amounted to € 20.1 billion in the
period under review (including classified ads and leaflets,
less discounts and agency commissions and excluding
production costs), representing a nominal increase of
0.9 % over the previous year.
In the online sector in Germany (display, keyword mar-
keting and affiliate), net advertising revenues increased
by 7.1 % to € 6.8 billion in 2017. The digital advertising
expenditures thus represent a market share of the total
advertising expenditures of 34.0 %. The advertisers are
feeling the pressure of the rapid transformation of their
companies. Marketing communication is shifting rapidly
to online channels in response to changes in consumer
behavior.
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Economic Report
In the print media, net advertising revenues of newspa-
pers (newspapers, advertising papers and newspaper
supplements) totaled € 4.6 billion in the reporting period,
2.5 % below the previous year's level. Magazines (con-
sumer magazines, directory magazines, directory media)
also had a decline compared to the previous year, with
net advertising revenues falling by 6.3 % to € 2.2 billion.
Commercial television in Germany recorded a decline
of 0.8 % to € 4.5 billion in 2017 and net advertising
revenues on radio were € 773 million, 0.7 % above the
previous year. Net advertising revenues in outdoor
advertising increased in 2017 by 1.6 % to € 1.1 billion.
According to ZenithOptimedia, the following digital
advertising revenue development is expected in 2017
for selected countries:
print distribution (€ 4.6 billion), overall market growth in
distribution will take place online over the next few years,
while the print market will see a slight decline. The online
distribution market will grow by 5 % each year from
2017-2021. But we see a positive trend: All major
national daily newspapers in Germany already offer
digital subscriptions. The Axel Springer products in this
segment, BILD Plus and WELT Plus, pioneers with their
respective founding years of 2013 and 2012, have seen
a growing number of subscribers for years.
The German press distribution market contracted
somewhat further. The total paid circulation of
newspapers and magazines was 5.0 % below the
corresponding prior-year figure. Thanks to the price
increases implemented in the past four quarters, however,
circulation revenues declined by only 0.7 %.
Anticipated Advertising Activity 2017 (Selection)
Change in net ad revenues compared to prior year
(nominal)
Germany
Central and Eastern Europe
USA
United Kingdom
The 335 IVW-registered daily and Sunday newspapers
achieved total sales of 16.5 million copies per publication
date. Compared to the prior-year figure, this corresponds
to a fall of 4.6 %. As in the prior year, retail sales (– 10.2 %)
suffered a much greater decline than subscription sales
(– 3.5 %). Demand in the segment of daily and Sunday
newspapers within the press distribution market
weakened by 4.8 %, weighted according to the
respective frequency of publication.
Online
7.1 %
16.3 %
14.6 %
4.6 %
Source: ZenithOptimedia, Advertising Expenditure Forecast, December 2017.
Press distribution market
More and more people use the Internet as the main
medium for news consumption. There is an increasing
willingness to pay for digital content in Germany.
Economically successful offers such as the New York
Times, Washington Post, but also Netflix or Spotify prove
that media content can be monetized not only via range
models, but also via subscriptions. While digital news-
paper distribution, at € 350 million, is not nearly as big as
Overall sales of general-interest magazines, including
membership and club magazines, was 91.0 million
copies per publication date. Compared to the prior-year
figure, this corresponds to a fall of 3.8 %. The number of
IVW registered titles was 756 (– 2.2 % compared to
the previous year). The demand for general-interest
magazines weighted for their respective publication
frequencies declined by 5.7 %.
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by the end of 2019. Axel Springer will rent the new
building from 2020 on a long-term basis.
In September 2017, Axel Springer announced that it
would reorganize the publishing structure of its media
brands (including BILD, WELT) as well as the marketing
and sales activities in the German market. In order to
make even better use of the different potential of print
and digital offerings, two separate publishing areas are
created to which the respective brands and teams are
assigned. For this purpose, on the one hand, the digital
activities of the media brands are bundled with digital
marketing, customer service and IT which are part of
Media Impact, and on the other hand the print offers,
including print marketing, print distribution and printing
plants. The reorganization concerns exclusively the pub-
lishing areas, the editors continue to work fully integrated
across all channels - digital, TV and print.
With effect from October 1, 2017, Axel Springer and
United Internet have merged their companies Awin and
affilinet to build a joint affiliate network. Axel Springer
will hereby strengthen its competitive position in the
affiliate marketing sector. Following the transfer of 100 %
of the affilinet shares by United Internet to AWIN AG,
United Internet holds 20 % of the Awin Group. Previously,
Axel Springer had taken over the shares still held by
Swisscom Schweiz AG (47.5 %) for a purchase price of
€ 62.4 million under an option agreement. The combi-
nation of the expertise, competences and reach of Awin
and affilinet enables the development of innovative
revenue models in order to increase further growth
potential.
At the end of November 2017, the Bonial Group, which
is majority owned by Axel Springer, announced that it
was closing its offer in the USA, a website and an app
under the name Retale, as no convincing economic
perspective was foreseeable.
Business performance
In January 2017, the Awin Group (previously Zanox
Group), which is majority owned by Axel Springer, ac-
quired 100 % of ShareASale, a leading affiliate network
in the USA. Acquisition costs amounted to € 44.4 million
and included, in addition to the purchase price paid
in the year under review, a contingent purchase price
liability of € 9.3 million dependent on the development of
earnings.
In June 2017, Axel Springer Digital Classifieds France
entered into a purchase agreement with the French
media holding company Spir Communication SA for the
purchase of 100 % of the shares of Spir's subsidiary
Concept Multimédia for a purchase price of € 105 million,
taking into consideration purchase price adjustments
which are to be determined on the basis of net debt and
net cash. The transaction was approved by the French
antitrust authorities at the end of January 2018 and com-
pleted in early February. In particular, Concept Multimédia,
headquartered in Aix-en-Provence and Paris, runs under
the core brand of Logic-Immo.com a real estate portal
in France as well as additional online portals for mediation
of luxury real estate and new-build properties.
In July 2017, we signed contracts to sell the new
Axel Springer building under construction and the
Axel-Springer-Passage for a total sale price of € 755
million. The sale of Axel-Springer-Passage, which was
opened in 2004, was completed at the end of 2017 with
payment of the purchase price of € 330 million (before tax
payments of approximately € 80 million) and the hand-
over of the building. The new owners of Axel-Springer-
Passage are Blackstone Real Estate Partners Europe V
and QUINCAP Investment Partners. We will continue to
use the main part of the passage as a tenant until the end
of 2020 after the completion of the sale. The sale of the
Axel Springer new building to a company of the Norwe-
gian state fund Norges Bank Real Estate Management
is subject to the completion of the construction project
(total investment volume of around € 300 million). The
purchase price is € 425 million (before tax payments of
about € 30 million). The sale is expected to be completed
24
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Combined Management Report
Economic Report
Overall statement of the Executive
Board on the course of business and
economic environment
Digitization continues to be the defining trend for the
economic environment for media companies. This
reflects the development of the Axel Springer Group
segments. While the two fully digitized segments
Classifieds Media and Marketing Media registered
significant organic revenue growth, revenues in the News
Media segment were only slightly above the previous
year's level due to the higher proportion of structurally
declining print business. Business performance was also
influenced by acquisitions in digital business models and
by an active portfolio management. The overall positive
development in the financial year confirms our strategy of
rigorously digitizing the company.
In December 2017, Axel Springer and Télévision
Française 1 (TF1) signed an option agreement and in
January 2018 signed an agreement to sell Axel Springer's
interest in the French aufeminin Group at a price of
€ 38.74 per share. This was equivalent to a premium of
45.7 % on the closing price on December 8, 2017. Axel
Springer's 78.43 % stake was therefore valued at € 286.1
million, plus a monthly interest payment until completion of
the transaction. After carrying out a works council consul-
tation as pertaining to French Law, the parties then
concluded an appropriate purchase agreement at the
beginning of January 2018. Completion of the transaction
requires approval by the relevant antitrust authorities.
In Slovakia, the acquisition of Autobazar.eu, the leading
car section portal in Slovakia, and TopReality.sk, a
leading Slovak real estate portal, was completed in
December 2017. In addition, the sale of the
newspaper and magazine portfolio, including the
associated online offers, is scheduled for the middle
of the year 2018 and should be completed with the
approval of the relevant authorities.
At the beginning of January 2018, we transferred the
Axel Springer high-rise building in Berlin to Axel
Springer Pensionstreuhandverein, thereby increasing
plan assets to cover our pension obligations by approxi-
mately € 140 million. As part of a long-term lease, we will
continue to use the property as headquarters.
25
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Economic Report
Financial performance, liquidity and financial position
Financial performance of the Group
In the reporting year, revenues of € 3,562.7 million were
8.3 % above the prior-year figure (€ 3,290.2 million). The
development of revenue was driven primarily by the
good operational development of our activities. In addi-
tion, consolidation effects, mainly due to the inclusion of
eMarketer and DanCenter (previously Land & Leisure),
had an impact. Overall, currency effects had an opposite
effect. Adjusted for consolidation and currency effects,
total revenues rose by 6.3 %.
Organic revenue development for digital media is
illustrated in the table below. Consolidation and currency
effects have been adjusted.
Revenue Development Digital Media, Organic
yoy
Digital Media
Classifieds Media
News Media
Marketing Media
2017
2016
12.5 %
10.7 %
12.7 %
12.5 %
12.0 %
14.7 %
12.4 %
7.5 %
International revenues increased by 12.5 % from
€ 1,564.3 million to € 1,759.8 million. The share of Axel
Springer's revenues increased from 47.5 % to 49.4 %.
Advertising revenues increased by 13.4 % to
€ 2,521.3 million (PY: € 2,223.1 million), due to a
positive development of all three operating segments. In
addition, particularly consolidation effects from the ac-
quisition of DanCenter (previously Land & Leisure) in the
Classifieds Media and the merger of Awin and affilinet, as
well as the acquisition of ShareASale in the Marketing
Media segment had an impact. Adjusted for consoli-
dation and currency effects, advertising revenues within
the Group increased by 10.8 %. Advertising revenues as
a proportion of total revenues were 70.8 % (PY: 67.6 %).
Of the total advertising revenues, 87.1 % were generated
by digital activities.
The decline in circulation revenues by 2.1 % from
€ 646.9 million to € 633.0 million, was due to market
conditions. Although digital circulation revenues continued
to increase significantly, they were not yet able to fully
compensate for the decline in circulation revenues in
printed publications. Circulation revenues as a proportion
of total revenues were 17.8 % (PY: 19.7 %).
Other revenues amounting to € 408.3 million were 2.8 %
below the prior-year figure of € 420.2 million. Deconsoli-
dation effects, in particular from the sale of Poliris and
Smarthouse, had an impact. Adjusted for consolidation
and currency effects, the decline was reduced to 0.8 %.
Overall, other revenues represented a share of 11.5 %
(PY: 12.8 %) of total revenues.
Other operating income amounted to € 317.3 million
(PY: € 339.9 million) and was mainly impacted in the
reporting year by the sale of the Axel-Springer-Passage in
Berlin (€ 200.5 million) and effects from the revaluation of
contingent considerations (€ 56.6 million). In the previous
year, in addition to income in connection with the estab-
lishment of Ringier Axel Springer Schweiz AG (€ 102.2
million) and the sale of CarWale (€ 83.3 million), income
from the sale of our real estate in Hamburg (€ 71.3 million)
was included.
Changes in inventories and other internal costs
capitalized amounted to € 87.7 million (PY: € 82.6 million)
in the reporting year and continued to relate mainly to
comprehensive IT development projects for the develop-
ment and expansion of our digital business models.
Compared to the prior-year period, total expenses
increased by 7.8 % to € 3,402.0 million (PY: € 3,155.5
million).
The increase in purchased goods and services of
8.2 % to € 1,051.4 million (PY: € 971.5 million) mainly
relates to the Awin Group and, in addition to an increase
due to increasing revenues, resulted in particular from the
acquisition of affilinet during the reporting year. The ratio of
purchased goods and services to total revenues remains
unchanged compared to the previous year at 29.5 %.
26
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Economic Report
The increase in personnel expenses by 9.3 % to
€ 1,202.1 million (PY: € 1,100.1 million) is mainly due to
an increase in personnel in the digital business models,
effects from the acquisition of subsidiaries, as well as
higher expenses for restructuring measures and long-term
compensation programs. The average number of employ-
ees grew by 3.3 % to 15,836 in 2017.
Depreciation, amortizations, and impairments
amounted to € 236.1 million, and remained at the prior-
year level (€ 232.6 million). Increased depreciation and
amortization due to high investments in intangible assets
was offset by slightly lower depreciation, amortization and
impairments from purchase price allocations.
Other operating expenses increased by 7.1 % to
€ 912.4 million (PY: € 851.2 million), mainly due to the
inclusion of acquired subsidiaries.
Income from investments amounted to € – 39.0 million
(PY: € 40.2 million) and was impacted in the reporting year
by impairments of financial assets, in particular of our
share in Ringier Axel Springer Schweiz AG. In the previous
year, income from investments was particularly influenced
by effects from the contribution of our intererst in Thrillist
and NowThis into the non-controlling interest in Group
Nine Media. The operating income from investments
included in EBITDA amounted to € 16.0 million
(PY: € 18.7 million).
The financial result was € – 18.4 million and slightly
above the prior-year level (PY: € – 21.4 million).
Income taxes amounted to € – 130.2 million
(PY: € – 126.1 million) at the end of the reporting period.
The tax rate of 25.6 % (PY: 21.9 %) was characterized in
the reporting year by the release of deferred taxes due to
changes in tax rates, particularly in the USA. In the previ-
ous year, the tax rate was lower – as a consequence of
the largely tax-neutral income in connection with the es-
tablishment of Ringier Axel Springer Schweiz AG and the
lower taxed income from the sale of CarWale.
Compared with the prior year, adjusted EBITDA rose by
8.5 % to € 645.8 million (PY: € 595.5 million). The adjust-
ed EBITDA margin is the same as in the previous year at
18.1 %. Adjusted EBITDA of digital media increased
by 23.3 % from € 472.1 million to € 582.0 million. Based
on the operating business, the digital business share in
adjusted EBITDA was 80.0 % (PY: 72.5 %). Due to an
increase in depreciation and amortization, adjusted EBIT
increased by 7.0 % compared with the prior year to
€ 504.0 million (PY: € 471.1 million).
Net income of the Group developed as follows:
Net Income1)
€ millions
Net income
2017
378.0
2016
Change
450.0
– 16.0 %
Non-recurring effects
– 117.0
– 234.6
−
Depreciation, amortization, and
impairments of purchase price
allocations
Taxes attributable to these
effects
Net income, adjusted2)
Attributable to non-controlling
interest
Adjusted net income2) from
continuing operations
attributable to shareholders of
Axel Springer SE
Earnings per share, adjusted
(in €)2) 3)
Earnings per share (in €)3)
94.2
108.3
– 13.0 %
– 27.8
327.5
– 23.8
299.9
−
9.2 %
47.1
40.4
16.6 %
280.4
259.5
8.1 %
2.60
3.19
2.41
8.1 %
3.94
– 19.1 %
1) Continuing operations, for the portion attributable to discontinued operations see
notes to the consolidated financial statements under note (2d).
2) Explanations with respect to the relevant key performance indicators on page 33.
3) Calculation based on average weighted shares outstanding in the reporting period
(107.9 million; PY: 107.9 million).
Non-recurring effects included income from the sale,
i.e. contribution of business units and real estate
of € 172.4 million (PY: € 290.9 million), in particular in
connection with the sale of the Axel-Springer-Passage in
Berlin (PY: effects from the establishment of Ringier Axel
Springer Schweiz AG, the sale of CarWale, as well as the
disposal of the remaining part of the office building com-
plex at the Hamburg site). In addition, impairment losses
of € – 55.5 million on investments were included
27
Annual Report 2017
Axel Springer SE
Combined Management Report
Economic Report
(PY: € – 3.0 million), mainly related to our interest in
Ringier Axel Springer Schweiz AG, effects from the
subsequent valuation of contingent considerations from
options for the acquisition of non-controlling interests of
€ 34.9 million (PY: Expense of € – 29.7 million), as well
as other effects from initial consolidations of € – 14.6
million (PY: € – 20.0 million), which mainly resulted from
acquisition costs and further effects from purchase price
allocations. Expenses of € – 20.2 million (PY: € – 3.5
million) related to the long-term Executive Board
remuneration program (LTIP) were adjusted.
Financial perfomance of the operating
segment
Classifieds Media
In the Classifieds Media all business models are
summarized, which generate their revenues mainly in the
online classifieds business. The segment is sub-divided
into Jobs, Real Estate, and General/Other.
Key Figures Classifieds Media
€ millions
Revenues
Advertising revenues
Other revenues
2017
2016
Change
1,007.7
990.4
17.3
879.5
858.5
14.6 %
15.4 %
20.9
– 17.1 %
Jobs
Real Estate
General/Other
EBITDA, adjusted1)
Jobs
Real Estate
General/Other
473.2
290.1
244.4
413.2
197.3
146.2
78.1
410.0
270.7
198.8
354.6
175.8
121.5
15.4 %
7.2 %
23.0 %
16.5 %
12.2 %
20.4 %
64.9
20.3 %
EBITDA margin, adjusted
41.0 %
40.3 %
Jobs
Real Estate
General/Other
41.7 %
42.9 %
50.4 %
44.9 %
32.0 %
32.7 %
1) Segment EBITDA, adjusted includes non-allocated costs of € 8.5 million
(PY.: € 7.6 million).
Revenues in the Classifieds Media segment increased
compared to the prior-year period by 14.6 % to € 1,007.7
million (PY: € 879.5 million). The deciding factor in parti-
cular was again a very significant operational improvement,
especially for the job and real estate portals. In addition,
consolidation effects had a particular effect due to the
inclusion of the DanCenter Group (previously Land &
Leisure Group) in the subsegment General/Other. The
organic increase in revenues, i.e. adjusted for consolida-
tion and currency effects was 12.7 %. The currency effects
mainly pertained to the job portal activities in the UK. The
job portals achieved a revenue increase of 15.4 %, organi-
cally they increased by 17.0 %. Once again, business in
continental Europe primarily contributed to this growth,
but activities in the UK also slightly accelerated their
growth. The real estate portals showed an increase of
7.2 %. Consolidation effects from the sale of the software
business at SeLoger in the previous year had a positive
effect here. Organically, growth was at 10.8 %. The
strongest growth was recorded in the Immowelt group. In
the subsegment General/Other, the revenue increase of
23.0 % was primarily due to consolidation effects in the
@Leisure group. Organically, revenues increased by 6.3 %.
The adjusted EBITDA of the segment increased consider-
ably by 16.5 % to € 413.2 million (PY: € 354.6 million). A
significant part of this increase can be attributed to opera-
tional improvements in earnings. Organically, i.e. adjusted
for consolidation and currency effects, the increase was at
14.7 %. The margin of 41.0 % was slightly higher than the
prior-year value (40.3 %). The adjusted EBITDA for the job
portals increased by 12.2 % compared to the prior year.
As in the case of revenues, the increase is primarily at-
tributable to business in continental Europe. The earnings
decline in the UK business of the StepStone Group is
attributable, among other things, to investments in improv-
ing its market position. Real estate portals recorded an
adjusted EBITDA increase of 20.4 %, mainly due to im-
provements in earnings at the Immowelt Group. The in-
crease in adjusted EBITDA of 20.3 % in the subsegment
General/Other was mainly attributable to consolidation
effects in the @Leisure Group. Organically, the increase
was 8.5 %.
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Annual Report 2017
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Economic Report
The adjusted EBIT in the Classifieds Media segment in-
creased by 13.6 % from € 317.6 million to € 361.0 million.
Depreciation, amortization and impairments / write-ups
increased by 41.1 % to € 52.2 million (PY: € 37.0 million).
News Media
The News Media segment mainly comprises the BILD and
WELT Group in the national segment, and in the interna-
tional area particularly the digital media offerings in Europe
and the USA.
Key Figures News Media
€ millions
Revenues
2017
2016
Change
1,509.8
1,481.6
1.9 %
Advertising revenues
Circulation revenues
Other revenues
666.1
633.1
210.6
617.2
7.9 %
646.8
– 2.1 %
217.7
– 3.2 %
National
1,109.2
1,142.4
– 2.9 %
Advertising revenues
Circulation revenues
Other revenues
International
Advertising revenues
Circulation revenues
Other revenues
448.3
504.7
156.2
400.7
217.8
128.4
54.4
441.0
1.7 %
539.6
– 6.5 %
161.8
– 3.5 %
339.2
18.1 %
176.2
23.6 %
107.2
19.8 %
55.8
– 2.5 %
EBITDA, adjusted
218.8
214.4
2.0 %
National
International
164.5
178.0
– 7.6 %
54.3
36.3
49.3 %
EBITDA margin, adjusted
14.5 %
14.5 %
National
International
14.8 %
15.6 %
13.5 %
10.7 %
Revenues in the News Media segment were € 1,509.8
million, which is 1.9 % above the prior-year figure
(€ 1,481.6 million). The digital proportion of revenues
was 33.9 %. Revenues of News Media National were
€ 1,109.2 million, which is 2.9 % below the prior-year
figure. Here, the digital proportion of revenues is 24.1 %.
National advertising revenues increased slightly by 1.7 %,
in the reporting period, supported by a BILD special
issue in the second quarter, strong digital growth and a
slight increase in print advertising revenues in the third
quarter. The national circulation revenues, based on the
general market environment were 6.5 % lower than the
prior-year value. Revenues at News Media International
also increased due to the first-time consolidation of
eMarketer in mid-2016 by 18.1 % to € 400.7 million.
Organically, i.e. adjusted for consolidation and currency
effects, they grew by 10.3 %. The evolution of digital
offerings continued to be good, with Business Insider
recording strong growth. By contrast, most print
activities were unable to escape the market trend and
achieved revenues below the previous year's level. The
digital proportion of revenues from News Media Interna-
tional was 60.9 %.
The adjusted EBITDA of € 218.8 million was 2.0 %
above the value of the previous year (€ 214.4 million).
International business contributed to the slight increase
in earnings, boosted by the first-time consolidation of
eMarketer since July 2016. Organically, i.e. adjusted for
consolidation and currency effects, EBITDA was 3.2 %
below the prior-year level. The segment's margin
remained stable at 14.5 % compared to the same
period last year (14.5 %).
Adjusted EBIT in the News Media segment increased
by 1.1 % from € 180.9 million to € 182.9 million.
Depreciation, amortization and impairments / write-ups
increased by 6.9 % from € 33.5 million to € 35.8 million.
29
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Marketing Media
In the Marketing Media segment, idealo, aufeminin
and the Bonial Group, among others, are pooled in
the reach-based marketing subsegment, whereas
performance-based marketing consists of the Awin
Group (previously Zanox Group).
Key Figures Marketing Media
€ millions
Revenues
Advertising revenues
Other revenues
Reach Based Marketing
Performance Marketing
EBITDA, adjusted1)
Reach Based Marketing
Performance Marketing
2017
984.5
864.7
119.8
314.7
669.9
95.6
71.2
32.4
2016
Change
856.2
15.0 %
747.4
15.7 %
108.7
10.2 %
288.7
9.0 %
567.4
18.1 %
82.2
65.5
25.5
16.3 %
8.8 %
27.4 %
EBITDA margin, adjusted
9.7 %
9.6 %
Reach Based Marketing
22.6 %
22.7 %
Performance Marketing
4.8 %
4.5 %
intensified in the last quarter of the reporting year by the
merger between Awin and affilinet in October. Organic
growth was at 12.7 %.
The adjusted EBITDA in the segment of € 95.6 million
was 16.3 % above the prior-year value (€ 82.2 million).
Earnings declines in the Bonial and aufeminin groups
were more than compensated by improvements in other
activities. In organic terms, too, the segment achieved an
adjusted EBITDA improvement and increased by 8.4 %.
Due to revenue growth, especially in the subsegment
Performance Marketing, the return for the segment
remained more or less stable at 9.7 % (PY: 9.6 %)
despite the earnings growth.
The adjusted EBIT in the Marketing Media segment
increased by 14.9 % from € 67.4 million to € 77.4 million.
Depreciation, amortization and impairments / write-ups
increased by 22.6 % to € 18.2 million (PY: € 14.8 million).
Services/Holding
Group services, which also include the three domestic
printing plants, as well as holding functions, are reported
within the Services/Holding segment. The services of the
Group Services are procured by in-house customers at
normal market prices.
1) Segment EBITDA, adjusted includes non-allocated costs of € 8.1 million
(PY: € 8.7 million).
Key Figures Services/Holding
€ millions
Revenues
2017
60.7
2016
Change
72.9
– 16.8 %
EBITDA, adjusted
– 81.7
– 55.7
Revenues in the Services/Holding segment decreased
by 16.8 % due to market conditions compared to the
comparable prior-year period, and amounted to € 60.7
million (PY: € 72.9 million).
Revenues in the Marketing Media segment increased
by 15.0 % to € 984.5 million (PY: € 856.2 million). In
addition to a still very good operating performance, the
consolidation of Awin and affilinet in Performance
Marketing intensified in the fourth quarter. Organically,
i. e. adjusted for consolidation and currency effects,
the increase was 12.4 %. Revenues in Reach Based
Marketing increased by 9.0 % to € 314.7 million.
Adjusted for consolidation and currency effects, which
resulted in particular from the sale of Smarthouse Media
in the previous year, organic growth was 12.0 %.
Revenues in Performance Marketing increased by 18.1 %
to € 669.9 million. Revenue growth had already been
positively impacted by the first-time consolidation of
ShareASale since the beginning of 2017, and was further
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The adjusted EBITDA with € – 81.7 million was below the
level of the previous year (€ – 55.7 million). This develop-
ment was driven by a number of factors, including higher
stock option costs, higher restructuring expenses, as well
as lower revenues in the structurally declining business of
printing plants.
The adjusted EBIT in the Services/Holding segment
amounted to € – 117.4 million (PY: € – 94.8 million).
Depreciation, amortization and impairments / write-ups
of € 35.7 million were slightly below the prior-year value
(€ 39.0 million).
Liquidity
Financial Managment
As a general rule, Axel Springer SE provides all financing
for the Axel Springer Group. This arrangement ensures
that the Group companies have sufficient liquidity at all
times. The overriding goal of financial management is to
provide cost-effective liquidity in the form of maturity-
matched financing.
Net Liquidity/Debt
€ millions
Cash and cash equivalents
Financial liabilities
Net liquidity/debt1)
2017
216.8
2016
224.1
1,237.0
1,259.3
– 1,020.2
– 1,035.2
1) Explanations with respect to the relevant key performance indicators on page 33.
In order to optimize our financing conditions, in May
2017, we improved the average rate of interest,
extended the average term and significantly increased
the financing volumes through the partial termination,
transformation and subscription of our existing
Schuldschein (promissory note). In this context, the long-
term credit lines drawn down were repaid; furthermore,
two promissory notes with floating interest rates were
repaid prematurely.
As at December 31, 2017, there were now promissory
notes totaling € 879.0 million (December 31, 2016:
€ 580.5 million) with a term to April 2018 (€ 70.5 million),
to October 2018 (€ 104.0 million), to October 2020
(€ 69.0 million), to May 2021 (€ 11.5 million), to May
2022 (€ 158.0 million), to May 2023 (€ 72.0 million) and
to May 2024 (€ 394.0 million). In addition, we can avail
ourselves of long-term credit lines of € 1,200.0 million
(PY: € 1.500,0 million), the drawdown of which will be
due for repayment in July 2020. Both the Schuldschein
and the credit facilities may be used either for general
business purposes or for financing acquisitions. As of,
December 31, 2017, € 365.0 million (December 31,
2016: € 680.0 million) of the existing long-term credit
facility (€ 1,200.0 million; PY: € 1,500.0 million) had been
utilized. Short-term and long-term credit facilities that
were not utilized amounted to € 855.0 million as of the
balance sheet date (December 31, 2016: € 840.0 million).
Cashflows
Consolidated Cash Flow Statement (Condensed)
€ millions
Cash flow from continuing operations
Cash flow from investing activities
2017
490.7
– 194.5
2016
358.8
– 94.3
Cash flow from financing activities
– 281.7
– 299.9
Change in cash and cash equivalents
14.5
– 35.4
Cash and cash equivalents as of
December 31
216.8
224.1
Cash flow from operating activities in the reporting period
was € 490.7 million and therefore significantly above the
value for the prior-year period (€ 358.8 million). This
development was due in particular to the positive devel-
opment of operating earnings. In addition, the increase
resulted from payments from long-term compensation
programs and restructuring programs that were lower
than in the previous year, as well as from tax refunds
received in the reporting period.
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Economic Report
The cash flow from investing activities amounted to
€ – 194.5 million (PY: € – 94.3 million). At the end of
December 2017, the sale of the Axel-Springer-Passage
in Berlin was completed, the purchase price of € 330.0
million was collected and the related tax payments of
€ 79.9 million were made. Investments in intangible
assets and property, plant and equipment increased in
particular as a result of the new building in Berlin (on the
total investment volume and the sale of the new building
after completion see page 24). Payments (less cash
acquired) for the acquisition of shares in consolidated
subsidiaries and business units were mainly due to the
acquisition of ShareASale and the cash outflows related
to the exercise of options to acquire non-controlling
interests in Immoweb, Onet and My Little Paris. In the
previous year, payments were made in connection
with the sale of the remaining part of the office building
complex at the location in Hamburg, payments were
received from the early repayment of the vendor loan
granted to FUNKE Mediengruppe, payments were re-
ceived in connection with the sale of 2.3 % of our share
in Do⁄an TV Holding and the purchase price (less taxes)
from the sale of our shares in CarWale. In addition to
investments in intangible assets and property, plant and
equipment in the previous year, these payments were
offset by payments (less cash acquired) for the acquisi-
tion of shares in consolidated subsidiaries and business
units (mainly the acquisitions of eMarketer and
DanCenter (previously Land & Leisure) and the exercise
of option rights for the acquisition of the remaining non-
controlling interests in Car & Boat Media.
The cash flow from financing activities of € – 281.7
million (PY: € – 299.9 million) was characterized in
particular by the payment of the dividend to the share-
holders of Axel Springer SE, payments due to the
exercise of the option rights to acquire remaining
minority interests in Awin, the reorganization of our
promissory notes and the repayment and reduction of
our credit line in connection with this.
Financial position
Consolidated Balance Sheet (Condensed)
€ millions
Non-current assets
Current assets
Assets
Equity
Non-current liabilities
Current liabilities
Equity and liabilities
12/31/2017 12/31/2016
4,994.1
5,393.0
1,441.5
1,063.2
6,435.6
6,456.2
2,801.5
2,638.6
2,036.1
2,427.2
1,598.0
1,390.4
6,435.6
6,456.2
The development of non-current assets resulted in
particular from the reduction in intangible assets
(€ – 257.9 million) and property, plant and equipment
(€ – 67.5 million). Due to the expected sale of the
aufeminin Group in the first half of 2018 and the sale of
the print activities in Slovakia in the middle of the year
2018, the assets and liabilities to be disposed of were
reported separately as held for sale. In addition, the sale
of the Axel-Springer-Passage Berlin was completed at
the end of December 2017, and carrying amounts of
€ 104.8 million (property, plant and equipment) and
€ 29.8 million (investment property) were derecognized.
The sale was made for a purchase price payment of
€ 330.0 million. At the same time, financial assets were
reduced by € 36.5 million, which was mainly due to the
impairment of our investment in Ringier Axel Springer
Schweiz AG as a result of the development of earnings.
In contrast, the first-time consolidation of the companies
ShareASale and affilinet, which were acquired in the
reporting year, had a positive effect.
The development of current assets was characterized by
the reclassification of the assets held for sale of the
aufeminin Group and the print activities in Slovakia.
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Economic Report
The increase in equity resulted mainly from the generated
net income. In addition, in connection with the acquisi-
tion of 100 % of the affilinet shares against the granting
of 20 % non-controlling interests in the already fully
consolidated Awin Group (including affilinet), the non-
controlling interests were increased. In addition to the
dividend payments to the shareholders of Axel Spring-
er SE and other shareholders, the effects of currency
translation of consolidated financial statements also had
a reducing effect. The equity ratio increased to 43.5 %
(PY: 40.9 %).
The development of non-current liabilities was character-
ized by the reclassification of short-term promissory
notes and the decline in deferred tax liabilities, mainly
due to the sale of the Axel-Springer-Passage in Berlin,
changes in tax rates, particularly in the USA, and the
reclassification of the aufeminin Group's liabilities and
print activities in Slovakia as held for sale. In addition,
other liabilities from agreed option rights decreased
due to revaluation effects and the premature exercise of
option rights to acquire non-controlling interests in
My Little Paris.
The development of short-term debt was due in particular
to the reclassification of short-term promissory notes and
the reclassification of the liabilities held by the aufeminin
Group and the print activities in Slovakia as held for sale.
In addition, the recognition of short-term debt decreased
mainly due to cash outflows related to the exercise of the
option to acquire non-controlling interests in Immoweb
(14.5 % of 20.0 %), Onet (25 %) and Awin (47.5 %).
Explanations with respect to the relevant
key performance indicators
In accordance with the International Financial Reporting
Standards (IFRS), the performance indicators used in this
Annual Report, adjusted EBITDA (earnings before inter-
est, taxes, depreciation, and amortization), adjusted
EBITDA margin, adjusted EBIT (earnings before interest
and taxes), adjusted net income, adjusted earnings per
share, free cash flow, net debt/liquidity and equity ratio
are undefined performance indicators to be regarded as
additional information.
Adjusted EBITDA, adjusted EBITDA margin, adjusted
EBIT, adjusted net income and adjusted earnings per
share do not include any non-recurring effects, deprecia-
tion, amortization and impairments from purchase price
allocations and taxes attributable to these items. Non-
recurring effects include effects from the acquisition and
disposal (including contribution) of subsidiaries, business
units, and investments (including effects from the sub-
sequent valuation of contingent considerations and other
option liabilities for the acquisition of non-controlling
interests), as well as impairment and write-ups of in-
vestments, effects from the sale of real estate, impair-
ments, and write-ups of real estate used for own opera-
tional purposes, plus expenses related to the long-term
incentive plan for the current Executive Board members
(LTIP) granted at the beginning of May 2016. Purchase
price allocation effects include the expenses of amortiza-
tion, depreciation, and impairments of intangible assets,
and property, plant, and equipment from the acquisition
of companies and business units.
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Economic Report
The adjusted EBITDA margin is the ratio between the
adjusted EBITDA to revenues. The reconciliation of net
income to adjusted EBITDA and adjusted EBIT results
from the Group segment reporting. The financial perfor-
mance of the Group contains the reconciliation of net
income to the adjusted net income as well as the deter-
mination of the adjusted earnings per share.
The free cash flow results from the cash flow from
operating activities less investments in intangible assets,
property, plant and equipment, and investment property
(capital expenditures), plus payments received for the
disposal of intangible assets, property, plant and
equipment and investment property. These partial
amounts are stated separately in the Consolidated
Statement of Cash Flows. Net debt/-liquidity is the
balance of cash and cash equivalents and financial
liabilities.
The equity ratio reflects the ratio between equity and the
balance sheet total as of the respective balance sheet
date.
We regard adjusted EBITDA, adjusted EBITDA margin,
adjusted EBIT, adjusted net income and adjusted
earnings per share as a suitable indicator for measuring
the operating performance of Axel Springer, as these
measures ignore effects that do not reflect Axel Springer's
fundamental business performance.
To assess our Group’s current financing and capital
structure as well as the future financing volume, we
regard free cash flow, net debt/liquidity, and equity
ratio to be suitable performance indicators.
Non-financial performance indicators
Employees
Axel Springer employed an average of 15,836
(PY: 15,323) employees in the reporting year (excluding
vocational trainees and journalism students/interns). The
slight increase of 3.3 % is mainly attributable to acquisi-
tions and organic increase in personnel in the Classifieds
Media and Marketing Media segments. Abroad, Axel
Springer had an average of 7,425 employees (PY: 6,877);
this corresponds to a share of 46.9 % (PY: 44.9 %). The
group employed an average of 6,981 women and 8,854
men. The proportion of women increased to 44.1 %
(PY: 43.5 %). The number of editors remained stable at
2,867 (PY: 2,888). In contrast, the number of employees
increased by 5.1 % to 12,397, mainly due to the expan-
sion of digital business activities and new investments.
Employees by Segments
Average number per year
Classifieds Media
News Media
Marketing Media
Services/Holding
2017
4,431
6,959
2,822
1,623
2016
Change
4,005
10.6 %
6,981
– 0.3 %
2,640
6.9 %
1,697
– 4.4 %
Group
15,836
15,323
3.3 %
The annual average increase in the number of employees
in the Classifieds Media segment was due to acquisitions,
but above all due to organic growth, especially in the
subsegments Jobs and General/Other. In the Marketing
Media segment, the increase resulted from the inorganic
growth of the Awin Group, driven by ShareASale and
affilinet, as well as from organic growth of the Bonial and
the idealo Group. The decline in the News Media and
Services/Holding segments is mainly attributable to
staff reductions in offset printing plants, newspaper
distribution, staff catering and event management.
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Economic Report
Length of service and age structure
As of the reporting date in 2017, the average length of
service with Axel Springer was 10.1 (PY: 10.1) years;
42.4 % (PY: 43.8 %) of the workforce belonged to the
Group for more than ten years. More than half of all
employees are between 30 and 49 years old. The
proportion of severely disabled employees in the German
companies averaged 3.7 % for the year (PY: 3.7 %).
Equal opportunities and diversity
In 2010, Axel Springer launched the initiative "Chancen:
gleichl!". The aim was to increase the diversity and
balance of women and men in leadership positions. At
the end of 2016, a first milestone was reached: The
proportion of women in management positions of 16 %
in 2010 was almost doubled. As at December 31, 2017,
the share within the Group was 32 %. This share should
be further increased. In order to achieve this, the follow-
ing topics should be in focus: Creating the best possible
conditions for reconciling family life and work, promoting
the potential of young women and developing a modern
and attractive corporate culture. From this, concrete
measures were derived, among others, systematic talent
development with modules such as succession planning,
talent development programs, mentoring and coaching.
Axel Springer is committed to diversity and tolerance -
based on nationality, age, gender, sexual orientation,
physical ability and religion. Out of this conviction,
numerous networks have been established; for example,
parent networks, networking for tech-women, cross-
company mentoring exclusively for women, and the
LGBT network "queer: seite!". This is also supported, for
example, by the annual participation of the Executive
Board in Berlin's Christopher Street Day.
Human resources development
Our department for human resources development has
consistently aligned its qualification activities in recent
years with the requirements of digitization. In addition to
established seminars and promotional programs, the
range of shorter and unconventional formats has been
greatly expanded, which in addition to the mere transfer
of knowledge, leads to greater interlinking among each
other. In this context, the collaboration platform
moveoffice (Office 365) was introduced at Axel Springer
and rolled out throughout the whole company.
Networking, simultaneous and location-independent
work in a team, open communication but also the shar-
ing of knowledge are thus supported and promoted.
Human resources development thus pursues the goal of
developing Axel Springer into a permanent "learning
organization" that copes well with change processes.
With the Talent Management division, Axel Springer is
investing in the development and retention of high
potentials. Through network events and so-called talent
dialogues at division and board levels, the Group creates
transparency in terms of talent, development oppor-
tunities and vacancies within the Axel Springer family.
Increasing synergies, sharing knowledge between Axel
Springer family companies, teaching new knowledge
content, and guiding teams to adopt new work tech-
niques such as agile process work are equally important.
Research and development
Axel Springer does not operate a research and devel-
opment department in the sense of an industrial enter-
prise. All areas of the company are optimizing existing
offerings and working to establish innovative products in
the market. Above all, this means that we are continually
expanding our range of services through innovations in
the digital business, developing editorial content and
expanding our journalistic excellence. In doing so, we
attach great importance to the early consideration of the
changing use of media. In addition to our investments in
companies in an early stage of development, we capital-
ized internal costs of € 87.0 million relating to IT devel-
opment projects for the expansion of our digital business
models in the financial year. We also reported € 59.3
million as planned depreciation, amortization and
35
Annual Report 2017
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Economic Report
The very accurate initial pricing is based on the excellent
quality and quantity of data from LaCentrale, with which
damage and defects can be priced in directly. Yad2, our
generalist classifieds portal in Israel, has implemented
high-quality 3D and virtual reality tours for its real estate
business. These provide a complete visualization of the
respective property. The new offerings allow potential
buyers to virtually browse their future property. In
particular, real estate developers who, unlike sellers of
existing real estate, cannot offer on-site visits, have the
opportunity to market new construction projects in less
time and at lower cost.
Further development of News Media
Our journalistic products, both digital and printed, were
consistently expanded in the reporting year. In the digital
domain, we have made progress on the product and
technology side. BILD and WELT work together with
Facebook and Google on innovative approaches for
platform-based paid content. The introduction of
FITBOOK and NOIZZ brought innovative content models
to the German market. WELT.de is now the fastest news
website in Germany (based on loading speed). At the
same time, our joint venture Verimi continues to work on
a single sign-on process for all companies involved in
Verimi in order to make the use of Internet services sig-
nificantly easier and safer in the future. In addition to Axel
Springer, the partners include Allianz, Bundesdruckerei,
Core, Daimler, Deutsche Bank and Postbank, Deutsche
Lufthansa, Deutsche Telekom, Giesecke + Devrient and
Here Technologies. In the print sector, we have launched
"die dame" (The Lady) in Germany as an innovative,
high-quality print lifestyle magazine on the market. In the
sports segment we successfully introduced the BIKE
BILD. In addition, FUSSBALL BILD was launched in
January 2017 throughout Germany as an innovative
content syndication model.
impairments on software and technologies that were
developed in-house.
Further development of Classifieds Media
The development of new offers plays an important role in
the Classifieds Media segment. The following examples
illustrate this:
The core technology of the StepStone platform, the so-
called Search & Match algorithm, is being continuously
developed further and consistently implemented at newly
acquired companies. StepStone has also introduced
rating capabilities for employers and wages, further
increasing its relevance to job seekers. Within the
StepStone Group, Good & Co has developed a
personality test via App. Using the knowledge gained
from this, the job seeker can get an impression of how
far his or her value orientation fits into a specific
company or, depending on data availability, even to a
specific department. With StepWeb, StepStone is devel-
oping a technology that aggregates publicly available
data from job seekers to create a holistic profile. This
enables companies to search for potential candidates
and to actively approach them. The technology comple-
ments StepStone Group's existing resume databases,
which are used in the UK in particular.
SeLoger has developed a range of offerings that build on
the company's database and add value to the customer
through algorithm-based processes. Thus, LaCoteImmo,
as part of the SeLoger Group, offers the potential seller
of a property an opportunity to have an indicative sale
price. The intended audience generated by the product
is of interest to agents, who can increase the likelihood
of winning sales mandates through advertising in this
environment. Likewise, Enriched Contacts provides
SeLoger with an opportunity to assist agents with a
scoring system particular to look after prospective
buyers, where the probability is considered particularly
high that the advertised property fits their previous
search behavior and the prospect is in an intense phase
of its search process. LaCentrale, our car portal in
France, has developed a platform with MaVoitureCash
that allows private car dealers to have their vehicle rated
online while also showing dealers interested in the car.
36
Annual Report 2017
Axel Springer SE
Combined Management Report
Economic Report
The topics of the report are determined in advance by
market research and stakeholder surveys - those groups
that have a legitimate interest in the company, be it em-
ployees, customers or non-governmental organizations.
The result: Above all, information on product responsibil-
ity, customer satisfaction, journalistic independence,
employer attractiveness, compliance with social and
ecological standards as well as the company's ability to
innovate was in demand. The report also provides trans-
national figures on energy use and the calculated CO2
emissions.
The sustainability reports of Axel Springer are audited by
independent auditors. The current sustainability report
was published in November 2016 and is available at
www.sustainability.axelspringer.com. The next sustaina-
bility report will be published in mid-2018.
Separate combined non-financial report
Axel Springer SE as well as the Axel Springer Group is
required by Section 289b as well as Section 315b of the
German Commercial Code (HGB) to expand its man-
agement report with a non-financial statement for the
first time for the 2017 financial year. We make use of our
option to publish the non-financial statement at the
statutory deadline of April 30, 2018 and separately from
the combined management report of the Company. This
separate report will be published on our website at
www.axelspringer.de/NonfinancialReport.
Further development of Marketing Media
In the area of Marketing Media, the existing online ser-
vices are continuously being developed and supple-
mented by new ones. The development of innovative
product functionalities and marketing technologies to
increase range and use of offers and their monetization
have a high priority for our investments. In addition, in the
early stage, we invest in young companies that are de-
veloping new business models and technologies, either
as direct investments or indirectly through investment
companies such as Project A-Ventures, in which Axel
Springer and the Otto Group are both involved, or the
start-up accelerator recently founded together with Por-
sche to support digital business ideas with high market
potential.
Sustainability and social responsibility
For Axel Springer, sustainability means linking economic
success with ecologically sound and socially balanced
action. These three criteria are an integral part of the
corporate strategy. Hence, sustainability is integrated
into the business processes. The Sustainability Depart-
ment accompanies respective activities throughout the
company - from measures to improve resource efficiency
to social engagement initiatives. The department falls
under the responsibility of the Chairman of the Executive
Board. With our sustainability strategy, we take respon-
sibility for present and future generations and create the
basis for long-term business success.
Axel Springer had already started to publish environmen-
tal reports in the mid-1990s, and since 2000 publishes
sustainability reports. Since 2005 we have been publish-
ing a sustainability report on a biannual basis, which
follows the full list of indicators in the Global Reporting
Initiative (GRI), the internationally relevant format for sus-
tainability reporting. The Sustainability Report 2016/2017
is also prepared in accordance with the Sustainability
Reporting Standards of the Global Reporting Initiative
(GRI).
37
Annual Report 2017
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Economic Report
General assessment of the company’s
financial performance, liquidity, and
financial position by the Executive
Board
The strategy of digital transformation was also at the fore
during the 2017 financial year, through organic growth
and through acquisitions. Important milestones in the
inorganic growth were the acquisition of the American
affiliate network ShareASale and the merger of Awin with
affilinet in Performance Marketing. Revenues, adjusted
EBITDA, adjusted EBIT, and the adjusted earnings per
share from continuing operations were all above the
prior-year figures. At the end of the reporting year, the
net debt was roughly at the level of the previous year.
With a very strong cash flow, a still solid balance sheet
structure, and the favorable financing options available to
us, we continue to be in a good position to make the
necessary investments to realize future growth.
We continue to believe that the path of systematic digiti-
zation is the right strategy for further improving the com-
pany’s profitability in the future.
Financial performance, liquidity, and financial position
Group Key Figures (in € millions)
2017
2016
Revenues
EBITDA, adjusted1)
3,562.7
3,290.2
645.8
595.5
EBITDA margin, adjusted 1)
18.1 %
18.1 %
EBIT, adjusted1)
Tax rate
Net income2)
Net income, adjusted1) 2)
Earnings per share, adjusted (in €)1) 2) 3)
Dividend per share (in €)4)
Total dividends4)
Net debt/liquidity1)
Free cash flow1)
504.0
471.1
25.6 %
21.9 %
378.0
327.5
2.60
2.00
450.0
299.9
2.41
1.90
215.8
205.0
– 1,020.2
– 1,035.2
497.4
270.5
1) Explanations with respect to the relevant key performance indicators on page 33.
2) Continuing operations, for the portion attributable to discontinued operations see
notes to the consolidated financial statements under note (2d).
3) Calculation based on average weighted shares outstanding in the reporting period
(107.9 million; PY: 107.9 million).
4) The dividend for the financial year 2017 is subject to the condition of approval by
the annual shareholders’ meeting.
38
Annual Report 2017
Axel Springer SE
Combined Management Report
Economic position of Axel Springer SE
Economic position of Axel Springer SE
€ millions
Revenues
Net income
Transfer to retained earnings
Total dividends1)
Dividend per share (in €)1)
2017
2016
2015
2014
2013
823.2
271.9
56.1
215.8
2.00
833.1
296.4
91.4
205.0
1.90
925.9
1,174.6
1,442.8
213.5
19.3
194.2
1.80
590.8
412.7
178.1
1.80
186.4
8.3
178.1
1.80
1) The dividend for the financial year 2017 is subject to the condition of approval by the annual shareholders’ meeting.
Introductory remarks
Financial performance
Axel Springer SE is the parent company of the Axel
Springer Group. Due to its subsidiaries, which Axel
Springer SE controls directly or indirectly, the business
development is subject to the same risks and oppor-
tunities as the entire Group. These are presented in the
report on risks and opportunities (see page 42 et segq.).
Similarly, the expectations regarding the development
of Axel Springer SE essentially correspond to the Group
expectations described in the forecast report (see
page 59).
The following explanations are based on the annual
financial statements of Axel Springer SE, which were
prepared in accordance with the provisions of the
German Commercial Code and the German Stock
Corporation Act. The annual financial statements and
management report are published in the German Federal
Gazette and published on the Axel Springer SE website.
Business activity
Axel Springer SE is active in the News Media segment
and publishes mainly nationwide daily and weekly news-
papers. Axel Springer SE, as the parent company of
the Axel Springer Group, carries out holding functions,
manages group-wide liquidity management and
provides additional services to Group companies. The
economic framework conditions of Axel Springer SE
correspond largely to those of the Group and are
described in the economic report (see page 22 et seqq.).
Income statement (Condensed)
€ millions
Revenues
Other operating income
2017
823.2
313.5
2016
833.1
139.5
Purchased goods and services
– 199.9
– 208.5
Personnel expenses
– 240.4
– 203.9
Amortization, depreciation and
impairments of intangible assets and
property, plant and equipment
Other operating expenses
Net income from non-current financial
assets
Net interest income
Income taxes
Net income
– 19.0
– 21.1
– 422.5
– 401.6
215.8
– 33.2
– 165.7
233.2
– 30.1
– 44.2
271.9
296.4
Revenues decreased by € 9.9 million or 1.2 % in the
reporting year. Declines in circulation revenues of € 28.1
million were partially offset by increases of advertising
revenues and other revenues of € 8.6 million and € 9.6
million, respectively.
Other operating income increased by € 174.0 million to
€ 313.5 million compared to the previous year. This was
due in particular to higher income from the sale of real
estate. In the reporting year, the Axel-Springer-Passage
in Berlin was sold for a purchase price of € 330.0 million.
The gain on disposal amounted to € 281.8 million. In the
previous year, there was a profit of € 91.2 million from
the sale of the office building in Hamburg.
39
Annual Report 2017
Axel Springer SE
Combined Management Report
Economic position of Axel Springer SE
Liquidity
The net debt (liabilities due to banks and promissory note
less cash and cash equivalents) amounted to € 1,198.8
million as of December 31, 2017 (PY: € 1,242.8 million).
In the reporting year, the financing conditions of our
existing promissory notes were optimized through partial
termination, conversion and redrafting. As of December
31, 2017, there were promissory notes totaling € 879.0
million (PY: € 580.5 million). The long-term revolving
credit facilities were reduced to € 1,200.0 million in the
2017 financial year (PY: € 1,500.0 million) and had been
utilized to € 365.0 million at the balance sheet date
(PY: € 680.0 million).
Financial position
Balance Sheet (Condensed)
€ millions
12/31/2017 12/31/2016
Intangible assets and property, plant and
equipment
153.8
170.7
Non-current financial assets
5,643.5
5,435.2
Receivables from affiliated companies
171.2
186.0
Cash and cash equivalents
Other assets
Total assets
Equity
Provisions
45.2
63.9
17.8
98.8
6,077.6
5,908.5
2,632.7
2,565.8
333.2
266.7
Liabilities due to banks and promissory
note
1,244.0
1,260.6
Liabilities to affiliated companies
1,796.6
1,740.7
Other liabilities
71.1
74.7
Total equity and liabilities
6,077.6
5,908.5
The cost of purchased goods and services fell by € 8.6
million to € 199.9 million, mainly due to lower expenses
for printing services.
Personnel expenses rose to € 240.4 million (PY: € 203.9
million). Higher expenses resulted in particular from the
valuation of share-based payment programs, restructur-
ing measures and pensions. The decline in the average
number of employees by 10.0 % from 1,586 in the pre-
vious year to 1,427 in the 2017 financial year had the
opposite effect.
Amortization, depreciation and impairments of intangible
assets and property, plant and equipment remained
€ 2.1 million below the previous year's level at € 19.0
million.
The increase in other operating expenses to € 422.5
million (PY: € 401.6 million) resulted in particular from
higher transaction costs in connection with the sale of
real estate.
Net income from non-current financial assets amounted
to € 215.8 million (PY: € 233.2 million). Higher profit
transfer from subsidiaries (€ 231.0 million; PY: € 207.5
million), was off-set in particular by lower income from
participating interests (€ 16.3 million; PY: € 35.3 million)
and higher impairments of non-current financial assets
(€ 37.2 million; PY: € 18.8 million).
The net interest income for the reporting year was
€ – 33.2 million (PY: € – 30.1 million) and mainly
comprised interest expenses from the utilized revolving
credit facility and the promissory note as well as the
valuation of the pension obligations. The increase
opposite to the previous year mainly resulted from
prepayment fees in connection with the restructuring of
the existing promissory note.
Income taxes amounted to € 165.7 million (PY: € 44.2
million). The increase compared to the previous year was
mainly due to real estate transactions.
The 2017 financial year ended with a net income of
€ 271.9 million (PY: € 296.4 million).
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Combined Management Report
Economic position of Axel Springer SE
Profit utilization proposal
The Supervisory Board and Executive Board propose
that the company applies the full amount of the distri-
butable profit of € 215.8 million (PY: € 205.0 million) to
pay a dividend of € 2.00 (PY: € 1.90) per qualifying share
for the 2017 financial year.
The company does not currently hold any treasury
shares, so that all the company’s shares qualify for
dividends. However, the number of shares qualifying for
dividends may be reduced in the time remaining before
the annual shareholders’ meeting. In that case, an
adjusted profit utilization proposal will be submitted to
the annual shareholders’ meeting, without changing the
target dividend of € 2.00 per qualifying share.
Dependency Report
The Executive Board of Axel Springer SE submitted the
dependency report prescribed by Section 312 of the
German Stock Corporations Act (Aktiengesetz – AktG)
to the Supervisory Board and made the following
concluding statement:
“According to the circumstances known to the man-
agement at the time of each transaction with an affiliated
company, Axel Springer SE received adequate consider-
ation for every such transaction and did not take, or fail
to take, any actions in the reporting period, either at the
behest or in the interest of the controlling company or a
company affiliated with the controlling company.”
The balance sheet total increased by € 169.1 million to
€ 6,077.6 million in the reporting year (PY: € 5,908.5
million). Non-current assets amounted to € 5,797.3
million (PY: € 5,605.9 million) and represented 95.4 %
(PY: 94.9 %) of total assets. 45.4 % (PY: 45.8 %) was
covered by equity.
The decline in intangible assets and property, plant
and equipment of € 16.9 million to € 153.8 million is
attributable in particular to the sale of real estate in the
reporting year.
Non-current financial assets increased by € 208.3
million to € 5,643.5 million. This increase was mainly due
to additional payments in capital reserves of subsidiaries
for financing company acquisitions.
Receivables from affiliated companies (€ 171.2 million;
PY: € 186.0 million) and liabilities to affiliated companies
(€ 1,796.6 million; PY: € 1,740.7 million) resulted mainly
from group-wide liquidity management.
Other assets (€ 63.9 million; PY: € 98.8 million)
decreased mainly due to lower income tax receivables
as at the balance sheet date.
Equity increased by € 66.9 million to € 2,632.7 million
(PY: € 2,565.8 million). The net profit for the reporting
year (€ 271.9 million) more than compensated for the
reduction in equity due to the dividend payment for the
past financial year (€ 205.0 million). The equity ratio at
the balance sheet date remained at 43.3 % (PY: 43.4 %)
virtually unchanged.
Provisions grew by € 66.5 million compared with the
previous year's balance sheet date to € 333.2 million
(PY: € 266.7 million). The reason for the increase was
higher pension provisions due to a lower discount rate
and higher obligations from share-based payment
programs.
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Annual Report 2017
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Combined Management Report
Report on risks and opportunities
Report on risks and opportunities
Risk policy principles and risk strategy
At Axel Springer, we define risks as the possibility of
negative deviations of actual business performance from
the planned targets or objectives, while opportunities
represent the possibility of positive deviations. The risk
policy principles and risk strategy of Axel Springer are
coordinated and closely aligned with the business strat-
egy and business objectives. We do not seek to avoid
risks at all costs, but to carefully weigh the opportunities
and risks associated with our decisions and our business
activities, from a well-informed perspective. Against this
backdrop, opportunities should be exploited to generate
income or increase the company’s value and risks
should be assumed only if they remain within appropriate
limits that are acceptable to the company. Thus, risks
should be limited to a level deemed acceptable by the
company’s management by taking appropriate
measures, be transferred to third parties in full or in part,
or, in those cases where risk mitigation is not considered
advisable, be avoided or monitored closely.
Group-wide risk management system
In this reporting year, we have continued to develop and
expand individual elements of internal corporate monitor-
ing (risk management, compliance management, internal
control and internal auditing) against the background of
national and international requirements, and an increas-
ingly complex and volatile environment of a growing and
globally changing company. One focal point was the
continuous improvement of the quality and completion of
the risk inventory as well as the corresponding control
measures and the integration of new investments and
areas into the existing risk management system. The
general form of structures and processes in the risk
management system at Axel Springer are based on the
internationally recognized “Enterprise Risk Management
Framework”, a framework developed by the Committee
of Sponsoring Organizations of the Treadway Commis-
sion (COSO), which links the risk management process
with the internal control system. Group-wide coordina-
tion of the systems - risk management, compliance
management and the internal control system as well as
the related reporting – is carried out by the Compliance
division as well as Corporate Audit & Risk Management.
The risk management process at Axel Springer is inter
alia focused in accordance with Section 91 (2) of the
German Stock Corporations Act (AktG) on recognizing
and evaluating all significant and existential risks as well
as essential changes in the risk situation as promptly as
possible. It should therefore be assured that correspond-
ing control and countermeasures can be used in time to
react to such risks. This approach gives us the neces-
sary maneuvering room and allows for the controlled and
responsible management of risks.
Based on the risk management framework developed by
COSO, the risks of Axel Springer are divided into the risk
categories strategic, operative, reporting-relevant and
compliance-related risks. Insofar it is appropriate and
quantifiable, risks are assessed quantitatively with refer-
ence to the parameters “loss amount” (impact) and
“probability of occurrence”. Based on these parameters,
risks are assigned to one of the following risks classes:
critical risks, significant risks, risks to be monitored, and
other risks. In order to achieve a focus on the relevant
and significant risks at the Group level, an annual
materiality limit is defined on the basis of adjusted
EBITDA, from which the grading of the imaged risk
matrix is derived. The materiality threshold at Group level
is currently € 10 million.
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Report on risks and opportunities
The purpose of the risk inventories and analyses carried
out in the top-down and bottom-up procedures is to
systematically identify and assess cross-company,
cross-divisional and cross-procedural risks in order to
complete the risk inventory and ensure its quality. In the
Governance, Risk & Compliance division, risk manage-
ment activities are coordinated, risks are aggregated up
to the Group level, reported risks are checked in terms of
their plausibility, and the completeness of the required
risk reports is monitored. The division is also responsible
for all supporting measures, such as maintaining the risk
management software, and reporting to the Supervisory
Board and Executive Board.
The semi-annual and ad-hoc risk reports prepared for
the Executive Board and Supervisory Board focus
primarily on existential risks and significant risks of
individual business units and investments, along with the
countermeasures adopted and suitable early warning
indicators, to the extent they are available.
Internal audit system
Group Auditing within Axel Springer SE is organized as a
process-independent staff department, which is under
the control of the full Executive Board in functional terms,
and under the Executive Board member in charge of
Personnel and Finance in disciplinary terms. It provides
consulting and investigations in all Group companies and
divisions in a risk-oriented manner and aligns its activities
with relevant national and international professional
standards.
In particular, Group Auditing has the task of inspecting
the effectiveness of the internal risk management and
control system as well as the compliance management
system based on a risk-oriented inspection plan and to
derive measures for eradicating weaknesses. Implemen-
tation of improvement measures is tracked based on a
systematic process.
Risk Matrix of Axel Springer SE
Critical Risks
Significant Risks
Risks to be Monitored
Other Risks
very
high
50 %
high
25 %
medium
10 %
low
5 %
very
low
e
c
n
e
r
r
u
c
c
O
f
o
y
t
i
l
i
b
a
b
o
r
P
Extent of Damage (€ millions)
very
low
low
medium
high
very
high
0.5
2.5
5
10
For the purpose of effective management and trans-
parent presentation of the risk situation, all risks record-
ed are assessed both before risk management measures
(gross assessment – inherent risk) and after the
corresponding measures are taken (net assessment –
residual risk).
Whilst overall responsibility for risk management lies with
the full Executive Board, the operational management
of the individual risks falls primarily within the area of
responsibility of the respective company divisions or Axel
Springer investments. This includes the early detection
and identification, assessment, definition of appropriate
measures, the management and monitoring of such
measures and adequate documentation and reporting
processes.
In addition, the respective divisional and senior manage-
ments of our companies are required to participate in the
semi-annual update campaign in addition to the system-
atic, standardized risk-surveying conducted once a year.
Additionally, they have to constantly monitor their area or
company for a changing risk situation. Significant chang-
es in the risk situation must be reported immediately to
central risk management.
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The results of individual audit or consultancy mandates
are typically reported to the Executive Board and period-
ically summarized to the Audit Committee of the Super-
visory Board.
We consider the following elements of the risk manage-
ment system and internal control system to be significant
with respect to the (consolidated) financial reporting
process:
To ensure the effectiveness of the internal audit system,
a quality assurance and improvement process is set up,
which provides for external quality assessments among
others in accordance with professional guidelines.
Report on the financial reporting related
risk management system and internal
control system pursuant to Section 289
(4) and Section 315 (4) of the
Commercial Code (HGB)
The (consolidated) financial reporting-related risk man-
agement system and the connected internal control
system are important elements of the internal manage-
ment system of Axel Springer SE, which is also based
on the internationally recognized framework of the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO) (see page 42). As emphasized in
the concept, the effective interplay of the risk manage-
ment system and internal control system is meant to
ensure the effectiveness and economic efficiency of the
Group’s business activities, as well as the completeness
and reliability of its financial reporting. The (consolidated)
financial reporting related risk management system and
internal control system comprise all organizational
regulations and measures aimed at the detection and
management of risks related to financial reporting. With a
view to the (Group) accounting process, it is intended to
ensure that the Group’s financial reports convey a true
and fair view of the financial position, liquidity, and
financial performance of Axel Springer SE and the Axel
Springer Group, in compliance with all relevant laws,
regulations, and standards. However, even an effective
and therefore adequate and well-functioning risk man-
agement system and internal control system cannot
guarantee the prevention or detection of all irregularities
or inaccurate disclosures.
Processes for identifying, assessing, and document-
ing all significant financial reporting-related processes
and risk areas, including the corresponding key
controls. Such processes include financial and
accounting systems, as well as administrative and
operational business processes that generate
important information used in the preparation of the
separate and consolidated financial statements,
including the management reports of the parent
company and the Group.
Process-integrated controls (computer-assisted
controls and access restrictions, dual control principle,
functional separation, analytical controls).
Standardized financial accounting processes through
the use of an intra-group shared service center for
most consolidated German Group companies.
Group-wide directives in the form of accounting guide-
lines, charts of accounts and reporting processes.
Quarterly communication of information to all consoli-
dated Group companies on current developments re-
lated to accounting, and the process of preparing the
financial statements, as well as reporting deadlines to
be observed.
Assuring the requisite expertise of employees involved
in the financial accounting process by means of
appropriate selection procedures and training.
Centralized preparation of the consolidated financial
statements (including management report) employing
manual and computer-system controls in respect of
financial reporting-specific connections and depend-
encies.
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Protection of financial reporting-related IT systems
against unauthorized access, by means of access
restrictions.
(cid:31)Monthly internal reports (complete income statement,
statement of financial position, cash flow statement)
and monthly reports on all cost units of the Group,
including analysis and reporting of significant devel-
opments and budget/actual variances.
Regular, group-wide reports to the persons
responsible for reporting, the Executive Board and the
Supervisory Board
The effectiveness of the (consolidated) financial report-
ing–related risk management system and internal control
system is systematically reviewed and assessed by
means of periodic control tests. As a process-indepen-
dent staff unit, Group Auditing will inspect at regular
intervals randomly selected elements of the accounting-
related internal control system organized at central level
and in the Group companies, in order to uncover weak-
nesses and thus contribute towards improving the legal
conformity with rules and regulations (compliance).
Both the risk management system and the internal
control system are being continuously refined.
Risk areas
If not stated elsewhere, all risks which have a considera-
ble negative effect on reaching our company-wide tar-
gets will be mentioned in the following. Within the risk
areas described below, risks are typically presented in
the order of their priority for the Group. This method may
be deviated from in order to prevent repetitions and in
the interests of readability.
The risks recorded at the balance sheet date and
described below are primarily based on the 2018
forecast period, unless the risks in question relate to
long-term objectives.
Market and competition risks
Market and competitive risks basically relate to changes
in sales and purchasing conditions as well as the devel-
opment of competing suppliers. Since Axel Springer
operates and acquires globally, a large number of eco-
nomic factors must be taken into account to determine
market risks. Economic forecasts, above all for the im-
portant sales markets of Germany, Europe and the USA,
serve as overarching indicators for assessing market and
competition risks.
Following positive economic growth in the year 2017, the
market development in Germany for 2018 continues to
be very good. The declining global uncertainties of the
past year, a favorable labor market situation and low
unemployment figures are leading to rising private
consumption. In addition, companies benefit from an
investment-friendly interest rate climate and rising
demand, especially from the European and international
economic area.
Also for Europe an increase of the economic situation is
predicted. This economic upturn tends to be distributed
synchronously across the Euro area Member States. The
low level of interest rates throughout Europe is seen as a
key pillar for a sustained good economy. Uncertainties
arise with regard to upcoming political events such as the
UK's exit negotiations or the parliamentary elections in Italy.
A cyclical economic upturn can be recognized world-wide
in almost all major economies and is continuing. However,
countries are in different stages of the business cycle. For
example, the relatively high level of private debt in the US
already points to an excess of the economic peak. Howev-
er, it is unclear how the tax reform initiated by US President
Trump will affect the economy. By contrast, economic
growth in emerging markets is picking up. China, as the
second largest economy in the world, has a decisive share
in this development. The growth of the most important
emerging market is greater than that of the USA. The con-
sequences of the change of government in the US have
not yet assumed the potentially negative impact on the
global economy. However, possible protectionist intentions
as well as political relations with North Korea and Russia
pose risks to international markets.
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Despite the overall very positive forecasts, the above-
mentioned economic and political framework conditions
must be viewed critically, as negative changes in Axel
Springer's sales markets could lead to revenue reduc-
tions in all segments of the company at national and
international level.
A particular challenge for Axel Springer's digital trans-
formation and expansion is the high dynamics of digital
offers and innovations. Digital technologies have long
since established themselves in private and business
everyday life. The digital transformation is comprehensive,
omnipresent, changing people, society and markets in a
sustainable way. New technologies enable a variety of
innovations that offer good growth opportunities, while at
the same time threatening traditional business models
and forcing companies to fundamentally rethink and
develop their business.
Classifieds & Marketing Media
Our Classifieds Media segment is also continuously
exposed to high market and competitive dynamics,
among others, due to ever shorter innovation cycles and
technological change. Increasing competition threatens to
continue on the part of the world's leading Internet
corporations Google, Apple, Facebook and Amazon,
called GAFA for short, which penetrate into new market
segments and may possibly compete with our business
segments. These dominant US companies not only pool
specialized knowledge in their corporations, but also
point the way in the course of digitized globalization.
GAFA dominate the B2C domain on the Internet, e. g.
through its platforms, the business relationships with
retailers on the one hand, and with private persons on the
other, so that hardly any retailer can afford to ignore, for
example, Amazon's marketplace or refrain from integrat-
ing Google or Facebook into its communications and
marketing strategy. However, young companies with
innovative and disruptive technologies or business mod-
els may also pose potential risks, as well as associations
of direct competitors, for example in the field of real es-
tate marketing. In addition, the potential for missing out
on trends, the late introduction of new technologies, as
well as the lack of further development of our own prod-
ucts could increase this risk and, as a result, jeopardize
our existing market position. In order to limit the before
mentioned market and competition risks, a systematic
and continuous monitoring of the market and competitive
environment and resulting trends is carried out. Based on
this information, control measures for operational man-
agement are derived. We enhance the attractiveness of
our business models by investing in innovative product
development, the use of new technologies, journalistic
expertise, target-group-oriented marketing and increasing
brand awareness through, for example, TV campaigns.
With these measures, we want to meet the changing
needs of our customers and readers while at the same
time maintaining or expanding our competitive edge. The
acquisition of highly qualified key personnel with appro-
priate expertise and the development of long-term cus-
tomer relationships also reduces risk.
In addition, new business models are constantly being
tested, the digitization of our products promoted, and
our product portfolio supplemented both nationally and
increasingly internationally.
Many of our digital marketing and classifieds offerings
are constantly faced with the risk of a sudden loss of
visibility resulting from the dominance of large internet
search engines. The ever-changing and partly non-
transparent criteria of the search algorithms can have a
significant impact on the current and future revenue
situation. Even small increases and decreases in the
visibility or placement on the results pages can lead to
significant traffic loss and concomitant decline in traffic-
related revenues for certain business models.
We counter this risk by targeting paid ads on search
engine results pages, improving online page structure,
and search engine optimization. At the same time, the
continuous improvement of the attractiveness of our
offerings and the increase of awareness of the brands
and offers of Axel Springer are in the foreground, in order
to make their range and use more independent of offers
of third parties, in particular the search engine visibility.
News Media
Digitization has significantly changed consumer and
reader behavior. The increased importance and use of
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Report on risks and opportunities
digital offerings, in particular the digitization of print me-
dia, continues to lead to ongoing revenue reductions in
the area of printed publications. The rapid development
in the performance of mobile devices also drives the
digital transformation and leads to a rapidly increasing
use of the mobile Internet compared to the stationary
one. A further acceleration of this trend or unpredictable
market developments could further increase the already
factored in declines due to the structural change. In the
television news market, too, the changing user behavior
is reflected in the growing demand for video on demand
and mobile services. This, as well as the increasing mar-
ket density results in declining viewership and ultimately
in advertising revenue losses. Falling advertising reve-
nues are compounded by the general economic down-
turn in the TV advertising market.
Our national print business is still confronted with in-
creasing challenges in the marketing environment. In
addition to increasingly specific customer requirements,
the general market and media situation is subject to an
increasing number of competitors and at the same time
a high degree of dynamism. With the marketing alliance
Score Media, a national cross-media newspaper mar-
keter, founded by several newspaper publishers and
media groups, Media Impact, a joint marketing company
with FUNKE media group, has a major counterpart. The
competition for the daily newspaper titles of Axel Spring-
er SE has increased significantly. Price pressure on ad
marketing and the concomitant loss of revenue in the
print sector cannot be ruled out for the coming financial
year either. As a counterweight to Score Media, the
marketing group Red Impact was founded under the
umbrella of Media Impact. This cooperation, which Me-
dia Impact has entered into with other media groups in
order to bundle the marketing of all relevant German
tabloid titles under one roof, enables all participants to
develop further sales potential for their brands in addition
to the already established marketing.
The development of technical expertise helps us to con-
tinue our successful offensive strategy also in the area of
national trade customers. In particular, it focuses on
accompanying important retail customers in their trans-
formation into the digital business.
In addition to the challenging competitive environment,
our advertising revenues in the print and online sectors
are exposed to the risk that annual contracts with major
agency groups will not be concluded, or only at a lower
volume. Also, the loss of large advertisers due to legal
advertising restrictions or the evasion of significant com-
mercial customers to other forms of advertising such as
television or other online media pose a serious risk.
The marketing of audiovisual content also confronts risks.
Visoon Impact, a company of Axel Springer and Viacom
International Media Networks and active since the begin-
ning of 2016, is responsible for the marketing of audio-
visual content. Should the broadcasting performance of
the clients deteriorate, this means a loss of attractiveness
of the program for the viewers. Ultimately, fewer viewers
lead to significantly lower prices that can be achieved in
the market, even losing their relevance as an advertising
medium.
In order to identify and counteract changing customer
needs at an early stage, we carry out continuous market
analyses and intensify customer service. Organizational
restructuring measures, which primarily serve to
strengthen customer support, also contribute to risk
minimization.
The use of the mobile Internet has accelerated rapidly in
recent years compared to the stationary Internet. The
increasing orientation towards mobile services is risky,
because the traffic in the mobile environment is associat-
ed with lower advertising prices and a lower utilization. In
order to reduce risk, we combine the mobile and sta-
tionary marketing and work on opportunities to attain an
even better monetization of mobile traffic. As a result, a
shift in traffic from stationary to mobile leads, at least
today, to a downward trend in advertising revenues. In a
risk-reducing manner, we hereby exploit technical possi-
bilities, for example by redirecting mobile access to sta-
tionary websites.
The increased availability and, above all, the widespread
use of ad blockers also harbors risks for our digital ad-
vertising revenues by restricting marketing opportunities
in the online advertising market and reducing advertising
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effectiveness. Specifically preconfigured browser and
browser add-on programs are called ad blockers, which
prevent the display of advertising on the targeted pages,
both stationary and mobile, and thus have a revenue-
reducing effect. This not only affects our digital payment
offerings, but also our business models for reach market-
ing and performance-oriented advertising models. For
the impact of the ePrivacy Regulation on our digital busi-
ness models, please refer to the "Political and Legal
Risks" section.
We counter the proliferation of ad blockers both with
legal action against providers and with the development
of alternative revenue streams. Also, technical solutions
for detecting and deactivating ad blockers are increas-
ingly being used. For example, for the readers of BILD.de,
the journalistic content can only be used if the ad block-
ers used are deactivated or an almost ad-free subscrip-
tion is concluded.
Political and legal risks
The relevance of data protection as well as the social
and political sensitivity to privacy and security gaps in the
digital domain have been steadily increasing for years.
For 2018, completely new risks arise from two European
legislations. On the one hand, this is the European Gen-
eral Data Protection Regulation (DSGVO), which will
apply from May 25, 2018. In addition to numerous sub-
stantive tightening of data protection (including consent,
information to those affected, the processing of large
amounts of data in the context of "Big Data and the
requirements for IT security) the DSGVO brings two
fundamental changes, which increase significantly the
risks for data processing companies: There is a corpo-
rate accountability under which the data processor must
be able to demonstrate compliance with the GDPR. In
addition, the fines will be drastically increased in case of
breaches. Fines of up to 4 % of group-wide turnover are
possible, based on antitrust law.
GDPR, the ePrivacy Regulation has not yet been decid-
ed. Also, a concrete date of entry into force and any
transition periods are not finalized (as of February 2018).
Axel Springer deals with possible consequences and
possible measures at an early stage. These include inter-
nal projects, but in the broader sense also the participa-
tion as a founding partner in the joint venture Verimi. At
the same time, Axel Springer, as well as the entire Euro-
pean industry of publishers, marketers and e-commerce,
is extremely concerned about the current drafts. This
applies equally to the associations of publishers and the
internet economy.
In order to be able to counteract the associated risks,
Axel Springer is informed about these developments at
an early stage, also through the associations represent-
ing us. The stakeholders in the publishing and media
industries throughout Europe are making an effort to
explain to political decision-makers the business models
and risks that exist among members, so that they are
properly reflected in the democratic legislative process.
Axel Springer also intends to take timely measures to
identify changes that are relevant to Axel Springer and to
adequately implement the resulting organizational and
legal requirements as part of its risk-based prioritization.
In order to reduce the risk of legal violations, binding
guidelines are also issued for divisions and subsidiaries,
which include organizational and risk-based measures
for increased data protection compliance. For the
measures taken by Axel Springer in the area of IT securi-
ty, please refer to the section "IT risks".
Nevertheless, the political and legal risks can by no
means be completely ruled out. In view of the continuous
technical development of the digital business models
and a largely new and risk-increasing legal situation and
in the absence of relevant case law, there is often an
unclear legal situation and thus the latent danger of
warnings and possible legal violations.
The second European legislation is the draft of ePrivacy
Regulation. Among others, this should regulate the very
relevant setting of cookies and the creation of user pro-
files on the Internet for Axel Springer. In contrast to the
Specifically, this concerns the regulation of the use of so-
called cookies and similar technologies, in particular the
admissibility of creating user profiles as well as the inte-
gration of advertising networks and "retargeting" in the
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areas of web, mobile and app. The obtaining of consents,
so-called "opt-ins", warnings and potential legal viola-
tions bring with it reputational damage, particularly to
well-known brands of Axel Springer such as BILD and
WELT, alongside direct legal and commercial conse-
quences.
The involvement of public service broadcasting on the
Internet continues to pose a risk to us. Above all, the
ARD has gone with a fee-financed, text-focused news
app of the Tagesschau far into the business field of the
private press and distorted the competition. Naturally, it
is more difficult for publishers to enforce paid apps
against this and other free offers from ARD's state
broadcasters.
After negotiations with the ARD and the NDR had been
fruitless, Axel Springer SE filed with seven other publish-
ers and full support of the newspaper publisher's associ-
ation BDZV action against ARD and NDR at the competi-
tion chamber of the District Court of Cologne. The
district court granted the claim in September 2012 for
the most part. The defendants have appealed against
the judgment and prevailed in the appeal before the
Higher Regional Court of Cologne. The plaintiffs lodged
an appeal against this before the Federal Court of Jus-
tice, the appeal was granted and the case remanded to
the Higher Regional Court of Cologne for a new trial.
Admittedly, the Cologne Higher Regional Court respond-
ed to the publishers' request and did not approve the
appeal. Nevertheless, the legal process is not over, be-
cause after an unsuccessful so-called non-admission
complaint, the NDR has now challenged the violation of
a right to have a hearing in court with the Federal Court
of Justice. Our business remains exposed to the risks of
distortion of competition from public service broadcast-
ing and regulatory pressure from legislators at all relevant
levels of government, despite countermeasures taken.
Further potential risks or uncertainties for the Axel
Springer arise from the political situation in the individual
countries. The Polish media landscape, in particular, has
been decisively influenced by the political influence of the
national-conservative government; currently already on
public-law but in the future also through attempts to
influence private media. Government-influenced compa-
nies could reduce or even stop their advertising activities
in our products, which would lead to a significant decline
in our advertising revenues. We counteract this risk with
targeted cost-saving measures and programs for secur-
ing earnings.
IT risks
For Axel Springer, as a Group with a high degree of
digitization of its offers and internal processes, there are
numerous significant risks with regard to the availability
of IT systems used and the confidentiality and integrity of
information.
Due to the high degree of integration of information
technologies into business processes, Axel Springer
relies on a high availability of IT components. A signifi-
cant impact on the availability can be a failure of the IT
infrastructure and the applications run on it, such as the
use of paid content on BILD.de. Potential causes of
impairment include internal factors such as the increas-
ing complexity of systems and longer-term infrastructure,
as well as external factors such as: Computer crime by
deliberately induced data encryption (so-called ransom-
ware attacks) or by third party injected malicious soft-
ware. In the worst case, these can result in business
interruptions with far-reaching consequences for revenue
and reputation.
Additional IT risks are classified as important if the confi-
dentiality of information and data integrity is compro-
mised as a consequence. Against the background of the
growing importance of paid content, notifiable services
and the associated collection and storage of personal
data as well as the constantly growing computer crime,
the sensitive handling and protection of data is of great
importance.
For this reason, targeted measures have been and are
being taken to prevent or limit as far as possible the
effects and likelihood of criminal acts and the failure of IT
components. The risk reduction measures include DDoS
protection, emergency data centers, vulnerability analysis,
use of encryption, identity & access management, con-
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solidation and standardization, and improving of systems.
These measures are continuously analyzed and, if nec-
essary, expanded and improved.
Reputation risks
As part of the risk survey at Axel Springer reputation
risks are not separately levied, as they usually result in a
secondary risk or effect related to the primary risks.
A violation of law and order can cause high attention and
damage our reputation due to Axel Springer's prominent
position in contributing to social opinion. Potential reputa-
tion risks may arise, for example, from the violation of
journalistic independence if the journalistic work is endan-
gered due to personal advantage, inadequate research,
incomplete information or lack of care in dealing with
sources. Violation of country-specific laws and regulations,
as well as non-compliance with equal treatment and
opportunity programs can also damage reputation.
In order to avoid reputation risks, the risk management
measures introduced are primarily intended to prevent
the occurrence of a corresponding primary risk. Regard-
less, it includes the basic compliance with law and order,
education campaigns and public relations work on es-
tablished measures to prevent reputation damage.
In addition, our International Social Policy, a catalogue of
social standards, counteracts potential reputation risks.
The International Social Policy defines the attitude of the
company and others on questions of legal compliance,
the protection of children and young people, dealing with
employees and health and safety. These standards are
globally binding for all activities of the company and can
lead to a significant loss of image if disregarded. For
further information, please refer to the section “Important
management practices” on page 67 et seqq.
wood, pulp and paper industries and environmental
organizations. In addition, we use monitoring measures
along the value chain. Our internal and external commu-
nication in this respect is characterized by openness and
transparency.
Violations of confidentiality agreements and insider regu-
lations as well as information that has not been published
correctly in the context of external reporting can have
economic or legal consequences for Axel Springer. In
addition, there is the risk of damage to the image of the
Group or its brands through negative reporting or cam-
paigns in social media channels, even if there is no viola-
tion of the law from a legal perspective.
The following risk management measures primarily serve
to avoid or reduce reputational risks: Compliance with
law and regulations, education campaigns and public
relations as well as relevant guidelines (e. g. guideline on
journalistic independence). These should prevent the
occurrence of a corresponding primary risk and protect
against reputational damage.
Strategic risks
Significant strategic risks at Axel Springer result primarily
from decisions to invest in new business fields and mod-
els as well as companies that develop differently than
planned over the long term or that cannot assert them-
selves on the market or are displaced by new business
models. Also a possible insufficient diversification holds a
high risk potential. Unscheduled write-off in the case of
expected permanent impairment in the context of the
impairment tests to be performed would be the result. In
addition to our activities in the Classifieds Media and
Marketing Media segments, this risk also affects our
product portfolio of national and international News
Media offerings.
Axel Springer operates an advanced sustainability man-
agement system that meets international standards.
However, if we were to recognize potential environmental
and social conflicts in the procurement of resources
along the wood, pulp, paper and recycling chain too late,
this could damage our image. In order to effectively
minimize this risk, we work closely with experts from the
Overall, however, the business fields and models of our
investments are very heterogeneous, so that diversifica-
tion avoids so-called cluster risks. There is also further
risk minimization, preventive control measures such as
clear investment criteria, which we use to review new
investments as part of our M & A activities, as well as
active portfolio and investment management, the estab-
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such as unplanned project delays as well as cost over-
runs due to planning, tendering or procurement errors,
or raw material price increases such as steel, glass or
concrete. To reduce the aforementioned risks, a corre-
sponding general contractor agreement was concluded,
professional project controlling and reporting structures
were established. Also, the development of supplier
relationships and their early contractual commitment help
us to minimize these risks.
In addition to our construction project Berlin, our con-
struction activities at the Hamburg site are also subject
to risk. In the part of the building sold to the city of Ham-
burg, work is still to be done which, like the construction
activities in Berlin, is subject to risk. Here, too, risk reduc-
tion is achieved through systematic and highly profes-
sional project management and the involvement of ex-
ternal specialists.
Personnel risks
The individual abilities, professional skills and commit-
ment of our employees make a significant contribution to
the success of Axel Springer. A significant risk therefore
represents the loss of specialists and executives and the
associated company-specific loss of knowledge and
competence. We act professionally and actively. One
focus of our HR management is the targeted and for-
ward-looking development and motivation of employees
through individual training and further education
measures, regular feedback discussions, attractive bo-
nus programs, flexible working time models and a com-
prehensive offer for better reconciliation of work and
family life. Field-specific measures based on educational
needs analysis also help us to identify individual employ-
ee needs and to minimize the risk of loss of skilled work-
ers. Systematic succession planning and development,
especially in the case of age-related fluctuation, is indis-
pensable. In this way, the transfer of valuable wealth of
experience and company expertise should be guaran-
teed and the personnel requirements should be covered
in the long term.
lishment and maintenance of a qualified management
level and active and systematic monitoring of business
and market development.
In addition to the aforementioned risks, the dependence
on strategically important cooperation partners is also
risky, for example for Upday, a personalized pan-
European news service that was developed in collabora-
tion with Samsung and currently represents the news
app with the widest reach in Germany. If Samsung does
not want to continue the cooperation, this would call into
question the continued existence of the business model.
Active key account management, legal support in the
negotiation and renegotiation of contracts and continu-
ous monitoring of the business activities of our coopera-
tion partners contribute to reducing this risk.
Other risks
Axel Springer is naturally exposed to natural hazards that
continue to pose significant risks to the Group. Possible
damage caused by natural phenomena can lead to
property damage and business interruptions. We counter
these risks in two ways: On the one hand structural and
organizational structural measures were taken to in-
crease the safety standard even further, on the other
hand there is an insurance protection to mitigate any
financial consequences.
Terrorist attacks continue to pose a serious risk to Axel
Springer and, due to the current global political situation,
a significant increase in risk. We counter this, among
others, with increased security standards, significantly
tightened access regulations and controls as well as a
detailed education and training of the safety-relevant
group of people. The financial risk from possible property
damage and business interruptions is covered here by
appropriate insurance.
In order to support the cultural change to the leading
digital publishing house, work is under way on the con-
struction of the new publishing house of Axel Spring-
er SE, which should enable employees to work together
more closely and exchange knowledge more effectively.
When implementing such a major project, Axel Springer
is inevitably confronted with construction-specific risks
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In addition, the difficult situation in recruiting junior ex-
ecutives and executives represents a continuously grow-
ing risk. Due to demographic change and increasing
competition in the personnel market, it is increasingly
difficult to recruit qualified personnel. Particularly with
regard to the continuously increasing digitization of the
Group, IT specialists in particular will continue to be in
greater demand. That is why we have set up an internal
recruiting team that designs personnel strategy initiatives
and, for example, pursues the long-term development of
a shared talent pool with a focus on bottleneck and key
functions. In addition, professional employer branding,
our social media activities on Facebook and Instagram,
and university marketing with its diverse internal and
external events make an important contribution to setting
us apart from other companies and positioning Axel
Springer as an attractive and innovative employer in the
relevant target group.
Financial risks and risks from the use of financial
instruments
With regard to financial risks, default risks for loans and
investments as well as interest rate risks for Axel Spring-
er are particularly important for the 2018 financial year.
We counter the risk of possible default of loans, which
Axel Springer assigns on a case-by-case basis, by regu-
larly informing ourselves about the economic and finan-
cial situation of the borrower, analyzing and processing
these data accordingly, and thus identifying possible
negative developments at an early stage. Should these
manifest themselves, we allow the borrowers to collat-
eralize their assets on a case-by-case basis.
Regarding our stake in Do⁄an TV Holding A.S., potential
default risks from the agreed sales options were fully
hedged by bank guarantees.
In order to counteract possible default risks when invest-
ing funds that are not required for operational purposes,
investment is made according to predefined criteria that
are specified in a Group guideline. It defines fixed asset
limits for risk limitation that must not be exceeded are
defined therein. The limit compliance is monitored by
consistent, daily monitoring.
The existing interest rate risk results primarily from a
financial asset or liability with variable interest rates.
However, this risk is limited due to well-defined financing
principles and regular monitoring of the variable interest
component. Among others, we finance ourselves on
borrower's promissory notes, which are mostly fixed
income. Any additional interest rate risk that could affect
the promissory notes and variable interest rate credit
lines is minimized, where necessary, by the use of inter-
est rate derivatives. Significant financing risks due to
uncertain developments in the financial sector are cur-
rently not apparent to Axel Springer: The current € 1.2
billion (up to 2020) credit line taken out as part of secur-
ing liquidity has been bindingly committed by the partici-
pating banks. The interest rate is linked to a ratio be-
tween the net debt and the earnings ratio of the Axel
Springer Group, so that the use of the credit lines would
result in higher interest charges if the debt ratio is higher.
In addition, we have to take into account some uncritical
additional conditions under the loan agreements, which
give the banks a right of termination in the event of non-
performance. We comply with these and therefore con-
sider the risk of early maturity of drawn loans to be low.
Continuous monitoring of the money, capital and credit
markets shows that the company can refinance on good
terms due to its continued excellent credit standing and
reputation. Furthermore, we have a reliable generation of
liquidity due to a diversified customer base with no signif-
icant delays or defaults.
Due to the degree of internationalization of Axel Springer,
there are corresponding currency risks for the Group.
These result from expenses, revenues, income from
participations as well as receivables and liabilities in
foreign currencies (transaction risk).
The risk of changes in value due to exchange rate fluctu-
ations is largely avoided by raising operating costs in the
countries in which we sell our products and services.
Residual currency risks from foreign currency cash flows
are insignificant, as we generate most of our results in
the euro currency area. Currency risks from open net
positions of € 5 million or more per foreign currency are
analyzed in a treasury committee. The Treasury Commit-
tee meets at least six times a year to better identify po-
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tential risks and resolve countermeasures. Local curren-
cy financial resources generated in non-euro countries
are either reinvested to expand local business activities,
invested in and secured or distributed by Axel Spring-
er SE. The liquidity risk arising from exchange rate fluctu-
ations on foreign currency financial assets is therefore
limited.
Currency effects from the translation of foreign currency
financial statements (translation risk) are recognized
directly in accumulated equity. Therefore, Axel Springer
does not hedge against such currency risks.
The risks from financial instruments and hedging
measures are explained in detail in Note (34) of the ex-
planatory notes to the consolidated financial statements.
Overall risk assessment
The overall risk situation of the Axel Springer Group
consists of the individual risks of all risk categories of the
consolidated majority holdings and the central areas.
Taking into account the interaction of risks and risk ag-
gregation, there are currently no risks that could jeopard-
ize the continued existence of the Axel Springer Group or
could significantly influence its asset, earnings and finan-
cial position. This applies to the condition that there is no
significant deterioration of the economy in our markets
and the media industry and, consequently, a significant
deterioration in the market and earnings position of the
Group. In addition, risk concentrations are reduced
through continuous diversification, internationalization,
optimization of the brand and product portfolio and
digitization.
In contrast to the presentation in the 2016 Annual Report,
there are slight changes in risk positions, in particular as
a result of the acquisitions and sales of companies and
the associated investments. However, these changes did
not materially affect the overall risk situation and risk-
bearing capacity of the company.
Opportunity management
Axel Springer pursues the goal of sustainably securing
entrepreneurial success. Potential opportunities arising
from positive developments in the course of business
activities should be identified early and systematically
exploited. As part of the management, strategic and
planning processes, potential opportunities induced both
internally as well as externally are identified and assessed
for the company divisions and interests. External oppor-
tunities are offered, for example, by changing market
structures or customer requirements; internal opportuni-
ties arise from product innovations or quality improve-
ments. This is based, for example, on market and com-
petition monitoring activities and analyses as well as
regular dialog with experts. In considering the risks in-
volved, identified opportunities are fundamental to corpo-
rate decision-making and the introduction of corre-
sponding measures, such as measures regarding
investments in new markets or technologies. Responsi-
bility for the management of opportunities is taken in as
decentralized a manner as possible by the operational
divisions and their management or senior managers.
Opportunities
In line with the definition of risks, opportunities are mir-
rored as the possibility of positive deviations from defined
targets and can thus serve both the added value and the
generation of potential competitive advantages. They
may arise from unscheduled and/or non-budgeted posi-
tive developments and/or events. This applies if there is
insufficient certainty regarding the occurrence of events,
or the framework conditions and environment develop in
a more favorable manner than expected. In addition,
potential arising from long-term strategic decisions that
had not been fully budgeted may lead to additional
growth.
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Strategic opportunities
In a constantly changing environment we continue to
develop our company so that we are able to face global
and industry-specific challenges in the future with inno-
vative and tailored solutions.
Axel Springer’s international digitization strategy offers
further promising opportunities for generating additional
growth and revenues based on highly positive develop-
ments within the digital markets. Axel Springer exploits
these developments by investing in new or future-
oriented technologies, entering into new forms of coop-
eration, the ongoing digital transformation and monetiza-
tion of journalistic products. In addition, by combining
different media, we achieve the most comprehensive
multimedia coverage in the German media landscape.
This spans digital, print, video, and live TV, with an em-
phasis on quality journalism as the hallmark in all media
channels.
Acquiring interests in companies with promising digital
business models in the early and growth phases of their
life cycle gives us the opportunity to make contacts
within the industry and to other founders and investors
as well as to access and use new ideas and business
models. On the other hand, we can gain access to co-
investments, which may also be available to us for a later
majority acquisition. If the portfolio companies develop
successfully, we can benefit from potentially significant
increases in value. For this purpose, Axel Springer and
Martin Varsavsky, an experienced Internet entrepreneur
and member of the supervisory board of Axel Spring-
er SE, founded an investment fund for media start-ups.
This cooperation is not only intended to secure long-term
growth, but also to further expand our business in the
US market. In addition to this new early-stage investment,
the start-up accelerator recently founded with Porsche,
which supports digital business ideas with high market
potential, can offer valuable strategic opportunities. We
see further growth opportunities in our digital internation-
alization strategy and the associated entry into new or
expanding existing markets. For example, the introduc-
tion of successful business models on the home market,
the acquisition of existing and successfully established
companies and the establishment of strategic partner-
ships in international growth regions offer considerable
potential for success. Compared to our competitors, we
also benefit from the fact that we already have strong
market positions in many countries.
The sale of the new Axel Springer building and the Axel-
Springer-Passage will provide us with additional liquid
funds that can be used for future growth initiatives, es-
pecially in the digital sector.
Market and competitive opportunities
Should the global economy develop better than previ-
ously forecasted, this could have a positive impact on
our revenue performance. The deciding factor will be the
impact that regional conflicts and crises will have on our
core markets when the world economy is highly inter-
connected. Nonetheless, its early investments in regional
and digital growth markets places Axel Springer in a
good position to capitalize on the opportunities this
brings. Even a negative macroeconomic development
can open up opportunities: This could eliminate competi-
tors from the market, thereby strengthening our own
position. In addition, it would be possible to acquire
companies at advantageous prices, thus expanding our
position in existing markets and investing in new markets
with growth potential.
Additional industry-specific potential to generate un-
planned revenues for Axel Springer may also arise from
higher advertising expenditures on individual advertising
media than forecasted by advertising associations. This
could in particular be the case if the media mix changes
in our favor, or, in other words, if advertising expenditure
flows into the digital sector driven by journalistic content.
For example, the paid subscription service for journalistic
offers announced by Google and Facebook could help
us to better market our paid content online. Should this
actually happen and succeed, additional sales revenues
could result and the brands of Axel Springer can be
strengthened. Furthermore, increasing mistrust of Fake
News could also strengthen the paid journalistic payment
offers in the journalistic pay range of Axel Springer and
generate higher circulation revenues. The technological
developments in the marketing business - in addition to
the associated challenges - also provide further opportu-
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nities for additional advertising revenues. Thus, a change
in the online marketing by programmatic advertising is
taking place. This form of media planning stands for the
automated purchase and sale of advertising with the
help of target group data in digital media and thus a
change from the marketing of the environment to the
marketing of target groups. With our know-how and the
targeted customer approach through targeting measures,
there are promising additional opportunities in the adver-
tising business. The international orientation of Axel
Springer, which has increased as a result of correspond-
ing investments, represents a further advantage for the
Group in advertising business. Compared to competing
publishers with a stronger focus on the German-
speaking area, we can offer global customers a broader
readership or higher reach for ad campaigns from a
single source.
All divisions and companies of Axel Springer are working
on the continuous improvement of technologies and
processes in order to maintain and expand their position
in the competitive field. This includes an intensive cross-
company exchange on successful business models, as
well as innovative start-ups.
Political and legal opportunities
The ancillary copyright for press publishers (Leistungs-
schutzrecht für Presseverleger) entered into force at
the beginning of August 2013, with the aim of further
enhancing the protection of intellectual property. This
stipulates that license fees shall be chargeable to search
engine providers for using publisher content, unless such
use relates to “individual words” or “the smallest text
snippets“. Google as the market leader among the
search engine providers rejected this. At present, there is
a revocable “free-of-charge” consent granted by the
publishers to Google to use their text snippets in search
results. VG Media (collecting company), which repre-
sents more than 200 digital publisher offers, including by
Axel Springer, has filed a payment claim against Google,
which is currently pending before the Berlin Court of
Appeal in a second instance. Depending on the outcome
of the legal dispute or the agreement reached, this may
have a positive effect on Axel Springer and its digital
offerings.
Business and other opportunities
Axel Springer is continually working on the optimization
of operational processes and structures. Axel Springer
therefore regards inter-company, cross-divisional and
cross-functional interlinking as a key factor for success in
order to produce innovative and tailored content as well
as provide high quality products and services for our
customers. For this Axel Springer has begun a compre-
hensive restructuring with the separation of the prints
from the digital business. If the new organizational struc-
ture is implemented swiftly and consistently for a cross-
brand collaboration of core functions, this could, in addi-
tion to more efficient marketing, be associated with addi-
tional opportunities for greater growth, especially in the
digital business and synergy potential in the cost area.
Axel Springer could better identify and exploit opportuni-
ties through focused teams, clear responsibilities and
less structural complexity.
The increased and promoted exchange of e. g. techno-
logical know-how of our companies offers additional
opportunities to further improve our position in our core
markets.
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Anticipated economic environment
Anticipated Economic Development (Selection)
General economic environment
The upward trend of the world economy will accelerate
according to the forecast of the International Monetary
Fund (IMF). Accordingly, the growth rate of the global
economy in 2018 should rise to a real + 3.9 %. The boom
is mainly driven by a significant growth spurt in the indus-
trialized countries.
According to estimates by the ifo Institute, the upturn
will continue in Germany in 2018. Growth drivers will
therefore continue to be domestic demand and exports.
According to the forecast, private consumption is
expected to expand strongly with a real growth rate of
1.7 % driven by rising employment and rising wages. In
view of the continued increase in the capacity utilization
rate of the German economy in the previous year, the
strong growth in corporate investment is expected to
continue at 3.9 % in real terms. According to the ifo
forecast, exports will continue to rise strongly in 2018,
with real growth of 5.6 %. With a price-adjusted expan-
sion of 5.5 %, imports will develop similarly dynamically.
According to forecasts by the ifo Institute, consumer
prices will rise by 1.9 % in 2018 in view of the continuing
buoyant economy. Unemployment is expected to fall to
5.3 % due to persistently high employment creation. At
the same time, the number of persons in employment
will rise by around 490,000. On average for the year
2018, the ifo Institute expects around 44.8 million
people to be in gainful employment.
Change in gross domestic product compared to
prior year (real)
Germany1)
United Kingdom2)
France2)
Central and Eastern Europe2)
USA2)
1) Source: ifo Institut, December 2017.
2) Source: DIW, December 2017.
2018
2.6 %
1.4 %
1.8 %
3.5 %
2.5 %
According to a forecast by the German Institute for
Economic Research (DIW), the British economy will
expand by 1.4 % in 2018. Investments are unlikely to
contribute to growth due to slightly restrictive monetary
policy and persistently high levels of uncertainty in the
face of the Brexit negotiations. However, positive impuls-
es are to be expected from foreign trade, helped by the
ongoing recovery in the eurozone and the continuing low
value of the British pound.
For France, the DIW forecasts a real growth rate of
1.8 % for 2018. According to the economic research
institute, the environment has improved slightly as a
result of labor market and tax reforms. The DIW expects
only modest price increases and rising of disposable
income in real terms.
The economic forecast of the DIW comes to altogether
optimistic expectations for the states of Central and
Eastern Europe. Consumption should remain the main
driver. The economic recovery in the region goes hand
in hand with a significantly and continuously falling
unemployment rate. Investments should gain some
momentum. Exports benefit from growing foreign
demand. Overall, price-adjusted growth will amount
to 3.5 % in Central and Eastern Europe, according to
the DIW.
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According to the DIW forecast, the development of
the US economy remains upward. The continuous im-
provement of the labor market situation supports private
consumption. The DIW estimates the real growth rate of
US economic output for 2018 at 2.5 %. It is assumed
that the tax reform will only have a relatively small
stimulating effect on economic growth.
Industry environment
According to the current advertising market forecast of
ZenithOptimedia, a worldwide increase of 4.1 % (nominal)
is expected for the year 2018. The shift of advertising
budgets to the internet continues with undiminished
speed. According to ZenithOptimedia's current forecast,
the share of online advertising in the global advertising
cake will rise to 40 % next year.
The forecasts for Germany available to date show a
largely similar picture for the individual media genres.
ZenithOptimedia expects net advertising market revenue
(marketing revenues net of rebates and agent’s commis-
sion) in Germany for 2018 to increase by 2.3 % (nominal).
Thus, the total advertising market will not grow as fast as
the general economy, which is expected to expand at a
nominal rate of 4.0 % (+ 2.2 % in real terms) according to
the DIW.
Growth in the advertising market is driven by digital
(+8.0 %), TV (+2.8 %), outdoor (+2.6 %) and radio
(+1.8 %). ZenithOptimedia is predicting a decrease in net
advertising revenues for newspapers (– 3.2 %) and
magazines (– 5.5 %).
The forecast data continue to reflect the structural
redistribution of advertising expenditure in favor of digital
offers. In the coming year, the share of online and mobile
in Germany should rise to 35.9 %. This puts Germany
below the global average. ZenithOptimedia says publish-
ers will hardly benefit from the additional online ad reveue.
Reason is the dominance of the big tech companies
from the USA.
However, global trends also set the direction for Germa-
ny. Growth in the advertising market is technology-driven,
especially in the mobile, online moving images (video),
social media and programmatic growth segments.
Thanks to the continued proliferation of mobile devices,
technical advances in advertising, increased variety of ad
formats, and technical innovations in driving multi-device
campaigns, a significant increase in digital advertising
investments is expected.
The progressive automation of advertising booking
through programmatic buying platforms is also seen as a
driver for online and mobile advertising. In addition, all
media will in future be digital, addressable and thus
programmatically tradable. The challenge for the market-
ers will be, on the one hand, to connect their inventory to
the available trading platforms and, on the other hand, to
provide data that will enable advertisers to address
consumers in a more targeted manner - and thus more
effectively.
The industry expects positive stimuli for the advertising
industry from the two sporting highlights of 2018, the
Winter Olympics in South Korea and the World Cup in
Russia, with sports-related advertising media likely to
benefit from this.
One of the big trends in the advertising industry is the
use of artificial intelligence for mass communication.
Self-learning technologies predict customer behavior
and focus on personalized customer engagement.
The expectation of further increasing budgets in the area
of digital classified ads in 2018 is confirmed by a
study of the strategy consultancy OC & C Strategy
Consultants in the spring of 2017. According to this
study, advertising expenditures (online) in Germany for
job advertisements will rise by an average of 12 % per
year by 2020 compared to 2016. This growth goes
hand in hand with the forecast that by 2020, 63 % of
advertising spending in the area of job advertisements in
Germany will be made online, whereas in 2016 the share
was still at 50 %. For the German real estate advertising
market (online), OC & C expects an average increase of
9 % by 2020 compared to 2016. The online share of real
estate advertising spend was already 69 % in 2016, and
according to the study, it will increase even further to
77 % by 2020.
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Forecast report
Group
Strategic and organizational orientation
The highest strategic priority for Axel Springer is to
pursue the consistent digitization of its business. We
aim to attain the goal of becoming the leading digital
publisher by further developing our digital offerings in
Germany and abroad, and by making targeted
acquisitions.
Comparison of forecast with actual performance
The forecast targets published in March 2017, and
raised at mid-year 2017 for adjusted EBITDA, adjusted
EBIT and adjusted earnings per share were attained.
For revenues the forecast was exceeded.
Group
Revenues
EBITDA,
adjusted
EBIT,
adjusted
Forecast /
adjustments during the year
Mid single-digit
percentage increase
Mid to high single-digit percentage
increase / high single-digit
percentage increase
Mid single-digit percentage
increase / mid to high single-digit
percentage increase
Earnings per
share, adjusted
Mid to high single-digit percentage
increase / high single-digit
percentage increase
2017
8.3 %
8.5 %
7.0 %
8.1 %
The digital international markets in which Axel
Springer engages in with its own corporate activities will
develop differently according to the prognosis of Zenith-
Optimedia: In the online market in Western Europe, net
advertising volume will increase by 7.3 % to USD 42.7
billion in 2018, based on the assumption of constant
exchange rates. While in the UK (+3.8 %) digital advertis-
ing spending will grow less strongly than in Germany,
France (+10.4 %) and the US (+13.1 %) are expected to
achieve higher growth.
Anticipated Advertising Activity 2018 (Selection)
Change in net ad revenues compared to prior year
(nominal)
Germany
Central and Eastern Europe
USA
United Kingdom
Online
8.0 %
12.9 %
13.1 %
3.8 %
Source: ZenithOptimedia, Advertising Expenditure Forecast, December 2017.
The expected positive development of foreign advertising
spending on digital classified advertisements in 2018 is
also underpinned by the OC & C study. For the job
market in the United Kingdom, the analysis forecasts an
average increase in digital advertising spending of 3 %
per year by 2020 compared to 2016. Real estate
markets in France and Belgium are expected to grow
by 6 % and 5 % respectively over the same period.
Compared to the German market, the online share of
advertising spending in the respective foreign markets in
2016 was already comparatively high, at 79 % in the UK,
65 % in France and 67 % in Belgium. For 2020, accord-
ing to the study, a further shift in advertising spend from
offline channels to online channels is forecast in all three
markets. As a result, the United Kingdom is expected to
have an 85 % online share of advertising spend in the
jobs segment, and France 72 % and Belgium 73 % in the
real estate segment (based on advertising expenses
online + offline per category).
58
Annual Report 2017
Axel Springer SE
Combined Management Report
Forecast report
Slovakia in the middle of the year 2018. Due to the
significant implications of these effects, we also state our
expectations regarding the organic development of our
key performance indicators that result from adjusted
consolidation and currency effects, as well as the effects
from IFRS 16. Consideration of IFRS 15 follows an ap-
propriate adjustment of our prior-year figures, which
reduces the Group revenues for 2017 by approximately
€ 500 million in the Marketing Media segment.
For the financial year 2018, we expect Group revenues
to increase by an amount in the low to mid single-digit
percentage range. Organically, we also assume growth
in the low to mid single-digit percentage range.
For adjusted EBITDA, we expect a rise in the low
double-digit percentage range. For organic growth in
adjusted EBITDA we assume an increase in the mid to
high single-digit percentage range.
For adjusted EBIT, we expect a rise in the low single-
digit percentage range due to higher depreciation,
amortization and impairments, and organically we expect
an increase in the low to mid single-digit percentage range.
For the adjusted earnings per share, we expect an
increase in the low to mid single-digit percentage range.
For the organic development we assume a rise in the
mid to high single-digit percentage range.
Anticipated business developments and financial
performance of the segments
The revenues of the Classifieds Media segment are
expected to show a rise in the double-digit percentage
range. Organic growth is expected to be in the high
single-digit to low double-digit percentage range. We
expect adjusted EBITDA to increase in the double-digit
percentage range. The organic increase should lie in the
high single-digit to low double-digit percentage range,
despite increased investments in IT, marketing and sales.
Segments
Revenues
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
Forecast
2017
Low double-digit
percentage increase
Development roughly on par
with prior-year level
High single-digit to low double-digit
percentage increase
Considerable
decline
EBITDA, adjusted
Classifieds
Media
Low double-digit
percentage increase
News
Media
Marketing
Media
Services/
Holding
EBIT, adjusted
Stable
development
High single-digit to low double-digit
percentage increase
Significant
deterioration
Classifieds
Media
Development significantly below
development of EBITDA, adjusted
News
Media
Marketing
Media
Services/
Holding
Comparable development to
EBITDA, adjusted
Development slightly below
development of EBITDA, adjusted
Significant
deterioration
14.6 %
1.9 %
15.0 %
-16.8 %
16.5 %
2.0 %
16.3 %
-46.5 %
13.6 %
1.1 %
14.9 %
-23.9 %
Business development in the segments confirmed or
exceeded expectations for both revenue, adjusted
EBITDA and adjusted EBIT. In terms of revenues
the forecast was exceeded in the News Media and
Marketing Media segments and in terms of adjusted
EBITDA in all three operating segments Classifieds
Media, News Media and Marketing Media.
Anticipated business developments and financial
performance of the Group
The forecast for the financial year 2018, takes the
application of the new accounting standards IFRS 15
and IFRS 16 into account (for impacts, we refer to the
notes to the consolidated financial statement of the
Group Note (3q)), the initial consolidation of Logic-Immo
from February 2018, as well as the sales of aufeminin in
the second quarter of 2018 and the print portfolios in
59
Annual Report 2017
Axel Springer SE
Combined Management Report
Forecast report
Dividend policy
Subject to the condition of continued sound financial
performance in the future, Axel Springer will pursue a
dividend policy of stable or slightly increased dividend
distribution, while also allowing for the financing of
growth.
Anticipated development of the workforce
The annual average number of employees in the Group
for 2018 will be higher than the prior-year figure. This is
mainly due to organic growth and acquisitions in
connection with the digital transformation of the Group’s
business.
Planning assumptions
We plan the future development of the financial perfor-
mance, liquidity, and financial position on the basis of
assumptions that are plausible and sufficiently probable
from today’s perspective. However, actual developments
could possibly be much different from the assumptions
applied and thus from the business plans and trend
forecasts prepared on the basis of those assumptions.
In particular, the forecast is based on the assumption
that no significant deterioration in the economic environ-
ment will follow and that the actual exchange rates do
not deviate significantly from the underlying assumed
exchange rates.
The forecasts for adjusted EBITDA, adjusted EBIT, and
the adjusted earnings per share reflect the expected
effects at the time of the publication of the Annual Report
from known acquisitions (particularly Logic-Immo),
divestments (in particular aufeminin and the print portfolio
in Slovakia) and planned restructuring expenses. The
additional disclosures regarding organic development
have been adjusted for consolidation and currency ef-
fects, as well as effects from the application of the new
accounting standards IFRS 16.
In the News Media segment, we expect a decrease in
revenues in the low to mid single-digit percentage range
for the financial year 2018. Deconsolidation effects from
the sale of the print portfolio in Slovakia will have an im-
pact here from mid year. Organically, we expect a decline
in revenues in the low single-digit percentage range. For
adjusted EBITDA we expect a rise in the mid single-digit
percentage range. Organically, we assume a decline in
the low to mid single-digit percentage range.
We expect revenues in the Marketing Media segment
to decrease by an amount in the high single-digit to low
double-digit percentage range, based essentially on the
anticipated closing of the sale of aufeminin in France. In
terms of organic development, we expect an increase in
revenues in the high single-digit percentage range. Start-
ing point for the forecast is the reduced revenue for 2017
by approximately € 500 million after applying IFRS 15.
For adjusted EBITDA, we expect an increase in the high
single-digit percentage range and organically we expect
a growth in the low double-digit percentage range.
For the Services/Holding segment, we expect a de-
cline in revenues in the mid single-digit percentage range,
depending on market conditions. For the organic devel-
opment too, we expect a decline in the mid single-digit
percentage range. For adjusted EBITDA, we expect a
rise (improvement) in the low to mid single-digit percent-
age range and equally organically a rise in the low to mid
single-digit percentage range.
For adjusted EBIT, we expect developments in all seg-
ment to be below that of adjusted EBITDA due to higher
depreciation.
Anticipated liquidity and financial position
With regard to liquidity and financial position, invest-
ments in property, plant and equipment and intangible
assets will be significantly above the prior-year level,
mainly due to investments in the new building in Berlin.
Financing will be provided by operating cash flow. Ex-
cluding the investments for the new building in Berlin,
investments are also expected to be significantly above
the prior-year figure.
60
Annual Report 2017
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
Disclosure and explanatory report of the
Executive Board pursuant to takeover law
This section contains the disclosures pursuant to Sec-
tions 289a (1), 315a (1) of the Commercial Code and the
explanatory report of the Executive Board in accordance
with Section 176 (1) sentence 1 AktG related to Section
9 (1) lit. c) ii) SE-VO.
Composition of subscribed capital
The subscribed capital of the company amounts to
€ 107,895,311.00 and is divided into 107,895,311 regis-
tered shares. The shares may only be transferred with
the company's consent (registered shares of restricted
transferability, see below).
Different classes of shares do not exist. All shares have
the same rights and obligations. Each share grants one
vote at the annual shareholders' meeting and is decisive
for the share of the shareholders in the profits of the
company. This does not apply to treasury shares held by
the company (see page 64), on treasury shares), from
which the company has no rights (see Section 71b of the
German Stock Corporation Act).
Restrictions on voting rights or the
transfer of shares
Pursuant to Section 5 (3) of the Articles of Association of
the company, the shares and the subscription rights to
shares in Axel Springer SE may only be transferred with
the consent of the Company. The approval is granted by
the Executive Board, whereby the Supervisory Board
decides internally on the approval. The consent can be
refused according to the statute without giving reasons.
However, the company does not arbitrarily refuse to
approve the transfer of the shares.
According to the knowledge of the company's Executive
Board, transfer restrictions under the law of obligations
arise from the following agreements:
On July 31/August 4, 2006, a share transfer re-
striction agreement was concluded between Dr. Ma-
thias Döpfner, Brilliant 310. GmbH, Axel Springer AG
and M.M. Warburg & Co. KGaA. Under this share
transfer restriction agreement, the direct and indirect
purchase or disposal of the shares of Axel Springer
AG by Brilliant 310. GmbH or by Dr. Mathias Döpfner
are made contingent to the prior consent of Axel
Springer SE in accordance with the Articles of Asso-
ciation of the company.
By virtue of a declaration dated August 14, 2012, Dr.
Mathias Döpfner acceded to a pool agreement (“pool
agreement”) concluded between Dr. h. c. Friede
Springer and Friede Springer GmbH & Co. KG, in re-
spect of the 1,978,800 shares of Axel Springer SE
that were given to him as a present by Dr. h. c. Friede
Springer on the same date. In total, the pool agree-
ment includes 52,826,967 voting shares of Axel
Springer SE (pool-linked shares). Under the terms of
the pooling agreement, a pool member wishing to
transfer his pooled shares to a third party must first
offer these shares to the other pool members for pur-
chase (purchase right). The purchase right expires
two weeks after the purchase offer. It does not apply
to transfers to certain persons close to the pool
member.
In addition, shares of Axel Springer SE acquired by
the Brilliant 310. GmbH and Dr. Mathias Döpfner were
pledged to a bank; the same applies to the shares of
Axel Springer SE held by Dr. Giuseppe Vita.
Under the virtual stock option plans 2011 II and 2014 for
executives, the beneficiaries are required to make a
personal investment in shares of Axel Springer SE. These
shares are not subject to any restrictions on disposal,
but any disposition of these shares would cause the
corresponding virtual stock option rights to lapse without
replacement or compensation (for information on the
virtual stock option plan 2011 II and 2014 for senior
executives, see page 80).
61
Annual Report 2017
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
The same applies to the virtual stock option plans 2012
and 2014 for members of the Executive Board (see page
78 for information on the virtual stock option plans 2012
and 2014 for Executive Board members).
Finally, persons performing managerial duties at Axel
Springer SE within the meaning of the European Market
Abuse Regulation (MAR) must comply with the closed
periods established by Section 19 (11) MAR (trade
prohibitions); Based on these statutory blocking periods,
the Company has developed guidelines for trading in
shares of Axel Springer SE, which should be followed by
persons of senior management.
Voting right restrictions
According to the aforementioned pool contract between
Dr. Mathias Döpfner, Dr. h. c. Friede Springer and Friede
Springer GmbH & Co. KG the voting rights and other
rights arising from the pooled shares in the Annual Gen-
eral Meeting of Axel Springer SE are to be exercised in
accordance with the respective resolutions of the pool
members, irrespective of whether and in what sense the
relevant pool member was voting on the pool. The voting
rights of the pool members in the pool meeting are
based on their voting rights at the General Meeting of
Axel Springer SE, calculated on the basis of the respec-
tive number of voting pool-linked shares. As long as
Friede Springer GmbH & Co. KG holds an indirect inter-
est in Axel Springer SE, its voting rights are based on the
number of shares of the pooling shares held indirectly by
Friede Springer GmbH & Co. KG.
Furthermore, restrictions on voting rights may exist in
accordance with the provisions of the German Stock
Corporation Act (AktG), for example pursuant to Section
136 AktG and capital market regulations, in particular
pursuant to Sections 33 et seqq. (prev. Sections 21 et
seqq. WpHG). Securities Trading Act (Wertpapier-
handelsgesetz, "WpHG").
Shareholdings that represent more than
10 % of voting rights
At the end of the 2017 financial year, the following direct
and indirect shareholdings in the capital of Axel Springer
SE, which exceeded the threshold of 10 % of the voting
rights, existed on the basis of the voting rights announce-
ments received by the company up to December 31, 2017
in accordance with Sections 33, 34 WpHG (prev. Sections
21, 22 WpHG): Axel Springer Gesellschaft für Publizistik
GmbH & Co, Berlin, Germany (direct), AS Publizistik GmbH,
Berlin, Germany (indirect), Friede Springer GmbH & Co. KG,
Berlin, Germany (indirect), Friede Springer Verwaltungs-
GmbH, Berlin, Germany (indirect), Dr. h. c. Friede Springer,
Berlin, Germany (indirect), and Dr. Mathias Döpfner,
Potsdam, Germany (indirect).
Information on the amount of the aforementioned
shareholdings in the Company can be found in statements
on the voting rights disclosures in the Notes to the
Financial Statements 2017 of Axel Springer SE, see
www.axelspringer.com/financialpublications, as well as in
the section "Voting Rights Announcements" on the
Company's website at www.axelspringer.com/votingrights.
Shares with special rights that confer
powers of control
Shares with special rights conferring control powers have
not been issued.
Manner of controlling voting rights
when employees hold shares in the
company's capital
As part of the bonus and share bonus program for 2009
and the share participation programs for the years 2011,
2012, 2013, 2014, 2015 and 2017, Deutsche Bank AG
was initially entered into the share register as the third-
party holder of the shares transferred to employees.
However, each employee is free to be registered as a
shareholder in the share register.
62
Annual Report 2017
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
Statutory provisions and provisions of
the Articles of Association pertaining to
the appointment and dismissal of
Executive Board members and
amendments to the Articles of Association
The Executive Board of Axel Springer SE consists of at
least two persons according to the Articles of Associa-
tion of the Company. The Supervisory Board determines
the number of Executive Board members, appoints them
and dismisses them. Pursuant to Section 8 (2) sentence
1 of the Articles of Association in connection with Sec-
tion 46 (1) SE-VO, the members of the Executive Board
are appointed for a maximum period of five years; reap-
pointments are allowed. If several persons are appointed
as members of the Executive Board, the Supervisory
Board may appoint a member as Chairman of the Exec-
utive Board (Section 8 (3) sentence 2 of the Articles of
Association). If a required member of the Executive
Board is absent, the court has to appoint a member in
urgent cases at the request of one involved party (Sec-
tion 9 (1) lit. c) ii) SE-VO in connection with Section 85 (1)
sentence 1 AktG). The Supervisory Board may revoke
the appointment as a member of the Executive Board
and the appointment as Chairman of the Executive
Board if there is good cause (see in detail Section 39 (2)
sentence 1, Section 9 (1) lit. c) ii) SE Regulation, Section
84 (3) sentences 1 and 2 AktG).
Insofar as mandatory statutory provisions or provisions of
the Articles of Association do not require a greater majori-
ty, amendments to the Articles of Association are made
by a resolution of the General Meeting by a majority of
two-thirds of the votes cast or, if at least half of the share
capital is represented, by a simple majority of the votes
cast (cf. Section 21 (2) sentence 2 of the Articles of Asso-
ciation in connection with Section 51 sentence 1 SEAG,
Section 59 (1) and (2) SE-VO). The latter does not apply
to an amendment changing the business object and
purpose of the company, or to a resolution regarding the
relocation of the registered head office of the SE to an-
other member state pursuant to Section 8 (6) SE-VO as
well as cases that prescribe a higher majority stake (see
Section 51 (2) SEAG, Section 59 (1) and (2) SE-VO). An
amendment to the corporate governance principles laid
down in Section 3 of the Articles of Association requires a
majority of at least four-fifths of the votes cast (see Sec-
tion 21 (3) of the Articles of Association).
The Supervisory Board is authorized to adopt amend-
ments to the Articles of Association which only affect the
wording (Section 13 of the Articles of Association).
Authority of the Executive Board to issue
or buy shares back
The Executive Board was authorized, in accordance with
Section 5 (4) of the Articles of Association, and based on
the resolution of the annual shareholders’ meeting of
April 14, 2015, to increase the capital stock by April 13,
2020, subject to the approval of the Supervisory Board,
by issuing registered shares of restricted transferability,
either in a single tranche or in several tranches and in
return for cash and/or non-cash contributions (including
mixed non-cash contributions), up to a total of
€ 11,000,000.00 (authorized capital).
By partially drawing down this authorized capital, the
capital stock was increased by € 8,955,311.00 and
8,955,311 new registered shares of Axel Springer SE
were issued to General Atlantic, with effect from Decem-
ber 9, 2015. The remaining authorized capital, which
allows an increase of the share capital by a further
€ 2,044,689.00 until April 13, 2020, was not utilized until
the end of the year under review.
By resolution of the General Meeting on April 16, 2014
(Agenda item 8), the Executive Board was authorized,
with the approval of the Supervisory Board, until April 15,
2019 to acquire treasury shares of up to 10 % of the
share capital existing at the time of the resolution. The
acquisition may be made via the stock exchange or by
means of a public offer addressed to all shareholders or
a public invitation to submit an offer.
Along with the shares held by the company or attributa-
ble to the company in accordance with Section 5 SE-VO
in conjunction with Sections 71a ff. AktG, the shares
63
Annual Report 2017
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
purchased by virtue of the foregoing authorization may
not at any time exceed 10 % of the company’s capital
stock. Details concerning this authorization are provided
in the invitation to the annual shareholders’ meeting of
April 16, 2014, which is available on the website of Axel
Springer SE (see Agenda Item 8 and the Executive
Board’s report on this subject).
The company held no treasury shares at the end of
financial year 2017.
There is no contingent capital at Axel Springer SE.
Significant agreements of the company
subject to the condition of a change of
control resulting from a takeover offer
With the exception of regulations in the promissory notes
and consortium loans stated in the following, as well as
contractually entitled cancellation rights for Executive
Board members in case of a change of control (see
further information below and page 78 of this Annual
Report), the company has not concluded any major
agreements that would take effect in the event of a
change of control due to a takeover.
The company has placed promissory notes on the capi-
tal market since April 2012. Following partial termination,
conversion and redrafting in October 2014 and May
2017 as well as the termination of two variable tranches
in October 2017, the promissory notes have a total
amount of € 879,000,000.00 available in nine tranches.
The lender may demand, in the event of a change of
control, that the claim held can be partially or fully paid
back early within a 90 days period.
Aside from specific exceptions that relate to the share-
holders that currently control Axel Springer SE, a change
of control is understood to mean, in the context of the
promissory notes, the acquisition of shares of Axel Spring-
er SE representing more than 50 % of the capital stock
and/or voting rights by one or more parties acting together.
With regard to the syndicated loans renegotiated in July
2015 and totaling € 1,200,000,000.00, the lenders are
also entitled to terminate the loan in the event of a
change of control with a term of 30 days following the
receipt of such knowledge. Aside from specific excep-
tions that relate to the shareholders that currently control
Axel Springer SE, a change of control is understood to
mean the acquisition of shares of Axel Springer SE rep-
resenting more than 50 % of voting rights by one or more
parties acting together.
Indemnification agreements between the
company and the Executive Board
members or employees in the event of a
change of control
Some Executive Board members have the right to termi-
nate their employment contracts in the event of a change
in control. A change of control within the meaning of
these contracts exists if the majority shareholder Dr. h. c.
Friede Springer no longer - directly or indirectly - should
hold or control the majority of shares. In such a case, the
members of the Executive Board concerned are entitled
to payment of the basic salary for the last agreed remain-
ing period of contract (some of the entitled Executive
Board members are entitled to payment of at least one
annual basic salary) or a severance payment equal to the
total remuneration for the duration of the original remain-
ing term; the above payments are regularly limited in
amount. In addition, the company pays the performance-
related remuneration pro rata temporis for the period of
the activity in the year of departure. Other remuneration
does not exist for the service contracts of members of
the Executive Board in the event of termination of em-
ployment due to a change of control. Corresponding
compensation agreements with other employees of the
company do not exist.
64
Annual Report 2017
Axel Springer SE
Combined Management Report
Corporate Governance Report
Corporate Governance Report
There follows a report by the Executive Board – also on
behalf of the Supervisory Board – on corporate govern-
ance at Axel Springer, in conformity with the recommen-
dation set out in Section 3.10 of the German Corporate
Governance Code ("GCGC"). This section also contains
the management declaration pursuant to Section 289f of
the German Commercial Code ("HGB") and the Com-
pensation Report.
Good corporate governance as a guiding
principle
At Axel Springer, sound transparent corporate governance
is considered to be a crucial element of responsible man-
agement and supervision geared to increasing the com-
pany’s value on a sustainable basis. It promotes the trust
and confidence of our national and international investors,
customers, employees, and the public in the management
and supervision of the company and is therefore an es-
sential basis for the company’s long-term success.
In this respect, we are guided by the GCGC. We have
taken appropriate measures in order to comply with and
implement the recommendations of the Code. The Cor-
porate Governance Officer is the Executive Board mem-
ber in charge of Finance and Personnel. The implemen-
tation of and adherence to the recommendations of
GCGC are reviewed continually.
Management declaration pursuant to
Section 289f of the Commercial Code
Declaration of conformity according to Section 161
AktG
On November 7, 2017, the Executive Board and Super-
visory Board published the following Declaration of Con-
formity:
Pursuant to Section 161 of the German Stock Corpora-
tion Act (Aktiengesetz, “AktG”), the Executive Board and
the Supervisory Board of Axel Springer SE declare the
following:
I. Future-related section
The Company follows the recommendations of the Ger-
man Corporate Governance Code (Deutscher Corporate
Governance Kodex, “DCGK”) as amended on February 7,
2017 and published by the German Federal Ministry of
Justice and Consumer Protection in the official an-
nouncements section of the electronic Federal Gazette
on April 24, 2017, with the exception of the deviations
set out and reasoned below:
1. Consideration of the relationship between the com-
pensation of the Executive board and that of senior
management and the staff overall, particularly in terms of
its development over time (Item 4.2.2 sentence 6 DCGK)
The Supervisory Board pays close attention to the ap-
propriateness and customariness of Executive Board’s
compensation and takes into account a multitude of
criteria, in particular those listed in Section 87 AktG and
in Item 4.2.2 sentences 4 and 5 DCGK. Nevertheless, a
deviation from the recommendation of Item 4.2.2 sen-
tence 6 DCGK is declared on a precautionary basis
because - apart from uncertainties in interpretation -
there are also doubts as to whether the particular em-
phasis on the relation between the Executive Board
compensation and the compensation of senior man-
agement or the staff overall is in accordance with the
importance of this criterion in the context of assessing
the appropriateness and customariness of Executive
Board remuneration.
2. Disclosure of the individual Executive Board compen-
sation in tabular form in the Compensation Report (Item
4.2.5 sentences 5 and 6 DCGK)
Executive Board compensation is disclosed in accord-
ance with the provisions of law and in consideration of
the so-called “opt-out“ resolution of the company's
Annual General Meeting of April 16, 2014. Based on this
resolution, and in accordance with Section 286 (5) sen-
tence 1 and Section 314 (2) sentence 2 of the German
Commercial Code (Handelsgesetzbuch, “HGB”), the
individual compensation of the members of the Executive
Board is not disclosed in the company's annual financial
and annual consolidated financial statements for the
financial years 2014 to (and including) 2018. As long as a
65
Annual Report 2017
Axel Springer SE
Combined Management Report
Corporate Governance Report
corresponding valid opt-out resolution of the Annual
General Meeting is in effect, the company will not include
the representations recommended according to Item
4.2.5 sentences 5 and 6 DCGK in the Compensation
Report.
3. Setting of a general limitation to the length of mem-
bership of the Supervisory Board, and taking it into ac-
count when making recommendations to the competent
election bodies (Item 5.4.1 sentences 3 and 7 DCGK)
The Supervisory Board has resolved to refrain from set-
ting any general limitation in view of the length of mem-
bership of the Supervisory Board. A general limit would
not take into account individual factors justifying longer
membership of individual Supervisory Board members.
4. Disclosure of relationships between Supervisory Board
candidates and the Company, its executive bodies and
with shareholders holding a material interest in the com-
pany, in election recommendations to the Annual Gen-
eral Meeting (Item 5.4.1 sentence 12 DCGK)
In its election recommendations to the Annual General
Meeting, the Supervisory Board will disclose all legally
required information concerning Supervisory Board
members and also introduce the candidates at the An-
nual General Meeting where possible. Furthermore,
shareholders will at the Annual General Meeting be given
an opportunity to ask questions concerning the candi-
dates. In the opinion of the Supervisory Board, this will
provide the shareholders with a solid and adequate basis
of information for judging the proposed candidates.
5. Individualized disclosure of Supervisory Board com-
pensation (Item 5.4.6 sentences 5 and 6 DCGK)
The compensation granted to the members of the Su-
pervisory Board, and the payments made by the Com-
pany to the members of the Supervisory Board for ser-
vices provided personally, are not individually itemized in
the Notes or the Management Report (Item 5.4.6 sen-
tences 5 and 6 DCGK).
This information is not individually itemized because the
competitors of Axel Springer SE do not publish any
information on individual compensation either. Addition-
ally, the Articles of Association of Axel Springer SE do
not regulate the individual distribution of compensation
between the Supervisory Board members. Rather, it
expressly assigns the responsibility for this to the Super-
visory Board; the individualized disclosure of the Super-
visory Board compensation would undermine such as-
signment of competence by the Annual General Meeting.
Furthermore, the company's Annual General Meeting
decided on April 16, 2014 that no details of the individual
compensation of members of the Executive Board will be
disclosed in the company’s stand-alone and consolidat-
ed annual financial statements to be prepared for finan-
cial years 2014 to (and including) 2018 so that, for the
sake of consistency, the individual compensation of the
Supervisory Board members is also not disclosed in
itemized form.
II. Retrospective section
Time since issuance of the latest Declaration of
Conformity on November 2, 2016 until publication of the
amended version of the Code on April 24, 2017:
In the time since issuance of the latest Declaration of
Conformity on November 2, 2016 until publication of the
amended version of the Code on April 24, 2017, the
company has followed the recommendations of DCGK
as amended on May 5, 2015 and published by the Ger-
man Federal Ministry of Justice in the official announce-
ments section of the Federal Gazette of June 12, 2015,
with the exception of the deviations justified and stated
above under I. 1 through I. 5, whereas, in the version of
the Code applicable in this period of time, the recom-
mendation referred to under I. 3 was issued in Item 5.4.1
sentences 2 and 5 DCGK, and the recommendation
stated under I. 4 in Item 5.4.1 sentence 8 DCGK.
Time since publication of the amended version of the
Code on April 24, 2017:
The recommendations of the DCGK as amended on
February 7, 2017 and published by the German Federal
Ministry of Justice and Consumer Protection in the offi-
cial announcements section of the Federal Gazette on 24
April 2017, have been followed by the Company since
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they were announced, with the exception of the devia-
tions set out and reasoned above under I. 1 through I. 5.
Berlin, November 7, 2017
Axel Springer SE
The Supervisory Board
The Executive Board”
The Declaration of Conformity from November 7, 2017
can, just like previous versions, also be seen via the link
www.axelspringer.com/declarationofconformity.
Important management practices
Axel Springer is the only independent digital publisher that
has a corporate constitution. Section 3 of the Company's
Articles of Association ("Principles of Corporate Govern-
ance") sets out the essentials that summarize the values
to which Axel Springer SE is committed and which,
above all, meets the social responsibility of media com-
panies in a democracy in a transparent manner. The
essentials were formulated by Axel Springer in 1967,
changed after reunification in 1990, supplemented by
considering the attacks of September 11, 2001, and
finalized in 2016 on the internationalization of the compa-
ny as an international option; this international variant was
also set out in the Articles of Association by the 2017
Annual General Meeting. The essentials are derived from
the idea of freedom as the most important value and its
safeguarding as an objective and see the unconditional
support for the free constitutional state of Germany, the
reconciliation between Jews and Germans, the support of
the transatlantic Alliance with the United States of Ameri-
ca, the rejection of any kind of political totalitarianism and
the defense of the free social market economy.
As part of corporate governance, Axel Springer has a
Compliance division as well as Corporate Auditing & Risk
Management section. Within the framework of Corporate
Governance, this department supports central divisions
and subsidiaries through responsibly handling risks via
approaches and requirements, amongst other things, for
a comprehensive risk management system, an internal
control system, and a compliance management system.
As described in the report on risks and opportunities (see
page 42 et seqq.), risk management and the internal con-
trol system seek to identify, analyze and assess, manage
and report on risks at Axel Springer, and to systematically
monitor the measures taken to minimize risks.
At Axel Springer, compliance means the fulfillment of all
laws, regulations, and guidelines, as well as the com-
mitments undertaken voluntarily. Violations of these
regulations can cause sustained economic damage to
the company, resulting in civil and criminal consequenc-
es as well as damage to reputation. Against this back-
drop, the goal of compliance management is to institute
structures and processes to ensure that all directors and
employees, and senior executives, conduct themselves
preventively in accordance with applicable laws and
regulations. In order to take account of the Group
structure, the Compliance Management System is
organized both centrally and de-centrally. The central
component is the Compliance Committee and the Chief
Compliance Officer. Decisive compliance officers are
named in the individual companies.
As part of the Compliance Organization, Axel Springer
has had a binding Code of Conduct. This is to be under-
stood as a summary of important behavioral rules of Axel
Springer. It clarifies ethical, moral and legal requirements
and serves to assess whether an action is permissible or
not. The Code of Conduct has, among other things,
integrated the existing Corporate Principles and Values,
Leadership Principles, Journalistic Guidelines, Internation-
al Social Policy, and Environmental Policy, which are
summarized below:
The corporate values of Axel Springer guide every em-
ployee in their work and shape the corporate culture.
They are: creativity as the crucial prerequisite for success
in journalism and business; entrepreneurship in the sense
of being courageously inventive, self-reliant and results-
oriented, qualities that are expected of all managers and
employees; integrity in all dealings with the company,
readers, customers, employees, business partners, and
shareholders. The management principles, which are built
on company values, should give management a concrete
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framework that creates transparency regarding the
requirements and expectations of management roles.
In addition, Axel Springer has set guidelines to ensure
journalistic independence. These guidelines substantiate
and expand on the professional ethics of the press as
set out by the German Press Council in conjunction with
the press associations in the publishing principles (Press
Code), and to which Axel Springer voluntarily commits
with regard to printed complaints (see Section 16 of the
Press Code). Axel Springer specifically delineates the
boundaries between advertising and editorial copy, and
between the editors’ and reporters’ private and business
interests. It also precludes actions in pursuit of personal
advantages and defines the company’s position with
respect to the treatment of news sources. The guidelines
thus represent the framework for independent and criti-
cal journalism in the editorial divisions of all media be-
longing to the Group. The editors-in-chief are responsible
for observing and implementing the guidelines in the
company’s day-to-day activities.
Furthermore, Axel Springer has developed a catalogue of
social standards applicable to all the company’s activities.
Known as the International Social Policy, it states the
company’s positions on matters of human rights, adher-
ence to the rule of law, the protection of children and
young people, the treatment of employees, equal oppor-
tunities, health and safety, and the compatibility of work
and family, and other matters. The standards are a bind-
ing guideline for social integrity and are globally binding
for all activities of the company. Compliance with the
principles described in the International Social Policy is
also expected of our business partners. The integration of
International Social Policy regulations into the group-wide
Code of Conduct and the codes of conduct and corpo-
rate principles contained therein significantly increased
the level of recognition of the International Social Policy.
Furthermore, the company has issued an Environmental
Guideline comprising four points, which serves as a
practical guide to the many environmental protection
measures conducted at Axel Springer and which is also
part of the Code of Conduct.
The requirements of the Code of Conduct are taught in
both on-the-job and online training courses. The Code of
Conduct can be found at www.axelspringer.de/coc_en.
In addition to the Code of Conduct as a superordinate
code, internal guidelines provide detailed rules on indi-
vidual business and procedural practices. In order to
ensure decentralized compliance with legal requirements
and governance minimum standards, so-called corpo-
rate principles are introduced for selected, primarily
sensitive regulatory areas such as tax compliance and
anti-corruption. These principles contain minimum re-
quirements that must be individually implemented and
adhered to in the respective company and, if applicable,
subsidiary. The respective managers are responsible for
this, who at the same time have to observe the respec-
tive, possibly deviating local legal regulations.
In order to further strengthen good corporate govern-
ance and effective compliance management, there is an
electronic whistle-blower system in addition to the exist-
ing reporting channels. This allows both employees and
external persons to provide confidential and, if desired,
anonymous information about suspected or actual viola-
tions and malfunctions, thus contributing to the preven-
tion and clarification of compliance violations. The elec-
tronic whistle-blower system can be accessed at
www.axelspringer.de/whistleblower.
Finally, every two years, the company submits a sustain-
ability report that complies with the criteria set out in the
"Global Reporting Initiative" (GRI), including the "Media
Sector Supplement" (GRI+).
Procedures of the Executive Board and Supervisory
Board, and composition of the committees of the
Supervisory Board
Cooperation between the Executive Board and
Supervisory Board
The management and supervision of the company, which
is organized in the legal form of a European company
(Societas Europaea SE) are carried out by means of a dual
board system. The Executive Board manages the compa-
ny under its own responsibility. The Supervisory Board
appoints the members of the Executive Board, and moni-
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tors and advises the latter in the conduct of the business.
The two boards work closely together in an atmosphere of
trust and confidence to sustainably enhance the compa-
ny’s value. The two boards are strictly separated in terms
of personnel and their areas of authority.
Procedures of the Executive Board
In its executive function, the Executive Board is obligated
to pursue the interests of the company and dedicated to
sustainable company development. It develops the stra-
tegic orientation of the company and is responsible for its
implementation in coordination with the Supervisory
Board. The Executive Board manages the company’s
affairs in compliance with the relevant laws, the Articles
of Association, and its rules of procedure.
It provides regular, timely, and comprehensive infor-
mation to the Supervisory Board on all relevant matters
of strategy, planning, business development, risk man-
agement including the risk situation, as well as the inter-
nal control system and compliance management system.
In accordance with the internal rules of procedure
adopted by the Supervisory Board, important decisions
of the Executive Board or specific cases require the
approval of the Supervisory Board. Such decisions in-
clude, above all, the creation or discontinuation of busi-
ness divisions, the acquisition or sale of significant equity
investments, and the adoption of the company’s annual
financial plan.
The members of the Executive Board are jointly respon-
sible for the management, work together collegially, and
keep each other informed of important measures and
business transactions in their business divisions. Without
prejudice to the overall responsibility of all members of
the Executive Board, each member of the Executive
Board - apart from decisions to be taken by the entire
Executive Board - is responsible for directing the as-
signed business to him/her.
The Executive Board meets regularly in the form of Ex-
ecutive Board meetings, which are convened and
chaired by the Executive Board Chairman, as a general
rule. Furthermore, every Executive Board member and
the Chairman of the Supervisory Board are entitled to
convene a meeting.
The Executive Board aims to ensure diversity with regard
to the staffing of leading positions within the company;
the Executive Board has set targets for the proportion of
women holding management positions in the first two
management levels of Axel Springer SE beneath the
Executive Board; for more information see page 71.
As a general rule, the full Executive Board adopts resolu-
tions by a simple majority of the votes cast; in the case
of resolutions adopted by a simple majority, the Chair-
man casts the deciding vote. A resolution adopted in
spite of being opposed by the Chairman and Chief Ex-
ecutive Officer is deemed to be invalid, also subject to
the limits of the applicable laws.
Rules of procedure issued from the Supervisory Board
for the Executive Board regulate the particulars, including
among others:
The obligation of observance, adherence and group-
wide anchoring of the corporate constitution,
The executive organization chart and the decisions to
be made by the full Executive Board,
The duties of the Chairman of the Executive Board,
Transactions that require the approval of the Supervi-
sory Board,
Rules concerning the regular, timely, and comprehen-
sive provision of information to the Supervisory Board,
Rules concerning meetings and the adoption of reso-
lutions,
Obligation to disclose conflicts of interest.
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The Executive Board of the company consisted of four
members during the 2017 financial year and from March
1, 2018 will increase to five members:
(page 82) for additional information on the specific activi-
ties of the Supervisory Board in financial year 2017.
Dr. Mathias Döpfner, Chairman and Chief Executive
Officer
The internal rules of procedure of the Supervisory Board
comply with the requirements of the GCGC and contain
rules covering the following topics, among others:
Jan Bayer, President News Media
Election and duties of the Chairman and Vice
Chairman of the Supervisory Board
Dr. Stephanie Caspar, President Technology and
Data (from March 1, 2018)
Calling of meetings
Dr. Julian Deutz, Chief Financial Officer
Adoption of resolutions at meetings or by voting by
Dr. Andreas Wiele, President Classifieds and
Marketing Media (from March 1, 2018 President
Classifieds Media)
Procedures of the Supervisory Board
As per the company’s Articles of Association, the Super-
visory Board of Axel Springer SE is composed of nine
members, who are elected by the annual shareholders’
meeting. The regular term of office of Supervisory Board
members is five years; they are eligible for re-election at
the end of their terms. The Supervisory Board elects its
Chairman from among its own ranks; the term of office of
the Supervisory Board Chairman coincide with that of
the Supervisory Board. The Supervisory Board advises
the Executive Board and monitors the work of the Exec-
utive Board. It holds at least four meetings a year. In
case of necessity, it meets without the Executive Board
in attendance. Meetings may be held and resolutions
adopted also by way of written correspondence, tele-
phone calls, faxes, or electronic media. As a general rule,
the Supervisory Board adopts resolutions by a simple
majority of the members voting on the resolution; in case
of a tie, the Chairman casts the deciding vote. The Su-
pervisory Board deliberates on the company’s business
developments, planning, strategy, and significant capital
expenditures at regular intervals. The Supervisory Board
adopts the separate financial statements of Axel Springer
SE and approves the consolidated financial statements
of the Group. It regularly assesses the efficiency of its
work. Please refer to the report of the Supervisory Board
way of written correspondence, telephone calls, fax,
or electronic media
Supervisory Board committees, including their
composition, organization, and duties
Obligation to disclose conflicts of interest
The members of the Supervisory Board are:
Dr. Giuseppe Vita, Chairman
Dr. h. c. Friede Springer, Vice Chairwoman
William E. Ford
Oliver Heine
Rudolf Knepper
Lothar Lanz
Dr. Nicola Leibinger-Kammüller
Prof. Dr.-Ing. Wolfgang Reitzle
Martin Varsavsky
The term of office of all current Supervisory Board mem-
bers regularly ends at the end of the Annual General
Meeting in 2019. William E. Ford and Rudolf Knepper
announced in January, i.e. February 2018 that they will
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resign from their positions at the end of the ordinary
Annual General Meeting in the 2018 financial year. The
Supervisory Board will therefore propose two new can-
didates as choices to be elected into the Supervisory
Board of Axel Springer SE who are to take over the
mandates of Bill Ford and Rudolf Knepper for the re-
mainder of their tenure.
The requirements for expertise and independence within
the meaning of Section 9 (1) lit. c) ii) SE Regulation in
connection with Section 100 (5) 1st var. AktG (financial
experts), are met among others by the Chairman of the
Supervisory Board, Dr. Giuseppe Vita, and Lothar Lanz,
who chairs the Audit Committee. In addition, the mem-
bers of the Supervisory Board are, in accordance with
Section 100 (5) 2nd var. AktG know in its entirety the
sector in which the company operates.
Composition and procedures of committees
The Executive Board has not formed committees.
In accordance with its internal rules of procedure, the
Supervisory Board has formed four permanent commit-
tees to support the work of the full board: the Executive
Committee, the Personnel Committee, the Nominating
Committee, and the Audit Committee. In those matters
stipulated in the internal rules of procedure of the Supervi-
sory Board, the committees prepare the resolutions to be
adopted and other matters to be addressed by the full
board. Within the limits of applicable laws, the committees
also adopt resolutions in lieu of the full board in those
matters stipulated in the internal rules of procedure of the
Supervisory Board. The internal rules of procedure of the
Supervisory Board stipulate the procedures for meetings
and resolutions adopted by the committees and define
their areas of responsibility. In March 2017, an Advisory
Committee on Corporate Structure was also formed,
which is responsible for preparing possible decisions of
the Supervisory Board on questions of corporate structure.
Please refer to the Report of the Supervisory Board (see
page 82) for information on the areas of responsibility
and composition of the committees.
Lothar Lanz is the Chairman of the Audit Committee of
the Supervisory Board; according to the Supervisory
Board, Mr. Lanz is particularly suited to the Audit Com-
mittee due to his many years of experience as Chief
Financial Officer, his special expertise and his personality.
He satisfies the requirements of expert knowledge and
independence within the meaning of Section 9 (1) letter c)
ii) SE-VO in conjunction with Section 107 (4), 100 (5)
AktG (financial expert), and the requirements of the rec-
ommendations in Section 5.3.2 Sentences 2 and 3
DCKG. Furthermore, the members of the Audit Commit-
tee in their entirety are familiar with the sector in which
the company operates.
Provisions to promote the participation of women
in management positions according to Section 76 (4)
and Section 111 (5) of the German Stock
Corporation Act (“AktG”)
Since 2010, Axel Springer has pursued a group-wide
strategy to promote diversity; reference is made to page
35 of the Annual Report with regard to the company’s
personnel policies designed to assure equal opportunity
and diversity as well as the group-wide targets to in-
crease the proportion of women at all management levels.
In addition to this voluntary group-wide commitment, the
law for the equal participation of men and women in
management positions in the private and public sector
(Gesetz für die gleichberechtigte Teilhabe von Frauen
und Männern an Führungspositionen in der Privat-
wirtschaft und im öffentlichen Dienst), also obliges cer-
tain companies, including Axel Springer SE, to set tar-
gets for the proportion of women acting on the
Supervisory Board, Executive Board and the two man-
agement levels beneath the Executive Board, and speci-
fy when the respective proportion of women should be
achieved. As the statutory minimum share of 30 % of
women and 30 % of men is not applicable to the Super-
visory Board of Axel Springer SE for the replacement of
vacating Supervisory Board mandates, the Supervisory
Board itself must set a target size.
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Accordingly, the Supervisory Board of Axel Springer SE
decided in September 2015, to set targets with regard to
the proportion of women on the Supervisory Board, and
the Executive Board of Axel Springer SE, each with a
deadline of implementation of no later than June 30,
2017. With the specified target figures of 22.2 % (Super-
visory Board) and 0 % (Executive Board), the status was
recorded at the time of the resolution. The proportion of
women in both committees was maintained, thereby
achieving the set targets. By resolution of the Super-
visory Board of April 2017, the previous targets of 22.2 %
(Supervisory Board) and 0 % (Executive Board) were
confirmed; see for justification page 73 (right-hand
column and 74 (right-hand column) of the Annual Report.
The aforementioned target figures are to be achieved by
the end of the day of the Annual General Meeting in the
financial year 2019, but no later than April 30, 2019.
Notwithstanding this, on February 13, 2018, the Super-
visory Board appointed Dr. Stephanie Caspar to be
President of Technology and Data as of March 1, 2018,
so that as of March 1, 2018 the proportion of women in
the Executive Board will be 20 %.
The Executive Board of the company passed a resolu-
tion in May 2015 to set a target of 25 % and a deadline
for implementation of no later than June 30, 2017, for
the first and second management levels of the company
beneath the Executive Board; at the time the targets
were set, the proportion of women in the first manage-
ment level beneath the Executive Board was 22.6 %, and
19.5 % in the second management level beneath the
Executive Board at Axel Springer SE. At the time of
expiry on June 30, 2017, the proportion of women in the
first management level of Axel Springer SE below the
Executive Board was 25 % and in the second manage-
ment level 23.9 %. At the top management level of Axel
Springer SE, we therefore attained our set targets. At the
second management level at Axel Springer SE, given the
short time frame, we recorded a considerable increase of
4.4 %-points, nevertheless we marginally missed our
objective by 1.1 %-points despite various measures
aimed at sustainably increasing the proportion of women
in the long-term. The main reason for narrowly missing
our desired targets at the second management level was
that despite all the set targets and measures undertaken,
in the end, actual appointments for available positions
were primarily made on the basis of the suitability and
qualifications of candidates, so that during the relevant
time frame, as a rule, the most suited applicant was
chosen to fill the actual position. On the other hand,
fluctuations in the first two management levels are mini-
mal and any increase will therefore take place gradually
but sustainably. Accordingly, the increase in targets set
for the proportion of women represented in the first two
management levels below the level of the Executive
Board at Axel Springer SE was agreed to be 30 % re-
spectively, effective from July 1, 2017, and with an im-
plementation period of three years, in other words, until
June 30, 2020. Of course, these targets do not preclude
any additional increase in the proportion of women on
the Supervisory and Executive Boards, as well as in the
two top management levels at Axel Springer SE within
the given implementation period.
Description of the Diversity Concept for the
Management Board and Supervisory Board
For several years now, Axel Springer SE has been pursu-
ing diversity concepts with a view to filling positions on
both the Executive Board and the Supervisory Board in
order to sustainably strengthen the diversity in both
committees.
For the composition of the Supervisory Board, it has set
the goals listed below. The objectives are to observe the
diversity of the members of the Supervisory Board, par-
ticularly with regard to their knowledge, their education,
their professional background and positions held, the
origin, gender and age of the Supervisory Board mem-
bers. These criteria are always taken into account in the
search for suitable candidates for succession on the
Supervisory Board and are used as the basis for election
proposals.
As a result, while choosing the most recently selected
candidates particular emphasis was put on the further
internationalization of the Supervisory Board and the
strengthening of its digital expertise.
The Supervisory Board also pursues a concept of diver-
sity in terms of the composition of the Executive Board,
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which aims at diversity in the case of necessary new
appointments in the future, in particular with regard to an
increase in the proportion of women, internationality and
the age of the Executive Board members. These princi-
ples of diversity are kept in mind in long-term succession
planning and are taken into account when new appoint-
ments are made in the future.
Further information on corporate
governance
Goals for the composition of the Supervisory Board
The Supervisory Board of Axel Springer SE has decided
the following objectives for its composition, in particular
with respect to with reference to Section 5.4.1 sentenc-
es 2 and 3 of GCGC:
The Supervisory Board of Axel Springer SE should be
composed in such a way that its members generally
possess all knowledge, abilities, and professional experi-
ence necessary to properly perform the duties of the
Supervisory Board.
With due consideration given to the company’s business
object and purpose set forth in the Articles of Association,
the size of the company, and the relative importance of
its international activities, the Supervisory Board will also
strive, as a goal for the upcoming regular elections, to
bring about a composition of its members that is appro-
priate in view of the following considerations, in particular:
At least two seats on the Supervisory Board should
be held by persons who fulfill the criterion of interna-
tionality to a particular degree (for example, by reason
of relevant experience in international business).
Supervisory Board members should not hold any
position on a board or perform any consulting work
for important competitors of the company.
The Supervisory Board should have an adequate
proportion of women. Currently, two of the nine
members (22.2 %) are women; the Supervisory Board
considers this adequate in any event. Accordingly,
and due to the fact that no regular Supervisory Board
elections are due within the implementation period un-
til the regular General Meeting in financial year 2019,
the legally required target for the proportion of women
on the Supervisory Board of Axel Springer SE was set
at 22.2 %.
In making nominations, due consideration should be
given to the general rule that Supervisory Board
members should not be older than 72 years; the
Supervisory Board can approve exceptions to this
policy.
Furthermore, the Supervisory Board should ensure
that as few members as possible are subject to a po-
tential conflict of interests.
Furthermore, the Supervisory Board should give due
consideration to the principle that its composition
should meet the criterion of diversity.
With respect to its composition, the Supervisory
Board adopted the goal that at least two of its mem-
bers will be independent according to the definition of
the GCGC; this objective takes into account the own-
ership structure of the company.
However, the Supervisory Board decided not to define a
regulatory limit with regard to the length of membership
of the Supervisory Board, despite the recommendation
stated in Section 5.4.1 sentence 3 of the GCGC. A fixed
regulatory limit fails to take into account individual factors
that may justify an extended length of membership for
individual Supervisory Board members (for more infor-
mation regarding this see the deviation declared in the
Declaration of Conformity of November 7, 2017, see
page 65).
In addition, the Supervisory Board of Axel Springer SE, in
accordance with the recommendation of Section 5.4.1
Sentence 2 GCGC, has drawn up a "Competence Pro-
file" based on the already developed requirements for the
members of the Supervisory Board of Axel Springer SE,
which shows the competencies that the Supervisory
Board considers necessary for the overall committee. At
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the same time, it should serve as the basis for the devel-
opment of nominations for Supervisory Board members
to the General Meeting.
The competency profile covers the areas of media and
digitization competence (sector and strategy compe-
tence), international competence, innovation compe-
tence, financial competence, personnel and team com-
petence as well as control competence and details the
requirements within these areas with regard to the overall
committee.
In the view of the Supervisory Board, the current compo-
sition of the Supervisory Board of Axel Springer SE fulfills
the competence profile that has been worked out, as
well as fully achieves the aforementioned goals. In par-
ticular, the number of independent members exceeds
the above-mentioned objective. From the point of view of
the Supervisory Board, it must be considered as inde-
pendent: Dr. Giuseppe Vita, William E. Ford, Rudolf
Knepper, Lothar Lanz, Dr. Nicola Leibinger-Kammüller,
Prof. Dr.-Ing. Wolfgang Reitzle and Martin Varsavsky.
With regard to its proposals on the election of new
Supervisory Board members, the Supervisory Board
makes sure that the respective candidates are able to
put aside the expected amount of time.
Axel Springer SE publishes a CV for all members of the
Supervisory Board on the company's website as well
as an overview of its main activities, which is updated
annually.
Goals for the composition of the Executive Board
The Supervisory Board has decided on the following
objectives for the composition of the Executive Board of
Axel Springer SE, in particular with respect to Section
5.1.2 sentence 2 of GCGC:
In making decisions concerning the composition of
the Executive Board, the Supervisory Board should
give due consideration to the principle for diversity
and should strive in particular to give appropriate con-
sideration to women. In this context, the Supervisory
Board has also complied with its statutory obligation
to establish a target for the proportion of women on
the Executive Board, see page 71. At the time of de-
termining the target, no changes were planned in the
composition of the Executive Board. As a result, the
Supervisory Board has once again set a target of 0 %
with a deadline for implementation before the Annual
General Meeting in the 2019 financial year, by April 30,
2019 the latest though. The Supervisory Board
appointed Dr. Stephanie Caspar to be President of
Technology and Data as of March 1, 2018. From
March 1, 2018, the proportion of women on the
Executive Board will therefore be 20 %.
The Supervisory Board should work together with the
Executive Board to assure long-term succession
planning.
At the time of being (re-)appointed to the Executive
Board, no member should be older than 62 years, as
a general rule; the Supervisory Board can approve
exceptions to this rule.
Goals concerning the staffing of key functions
In view of the recommendation set out in Section 4.1.5
of the GCGC, reference is made to the description of
personnel policies designed to assure equal opportunity
and diversity on page 35 of the Annual Report, and to
the stipulated targets in the two top management levels
of the company beneath the Executive Board on page
71 of the Annual Report.
Shareholders and annual shareholders’ meeting
The annual shareholders’ meeting is the central organ via
which Axel Springer SE shareholders can exercise their
rights and their voting rights. Every share confers the
right to cast one vote in the annual shareholders’ meet-
ing. Those shareholders who are registered in the share
register and have registered for the meeting in time are
entitled to vote. The Chairman of the Supervisory Board
generally chairs the shareholders’ meeting. To make it
easier for shareholders to exercise their prerogatives at
the annual shareholders’ meeting, their votes can be
cast by authorized proxies. Axel Springer SE also desig-
nates a voting proxy whom shareholders can elect to
execute their voting rights according to their instructions.
All required reports and documents are made available
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to the shareholders in advance, also on the company’s
Internet page.
The annual shareholders’ meeting resolves specifically
on the utilization of the distributable profit, the ratification
of the actions of the Executive Board and Supervisory
Board, the election of the Supervisory Board, the
election of the independent auditor, and other matters
legally assigned to them, such as corporate actions and
other amendments to the Articles of Association. The
resolutions of the annual shareholders’ meeting require a
simple majority of the votes cast, unless another majority
is prescribed by law or by the company’s Articles of
Association. The Articles of Association can be
inspected on the company’s website at
www.axelspringer.com/articlesofassociation.
Conflicts of interest
The members of the Executive Board and Supervisory
Board are bound to promote the interests of the compa-
ny. No member of either board may, through their deci-
sions, pursue personal interests or take advantage of
business opportunities that should be the province of the
company.
Executive Board members may not demand or accept
gifts or other benefits from, or grant unjustified benefits to,
third parties in connection with their activities, either for
their own benefit or for that of others. Sideline activities of
the Executive Board require the consent of the Superviso-
ry Board. Executive Board members are subject to a
comprehensive anti-competition clause during the period
of their activity for Axel Springer. Every Executive Board
member must inform the Supervisory Board of any con-
flict of interest without delay. No conflicts of interest arose
within the Executive Board in the financial year.
Also, every member of the Supervisory Board must
inform the Supervisory Board immediately of any con-
flicts of interest that may arise. In the annual sharehold-
ers' meeting, the Supervisory Board reports on all con-
flicts of interest and how to treat them.
No conflicts of interest arose within the Supervisory
Board in the financial year.
Memberships on other supervisory bodies
A summary of the seats held by the Executive Board and
Supervisory Board members of Axel Springer SE on
other legally prescribed supervisory boards or compara-
ble boards in Germany and abroad can be found on
page 175.
Transparency
Axel Springer is committed to always providing compre-
hensive and consistent information in a timely and simul-
taneous manner on the significant events and develop-
ments relevant to an evaluation of the company’s present
and future business performance to all capital market
participants. Reporting on the business situation and
Group results is presented in its Annual Report, at its
annual financial statements press conference, and in its
semi-annual financial report and quarterly financial state-
ments. Therefore, the company also regularly uses the
transmission paths on the Internet. Axel Springer also
takes part in numerous conferences at important interna-
tional stock exchanges or carries out corresponding road
shows; further information can be found on page 8 of the
Annual Report. In addition, to the extent legally required,
the company will publish information in the form of ad-
hoc announcements. Furthermore, it informs the interest-
ed public by means of press releases, the company's
websites or dedicated events such as a Capital Markets
Day.
In order to ensure equal treatment of all capital market
participants, Axel Springer also publishes information
relevant to the capital markets simultaneously in German
and English on the company’s website. Financial report-
ing dates are published in the financial calendar with
sufficient advance notice. Immediately upon receiving the
corresponding notices, the company publishes changes
in the composition of the shareholder structure that are
subject to the reporting obligation according to Section
40 of the WpHG (prev. Section 26 WpHG), and on the
purchase and sale of shares by persons who exercise
management duties at Axel Springer (directors’ dealings),
in accordance with Section 19 of the Market Abuse
Regulation.
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Preparation and audit of the financial statements
The consolidated financial statements and interim finan-
cial statements are prepared in accordance with Interna-
tional Financial Reporting Standards (IFRS), as they are
to be applied in the European Union. The quarterly
statement is also prepared on the basis of IFRS. The
consolidated financial statements also contain the dis-
closures prescribed by Section 315e (1) HGB. The con-
solidated financial statements are prepared by the Exec-
utive Board of Axel Springer SE and audited by the
independent auditor. Axel Springer publishes the consol-
idated financial statements within 90 days and the quar-
terly statements as well as the interim financial report
within 45 days of the respective period ending dates.
The notes to the consolidated financial statements also
contain information on the company’s relationships with
shareholders who are to be classified as related parties
according to the definitions of the applicable accounting
regulations. In accordance with the GCGC, it is agreed
with the independent auditor in each financial year that
the latter will inform the Chairman of the Supervisory
Board or the Audit Committee without delay of any cir-
cumstances arising during the course of the audit that
would constitute grounds for disqualification or partiality.
It is also agreed that the independent auditor will imme-
diately report any material issues, matters, and events
arising during the course of the audit that fall within the
purview of the Supervisory Board. It is further agreed
that the independent auditor will inform the Supervisory
Board or make an observation in the audit report if the
independent auditor were to discover, during the course
of the audit, any facts that contradict the Declaration of
Conformity by the Executive Board and Supervisory
Board according to Section 161 AktG. In addition, the
Audit Committee has established a system for monitor-
ing and approving non-audit services by the auditor.
Compensation report
Axel Springer’s compensation policy follows the principle
of granting compensation to the Executive Board and
Supervisory Board that is based on their performance in
the interest of sustainable corporate development.
Executive Board
In accordance with the requirements of the German
Stock Corporation Act and the recommendations of
GCGC, the compensation of the Executive Board mem-
bers consists of fixed and variable components. The
variable compensation consists of a cash component
paid as an annual bonus and long-term compensation
components in the form of the long-term incentive plan
launched in 2016 and the virtual stock option plans last
granted in the year 2014. All components of compensa-
tion are appropriate, both individually and as a whole.
The Supervisory Board has considered at length the
appropriateness and adequacy of the Executive Board
compensation by taking into account a number of criteria,
including in particular Section 87 of the German Stock
Corporation Act (“AktG”) and Section 4.2.2 sentences 4
and 5 of the GCGC, such as the tasks of the individual
Executive Board member, his personal performance and
the economic position, success and future prospects of
Axel Springer. Due consideration is also given to the
industry environment.
In the reporting year, the Supervisory Board did not
consult any external compensation expert.
The fixed compensation corresponds to the annual
fixed salary; in addition, the Executive Board members
receive a company car or company car allowance, the
assumption of premiums for insurance against the risk of
invalidity and death, individual travel and security expens-
es as fringe benefits. The annual fixed salary is generally
established for the entire term of an employment agree-
ment and is disbursed in 12 monthly installments.
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The variable compensation is in the form of an annual
bonus as a cash component, and depends on individual
performance with regards to individual objectives (relat-
ing to the quantitative divisional objectives and qualitative
individual objectives, amongst others, based on the
strategy of Axel Springer SE) as well as Group objectives;
it is limited to double the sum payable for 100 %
achievement of objectives. The Group's target for the
year 2017 and the previous year was the Group's ad-
justed EBITDA. Individual objectives for measuring per-
formance of individuals and Group objectives are decid-
ed upon by the Supervisory Board. Part of the variable
cash component is based on annual objectives and in
part based on achievement of Group objectives estab-
lished for an assessment period of three years. Achieve-
ment of objectives is initially determined by the Chairman
of the Supervisory Board members and the respective
Executive Board member and then reviewed and ap-
proved by the Supervisory Board.
In addition, there is a long-term variable compensa-
tion component in the form of a Long-Term Incentive
Plan (“LTIP”), which was granted to the in 2016 already
incumbent Executive Board members as of May 1, 2016,
and runs until 2023, including holding periods. The LTIP
stipulates a participation in the increase in the company
value, measured on the basis of market capitalization in
the form of a cash payment claim with subsequent obli-
gation to purchase shares.
It will be distributed in the form of a cash bonus and
contains a subsequent obligation to purchase Axel
Springer shares in the corresponding amount. The com-
pensation entitlement requires market capitalization of
Axel Springer SE to increase by at least 40 % within three,
four, and maximally five years (respective performance
periods). No claim for compensation can be made below
this threshold. In the event of targets being achieved, the
whole Executive Board is entitled to payment amounting
to a total of 4 % of the increase in market capitalization.
The compensation entitlement will increase only up to a
growth in market capitalization by maximally 60 %.
The increase in market capitalization is calculated on the
basis of the volume-weighted average price of Axel
Springer shares for the last 90 calendar days before May
1, 2016 or before the end of the respective performance
period multiplied by the number of outstanding Axel
Springer shares (less own shares) adding dividend distri-
butions during the performance period.
In the event of targets being achieved, an amount in the
value of 50 % of the total amount (“payout amount I“) will
be paid out. On meeting the targets after four or five
years respectively, a lock-up period of two or one year
respectively follows, before the remaining 50 % of the
total amount ("payout amount II") will be paid out. Should
targets be met prematurely after three years, each Exec-
utive Board member will have the option to request
payout amount I. The payout amount II will then only be
paid out after four or five years and a waiting period of
two years or one year after the target has been reached.
The net amount of all payouts (after the Executive Board
member's taxes and duties are paid) in each case has to
be fully invested in Axel Springer shares by the Executive
Board member. Regarding the shares acquired with pay-
out amount I, or II respectively, the Executive Board mem-
ber has to retain the shares for a minimum of two years, or
one year respectively. The LTIP contains the usual provi-
sions for early resignation. Thus, for instance all non-
contractual claims paid under the LTIP lapse if the mem-
ber of the Executive Board leaves the Executive Board at
his own request before expiry of the waiting period.
The LTIP is valued as a share-based compensation
program with cash settlement at its fair value as of the
balance sheet date and is recorded according to the
expected vesting date.
The value of the LTIP at the grant date was calculated on
the basis of a stochastic model for the valuation of stock
option rights taking into account the seven-year term of
the LTIP (including holding periods) and is determined at
€ 32.1 million.
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Until the LTIP was introduced, the long-term variable
compensation component was presented in the form of
virtual stock option plans, according to which stock
options were last granted in 2014 and whose key pa-
rameters are shown below:
Executive Board Program
Grant date
Term in years
Vesting period in years
2012
2014 I
2014 II
01.01.2012 01.01.2014 01.09.2014
6
4
6
4
6
4
Stock options granted
450,000
205,313
675,000
Underlying (€)
Maximum payment (€)
Value at grant date (€)
Total value at grant date
(€ millions)
30.53
61.06
5.26
44.06
88.12
6.69
44.56
89.12
6.26
2.4
1.4
4.2
The 2012 Executive Board program was terminated in
the 2016 financial year by exercising the existing options.
If the Executive Board service agreement or the ap-
pointment to the Executive Board exists for at least the
end of the four year waiting period, then all virtual stock
options may become vested to the member of the Exec-
utive Board. If the working relationship or the appoint-
ment of the authorized members of the Executive Board
finishes before the end of the waiting period, but at least
one year after the grant date, then the stock options
generally become vested pro rata temporis relating to
the waiting period.
A further condition for vesting to take place is that within
a period of one year before the end of the waiting period,
either the volume-weighted average price of the Axel
Springer share in a period of 90 calendar days is at least
30 % over the base value or the percentage increase of
this average price compared to the base value exceeds
the development of the DAX.
Exercising stock options is only possible if the volume-
weighted average price of the Axel Springer share of the
last 90 calendar days before exercising such options is
at least 30 % over the base value and that the percent-
age increase exceeds that of the DAX index. Each option
grants a payment claim in the amount of the growth in
value of the Axel Springer share, restricted to a maxi-
mum of 200 % of the base value, which corresponds to
the difference between the volume-weighted average
price during the last 90 calendar days prior to exercise
and the base value.
Executive Board members are obligated to hold one Axel
Springer share for every ten stock options as a personal
investment. Disposing of these shares prior to exercising
the options would result in the stock options being for-
feited at the same rate.
With regards to the Executive Board Programs that are
granted, see the information in the notes to the consoli-
dated financial statements under Section (13).
Executive Board members have received contractually-
agreed pension provisions. Payment of pension applies
when reaching the age of 62, provided that the Executive
Board member is no longer at their post at this point. In
case of premature departure, the Executive Board mem-
ber has – after five years since the pension entitlement or
earlier employment with the company – a vested claim to
a pension payment proportional to the length of his em-
ployment with the company. Payments are also made in
case of a complete reduction in earning capacity.
Executive Board members have the right to terminate
their employment contracts in the event of a change of
control. In such a case, they will have the right to receive
payment of their base salary for the most recently nego-
tiated remaining contractual term (some of the eligible
Executive Board members will have the right to receive
payment of an amount equal to at least one year’s base
salary) and/or a lump sum amounting to the total remu-
neration for the duration of the original residual term; the
amount of the aforementioned payments is typically
limited. In addition, the Company pays the performance-
related remuneration pro rata temporis for the period of
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Corporate Governance Report
the activity in the year of departure. Other remuneration
does not exist for the service contracts of members of
the Executive Board in the event of termination of em-
ployment due to a change of control.
In the 2017 reporting year the total compensation paid
to the Executive Board was € 19.7 million (PY: € 19.2
million excl. LTIP). The fixed components totaled € 9.5
million (PY: € 9.1 million); this figure also includes com-
ponents for fringe benefits (company car or company car
allowance, the assumption of premiums for insurance
against the risk of invalidity and death and security ex-
penses). The variable cash component came to a total of
€ 10.2 million (PY: € 10.1 million). According to this, the
fixed compensation including fringe benefits in the finan-
cial year amounts to a proportion of 48 % (PY: 47 %) of
total remuneration (in the prior year excluding LTIP).
In 2012, global growth investor General Atlantic entered
into a strategic partnership in the context of a joint
growth and internationalization strategy with a 30 %
stake in Axel Springer's online classifieds business and in
connection with the sale of its stake in the online classi-
fieds business on the Axel Springer SE itself involved.
Following the sale of its shares in the company by way of
various partial sales, most recently in the summer of the
reporting year, General Atlantic, in recognition of the
outstanding success of the joint investment in the online
classifieds business and the development of the compa-
ny, has made a voluntary one-time special payment to
the company subject to the provision to grant a special
payment to the Executive Board as well as to selected
executives essential to the success of the investment.
The Supervisory Board of Axel Springer SE has granted
the Executive Board members a recognition bonus total-
ing € 12.0 million (gross) from these funds, which have
been purposefully made available to Axel Springer SE.
An economic burden was not associated with Axel
Springer SE or the group companies, as all the expenses
associated with the recognition award, including statuto-
ry fees, were borne by the purposeful special payment
made by General Atlantic. The Executive Board thus
received € 31.7 million in the reporting year, including
the recognition premium.
In the 2016 financial year, in addition, a long-term varia-
ble remuneration was granted in the form of an LTIP, the
value of which was determined at the grant date on the
basis of a stochastic model for the valuation of stock
options taking into account the seven-year term (includ-
ing holding periods) and amounted to € 32.1 million.
Guaranteed pension payments to members of the Exec-
utive Board resulted in a personnel expense of € 1.6
million in financial year 2017 (PY: € 2.3 million). The cash
value of the guaranteed pension payments in pension
provisions totaled € 17.5 million (PY: € 15.2million).
Loans or advances were not granted to members of the
Executive Board in the 2017 financial year. In the case of
guaranteed pension payments to Executive Board mem-
bers, which became effective with the relevant recom-
mendation in Section 4.2.3 sentence 11 GCGC on June
10, 2013, the Supervisory Board established the pension
level desired in compliance with the previously stated
Code recommendation and considered the annual and
long-term expense for the company derived from this.
Axel Springer SE does not disclose the total compensa-
tion of individual Executive Board members by name,
given that Sections 314 (3) and 286 (5) HGB expressly
place the disclosure of Executive Board compensation
by name under the reservation of a differing resolution of
the annual shareholders’ meeting with a qualified majority
of the share capital represented upon the adoption of the
resolution. The annual shareholders’ meeting of Axel
Springer SE passed a resolution on April 16, 2014 with
the required majority.
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Corporate Governance Report
Supervisory Board
The compensation of the Supervisory Board is set by the
annual shareholders’ meeting.
The compensation of the Supervisory Board of Axel
Springer SE is regulated by Section 16 of the Articles of
Association of Axel Springer SE. According to this, the
Supervisory Board of Axel Springer SE receives fixed
compensation of € 3.0 million annually. The Supervisory
Board decides how the aforementioned amount is dis-
tributed among its members, with appropriate considera-
tion given to their activities as chairman and in the com-
mittees. If the member does not serve on the
Supervisory Board or exercise a higher-paying function
of a Supervisory Board member for the full year, such
member will receive a pro-rated share of the full-year
compensation. Only full months of activity are taken into
ac-count for this purpose. The compensation is payable
after the close of the given financial year.
For the reporting year 2017, the Supervisory Board will
receive total compensation of € 3.0 million (PY: € 3.0
million). In addition, the company reimburses all mem-
bers of the Supervisory Board for their expenses and for
the value-added tax payable on their compensation and
on the reimbursement of their expenses. The company
pays the premium for the D&O insurance taken out for
members of the Supervisory Board.
Contrary to Section 5.4.6 sentences 5 and 6 of the
GCGC, the compensation paid to members of the Su-
pervisory Board, as well as the compensation paid by
the company to them for services rendered personally,
are not presented in the Corporate Governance Report,
since Axel Springer SE’s competitors do not disclose
such information either. In addition, the Articles of Asso-
ciation do not regulate the individual distribution of com-
pensation between the members of the Supervisory
Board, but expressly assign it to the Supervisory Board;
the individualized statement of the remuneration of the
Supervisory Board would undermine this allocation of
powers to the General Meeting. Also on April 16, 2014,
the Company's General Meeting resolved that the dis-
closure of the individualized compensation of the Execu-
tive Board in the annual and consolidated financial
statements of the company, which are to be prepared
for the financial years 2014 to 2018 (inclusive), should be
avoided, meaning therefore that the compensation of the
Supervisory Board members is not published in individu-
alized form either.
Share-based compensation of senior executives
Axel Springer has issued virtual stock option plans for
selected senior executives, the main parameters of
which are shown in the following:
Senior Executive Program
Grant date
Term in years
Vesting period in years
Stock options granted
Underlying (€)
Maximum payment (€)
Value at grant date (€)
Total value at grant date
(€ millions)
2011 II
2014
01.10.2011 01.03.2014
6
4
5
3
472,500
60,000
35.00
70.00
2.31
46.80
93.60
8.14
1.1
0.5
Provided that the beneficiary is employed by the compa-
ny at least until the expiration of the respective vesting
period, all virtual stock options granted to the relevant
senior executives may become vested. If the authorized
senior executive is not employed by the company before
the end of the vesting period, but is at least one year
after the grant date, the stock options are vested up to
one half (Senior Executive Programs 2014) or to one
quarter per elapsed year of the waiting period (Senior
Executive Program 2011 II).
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Beneficiaries are obligated to hold one Axel Springer
share for every ten stock options as their own investment.
Disposing of these shares prior to exercising the options
would result in the stock options being forfeited at the
same rate.
The Senior Executive Program 2011 II was completed
during the financial year 2016 as the stock options were
exercised or forfeited. With regards to the executive
programs that are granted, see the information in the
notes to the consolidated financial statements under
Section (12).
A further condition for vesting to take place is that within
a period of one year before the end of the waiting period,
either the volume-weighted average price of the Axel
Springer share in a period of three calendar months is at
least 30 % over the base value or the percentage in-
crease of this average price compared to the base value
exceeds the development of the DAX.
Exercising stock options is only possible if the volume-
weighted average price of the Axel Springer share during
the three calendar months before exercising such op-
tions is at least 30 % over the base value and that the
percentage increase exceeds that of the DAX index.
Each option grants a payment claim in the amount of the
growth in value of the Axel Springer share, restricted to a
maximum of 200 % of the base value, which corre-
sponds to the difference between the volume-weighted
average price during the last three calendar months prior
to exercise and the base value.
81
Report of the
Supervisory Board
Dr. Giuseppe Vita
Chairman
Dr. h. c. Friede Springer
Vice Chairwoman
Oliver Heine
Attorney at law and partner in the
law firm Heine & Partner
William E. Ford
CEO General Atlantic
Rudolf Knepper
Entrepreneur
Lothar Lanz
Member of various Supervisory Boards
Dr. Nicola Leibinger-Kammüller
President and Chairwoman of the Executive Board
of TRUMPF GmbH + Co. KG
Prof. Dr.-Ing. Wolfgang Reitzle
Entrepreneur
Martin Varsavsky
CEO Prelude Fertility Inc.
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Annual Report 2017
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Report of the Supervisory Board
In financial year 2016, the supervisory board performed
all the duties incumbent upon it by virtue of applicable
laws, the company’s Articles of Association, and internal
rules of procedure. It worked closely and trustfully with
the Executive Board in an advisory role and supervised
the management of the company.
cussed specific transactions of importance to the com-
pany’s future development. It adopted resolutions on
those transactions and measures for which the participa-
tion of the Supervisory Board is required by law, by the
company’s Articles of Association, or by the Executive
Board’s internal rules of procedure.
By means of written and oral reports, the Executive
Board informed the Supervisory Board in detail, regularly,
and promptly about all essential matters of strategy,
planning, business performance, and the risk situation of
the company, as well as the risk management system,
the Internal Control System (ICS), and matters pertaining
to compliance. The Executive Board informed the Super-
visory Board of matters of particular importance between
meetings; in addition, the Chairman of the Supervisory
Board and the Chairman of the Executive Board held
regular information and advisory meetings.
The Supervisory Board examined the relevant planning
documents and financial statements presented to it and
assured itself that they were correct and appropriate. It
reviewed and discussed all submitted reports and docu-
ments to an appropriate extent. It was not necessary in
financial year for the Supervisory Board to inspect compa-
ny books and documents beyond those presented during
the normal course of reporting by the Executive Board.
The Supervisory Board discussed with the Executive
Board all matters of crucial importance for the company,
especially the company’s business plan, business struc-
ture, business strategy, major investment and disinvest-
ment plans, and personnel matters; the strategic orienta-
tion of the company was coordinated between the
Executive Board and Supervisory Board, and the status
in relation to the implementation of the strategy was
discussed. Furthermore, the Supervisory Board dis-
Composition and meetings of the
Supervisory Board
As per the company’s Articles of Association, the Supervi-
sory Board is composed of nine members (see page 70 of
the Annual Report regarding the individual members of the
Supervisory Board). William E. Ford, CEO of General At-
lantic, and Rudolf Knepper informed the Chairman of the
Supervisory Board in January, i.e. February 2018 that they
will resign from office at the end of the General Meeting in
the 2018 financial year. The Supervisory Board will there-
fore propose to the General Meeting two new candidates
for election to the Supervisory Board of Axel Springer SE,
who shall assume their mandates for the remainder of Bill
Ford's and Rudolf Knepper's term of office.
The Supervisory Board thanks Bill Ford for his work on the
Supervisory Board of Axel Springer SE. During his affilia-
tion, he has variously supported and advised our company
on the basis of his more than two decades of experience
in managing investments in growth companies, his inter-
national experience and digital knowledge. Furthermore,
the Supervisory Board likes to thank Rudolf Knepper for
his long-standing successful work as Executive Board and
Supervisory Board member of Axel Springer SE and for
his high degree of loyalty to the company.
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Report of the Supervisory Board
The term of current members of the Supervisory Board
ends with the expiry of the 2019 ordinary Annual General
Meeting in the 2019 financial year, which is decisive for
the ratification of actions by the company's Boards for
the 2018 financial year.
A total of seven meetings of the Supervisory Board were
held during the period under review, four in the first and
three in the second half of the calendar year, with ex-
traordinary meetings held on March 23, 2017 and July 4,
2017. Some individual members were excused and
unable to attend some of the meetings; none of the
Supervisory Board members attended fewer than four
sessions of the plenum. The members that apologized
for their absence for the most part participated in resolu-
tions by written vote.
Important matters addressed by the
Supervisory Board
At the meeting on, February 14, 2017, the Supervisory
Board dealt with the financial plan 2017 presented by the
Executive Board and approved it. The Executive Board
informed the Supervisory Board about preliminary figures
on business development in the expired financial year
2016. The Supervisory Board also primarily focused on
real estate sales in Berlin.
In its meeting on March 7, 2017, the Supervisory Board
devoted its attention primarily to the separate financial
statements of the parent company and the consolidated
financial statements of the Group as at December 31,
2016 (including, in each case, the combined manage-
ment report and Group management report), as well as
the report on the company’s dealings with affiliated com-
panies (Dependency Report), along with the respective
audit reports. In accordance with the recommendations
of the Audit Committee, it approved the annual financial
statements of Axel Springer SE, the consolidated financial
statements and the combined management and group
management report and approved the dependent com-
pany report. It followed the Executive Board’s profit utili-
zation proposal for financial year 2016 and agreed to the
Corporate Governance Report issued jointly with the
Executive Board. In addition, the Supervisory Board dealt
with the agenda for the 2017 General Meeting; this in-
cluded inter alia the proposed resolutions for the General
Meeting including the proposal for the election of the
auditor for the 2017 financial year and the election of
William E. Ford to the Company's Supervisory Board and
the proposal to update the Company Constitution, the
essentials, with a corresponding amendment to the com-
pany's Articles of Association. In addition, the Supervisory
Board adopted a resolution regarding its report for the
2016 financial year, which was submitted at the annual
shareholders' meeting. Finally, it was decided to set up
an advisory committee on corporate structure.
In the extraordinary meeting on March 23, 2017, the
Supervisory Board dealt in particular with the corporate
structure. In addition, the company reported on the
current status of investment projects.
At the meeting on April 26, 2017, the Supervisory Board
focused on preparing for the upcoming General Meeting.
In addition, among others, the achievement of the tar-
gets for the proportion of women in the Supervisory
Board and Executive Board resolved in September 2015
was discussed, and new targets and deadlines were
defined with regard to both bodies.
At the extraordinary meeting on July 4, 2017, which was
held in the form of a telephone conference, the Supervi-
sory Board dealt with issues relating to the remuneration
of the Executive Board.
At the meeting on September 6, 2017, the Executive
Board reported on the planned reorganization of the
publishing divisions in Germany. The Supervisory Board
also passed a resolution on the share participation pro-
gram planned for the 2018 financial year for employees
of the Company and of certain affiliated companies. In
addition, the Supervisory Board was informed about the
current status of real estate projects and the progress of
the new Axel Springer building in Berlin. The Supervisory
Board drew up a "competence profile" for the entire
Supervisory Board and passed a resolution on this. In
addition, the re-designation of the Executive Board divi-
sions was approved and the Executive Board provided
84
Annual Report 2017
Axel Springer SE
Report of the Supervisory Board
information about the US strategy and developments at
Business Insider.
Work of the committees of the
Supervisory Board
At its meeting on November 7, 2017, the Supervisory
Board focused on Axel Springer's corporate strategy
focusing on the News Media segment on the basis of a
comprehensive presentation of the Executive Board. The
Executive Board reported on the changes in accounting
from 2018 due to new IFRS standards. In addition, the
Supervisory Board adopted a resolution on the Declara-
tion of Conformity, published on the same date. It also
carried out a self-assessment of its efficiency and con-
tinued to assess its activity as efficient on the basis of a
prior written survey followed by a detailed discussion. In
addition, the Executive Board informed the Supervisory
Board about the current status of the company's trans-
action plans.
Conflicts of interest
There were no conflicts of interest in the Supervisory
Board during the reporting year.
Corporate governance
The Executive Board and Supervisory Board issued their
common Declaration of Conformity (pursuant to Section
161 of the German Stock Corporations Act (AktG)) in
November 2017. This explanation with information on
exceptions to the recommendations made in the GCGC
is made permanently available on the company's website.
It is also available on page 65 of the Annual Report.
Additional information on corporate governance in the
Axel Springer Group may be found in the joint Corporate
Governance Report of the Executive Board and Super-
visory Board (see page 65).
In the interest of performing its duties in an efficient man-
ner, the Supervisory Board has formed an Executive
Committee, an Audit Committee, a Personnel Committee,
and a Nominating Committee as permanent committees.
In March 2017, an advisory committee on corporate
structure was formed. The Chairman of the Audit Com-
mittee is Lothar Lanz, in the Corporate Structure Com-
mittee Martin Varsavsky, and in the other committees
Chairman of the Supervisory Board, Dr. Giuseppe Vita
fulfills that role. The chairmen of the committee report to
the plenum on the work of the committees and the deci-
sions taken by the committees.
Notwithstanding the general responsibility of the full
Supervisory Board, the Executive Committee is re-
sponsible for matters that are exclusively or predomi-
nantly related to publishing and journalism and for mat-
ters of strategy, financial planning, capital expenditures,
and the financing of investment. It is in particular respon-
sible, instead of the Supervisory Board, for approving
significant management actions undertaken by the Ex-
ecutive Board concerning investments or operative busi-
ness operations. Finally, the Executive Committee pre-
pares decisions regarding the organization of the
Executive Board and takes decisions, within stipulated
limits, regarding the approval to sell shares of the com-
pany and subscription rights to such shares. The mem-
bers of the Executive Committee are Dr. Giuseppe Vita,
acting as the Chairman, Dr. h. c. Friede Springer, acting
as the Vice Chairwoman, as well as Lothar Lanz and Prof.
Dr.-Ing. Wolfgang Reitzle.
85
Annual Report 2017
Axel Springer SE
Report of the Supervisory Board
The Executive Committee held eight meetings during the
reporting period, of which three were extraordinary meet-
ings; members of the Executive Board also took part
frequently at these meetings. In addition, resolutions
were passed in circulation proceedings. The Presidency
agreed upon the following transactions: In February and
April 2017 (in view of the final purchase price) the acqui-
sition of Logic-Immo, in March 2017 the sale of the print
business and related online activities of Ringier Axel
Springer Slovakia, in July 2017 the acquisition of Affilinet
GmbH by the AWIN AG and the acquisition of shares in
AWIN AG held by Swisscom Schweiz AG, in October
2017 the sale of the Slovak Ringier Axel Springer Print
Portfolio including related online activities and in Decem-
ber 2017 the sale of the aufeminin Group to TF1.
It was also discussed and decided, among others, on an
exchange offer for existing fixed-interest promissory
notes and the renewal of a promissory note, the sale of
the Berlin skyscrapers to Axel Springer Pensionstreu-
hand e.V., and the sale and lease-back of the Axel-
Springer-Passage and the new building. Further subject
matters were decisions about granting approval to con-
clude control and profit and loss transfer agreements
within the Group as well as to transfer shares of the
company in accordance with Section 5 (3) of the Com-
pany’s Articles of Association.
The Personnel Committee is responsible in particular
for preparing decisions on the appointment and dismis-
sal of Executive Board members. It is also responsible
for preparing the resolutions to be adopted by the Su-
pervisory Board on the compensation of individual mem-
bers of the Executive Board. If the Personnel Committee
consists of three or more members, then it approves
resolutions in lieu of the Supervisory Board in all other
matters pertaining to employment contracts; the same
applies in matters pertaining to the extension of loans
within the meaning of Sections 89, 115 AktG and on the
approval of contracts with Supervisory Board members
pursuant to Section 114 AktG. If the Personnel Commit-
tee consists of two members, then it is responsible for
preparing the resolutions to be adopted by the Supervi-
sory Board regarding such matters. To the extent it
bears responsibility, the Personnel Committee also rep-
resents the company in transactions with individual Ex-
ecutive Board members. Finally, if the Personnel Com-
mittee consists of three or more members, then it shall
decide on granting approval for management actions
assigned to it that require approval; if it consists of two
members, then it is responsible for preparing the resolu-
tions to be adopted by the Supervisory Board regarding
such business matters. The members of the Personnel
Committee are Dr. Giuseppe Vita, acting as the Chair-
man, and Dr. h. c. Friede Springer, acting as the Vice
Chairwoman.
The Personnel Committee met twice during the reporting
period. It prepared, among others, the decision of the
plenary session on the extension of the term of office of a
member of the Executive Board, together with the asso-
ciated extension of the respective Executive Board con-
tract, dealt with the individual goals and the Group ob-
jectives for the cash component of the variable
remuneration component of the Executive Board remu-
neration.
The Audit Committee, notwithstanding the responsibil-
ity of the full Supervisory Board, is responsible for pre-
paring the decisions to be made by the Supervisory
Board on the adoption of the separate financial state-
ments of the parent company and the approval of the
consolidated financial statements of the Group, by
means of conducting a preliminary review of the separate
financial statements, the Dependency Report, and the
consolidated financial statements, as well as the com-
bined management report of the parent company and
the group, the review of the profit utilization proposal, the
discussion of the audit report with the auditor, as well as
the monitoring of the accounting process and the audit,
in this regard in particular the independence of the audi-
tor, the monitoring of the effectiveness of the risk man-
agement system, the internal control system (ICS), the
compliance management system and the internal audit-
ing system. The Audit Committee also monitors and
approves the non-audit services provided by the auditor.
It is also responsible for auditing the interim financial
statements and interim reports and discussing the audi-
tor's report on a possible audit review of the interim
financial statements. With regard to the audit of the
86
Annual Report 2017
Axel Springer SE
Report of the Supervisory Board
financial statements, the Audit Committee is responsible
for preparing the proposal of the Supervisory Board to
the annual shareholders’ meeting on the election of the
independent auditor and the engagement of the inde-
pendent auditor, and for adopting audit priorities, among
other matters. The Audit Committee consists of Lothar
Lanz, acting as the Chairman, Dr. Giuseppe Vita, acting
as the Vice Chairman, and Oliver Heine, Rudolf Knepper
and Dr. h. c. Friede Springer as additional members.
The Audit Committee held four meetings during the
course of the financial year. It has been informed of the
scope, course, and result of the 2016 annual financial
statements and consolidated financial statements and
discussed them with the auditors, prepared the deci-
sions of the Supervisory Board regarding adoption of the
financial statements (including the combined manage-
ment report and group management report) and approv-
al of the Group consolidated statements as well as the
audited interim financial statements and reports for 2015.
Alongside this, in February 2017, the Audit Committee
handled preparation of the passing of the resolution by
the full board regarding the proposal at the annual
shareholders' meeting to commission the independent
auditor for the 2017 financial year. To this effect, the
Supervisory Board was also in receipt of written confir-
mation from Ernst & Young GmbH regarding their inde-
pendence. In addition, the Audit Committee dealt with
the audit priorities of the independent auditor for the
2017 financial year and issued the auditor with the audit
assignment for the 2017 financial year. The Audit Com-
mittee also dealt with the monitoring of the effectiveness
of the risk management system, the internal control
system (ICS), of the compliance management system
and of the internal audit system, as well as additional
compliance issues. The Audit Committee also has,
among others, discussed the necessary adjustments to
the Company's reporting due to changes in accounting
rules, dealt with non-financial reporting (CSR), and ap-
proved audit assignments for non-audit services.
The Nominating Committee prepares the proposal of
the Supervisory Board to the annual shareholders’ meet-
ing on the election of Supervisory Board members; in
particular, it proposes suitable candidates for the Super-
visory Board, also in consideration of the competency
profile and the diversity and independence criteria
adopted by the Supervisory Board. It develops and re-
views the job profiles relative to the qualifications ex-
pected of Supervisory Board members by the company,
and continually adapts them to suit changing company
requirements. The members of the Nominating Commit-
tee are Dr. Giuseppe Vita, acting as the Chairman, and
Dr. h. c. Friede Springer, acting as the Vice Chairwoman.
The Nominating Committee did not meet during the
financial year.
The Advisory Committee on Corporate Structure
held a meeting in the reporting year. The committee
consists of Martin Varsavsky as chairman and William E.
Ford and Lothar Lanz as members.
Separate financial statements of the
parent company and consolidated
financial statements of the Group;
management report for the parent
company and the Group
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
audited the annual financial statements of the parent
company and the consolidated financial statements of
the Group, as well as the combined management report
of the parent company and the Group, all of which were
prepared by the Executive Board for financial year 2017,
and issued an unqualified audit opinion in every case.
In connection with the audit, the independent auditor
also noted in summary that the Executive Board has
implemented a risk management system that fulfills the
requirements of law, and that this system is generally
suitable for the early detection of any developments
that could endanger the company’s survival as a going
concern.
87
Annual Report 2017
Axel Springer SE
Report of the Supervisory Board
The Supervisory Board acknowledged and approved the
audit results. Based on the results of its own review, the
Supervisory Board noted that it had no objections to
raise. Based on the recommendations of the Audit
Committee, the Supervisory Board approved the annual
financial statements of the parent company and the
consolidated financial statements of the Group, as well
as the combined management report of the parent com-
pany and the Group, all of which were prepared by the
Executive Board. Accordingly, the annual financial
statements of Axel Springer SE were officially adopted.
The Supervisory Board also reviewed the proposal of the
Executive Board concerning the utilization of the distrib-
utable profit and concurred with that proposal, in con-
sideration of the company’s financial year net income,
liquidity, and financing plan.
The Executive Board also submitted its report on the
company’s dealings with related parties pursuant to
Section 312 of the German Stock Corporations Act
(AktG) to the Supervisory Board. The Supervisory Board
was also in receipt of the corresponding audit report by
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft.
Both reports were also provided to each member of the
Supervisory Board in advance. The audit opinion of the
independent auditor reads as follows:
The aforementioned documents and the proposal of the
Executive Board for the utilization of the distributable
profit, as well as the audit reports of Ernst & Young
GmbH Wirtschaftsprüfungsgesellschaft, were provided
to all members of the Supervisory Board in a timely
manner. The documents were audited and discussed in
the presence of the independent auditor in the meeting
of the Audit Committee of March 6, 2018. The inde-
pendent auditor reported on the key results of the audit
and was available for additional information if required.
No deficiencies in the internal control and risk manage-
ment system, as it relates to the financial accounting
process, were noted. The independent auditor explained
further the scope, priorities, and costs of the audit. No
circumstances that would cast doubt on the impartiality
of the independent auditor arose. The Audit Committee
resolved to recommend to the Supervisory Board that it
approve the separate financial statements of the parent
company and the consolidated financial statements of
the Group, as well as the combined management report
of the parent company and the Group.
The Audit Committee reported to the Supervisory Board in
the balance sheet meeting of March 7, 2018 on the inves-
tigations carried out by the Committee and the results
thereof, alongside their recommendations for approval of
the separate financial statements of the parent company
and consolidated financial statements of the Group, and
the combined management report of the parent company
and the Group. The Supervisory Board has reviewed the
documents in question, having noted and duly considered
the report and recommendations of the Audit Committee
and the reports of Ernst & Young GmbH Wirtschafts-
prüfungsgesellschaft, and having discussed them with the
independent auditor, who was in attendance.
88
Annual Report 2017
Axel Springer SE
Report of the Supervisory Board
“Based on the audit and evaluation conducted in ac-
cordance with our professional duties, we hereby con-
firm that
Thanks to the members of the Executive
Board and to all employees of the
company
1. the factual information contained in the report is correct;
2. the consideration provided by the company in respect
of the legal transactions mentioned in the report was
not inappropriately high.”
The Supervisory Board also reviewed the report of the
Executive Board on the dealings with related parties
pursuant to Section 312 AktG and the independent
auditor’s report on this subject. At the Supervisory Board
meeting of March 7, 2018, the independent auditor also
reported orally on the principal findings of the audit and
provided additional information, as requested. The Su-
pervisory Board acknowledged and approved the report
of the independent auditor. Based on the final results of
its own review, the Supervisory Board had no objections
to raise with respect to the results of the audit report of
the independent auditor or the Executive Board’s decla-
ration on the report pursuant to Section 312 (3) AktG.
The Supervisory Board wishes to thank all members of
the Executive Board and all employees for their out-
standing work in the past year.
The Supervisory Board likes to welcome Dr. Stephanie
Caspar, who, following the Board's meeting of February
13, 2018, was appointed Executive Board member
responsible for Technology and Data with effect of
March 1, 2018, and looks forward to working with her.
Berlin, on March 7, 2018
The Supervisory Board
Dr. Giuseppe Vita
Chairman
89
Consolidated Financial
Statements
91
Consolidated Statement of
Financial Position
93
Consolidated Income Statement
93
Consolidated Statement of
Comprehensive Income
94
Consolidated Statement of Cash Flows
95
Consolidated Statement of
Changes in Equity
96
Consolidated Segment Report
Notes to the Consolidated Financial
Statements
97
General information
115 Notes to the consolidated statement of
financial position
138 Notes to the consolidated income statement
144 Notes to the consolidated statement of
comprehensive income
145 Notes to the consolidated statement of
cash flows
146 Notes to the consolidated segment report
149 Other disclosures
90
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
€ millions
ASSETS
Non-current assets
Intangible assets
Property, plant, and equipment
Investment property
Non-current financial assets
Investments accounted for using the equity method
Other non-current financial assets
Receivables due from related parties
Receivables from income taxes
Other assets
Deferred tax assets
Current assets
Inventories
Trade receivables
Receivables due from related parties
Receivables from income taxes
Other assets
Cash and cash equivalents
Assets held for sale
Total assets
Note 12/31/2017
12/31/2016
(4)
(5)
(6)
(7)
(36)
(9)
(26)
(8)
(36)
(9)
(29)
(10)
4,994.1
5,393.0
3,904.4
4,162.3
451.7
0.0
526.8
167.5
359.3
12.1
0.6
44.0
54.6
519.2
29.8
563.3
221.0
342.3
23.4
0.4
39.5
55.0
1,441.5
1,063.2
19.8
693.9
17.2
21.7
104.7
216.8
367.3
21.6
614.6
16.6
65.0
121.3
224.1
0.0
6,435.6
6,456.2
91
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Consolidated Statement of Financial Position
€ millions
EQUITY AND LIABILITIES
Equity
Shareholders of Axel Springer SE
Non-controlling interests
Non-current provisions and liabilities
Provisions for pensions
Other provisions
Financial liabilities
Trade payables
Liabilities due to related parties
Other liabilities
Deferred tax liabilities
Current provisions and liabilities
Provisions for pensions
Other provisions
Financial liabilities
Trade payables
Liabilities due to related parties
Liabilities from income taxes
Other liabilities
Liabilities related to assets held for sale
Total equity and liabilities
Note 12/31/2017 12/31/2016
(11)
2,801.5
2,638.6
2,290.1
2,217.4
511.4
421.2
2,036.1
2,427.2
343.2
79.8
350.4
69.8
1,062.0
1,258.3
0.1
23.7
158.1
369.3
0.2
6.5
211.6
530.5
1,598.0
1,390.4
20.4
186.0
175.1
462.0
40.8
60.9
581.6
71.2
21.2
183.2
1.0
379.6
23.1
37.3
745.1
0.0
6,435.6
6,456.2
(13)
(14)
(15)
(36)
(16)
(26)
(13)
(14)
(15)
(36)
(16)
(10)
92
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Consolidated Income Statement
Consolidated Income Statement
€ millions
Revenues
Other operating income
Change in inventories and internal costs capitalized
Purchased goods and services
Personnel expenses
Depreciation, amortization, and impairments
Other operating expenses
Income from investments
Result from investments accounted for using the equity method
Other investment income
Financial result
Income taxes
Income from continued operations
Income from discontinued operations (after taxes)
Net income
Net income attributable to shareholders of Axel Springer SE
Net income attributable to non-controlling interests
Basic/diluted earnings per share (in €) from continued operations
Basic/diluted earnings per share (in €) from discontinued operations
Consolidated Statement of Comprehensive Income
€ millions
Net income
Actuarial gains/losses from defined benefit pension obligations
Items that may not be reclassified into the income statement in future periods (after taxes)
Currency translation differences
Changes in fair value of available-for-sale financial assets
Changes in fair value of derivatives in cash flow hedges
Other income/loss from investments accounted for using the equity method
Items that may be reclassified into the income statement in future periods if certain criteria are met
(after taxes)
Other income/loss
Comprehensive income
Comprehensive income attributable to shareholders of Axel Springer SE
Comprehensive income attributable to non-controlling interests
Note
(28)
2017
379.3
– 3.4
– 3.4
– 80.8
– 17.8
0.1
2.8
– 95.7
– 99.1
280.2
240.6
39.6
93
Note
2017
2016
(18)
(19)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(2d)
(27)
(27)
3,562.7
3,290.2
317.3
87.7
339.9
82.6
– 1,051.4
– 971.5
– 1,202.1
– 1,100.1
– 236.1
– 232.6
– 912.4
– 851.2
– 39.0
– 43.9
4.9
40.2
23.4
16.8
– 18.4
– 21.4
– 130.2
– 126.1
378.0
450.0
1.3
379.3
345.5
33.9
3.19
0.01
1.9
451.9
427.3
24.6
3.94
0.02
2016
451.9
– 25.3
– 25.3
– 47.0
13.6
0.1
– 1.9
– 35.2
– 60.5
391.4
372.4
19.0
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
€ millions
Net income
Reconciliation of net income to the cash flow from operating activities
Depreciation, amortization, impairments, and write-ups
Result from investments accounted for using the equity method
Dividends received from investments accounted for using the equity method
Income from disposal of subsidiaries and business units, intangible assets and property, plant and
equipment, financial assets and assets held for sale
Changes in non-current provisions
Changes in deferred taxes
Other non-cash income and expenses
Changes in trade receivables
Changes in trade payables
Changes in other assets and liabilities
Cash flow from operating activities1)
Proceeds from disposals of intangible assets, property, plant, and equipment, and investment property
Proceeds from disposals of consolidated subsidiaries and business units, less cash and cash equivalents
given up
Proceeds from disposals of non-current financial assets including repayment of vendor loan
Proceeds from / disbursements of investments in short-term financial funds
Puchases of intangible assets and property, plant and equipment
Purchases of shares in consolidated subsidiaries and business units less cash and cash equivalents
acquired
Purchases of investments in non-current financial assets
Cash flow from investing activities1)
Dividends paid to shareholders of Axel Springer SE
Dividends paid to other shareholders
Purchase of non-controlling interests
Disposal of non-controlling interests
Repayments of liabilities under finance leases
Proceeds from financial liabilities
Repayments from financial liabilities
Other financial transactions
Cash flow from financing activities1)
Cash flow-related changes in cash and cash equivalents
Changes in cash and cash equivalents due to exchange rates
Changes in cash and cash equivalents due to changes in companies included in consolidation
Cash and cash equivalents at beginning of period
Reclassification relating to assets held for sale
Cash and cash equivalents at end of period
1) For the portion attributable to discontinued operations see note (2d)
€ millions
Cash flows contained in the cash flow from operating activities
Income taxes paid
Income taxes received
Interest paid
Interest received
Dividends received
Note
(24)
(29)
(29)
2017
379.3
236.1
43.9
4.8
2016
451.9
232.6
– 23.4
3.8
– 207.2
– 264.3
3.1
– 104.2
0.5
– 86.5
69.7
151.2
490.7
207.7
8.7
19.5
3.3
7.9
– 28.7
5.2
– 41.4
13.7
1.4
358.8
68.5
74.1
318.4
– 2.7
– 200.9
– 156.8
(2c)
– 185.1
– 365.3
(29)
– 47.6
– 194.5
– 205.0
– 10.5
– 63.7
0.0
– 0.4
639.0
– 660.7
19.6
– 30.5
– 94.3
– 194.2
– 8.9
– 30.9
2.4
– 0.7
271.4
– 264.7
– 74.3
(29)
– 281.7
– 299.9
14.5
– 7.0
0.2
224.1
– 14.9
216.8
– 35.4
1.0
0.0
253.8
4.7
224.1
(10)
(29)
2017
2016
(29)
– 161.8
– 170.3
63.0
– 20.1
4.6
13.9
37.1
– 16.6
16.6
15.2
94
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Accumulated other comprehensive income
Changes in fair value
Sub-
scribed
capital
Ad-
ditional
paid-in
capital
Accumu-
lated
retained
earnings
Treasury
shares
Currency
translation
Available-
for-sale
financial
assets
Deriva-
tives in
cash flow
hedges
Other
equity
Share-
holders
of Axel
Springer
SE
Non-
controlling
interests
Equity
107.9
499.8
1,508.4
0.0
31.5
12.4
– 0.3
– 97.1
2,062.7
448.8
2,511.5
427.3
427.3
– 194.2
– 5.1
– 23.3
– 5.3
0.2
– 41.4
– 41.4
13.6
13.6
0.1
0.1
4.9
427.3
– 27.2
– 54.9
24.6
– 5.6
451.9
– 60.5
– 27.2
372.4
19.0
391.4
– 194.2
– 9.7
– 203.9
5.1
0.0
22.8
22.8
– 18.4
– 58.5
– 77.0
– 5.1
– 1.1
– 6.2
107.9
500.1
1,707.6
0.0
– 5.0
26.0
– 0.2
– 119.2
2,217.4
421.2
2,638.8
345.5
345.5
– 205.0
0.0
40.7
– 5.0
– 0.6
1.0
– 86.2
– 86.2
– 18.0
– 18.0
0.1
0.1
– 0.7
– 104.9
5.8
– 99.1
– 0.7
240.6
39.6
280.2
345.5
33.9
379.3
1.1
0.0
– 205.0
– 9.8
– 214.8
41.7
58.1
99.8
– 5.0
0.4
2.1
0.2
– 2.9
0.6
107.9
501.0
1,883.2
0.0
– 90.1
8.0
– 0.1
– 119.9
2,290.1
511.4
2,801.5
€ millions
Balance as of
01/01/2016
Net income
Other income/loss
Comprehensive income
Dividends paid
Change in consolidated
companies
Purchase of non-
controlling interests
Other changes
Balance as of
12/31/2016
Net income
Other income/loss
Comprehensive income
Dividends paid
Change in consolidated
companies
Purchase and disposal of
non-controlling interests
Other changes
Balance as of
12/31/2017
95
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Consolidated Segment Report
Consolidated Segment Report
Operating segments (30)
Classifieds Media1)
News Media1)
Marketing Media1)
Services/Holding
Consolidated totals
€ millions
Revenues
2017
2016
2017
2016
2017
2016
1,007.7
879.5
1,509.8
1,481.6
984.5
856.2
Internal revenues
0.9
0.6
6.7
5.9
4.8
8.5
Segment revenues
1,008.6
880.1
1,516.5
1,487.6
989.3
864.7
2017
60.7
161.4
222.0
2016
2017
2016
72.9
3,562.7
3,290.2
156.0
228.9
EBITDA, adjusted2)
413.2
354.6
218.8
214.4
95.6
82.2
– 81.7
– 55.7
645.8
595.5
EBITDA margin,
adjusted2)
Thereof income from
investments
Thereof accounted for
using the equity method
Depreciation, amortiza-
tion, impairments, and
write-ups (except from
non-recurring effects and
purchase price
allocations)
EBIT, adjusted2)
Amortization and
impairments from
purchase price
allocations
41.0%
40.3%
14.5%
14.5%
9.7%
9.6%
18.1%
18.1%
1.0
1.0
0.4
10.0
16.9
0.1
6.3
12.7
5.7
1.8
1.3
– 0.7
0.0
16.0
18.7
– 6.2
– 0.4
0.0
8.8
6.6
– 52.2
– 37.0
– 35.8
– 33.5
– 18.2
– 14.8
– 35.7
– 39.0
– 141.9
– 124.3
361.0
317.6
182.9
180.9
77.4
67.4
– 117.4
– 94.8
504.0
471.1
– 55.6
– 58.8
– 21.9
– 22.9
– 16.7
– 26.6
0.0
0.0
– 94.2
– 108.3
Non-recurring effects
– 17.2
54.1
– 66.2
74.0
36.8
40.9
163.5
65.6
117.0
234.6
Segment earnings before
interest and taxes
Financial result
Income taxes
Income from continued
operations
Income from
discontinued operations
Net income
288.2
312.9
94.8
232.1
97.6
81.6
46.1
– 29.1
526.7
597.5
– 18.4
– 21.4
– 130.2
– 126.1
378.0
450.0
1.3
1.9
379.3
451.9
1) Adjustment of segment name (see Annual Report 2017, p. 11 and note (30a)).
2) Adjusted for non-recurring effects (see Annual Report 2017, p. 33 and note (31)).
Geographical information (30)
€ millions
Revenues
Non-current segment assets
Germany
Other countries
Consolidated totals
2017
2016
2017
2016
2017
2016
1,802.9
1,725.9
1,759.8
1,564.3
3,562.7
3,290.2
1,352.5
1,388.3
3,003.6
3,323.0
4,356.1
4,711.3
(31)
(31)
96
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial
Statements
General information
(1) Basic principles
Axel Springer SE is a European exchange-listed stock
corporation (Societas Europaea) with its registered head
office in Berlin, Germany. The company is registered in
the Commercial Register of the local court Berlin-Char-
lottenburg under number HRB 154517 B. The principal
activities of Axel Springer SE and its subsidiaries (“Axel
Springer Group”, “Axel Springer” or the “Group”) are de-
scribed in note (30a).
On February 20, 2018, the Executive Board of Axel
Springer SE authorized the consolidated financial state-
ments for fiscal year 2017 and subsequently presented
them to the Supervisory Board for approval. The consoli-
dated financial statements were prepared by application
of Section 315e HGB in accordance with the Interna-
tional Financial Reporting Standards (IFRS) of the Inter-
national Accounting Standards Board (IASB) and the in-
terpretations of the IFRS Interpretations Committee
(IFRS IC) approved by the IASB, in effect and recognized
by the European Union (EU) on the reporting date. The
reporting currency is the euro (€); unless otherwise indi-
cated, all figures are stated in euro millions (€ millions).
Totals and percentages have been calculated based on
the euro amounts before rounding and may differ from a
calculation based on the reported million euro amounts.
The consolidated financial statements and consolidated
management report will be published in the Federal Ga-
zette in Germany.
(2) Consolidation
(a) Consolidation principle
The financial consolidated statements include Axel
Springer SE and its subsidiaries over which Axel Springer
SE either directly or indirectly has control, can influence
variable outflows from the subsidiary, and is exposed to
the variability of these outflows.
The consideration transferred in business combinations
is offset against the pro-rated fair value of the acquired
assets and liabilities on the acquisition date. Any remain-
ing positive difference allocated to our interests is capital-
ized as goodwill and recognized in the amount allocated
to our shares, unless we acquire all shares in the com-
pany. Negative differences are immediately recognized
as income. The acquisition date indicates the time at
which the possibility for gaining control of the acquired
business or company was obtained. We offset differ-
ences arising from disposals and purchases of non-con-
trolling interests in equity.
If in the context of business combinations reciprocal call
and put options for the remaining non-controlling inter-
ests are agreed upon, in which the acquisition price to
be paid is based on future company results, we assume
an anticipated acquisition of these remaining shares. In-
sofar, non-controlling interests are not disclosed. The
contingent consideration for these shares is accounted
for as a financial liability measured at fair value. The ef-
fects of its remeasurement at each balance sheet date
are recorded in the income statement.
Associated companies in which the Axel Springer Group
can exert significant influence over the financial and op-
erating policies, as well as joint venture companies that
are managed jointly by Axel Springer and one or more
other parties, are included in the consolidated financial
statements by application of the equity method. The
IFRS separate and consolidated financial statements of
these companies as at the Axel Springer Group’s report-
ing date, respectively, serve as the basis for applying the
equity method. Goodwill and assets and liabilities in-
cluded in the amortized carrying amount are accounted
for using the accounting principles applied to business
combinations. Losses that exceed the carrying amount
of the investment, or any other long-term receivables re-
lated to the financing of these companies, are not recog-
nized, unless the Axel Springer Group is bound by addi-
tional contribution requirements. Intercompany profits
and losses are eliminated on a pro-rated basis. The car-
rying amounts of investments are tested for impairment;
if impairments exist, they are written down to the lower
recoverable amount.
97
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(b) Companies included in the consolidated
financial statements
Companies included in the consolidated financial state-
ments broke down as follows:
Fully consolidated companies
Germany
Other countries
Investments accounted for using the
equity method
Germany
Other countries
12/31/2017 12/31/2016
88
136
7
6
79
120
5
6
Consolidated companies are listed in note (42). Essen-
tially, the following major changes occurred in 2017:
At the beginning of January, we acquired 100 % of the
shares in ShareASale.com Inc., Chicago, USA, through
AWIN Inc. (previously Digital Window, Inc.), Wilmington,
USA. ShareASale.com Inc. has been included in our
consolidated financial statements by means of full con-
solidation since then.
At the beginning of October, United Internet has contrib-
uted 100 % of the shares in affilinet GmbH, Munich, into
AWIN AG, Berlin, and thereby received 20 % of the
shares in the Awin Group (including affilinet). As a conse-
quence of this transaction, we have fully consolidated af-
filinet GmbH and six further foreign subsidiaries since
then.
The other changes relate to initial consolidations, decon-
solidations, mergers, and liquidations which are immate-
rial for the consolidated financial statements.
(c) Acquisitions and divestitures
At the beginning of January 2017, we have acquired
through AWIN Inc. (previously Digital Window,Inc.), Wil-
mington, USA, a company of the Awin Group (previously
zanox Group) owned by Axel Springer, and consolidated
100 % of the shares in ShareASale.com Inc., Chicago,
USA, a leading affiliate network in the USA.
Acquisition costs amounted to € 44.4 million and, in ad-
dition to the purchase price of € 33.1 million paid in
2017, include a paid purchase price adjustment of
€ 2.0 million as well as a contingent purchase price liabil-
ity of € 9.3 million recorded at the acquisition date which
is dependent upon reaching earnings targets in 2017.
The acquisition-related expenses recorded in other oper-
ating expenses totaled € 0.2 million.
Based on the purchase price allocation, the acquisition
costs were allocated to the purchased assets and liabili-
ties on the acquisition date as follows:
€ millions
Intangible assets
Other assets
Cash and cash equivalents
Provisions and liabilities
Deferred tax liabilities
Net assets
Acquisition cost
Goodwill
Carrying
amount
after
acquisition
25.7
2.2
16.2
– 15.2
– 10.2
18.8
44.4
25.5
Of the intangible assets acquired, intangible assets with
carrying amounts of € 12.0 million have indefinite useful
lives. The non-tax-deductible goodwill is above all at-
tributable to inseparable values such as employee exper-
tise, expected synergy effects from the integration and
the strategic advantages resulting from the leading mar-
ket position and digital range of the company, and was
allocated to the Marketing Media segment.
Since first inclusion as of the beginning of January 2017,
ShareASale contributed to consolidated revenues in the
amount of € 14.0 million and to consolidated net income
in the amount of € 6.1 million.
As of October 1, 2017, Axel Springer and United Inter-
net have merged their respective companies Awin and
affilinet to create a common affiliate network. Axel
98
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Springer thereby strengthens its market position in affili-
ate marketing business. After contributing 100 % of the
affilinet shares, United Internet holds 20 % in the Awin
Group.
The preliminary acquisition costs for the acquisition of
the affilinet Group amounted to € 100.6 million and com-
prised the purchase price of € 1.4 million paid in 2017,
and the fair value of the 20 % of the shares in the Awin
Group given in exchange totaling € 99.2 million. As a re-
sult of the exchange following the contribution of the
Awin shares, a positive difference of € 61.6 million was
recorded directly in equity (thereof € 20.1 million attribut-
able to non-controlling shareholders), taking into account
the fair value of these shares and the addition of non-co-
trolling interests in the amount of € 37.6 million. The
share of the net assets of the Awin Group, which was at-
tributable to non-controlling shareholders, increased by
€ 56.6 million of which € – 1.1 million resulting from for-
eign currency translation effects needed to be reclassi-
fied into the according accumulated other comprehen-
sive income position. The acquisition-related expenses
recorded in other operating expenses amounted to
€ 0.5 million.
Based on the preliminary purchase price allocation, the
preliminary acquisition costs were allocated to the pur-
chased assets and liabilities at the acquisition date as
follows:
€ millions
Intangible assets
Property, plant, and equipment
Trade receivables
Other assets
Cash and cash equivalents
Trade payables
Provisions and other liabilities
Deferred tax liabilities
Net assets
Acquisition cost (preliminary)
Goodwill (preliminary)
Carrying
amount
after
acquisition
29.2
0.7
30.2
1.0
3.6
– 26.0
– 6.2
– 9.5
23.1
100.6
77.5
The purchase price allocation considers all knowledge
and adjusting events about conditions that already ex-
isted on the acquisition date, and has not yet been com-
pleted, particularly due to the closeness in time to the re-
porting date.
Of the intangible assets acquired, intangible assets with
carrying amounts of € 20.8 million have indefinite useful
lives. The non-tax-deductible goodwill is above all at-
tributable to inseparable values such as employee exper-
tise, expected synergy effects from the integration and
the strategic advantages resulting from the leading mar-
ket position and digital reach of the company, and was
allocated to the Marketing Media segment.
The gross amount of the acquired trade receivables was
€ 31.1 million. Corresponding valuation allowances of
€ 0.9 million were recorded.
Since initial consolidation as of the beginning of October
2017, the affilinet Group contributed to consolidated rev-
enues in the amount of € 37.5 million and to consoli-
dated net income in the amount of € 0.6 million. If the af-
filinet Group had already been fully consolidated on
January 1, 2017, the affilinet Group would have contrib-
uted to consolidated revenues in the amount of
€ 155.9 million and to consolidated net income in the
amount of € 4.7 million.
99
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Further business combinations that occurred in the
reporting period related in particular to the acquisition of
100 % of the shares in CV Keskus OÜ, Tallinn, Estonia,
Tourismuszentrum GmbH Mecklenburgische Ost-
seeküste, Kröpelin, ICI Formations SAS, Paris, France, t-
bee GmbH, Puchheim, Turijobs Tourism Services S.L.,
Barcelona, Spain, G-Construct SA, Brussels, Belgium
and Autobazar.EU portál s.r.o., Topreality.sk s.r.o. und
RealSoft s.r.o, all Nové Mesto nad Váhom, Slovakia, as
well as the acquisition of a division of Ad Up Technology
AG, Hamburg. These business acquisitions were gener-
ally carried out in the context of our strategy to become
the leading digital publisher and individually had no major
effects on the financial position, liquidity, and financial
performance of the Axel Springer Group.
The acquisition costs for the acquisitions – which are
partly preliminary – carried out in the reporting period
amounted to € 36.9 million and contained besides the
purchase prices paid also contingent considerations
amounting to € 3.9 million. The acquisition-related ex-
penses recorded in other operating expenses totaled
€ 0.2 million.
The contingent considerations resulted from earn-out
agreements, and were recorded at their fair values on
the acquisition date. The fair value predominantly de-
pends on earnings performance of the acquired compa-
nies in the years prior to possible payment dates or exer-
cise dates.
The cumulative acquisition costs of the business combi-
nations were allocated to the purchased assets and lia-
bilities based on the partly preliminary purchase price al-
locations as follows:
€ millions
Intangible assets
Property, plant, and equipment
Trade receivables
Other assets
Cash and cash equivalents
Trade payables
Provisions and other liabilities
Deferred tax liabilities
Net assets
Acquisition cost (preliminary)
Goodwill (preliminary)
Carrying
amount
after
acquisition
20.9
0.2
0.8
0.6
1.2
– 1.1
– 1.2
– 3.0
18.3
36.9
18.6
The purchase price allocations consider all knowledge
and adjusting events regarding conditions that already
existed on the acquisition date, and have not yet been
completed for some acquisitions because of the close-
ness in time to the publication of the consolidated finan-
cial statements.
Of the intangible assets acquired in these acquisitions,
intangible assets with carrying amounts of € 9.5 million
have indefinite useful lives. The predominantly non-tax-
deductible goodwill is above all attributable to insepara-
ble values such as employee expertise as well as ex-
pected synergy effects from the integration and was allo-
cated to the News Media (€ 11.9 million) and Classifieds
Media (€ 6.7 million) segments.
Since their respective initial consolidations, these compa-
nies have contributed to the 2017 consolidated revenues
in the amount of € 5.5 million and to the 2017 consoli-
dated net income in the amount of € 1.2 million. If these
acquisitions had already been finalized on January 1,
2017, consolidated revenues 2017 would have in-
creased by € 10.1 million and consolidated net income
2017 by € 0.7 million.
In June 2017, Axel Springer Digital Classifieds France
entered into a purchase agreement with the French me-
dia holding company Spir Communication SA ("Spir") for
100
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
the purchase of 100 % of the shares of Spir's subsidiary
Concept Multimédia SAS for a purchase price of
€ 105 million, taking into consideration purchase price
adjustments which are to be determined on the basis of
net debt and net cash. The transaction was approved by
the French antitrust authorities at the end of January
2018 and completed in early February 2018. In particu-
lar, Concept Multimédia, headquartered in Aix-en-Pro-
vence and Paris, runs under the core brand of Logic-
Immo.com a real estate portal in France as well as addi-
tional online portals for mediation of luxury real estate
and newly-built properties.
Additional transactions carried out in the reporting pe-
riod, as well as finalizations of purchase price allocations
arising from acquisitions of companies in the prior year,
had no material effects individually and collectively on the
financial position, liquidity, and financial performance of
the Axel Springer Group.
Acquisitions and divestitures in the prior year:
As part of the expansion of our digital activities in the
English-speaking countries and the expansion of the in-
novative paid-content portfolio, we acquired approxi-
mately 93 % of the shares in eMarketer Inc., New York,
USA at the beginning of July 2016. eMarketer is a lead-
ing provider of high-quality analyses, studies and digital
market data for companies and institutions. Reciprocal
call and put options were agreed upon for the remaining
approximately 7 % of the shares, for which the purchase
price to be paid will be measured by the future corporate
earnings of eMarketer. Insofar non-controlling interests
are not accounted for in this respect.
The acquisition costs amounted to € 219.0 million and
comprised the purchase price paid in July 2016 in the
amount of € 207.0 million, a purchase price adjustment
paid in October 2016 in the amount of € 2.0 million as
well as a contingent purchase price liability of € 10.0 mil-
lion recorded at the acquisition date for the agreed op-
tion rights. The acquisition-related expenses recorded in
other operating expenses of the fiscal year 2016
amounted to € 1.6 million.
Based on the purchase price allocation, the acquisition
costs were allocated to the purchased assets and liabili-
ties on the acquisition date as follows:
€ millions
Intangible assets
Property, plant, and equipment
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Trade payables
Provisions and other liabilities
Deferred tax liabilities
Net assets
Acquisition cost
Goodwill
Carrying
amount
after
acquisition
137.2
5.1
5.6
22.3
0.4
8.7
– 3.3
– 25.1
– 57.5
93.5
219.0
125.5
Of the intangible assets acquired, intangible assets with
carrying amounts of € 79.0 million have indefinite useful
lives. The non-tax-deductible goodwill is above all at-
tributable to inseparable values such as employee exper-
tise, expected synergy effects from the integration and
the strategic advantages resulting from the leading mar-
ket position of the company, and was allocated to the
News Media segment.
The gross amount of the acquired trade receivables was
€ 5.6 million. No valuation allowances were recorded.
Since initial consolidation as of July 8, 2016, eMarketer
contributed to consolidated revenues 2016 in the
amount of € 13.8 million and to consolidated net income
2016 in the amount of € – 3.5 million. If eMarketer had
already been fully consolidated on January 1, 2016,
eMarketer would have contributed to consolidated reve-
nues 2016 in the amount of € 33.7 million and to consol-
idated net income 2016 in the amount of € – 3.9 million.
101
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
In order to strengthen our market position in Scandina-
via, we acquired 75.96 % of the shares of Land & Lei-
sure A/S, Copenhagen, Denmark, at the end of July
2016 via the @Leisure Group through a public takeover
offer. Land & Leisure A/S offers vacation homes under
the brand DanCenter and accommodations in holiday
parks in Denmark, Sweden, Norway, and Germany un-
der the brand Danland.
The preliminary acquisition costs amounted to € 47.0
million and included the purchase price paid in 2016.
The acquisition-related expenses recorded in other oper-
ating expenses of the fiscal year 2016 amounted to
€ 0.8 million.
Based on the preliminary purchase price allocation, the
preliminary acquisition costs were allocated to the pur-
chased assets and liabilities at the acquisition date as
follows:
€ millions
Intangible assets
Property, plant, and equipment
Non-current financial assets
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Trade payables
Provisions and other liabilities
Deferred tax liabilities
Net assets
Share of non-controlling interests in net assets
Acquisition cost (preliminary)
Goodwill (preliminary)
Carrying
amount
after
acquisition
43.7
4.8
1.1
7.9
1.8
0.1
12.8
– 13.9
– 4.1
– 9.7
44.4
10.2
47.0
12.8
The purchase price allocation considers all knowledge
and adjusting events about conditions that already ex-
isted on the acquisition date, and had not yet been com-
pleted, particularly due to the closeness in time to De-
cember 31, 2016.
Of the intangible assets acquired, intangible assets with
carrying amounts of € 32.8 million have indefinite useful
lives. The non-tax-deductible goodwill is above all at-
tributable to inseparable values such as employee exper-
tise, expected synergy effects from the integration and
the strategic advantages resulting from the leading mar-
ket position and digital range of the company, and was
allocated to the Classifieds Media segment.
In September 2016, we increased our share in Land &
Leisure to 93.17 % at a purchase price of € 10.6 million
and acquired the remaining approximately 6.8 % of the
share capital at a purchase price of € 3.5 million as part
of a squeeze-out process in November 2016. Both
transactions were treated in the balance sheet as an ac-
quisition of non-controlling interests (€ 10.2 million). The
difference in the amount of € 3.9 million was offset in ac-
cumulated retained earnings attributable to the share-
holders of Axel Springer SE.
The gross amount of the acquired trade receivables was
€ 8.4 million. Corresponding valuation allowances of
€ 0.5 million were recorded.
Since initial consolidation as of the end of July 2016,
Land & Leisure contributed to consolidated revenues
2016 in the amount of € 15.1 million and to consolidated
net income 2016 in the amount of € – 0.6 million. If Land
& Leisure had already been fully consolidated on January
1, 2016, Land & Leisure would have contributed to con-
solidated revenues 2016 in the amount of € 41.5 million
and to consolidated net income 2016 in the amount of
€ 3.0 million.
In December 2016, we entered into an option agreement
to acquire the remaining 47.5 % shares in the Awin
Group (previously zanox Group) and treated it as an ac-
quisition of non-controlling interests. The share of the net
assets of the Awin Group, which was attributable to non-
controlling shareholders, amounted to € 44.5 million of
102
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
which € 4.9 million resulting from foreign currency trans-
lation effects needed to be reclassified into the according
accumulated other comprehensive income position. Due
to the option agreement, a liability for contingent consid-
eration was recorded in the amount of € 63.1 million.
The remaining difference of € 23.5 million was offset
within the accumulated retained earnings attributable to
the shareholders of Axel Springer SE which decreased
accordingly. Overall, the equity was reduced by
€ 63.1 million.
Further business combinations that occurred in 2016
related in particular to the acquisition of 50.01 % of the
shares in Traum-Ferienwohnungen GmbH, Bremen, of
60.4 % of the shares in infoRoad GmbH, Heroldsberg, as
well as 100 % of the shares in Good & Co Labs, Inc.,
San Francisco, USA, and Milkround Online Ltd., London,
United Kingdom. These business combinations were
carried out in the context of our strategy to become the
leading digital publisher, and individually had no material
effects on the financial position, liquidity, and financial
performance of the Axel Springer Group.
The acquisition costs for the acquisitions – which are
partly preliminary – carried out in 2016 – amounted to
€ 41.2 million and contained besides the purchase
prices paid in 2016 also contingent considerations
amounting to € 2.6 million. The acquisition-related ex-
penses recorded in other operating expenses of the fis-
cal year 2016 totaled € 0.2 million.
The contingent considerations resulted from earn-out
agreements as well as from option rights for the pur-
chase of the remaining shares, and were recorded at
their fair values on the acquisition date. The fair value
predominantly depends on earnings performance of the
acquired companies in the years prior to possible pay-
ment dates or exercise dates of the options.
The cumulative acquisition costs of the business combi-
nations in 2016 were allocated to the purchased assets
and liabilities based on the partly preliminary purchase
price allocations as of December 31, 2016, as follows:
€ millions
Intangible assets
Property, plant, and equipment and non-current financial
assets
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Trade payables
Financial liabilities
Provisions and liabilities
Deferred tax liabilities
Net assets
Share of non-controlling interests in net assets
Acquisition cost (preliminary)
Goodwill (preliminary)
Carrying
amount
after
acquisition
39.6
0.3
0.7
1.4
3.3
0.9
– 0.1
– 0.2
– 7.2
– 13.0
25.7
11.2
41.2
26.7
The purchase price allocations consider all knowledge
and adjusting events regarding conditions that already
existed on the acquisition date, and have not yet been
completed for some acquisitions because of the close-
ness in time to the publication of the consolidated finan-
cial statements 2016.
Of the intangible assets acquired in these acquisitions,
intangible assets with carrying amounts of € 23.7 million
have indefinite useful lives. The predominantly non-tax-
deductible goodwill is above all attributable to insepara-
ble values such as employee expertise as well as ex-
pected synergy effects from the integration and was allo-
cated to the Classifieds Media (€ 24.6 million) and News
Media (€ 2.1 million) segments.
Since their respective initial consolidations, these compa-
nies have contributed to the 2016 consolidated revenues
in the amount of € 9.3 million and to the 2016 consoli-
dated net income in the amount of € – 3.2 million. If
these acquisitions had already been finalized on January
1, 2016, consolidated revenues 2016 would have
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
changed by € 12.5 million and consolidated net income
2016 by € – 3.0 million.
At the beginning of January 2016, we jointly established
with Ringier the company Ringier Axel Springer
Schweiz AG, Zurich, Switzerland, in which we hold
50 % of the shares. The company gathers all Swiss-Ger-
man and West Swiss newspaper titles (including their as-
sociated online portals) and the West Swiss broadsheet,
Le Temps, belonging to Ringier and the entire business
of Axel Springer in Switzerland. Due to rights granted to
Ringier under the shareholder agreement, the company
has been included in the consolidated financial state-
ments using the equity method since then, see note (7a).
The carrying amounts contributed at the beginning of
2016 and of the assets and liabilities received in return as
well as the recognition to profit or loss of foreign cur-
rency translation differences previously recognized in
other comprehensive income in equity were as follows:
€ millions
Fair value of investment
Receivable from disposal of trademarks
Other contractual claims and obligations
Additions net assets
Goodwill
Intangible assets
Property, plant, and equipment and non-current financial
assets
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Provisions and liabilities
Deferred tax liabilities
Disposal net assets
Cumulative translation differences
Result from disposal
Carrying
amount
140.2
40.6
– 16.9
163.9
62.3
88.1
4.1
3.0
6.2
9.0
4.0
– 56.0
– 10.0
110.7
49.0
102.2
The income from disposal recorded in other operating in-
come of 2016 amounted to € 102.2 million, was allo-
cated to the News Media segment and adjusted as a
non-recurring effect.
In January 2016, our shares (90.3 %) in the previously fully
consolidated Automotive Exchange Private Limited,
Mumbai, India (CarWale), were sold completely at a dis-
posal price totaling € 81.1 million. The purchase price af-
ter deduction of taxes amounted to € 64.0 million. The
profit reported in other operating income of 2016 totaled
€ 83.3 million, was allocated to the Classifieds Media
segment and adjusted as a non-recurring effect. The car-
rying amounts of the assets and liabilities disposed of
were as follows:
€ millions
Goodwill
Intangible assets
Property, plant, and equipment
Trade receivables
Other assets
Cash and cash equivalents
Trade payables
Financial liabilities
Provisions and liabilities
Deferred tax liabilities
Disposal net assets
Share of non-controlling interests in net assets
Cumulative translation differences
Selling price
Gain on disposal before taxes
Carrying
amount
11.0
5.1
0.7
1.2
2.6
0.1
– 0.5
– 15.5
– 4.2
– 1.6
– 1.2
– 1.2
2.2
81.1
83.3
Further divestments finalized in 2016 related to dis-
posal of 91.0 % of the shares in Smarthouse Media
GmbH, Karlsruhe, 100 % of the shares in Axel Springer
Vertriebsservice GmbH, Berlin, as well as the contribu-
tion of 100 % of the shares in Poliris S.A.S., Paris,
France, into AC3 SAS which was founded together with
Gercop. These divestments individually had no material
effects on the financial position, liquidity, and financial
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
performance of the Axel Springer Group. The cumulative
gain on disposal recorded in other operating income or
other operating expenses 2016 with respect to these fur-
ther divestments amounted to € 17.5 million and was
adjusted as a non-recurring effect. The carrying amounts
of the assets and liabilities disposed of were as follows:
€ millions
Goodwill
Intangible assets
Property, plant, and equipment
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Trade payables
Financial liabilities
Provisions and liabilities
Deferred tax liabilities
Disposal net assets
Share of non-controlling interests in net assets
Selling price
Gain on disposal
Carrying
amount
9.9
13.8
1.1
12.5
1.6
0.6
9.6
– 1.5
– 0.2
– 20.1
– 4.4
23.1
0.4
40.2
17.5
Additional transactions carried out in 2016, as well as fi-
nalizations of purchase price allocations arising from
company acquisitions in the reporting year 2015, had no
material effects individually or collectively on the financial
position, liquidity, and financial performance of the Axel
Springer Group.
(d) Discontinued Operations
In 2014, we sold our German regional newspapers, TV
program guides and women's magazines. In the reporting
year, the resulting subsequent income and expenses were
shown separately as discontinued operations in the same
way as in the previous year.
For a part of the purchase price, the FUNKE Medien-
gruppe was granted a multi-year subordinated vendor
loan from the Axel Springer SE. The loan was fully repaid
in the previous year (see note (29)).
The results of the discontinued operations are as follows:
Mio. €
2017
2016
Gain on disposal of discontinued
operations before taxes
Taxes on the gain on disposal
Gain on disposal of discontinued
operations after taxes
Income from discontinued operations
(after taxes)
1.9
– 0.6
1.3
1.3
2.8
– 0.9
1.9
1.9
As in the previous year, the cash inflows and cash out-
flows attributed to the discontinued operations were only
included in the cash flow from investing activities and
amounted to € – 2.1 million (PY: € – 3.2 million).
(e) Translation of separate financial statements
denominated in foreign currency
Assets and liabilities of subsidiaries for which the func-
tional currency is not the euro have been translated at
the exchange rate in effect on the reporting date. Good-
will and fair value adjustments of assets and liabilities re-
lated to the acquisition of companies outside the Euro-
pean Monetary Union are assigned to the acquired
company and accordingly translated at the exchange
rate in effect on the reporting date.
Items of the income statement of these subsidiaries have
been translated at the weighted average exchange rate
for the year. Equity components have been translated at
the historical exchange rate at the date of origination.
Foreign exchange differences resulting from the transla-
tion have been recognized within accumulated other
comprehensive income and/or non-controlling interests.
105
Annual Report 2017
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The exchange rates to the euro of foreign currencies that
are significant for the Axel Springer Group underwent the
following changes in the past year:
1 € in foreign
currency
Average price
Exchange rate on
balance sheet date
Polish zloty
Swiss franc
US-Dollar
Hungarian
forint
2017
2016 12/31/2017 12/31/2016
4.26
1.11
1.13
4.36
1.09
1.11
4.18
1.17
1.20
4.42
1.08
1.06
309.29
311.44
310.03
309.82
British pound
0.88
0.82
0.89
0.86
(3) Explanation of significant accounting and
valuation methods
(a) Basic Principals
The accounting and valuation principles applied uniformly
across the Axel Springer Group in fiscal year 2017 are
basically the same as those applied in the previous year.
For information on the accounting and valuation methods
resulting from new or revised IFRS Standards and IFRS
IC Interpretations, please refer to note (3q).
(b) Recognition of income and expenses
The Axel Springer Group mainly generates advertising
and circulation revenues. Revenues are recognized at
the time when the significant risks of ownership have
passed to the buyer/the services have been rendered,
the amount of revenue can be reliably measured, and it
is sufficiently probable that the economic benefits will
flow to the enterprise. Revenues are stated net of any
discounts allowed. Revenues from services rendered
over a certain period in an indefinite number of transac-
tions are recognized on a straight-line basis over the
contractual term.
Advertising revenues include sales from the online classi-
fied offerings, reach-based marketing and performance
marketing, as well as from advertising marketing for our
digital media and print media.
Circulation revenues encompass the sales of print media
to retailers, wholesalers, and subscribers. Revenue is not
recognized for that portion of products sold, which can
be expected, on the basis of historical experience, to be
returned. In addition, circulation revenues include the
sale of digital subscriptions.
Where significant risks and rewards of business activities
do not lie with the Axel Springer Group or the income is
collected in the interest of third parties, only the corre-
sponding commission income or proportion of revenue
accruing to the Axel Springer Group are recognized as
revenues.
Offers that contain multiple service components ("bundle
products") are separated for purposes of revenue recog-
nition when the delivered components have an inde-
pendent benefit and the market values of goods not yet
delivered or services not yet performed can be deter-
mined objectively. The total remuneration for these offers
is distributed in principle among the individual service
components in such a way that the service components
still to be provided are allocated part of the remuneration
in the amount of their fair value, and then the service
components already provided are allocated the remain-
ing remuneration in proportion to their fair values.
Revenues from barter transactions are recognized if the
goods or services exchanged are dissimilar and the
amount of revenue can be measured reliably. Revenues
are measured at the fair value of services received. If the
fair value of the service received under barter transac-
tions cannot be measured reliably, the fair value is deter-
mined on the basis of the service rendered.
Other income is recognized when the future inflow of
economic benefits from the transaction can be meas-
ured reliably and was received by the company during
the reporting period.
Operating expenses are recognized either when the cor-
responding goods or services are sold or rendered, or at
the time of their origination.
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Interest expenses and income are recognized on an ac-
crual basis in the period of their occurrence. Interest ex-
penses incurred in connection with the acquisition and
production of qualified assets are capitalized as assets in
the financial statements. Dividend income is recognized
when the legal entitlement is constituted.
(c) Intangible assets
Internally generated intangible assets are measured as
the sum of costs incurred in the development phase
from the time when the technical and economic feasibil-
ity has been demonstrated until the time when the intan-
gible asset has been completed. The capitalized produc-
tion costs include all costs that are directly or indirectly
allocable to the development phase. Costs for the self-
development of websites are capitalized only when the
website directly serves the generation of revenues. Pur-
chased intangible assets are measured at cost.
Internally generated and purchased intangible assets that
have a determinable useful life are amortized over their
expected useful lives using the straight-line method,
starting from the time when they become available for
use by the enterprise, as follows:
Software
Licenses
Supply rights
Internet platform
Customer relationships
Useful life in
years
3 - 8
3 - 10
3 - 6
3 - 8
3 - 17
Intangible assets with an indefinite useful life, which in-
clude goodwill, title rights, and brand rights, are not
amortized. At present, the use of these assets by the
company is not limited by any economic or legal re-
strictions.
(d) Property, plant, and equipment
Property, plant, and equipment are measured at cost
and depreciated over their expected useful lives using
the straight-line method. Any gains or losses on the dis-
posal of property, plant, and equipment are recognized
as other operating income or expenses.
Leased assets whose economic benefits are attributable
to Axel Springer are recognized and measured at the
present value of the minimum future lease payments or
the lower fair value of the leased asset and depreciated
by the straight-line method over the minimum contract
term, taking any existing residual value into considera-
tion. When it is reasonably certain that ownership will
pass to Axel Springer at the end of the lease period,
such assets are depreciated over their useful lives. The
present value of the payment obligations associated with
the minimum future lease payments is recognized as a li-
ability.
For depreciation purposes, the following useful lives are
generally applied for property, plant, and equipment:
Buildings
Leasehold improvements
Printing machines
Editing systems
Other operational and business equipment
Useful life in
years
30 - 50
2 - 15
5 - 20
3 - 7
2 - 15
Capital investment subsidies and bonuses granted by
the government are recognized when it is reasonably
certain that the subsidies will be granted and the related
terms and conditions will be fulfilled. Bonuses and subsi-
dies granted for the acquisition or construction of prop-
erty, plant and equipment are recognized in a deferred
income item within other liabilities. In subsequent peri-
ods, the deferred income item is released and recog-
nized as income over the useful life of the corresponding
assets.
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Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(e) Investment property
Investment property intended for lease to third parties is
measured at amortized cost. Such property is depreci-
ated over a useful life of 50 years using the straight-line
method. For leased assets whose economic benefits are
attributable to Axel Springer, see note (3d).
(f) Recognition of impairment losses in intangible
assets, in property, plant, and equipment, and
in investment property
Impairment losses are recognized in intangible assets, in
property, plant, and equipment, and in investment prop-
erty when as a result of certain events or changed cir-
cumstances, the carrying amount of the assets is no
longer covered by the recoverable amount, i.e. the higher
of the fair value less cost of disposal (“net realizable
value”), and the value in use. If it is not possible to deter-
mine the recoverable amount of an individual asset, the
determination of the recoverable amount is carried out at
the cash generating unit level, or in the group of cash
generating units (each one a “reporting unit”) to which
the asset belongs.
Goodwill and intangibles with indefinite useful lives which
are acquired in the context of business combinations,
are not subject to amortization, and shall be tested at
least once annually for impairment. In order to carry out
the impairment tests, these assets are assigned to those
reporting units that can be expected to profit from the
synergies of the business combinations. These reporting
units represent the lowest level at which these assets are
monitored for management purposes. They generally
correspond to individual titles and digital products of the
Axel Springer Group. In the case of integrated business
models, individual titles and digital products are summed
up in a single reporting unit.
If the carrying amount exceeds the recoverable amount,
this results in an impairment loss. For reporting units, the
goodwill is initially reduced, and an additional impairment
loss is allocated pro rata to the carrying amounts of the
other assets of the reporting unit.
As a basic principle, the recoverable amount is initially
determined based on the value in use. The net realizable
value is additionally determined when the value in use is
less than the carrying amount. The net realizable value
corresponds to the amount reduced by the selling costs,
which can be achieved on commercial terms through the
sale of an asset or reporting unit. As quoted prices are
not observable, as a general rule, the net realizable value
is determined as the present value of future cash flows,
which are derived from the medium-term planning and
from the point of view of an independent third party.
Thus, the valuation is based on unobservable input fac-
tors (Level 3, see note (3g)).
The determination of the value in use is taking into con-
sideration the further use within the Group and is based
on the estimated future cash flows, which are derived
from the medium-term planning. Expenses of the
Group’s central operations are also taken into account.
Basically, the planning horizon for the medium-term plan-
ning is five years. However, the values in use are primar-
ily determined by the terminal value. The amount of the
terminal value depends on the forecasted cash flow in
the fifth year of medium-term planning, on the growth
rate of the cash flows subsequent to the medium-term
planning, and on the discount rate. The cash flows to be
received after the five-year period are extrapolated on
the assumption of a growth rate, which is derived from
the assumed average market or industry growth rate of
the reporting unit.
The discount rates for every business unit are deter-
mined with reference to the weighted average costs of
capital and costs of debt of comparable companies. In
this respect, country-specific risk premiums and tax
rates are taken into account.
Estimation uncertainties arise in the following assump-
tions applied in the calculations:
Medium-term planning: The medium-term planning is
determined on the basis of past historical values, and
factors in business-segment-specific expectations
about future market growth. Here, we assume that
cash flows in the electronic media sector will usually
exhibit higher growth rates than in the print sector.
108
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Discount rates: Based on the average weighted capi-
tal costs of the sector in question, the discount rates
of the reporting units also consider country-specific
risks, which reflect the current market estimates.
For financial assets and financial liabilities which need to
be measured at fair value, we apply the following valua-
tion hierarchy. Hereby, the input factors used in the valu-
ation models are categorized into three levels:
Growth rates: The growth rates are determined on the
basis of published market research reports for the
sectors in question. In estimating the long-term
growth rates with regard to the determination of the
value in use, due consideration was given to the com-
pensatory effects between the different business lines,
based on the adopted strategy of the Group.
Impairment losses are reversed when the recoverable
amount exceeds the carrying amount of an asset or a re-
porting unit, due to changes in the estimates upon which
the measurement is based. The reversal is limited to the
amount that would have resulted if previous impairment
losses had not been recognized. A recognized impair-
ment loss in goodwill is never reversed.
(g) Financial assets and liabilities
Financial assets are mainly composed of cash and cash
equivalents, trade receivables, receivables from related
parties, loans, investments, securities, and financial de-
rivatives with positive market values. Financial liabilities
are mainly composed of trade payables, liabilities due to
related parties, liabilities due to banks, promissory notes,
contingent consideration, and financial derivatives with
negative market values.
The initial recognition and derecognition of financial in-
struments coincide with the settlement dates of custom-
ary market purchases and sales of financial assets.
A financial asset is derecognized when the contractual
rights to the cash flows from the financial asset have ex-
pired or have been transferred to third parties, or when
the Group has assumed a contractual obligation to pay
the cash flows to a third party, under which the risks and
rewards or the power of control were transferred. A fi-
nancial liability is derecognized when the obligation un-
derlying the liability is settled or annulled, or has expired.
Level 1: Quoted (unadjusted) prices in active markets
for identical assets or liabilities (e.g. stock market
prices).
Level 2: Input factors other than prices quoted in
Level 1, which are observable for the asset or the lia-
bility, either directly or indirectly (e.g. interest yield
curves, forward rates).
Level 3: Input factors which are not observable on a
market for the asset or the liability (e.g. estimated fu-
ture results)
When determining the fair value, the application of rele-
vant and observable input factors is given high priority,
whereas the application of non-observable input factors
is given less priority. The classification of the valuation
models into the respective valuation hierarchy levels is
monitored at the end of each reporting period.
Investments and securities
Investments that have not been consolidated or ac-
counted for using the equity method in the consolidated
financial statements, as well as securities, are measured
at fair value if it can be determined reliably on the basis of
stock exchange or market prices and generally accepted
valuation methods, respectively. Otherwise, they are
measured at amortized cost. The valuation methods em-
ployed include especially the discounted cash flow
method (DCF method) based on the expected invest-
ment income. We assume that the fair value of invest-
ments and securities is not reliably measurable when ei-
ther material valuation differences appear in estimating
fair values based on projections and scenarios, or when
the likelihood of such projections and scenarios cannot
be reliably determined. Any unrealized gains or losses re-
sulting from the changes in fair value of the financial as-
sets and liabilities, considering resulting tax effects, are
recognized in accumulated other comprehensive in-
come. Changes in fair value are not recognized in profit
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Annual Report 2017
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
or loss until the corresponding non-current financial as-
sets are sold or an impairment loss is recognized.
The carrying amounts of investments and securities are
reviewed on every reporting date to determine whether
there are objective indications of a prolonged impair-
ment. We assume a prolonged impairment when the im-
pairment is significant, i.e. the impairment is at least 20 %
of the carrying amount of the investment, or if the impair-
ment already exists for twelve months. If a significant im-
pairment is found to exist, an impairment loss is recog-
nized in profit or loss.
Loans, receivables, and other financial assets
Upon initial recognition, loans, receivables, and other fi-
nancial assets are measured at fair value plus transaction
costs. In subsequent periods, they are measured at
amortized cost, after deduction of any write-downs, us-
ing the effective interest method. A write-down is taken
when objective indications suggest that the receivable
may not be fully collectible. Such an indication might be
the insolvency or other considerable financial problems
of the debtor, for example. The amount of the write-
down is measured as the difference between the carry-
ing amount of the receivable and the present value of the
estimated future cash flows from this receivable, dis-
counted by application of the effective interest rate.
Write-downs are charged against income both in the
form of an account for allowances on doubtful accounts
and by means of direct write-downs. The account for al-
lowances on doubtful accounts is used, in particular, for
allowances on doubtful trade receivables and receivables
due from related parties. If in subsequent periods the fair
value has objectively risen, the write-downs are reversed
and recognized in income in the appropriate amounts.
Financial derivatives
Financial derivatives are utilized to hedge against cur-
rency and interest rate risks that have an influence on fu-
ture cash flows. These are stated at their current market
value. The valuation is based on observable parameters,
using recognized valuation methods, and is particularly
influenced by the development of forward rates or yield
curves. If the conditions for the application of hedge ac-
counting are met, changes in the fair values, including
the tax effects, are recognized directly in equity as accu-
mulated other comprehensive income. The amounts rec-
ognized in accumulated other comprehensive income
are recycled when the underlying transaction is recog-
nized on the balance sheet or income statement. The
changes in the fair value of derivatives that do not meet
the conditions for the application of hedge accounting,
despite their economic hedging effect, are measured at
fair value through profit and loss. Furthermore, financial
derivatives are used to cover the risk of impairments of
investments and securities. When the underlying financial
assets are recognized at amortized costs because their
fair values are not reliably measurable, the financial deriv-
ative is recognized at amortized costs as well.
Contingent consideration
Contingent consideration arising from options written
over non-controlling interests and earn-out agreements
in connection with business combinations and the acqui-
sition of non-controlling interests are recognized at fair
value. To the extent it can be reliably measured, this
value is derived from the estimated profit trends of the
acquired companies in the years prior to the possible ex-
ercise dates of the options or the payment dates of the
earn-outs. In the subsequent periods, changes in the fair
value are recognized immediately in income. The dis-
count rates are determined on the basis of the Group’s
cost of debt. The earnings used as a basis for measure-
ment are generally EBITDA figures adjusted for material
non-recurring effects.
Other financial liabilities
Upon initial recognition, other non-derivative financial lia-
bilities are measured at fair value less transaction costs.
In subsequent periods, they are principally measured at
amortized cost using the effective interest method. Liabil-
ities arising from put options written over non-controlling
interests, which are not recognized as contingent con-
sideration, are measured at the present value of the re-
demption amount through profit or loss.
110
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Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(h) Inventories
Inventories are measured at cost. Purchase costs are
determined on the basis of a weighted average value.
Production costs include all costs directly related to the
units of production and production-related overhead
costs. Inventories are measured at the reporting date at
the lower of the purchase or production cost and the net
realizable value. The net realizable value is the estimated
selling price less estimated costs to be incurred until the
sale. The net realizable value of goods and services in
progress is calculated as the net realizable value of fin-
ished goods and services less remaining costs of com-
pletion. Impairments are reversed whenever the reasons
justifying an earlier write-down no longer exist.
(i) Assets held for sale and discontinued operations
Assets are classified as held for sale when their disposal
has been initiated, the sale of such is highly probable and
the asset or disposal group is available for immediate
sale in its present condition. The non-current assets held
for sale are measured at the lower of the carrying
amount or the fair value less costs to sell. Depreciation is
no longer applied to these assets. Liabilities that are held
in connection with assets held for sale are disclosed like-
wise separately in the balance sheet as a current item.
Discontinued operations represent a material geograph-
ical or operational line of business of the Group that is
available for sale.
The results from continued operations in the fiscal year
and the prior year are shown in the income statement.
The results from discontinued operations are shown sep-
arately. Cash inflows and cash outflows from discontin-
ued operations are shown separately in the notes to the
consolidated financial statements. The information in the
notes relates to the continued operations of the Group.
(j) Pension provisions
Pension obligations under defined benefit plans are de-
termined using the projected unit credit method under
which future changes in compensation and benefits are
taken into account. In order to calculate the pension pro-
visions, the present value of the obligations is netted
against the fair value of the plan assets.
The expected life spans of the participants are deter-
mined with reference to the country-specific recognized
actuarial tables. The present value of the defined benefit
commitments is determined by discounting the esti-
mated future cash outflows. The discount rate applied
for this purpose is determined with reference to high-
quality AA-rated corporate bonds that match the under-
lying pension obligations with respect to currency and
maturity. If corporate bonds with matching terms do not
exist, then the yields of these bonds at the balance sheet
date are adjusted along the yield curve for fixed-interest
government bonds using a constant spread over the
term of the underlying pension obligations.
The return underlying the measurement of the plan as-
sets is identical to the discount rate for defined benefit
commitments.
Actuarial gains and losses resulting from changes in ac-
tuarial parameters are offset against accumulated other
comprehensive income without affecting net income.
(k) Other provisions and accrued liabilities
Other provisions have been formed to account for all dis-
cernible legal and constructive obligations to third par-
ties, provided that the settlement of the obligation is
probable and the amount of the obligation can be reliably
estimated. The amount of each provision corresponds to
the expected settlement amount. In the case of long-
term provisions, the expected settlement amount is dis-
counted to the present value at the reporting date by ap-
plication of appropriate market rates of interest. Provi-
sions are recognized for restructuring expenses only
when the intended measures have been sufficiently con-
cretized and announced on or before the reporting date.
(l) Deferred taxes
Deferred taxes are recognized to account for the future
tax effects of temporary differences between the tax ba-
ses of assets and liabilities and the carrying amounts of
those assets and liabilities in the consolidated financial
statements, and for interest and tax loss carry-forwards.
Deferred taxes are measured on the basis of the tax laws
already enacted for those fiscal years in which it is prob-
able that the differences will reverse or the tax loss carry-
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
forwards can be utilized. Deferred tax assets are recog-
nized for temporary differences or interest and tax loss
carry-forwards only when the ability to utilize them in the
near future appears to be reasonably certain. Deferred
taxes are recognized for temporary differences resulting
from the fair value measurement of assets and liabilities
obtained through business combinations. Deferred taxes
are recognized for temporary differences relating to
goodwill only when the goodwill can be utilized for tax
purposes. Deferred tax assets and liabilities of tax
groups are netted if they are based on the same kind of
income taxes; otherwise, they are netted only if the de-
ferred taxes are based on the income taxes imposed by
the same tax authority and only when current taxes can
be netted as well.
(m) Treasury shares
Treasury shares are measured at cost and are charged
directly to equity.
(n) Share-based payment programs
As part of performance-based remuneration programs,
Axel Springer Group grants equity-settled and cash-set-
tled share-based payment programs. The compensation
components to be recognized as expenses over the
vesting period are measured as the fair value of the op-
tions granted at the time when they were granted (in
case of equity-settled programs) or at the reporting date
(in case of cash-settled programs). The fair values are
determined on the basis of generally accepted option
pricing models. The corresponding amount is recognized
in the additional paid-in capital (in the case of equity-set-
tled programs) or as provisions/liabilities (in the case of
cash-settled programs). Additions to liabilities or provi-
sions are recognized in personnel expenses; reversals
are accounted for in other operating income
(o) Transactions in foreign currencies
Purchases and sales in foreign currencies are translated
at the exchange rate on the date of the transaction. As-
sets and liabilities in foreign currencies are translated into
the functional currency at the exchange rate on the re-
porting date. Any foreign exchange gains or losses re-
sulting from such translations are recognized in income.
(p) Estimates and assumptions
The preparation of financial statements requires esti-
mates and assumptions, as well as the exercise of dis-
cretionary powers, which can have an impact on the
amount and disclosure of assets and liabilities, income
and expenses and contingent liabilities. Estimates and
assumptions are regularly reviewed and adjusted if nec-
essary. Nevertheless, they may differ from the actual val-
ues. Estimates and assumptions which are affected by
uncertainty are associated in particular with impairment
testing of goodwill and intangible assets with indefinite
useful lives (see note (3f)), for allocating purchase prices
(see note 2c)) and assessing contingent purchase price
liabilities (see note (3g)), setting actuarial parameters in
the context of the valuation of pension obligations (see
note (3j)), determining the amount of deferred tax assets
to be capitalized (see note (3l)), determining fair values of
financial assets (see note (3g)), accounting for other pro-
visions (see note (3k)), assessing share-based compen-
sation programs (see note (3n)), and the determination
of the useful lives of intangible assets (see note (3c)) and
property, plant and equipment (see note (3d)). Infor-
mation concerning the carrying amounts, which are
based on estimates and assumptions, can be found in
the comments on the specific line items.
(q) New accounting standards
In the fiscal year 2017, IFRS Standards or IFRIC Interpre-
tations to be applied for the first time caused no material
changes for Axel Springer. The following IFRSs have al-
ready been published, but have not yet been applied:
With the publication of the final version of IFRS 9 “Finan-
cial Instruments” in July 2014, the IASB completed its
project for replacing IAS 39 “Financial Instruments:
Recognition and Measurement”. IFRS 9 provides a
standardized approach for classification and measure-
ment of financial assets and liabilities which is primarily
based on the company's business model and the cash
flows of the financial instrument. Furthermore, IFRS 9
contains a new impairment model which also demands
the recording of expected losses in addition to incurred
losses. Finally, IFRS 9 also contains new guidelines for
the use of hedge accounting, targeted in particular at
better illustration of the risk management activities of a
112
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Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
company and the monitoring of non-financial risks. Axel
Springer has to apply IFRS 9 beginning with Janu-
ary 1, 2018. At the date of the initial application, we will
record the cumulative effects of applying the new stand-
ard in equity. Our analyses have shown that the classifi-
cation and valuation of financial assets as well as the ac-
counting for financial liabilities will only change to an
insignificant extent. In the future, we will generally recog-
nize investments that are not consolidated or not in-
cluded in the consolidated financial statements using the
equity method at fair value through profit or loss. On De-
cember 31, 2017 fair value adjustments recorded in ac-
cumulated other comprehensive income for investments
classified as available-for-sale will be reclassified into ac-
cumulated retained earnings. For all trade receivables,
contract assets in accordance with IFRS 15, as well as
receivables from leasing contracts in accordance with
IFRS 16, we will apply the simplified procedure for the
determination of risk provision for expected credit losses.
Therefore we do not expect any significant change in risk
provisions compared to the present accounting. The
hedge accounting is in principle simplified by the new
regulations. However, due to the low level of relevant
hedging instruments we expect no significant adaptation
effects. Overall, there will not be any significant changes
in the presentation and recognition of financial assets
and liabilities through the application of IFRS 9.
In May 2014, the IASB published the new standard for
revenue recognition, IFRS 15 “Revenue from Contracts
with Customers”, which will completely replace the exist-
ing regulations for the recognition of revenue, including
related interpretations, in accordance with IAS 18 “Reve-
nue” and IAS 11 “Construction Contracts”. Conse-
quently, revenues will be recognized in the future, when
the customer obtains control over the agreed goods and
services and can derive benefits from these. Revenues
are recognized in the amount of the consideration that
the company will presumably receive. The new standard
provides a five-step process, in which the volume of
sales and the time or the period of revenue recognition
can be determined. The model is as follows: Identifica-
tion of the customer contract, identification of the individ-
ual performance obligations, determination of the trans-
action price, allocation of the transaction price to the
separate contractual obligations, and the realization of
revenue when individual contractual obligations are ful-
filled. Furthermore, the new standard requires future
qualitative and quantitative disclosures which go far be-
yond the current regulations. Axel Springer has to apply
IFRS 15 beginning with January 1, 2018. We will apply
the standard retrospectively, and will also report the
comparative period by applying the new standard in the
reporting year 2018. At Axel Springer, IFRS 15 will have
an impact in particular on contracts that can give rise to
a new classification, whether a principal or agent activity
exists. Thus, for each separate performance obligation it
is to be examined whether these are controlled prior to
transfer to the customer. As supportive indicators, only
the primary responsibility for provision of the service, the
inventory risk as well as the pricing competency are to
be taken into account in the assessment. Any potentially
existing default risk should be disregarded. Taking into
account the newly introduced control principle as well as
the modified indicators, the contractual relationships of
our business model in the area of Performance Market-
ing are to be accounted for as agent relationships from
2018 onwards. As a result of this change, both the reve-
nues of the Performance Marketing subsegment and the
material expenses will decrease. With respect to the fis-
cal year 2017, application of the new regulations would
result in a reduction in the revenues and the material ex-
penses of approximately € 500 million. This would corre-
spond to a decline in sales in the Performance Marketing
subsegment of around 75 %. Our Group performance
figures adjusted EBITDA and adjusted EBIT, as well the
balance sheet disclosure are not affected. The adjusted
EBITDA margin of the Group as well as of the Marketing
Media segment will increase accordingly. In addition, due
to IFRS 15, an adjustment in the bundle offerings would
result. In some cases, these contracts lead to an earlier
recognition of revenues, since instead of the residual
value method (see note (3b)), a price reduction in the
bundle offer will also be applied to the goods to be deliv-
ered or services to be rendered in proportion to their fair
values. The effects of these adjustments are, however, of
minor importance.
In the reporting period, we also have also conducted a
group-wide survey of the likely impact of the new lease
113
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
accounting standard (IFRS 16). In January 2016, IASB
published IFRS 16, “Leases”. IFRS 16 replaces IAS 17
“Leases” and the associated interpretations.
According to the new regulation, lessees are required to
account for all leases in the form of a right-of-use asset,
and a corresponding leasing liability. A leasing relation-
ship exists if the fulfillment of the contract depends on
the use of an identifiable asset, and the customer simul-
taneously obtains control of this asset. The presentation
in the income statement is essentially a financing trans-
action, so that the right-of-use asset usually is depreci-
ated in a linear manner, and the leasing liability is up-
dated in accordance with the effective interest method.
Leases with a total duration of a maximum of twelve
months, and leases of so-called low-value assets (new
value of up to USD 5,000) are excluded from this princi-
ple. In such cases, the lessee has the option of selecting
an accounting method which is similar to that of the pre-
vious operating lease. IFRS16 is to be applied at the lat-
est to fiscal years starting on or after January 1, 2019.
Axel Springer will avail of the possibility of early applica-
tion of the standard and apply IFRS 16 beginning with
January 1, 2018. On January 1, 2018, we will record the
cumulative effects of the initial application of the new
standard in equity. At Axel Springer, the new regulations
will affect in particular the accounting and valuation of
rental and lease contracts, which are currently classified
as operating leases. These mainly comprise office
spaces, leased vehicles and other leased operating and
office equipment, which will lead to the recognition of
right-of-use assets and corresponding leasing liabilities in
the future. We will make use of the duration-specific and
value-specific simplification rules described above. On
the basis of existing leasing relationships at the reporting
date, we expect an increase in the adjusted Group
EBITDA by approximately € 45-50 million in 2018 due to
the changed accounting for lease expenses; we do not
expect a significant effect on the adjusted Group's EBIT.
The increase in adjusted Group EBITDA 2018 is ex-
pected to be distributed as follows across the operating
segments: News Media (approximately 45 %), Classifieds
Media (approximately 35 %), Marketing Media (approxi-
mately 20 %). Taking into account the interest expenses
to be recorded in the financial result from the compound-
ing of the leasing liabilities, a negative effect on the net
income for 2018 in the low single-digit million Euro range
results. Due to the reporting of the leasing liabilities in the
fiscal year 2018, net debt is expected to increase by ap-
proximately € 200 million to € 220 million. At the same
time, due to the future disclosure of the lease payments
in the cash flow from financing activities, the free cash
flow 2018 will increase by around € 40 million to
€ 45 million.
Furthermore, IASB and IFRS IC have published addi-
tional pronouncements that have had, or will have, no
material influence on our consolidated financial state-
ments.
114
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated statement of financial position
(4) Intangible assets
The changes in intangible assets were as follows:
€ millions
Acquisition or production cost
Balance as of January 1, 2016
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Transfers
Purchased
rights and
licenses
Internally
generated
rights
Goodwill
Total
2,012.1
208.7
2,277.9
4,498.7
210.6
– 23.7
– 12.4
35.2
– 9.8
– 20.9
9.9
– 4.5
– 8.7
64.9
– 2.3
20.9
168.8
– 8.9
– 13.2
0.0
0.0
0.0
389.2
– 37.2
– 34.3
100.1
– 12.0
0.0
Balance as of December 31, 2016
2,191.1
288.9
2,424.6
4,904.6
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Transfers
Balance as of December 31, 2017
Depreciation, amortization, and impairments
Balance as of January 1, 2016
Deconsolidation
Currency effects
Additions
Disposals
Transfers
Balance as of December 31, 2016
Deconsolidation
Currency effects
Additions
Thereof amortization
Thereof impairment losses
Disposals
Transfers
Balance as of December 31, 2017
Carrying amounts
Balance as of December 31, 2017
Balance as of December 31, 2016
71.2
– 8.3
– 37.4
33.8
– 50.4
– 160.2
2,039.9
469.2
– 12.1
– 5.9
127.7
– 9.5
– 4.1
565.3
– 7.4
– 1.1
110.4
108.8
1.6
– 49.7
– 51.6
566.0
1,473.9
1,625.8
5.4
0.0
– 3.2
79.6
– 1.4
0.0
369.2
103.4
– 1.9
– 5.3
48.7
– 2.1
4.1
146.8
0.0
– 1.5
69.9
67.1
2.8
– 1.3
4.6
218.4
150.9
142.0
124.6
– 1.7
– 53.1
0.0
0.0
– 184.4
2,310.0
29.1
0.0
1.0
0.0
0.0
0.0
30.1
0.0
0.2
2.0
0.0
2.0
0.0
– 2.0
30.3
201.2
– 10.0
– 93.6
113.4
– 51.8
– 344.7
4,719.1
601.7
– 14.0
– 10.2
176.4
– 11.6
0.0
742.2
– 7.4
– 2.5
182.3
175.8
6.5
– 51.0
– 49.0
814.7
2,279.7
2,394.4
3,904.4
4,162.3
115
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Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The purchased rights and licenses mainly comprised title
rights, trademarks, and customer relationships. The in-
ternally generated intangible assets mainly consisted of
software solutions and websites.
The reclassifications in the prior year consisted almost
exclusively of the reclassification into assets held for sale
(see note (10)).
In the following tables, we disclose the allocation of goodwills and the purchased rights and licenses within the intangi-
ble assets with indefinite useful lives for reporting units, as well as the discount rates and growth rates used for impair-
ment testing:
€ millions
Other intangible
assets with
indefinite useful life
Goodwill
Total
Discount rate
(before tax)
Discount rate
(after tax)
Growth rate
590.8
377.9
365.1
355.2
278.6
198.1
189.9
189.1
172.5
9.2%
8.6%
8.6%
10.4%
10.8%
7.9%
10.2%
11.1%
9.0%
7.0%
6.9%
7.6%
7.9%
8.4%
6.3%
8.4%
7.9%
7.4%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
591.5
7.6% – 10.9%
5.5% – 8.1%
1.5% – 2.5%
127.4
142.2
172.6
146.2
31.2
56.1
55.1
73.2
102.7
122.4
2017
SeLoger
StepStone
Ringier Axel Springer Media
Business Insider
Awin
Immowelt
Yad2
eMarketer
@Leisure
Others
Total
thereof Classifieds Media
thereof News Media
thereof Marketing Media
463.4
235.7
192.5
209.0
247.4
142.1
134.8
115.9
69.8
469.1
2,279.7
1,275.9
607.1
396.3
1,029.0
3,308.7
585.2
397.2
46.5
1,861.0
1,004.3
442.8
116
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Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
2016
SeLoger
Business Insider
Ringier Axel Springer Media
StepStone
AuFeminin
eMarketer
Immowelt
Yad2
Awin
Others
Total
thereof Classifieds Media
thereof News Media
thereof Marketing Media
€ millions
Other intangible
assets with
indefinite useful life
Goodwill
463.4
237.1
192.4
235.8
166.2
131.7
142.1
138.2
148.9
538.6
2,394.4
1,278.8
647.9
467.2
127.4
165.8
206.2
141.1
55.5
82.9
56.1
56.6
0.0
231.2
1,122.8
589.8
459.2
73.8
Total
590.8
402.9
398.6
377.0
221.6
214.6
198.1
194.8
148.9
769.8
3,517.2
1,868.5
1,107.1
540.9
Discount rate
(before tax)
Discount rate
(after tax)
Growth rate
10.0%
9.4%
8.2%
9.5%
11.4%
10.1%
8.6%
10.1%
10.6%
7.6%
7.3%
7.2%
7.7%
8.6%
7.3%
6.8%
8.3%
8.4%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
6.4% – 10.8%
5.0% – 8.6%
1.5% – 2.5%
The changes in goodwill of the major reporting units were as follows:
€ millions 01/01/2016
Initial
consolid
ation
Deconsolid
ation
Currency
effects
12/31/2016
SeLoger
Awin
471.5
157.0
0.0
0.0
StepStone
242.3
12.1
Business
Insider
Ringier Axel
Springer
Media
Immowelt
Yad2
eMarketer
@Leisure
230.4
0.0
198.3
– 0.1
142.1
132.0
0.0
0.0
0.0
125.5
40.5
28.9
AuFeminin
166.4
0.1
– 8.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
– 8.1
– 18.6
463.4
148.9
235.8
6.7
237.1
– 5.7
0.0
6.2
6.3
– 0.1
– 0.3
192.4
142.1
138.2
131.7
69.4
166.2
Initial
conso-
lidation
0.0
103.1
6.0
0.0
11.7
0.0
0.0
0.0
0.4
0.0
Total
1,780.5
166.5
– 8.0
– 13.7
1,925.2
121.3
Deconsolid
ation
Currency
effects
Transfers 12/31/2017
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
– 4.6
– 6.1
0.0
0.0
0.0
463.4
247.4
235.7
– 28.2
0.0
209.0
9.8
0.0
– 3.5
– 15.7
0.0
– 19.4
0.0
0.0
0.0
0.0
– 3.1
– 163.1
192.5
142.1
134.8
115.9
69.8
0.0
– 51.5
– 182.5
1,810.6
117
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
In addition to the discount rates and growth rates stated
above, the impairment tests depend upon the medium-
term planning of the reporting units.
The medium-term planning of SeLoger is based on an
increased market penetration through the development
of innovative marketing offers. The high brand awareness
of the core brand SeLoger will be maintained and further
increased by continuous investments in marketing. User-
friendly and innovate products will differentiate SeLoger
from competitors. The online real estate classifieds mar-
ket in France is assumed to grow moderately during the
planning period.
In the medium-term planning of the StepStone Group,
we assume that the anticipated development of the
economy in continental Europe will still have a positive
impact on the labor market. The assumptions made in-
clude increasing revenues in our European and South Af-
rican core markets as well as in our Latin American mar-
kets. The respective market position is to be expanded
and strengthened in particular through the further devel-
opment of the product portfolio and further improvement
of the system infrastructure, as well as by intensified
marketing measures (online and offline) to further
strengthen the Candidate Delivery (StepStone's capacity
to deliver relevant candidates to its customers). In addi-
tion, Step-Stone is strengthening the sales organization
in the UK in order to realize synergies between the indi-
vidual job portals. We expect the returns of the Step-
Stone Group to remain at a high level.
In the medium-term planning of Ringier Axel Springer
Media, we assume that our digital content offerings will
increasingly and sustainably participate in the structural
shift from print to digital channels and that our digital
business models will gain in importance in the areas of
paid-content models and classified ad models in the
long-term. However, the revenue streams in sales and in
the print advertising market will come under increasing
pressure in the coming years. It will be possible to at
least partly compensate for the declining circulation fig-
ures by price increases. With a strict cost management
in the print business it shall be possible to largely main-
tain profitability.
The medium-term planning of Business Insider is
based on the assumption that sales will grow signifi-
cantly. Advertising revenues as the main revenue source
benefit from increasing user numbers. One relevant
source of growth however is planned to be realized
through circulation revenues from both B2B and B2C
subscription offers. In order to reasonably consider in the
cash flow projections the period of developing the com-
pany to stable conditions, we have used a detailed plan-
ning period of eight years, thereby exceeding the period
normally applied.
The medium-term planning of Awin Group (previously
Zanox Group) is based on the merger of the two busi-
nesses, Awin and affilinet, to develop a combined affiliate
network. The merger will strengthen their competitive po-
sition and lay the foundations for accelerated growth in
the core markets of Germany, western Europe and the
USA, inter alia through the integration of platforms, the
development of new and innovative business products
(e.g. in the area of influencer marketing), and the realiza-
tion of cost synergies.
The medium-term planning of the Immowelt Group is
based on the assumption of continued positive market
conditions related to economic growth, employment
rates and interest rate developments. As result for the
German real estate market, the Immowelt Group as-
sumes stable development in case of continuing intense
competition. Furthermore, the planning includes price in-
creases and the possibility of up-selling activities in case
of a largely stable customer base. In future years, invest-
ments in brand awareness are planned and various new
product developments for differentiation on the market
will be realized. The returns are expected to remain at a
high level.
The medium-term planning of Yad2 is based on the as-
sumption of a moderate economic growth of Israel. Yad2
benefits from a high brand awareness in the classifieds
market that translates into an excellent market position.
Thus, in addition to continuous product innovations Yad2
assumes further growth of classifieds revenues in all of
their three core verticals jobs, real estate and cars. At the
118
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Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
same time advertising banner revenues are expected to
decline.
global booking platforms and to expand its market posi-
tion in the travel segment.
The medium-term planning of eMarketer is based on
the assumption, that the average revenue per customer
can be increased through additional customers and the
sale of new products. In addition, it is assumed to in-
crease the number of customers continuously through
an improved customer retention. Additional growth also
stems from content expansions to attract new industry
segments that are affected by digitalization.
In the medium-term planning of @Leisure Group, on
one hand, the growth of Traum-Ferienwohnungen in the
self-service segment as a result of new products and tar-
iffs in the listing business, as well as the new range of in-
telligent software solutions for booking administration
and sales channel control for private landlords contribute
to this. On the other hand, DanCenter Group, through
organic growth, as well as the further expansion of ca-
pacities of the Belvilla Group in high-demand target re-
gions made a significant impact to the growth of the full-
service segment. The Group is also planning to differenti-
ate itself more strongly from the competition through fur-
ther investments in the full-service segment and to accel-
erate its growth through specific cooperation with big
As in the previous year the recoverable amount was de-
termined as the value in use for all reporting units.
In the course of a sensitivity analysis, we have assumed
separately for each of our large reporting units a 10 %
decrease of future cash flows in the last planning year, a
10 % increase of the weighted average costs of capital or
a decrease of the terminal growth rate by half a percent-
age point. On this basis, no reporting unit showed that
its carrying amount of the assets exceeded its recovera-
ble amount.
Goodwill allocated to the other reporting units of the
Group and intangible assets with indefinite useful lives of
€ 591.5 million (PY: € 769.8 million) amounted to less
than 5 % (PY: 5 %) of the total value. In the course of a
sensitivity analysis, we have assumed separately for each
of our other reporting units a 10 % decrease of future
cash flows in the last planning year, a 10 % increase of
the weighted average costs of capital or a decrease of
the terminal growth rate by half a percentage point. As in
the previous year, no impairment was indicated for any
of the other reporting units.
119
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(5) Property, plant and equipment
The changes in property, plant, and equipment were as follows:
€ millions
Acquisition or production cost
Balance as of January 1, 2016
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Transfers
Technical
equipment
and
machinery
Other
equipment,
operational
and office
equipment
Construction
in progress
Total
Land and buildings
416.2
535.2
222.3
22.7
1,196.4
3.9
0.0
– 0.5
1.1
– 0.1
3.2
0.0
0.0
2.3
4.2
0.0
1.1
6.3
– 4.6
– 3.2
22.5
– 1.2
1.4
Balance as of December 31, 2016
423.8
542.9
243.5
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Transfers
Balance as of December 31, 2017
Depreciation, amortization, and impairments
0.0
0.0
0.9
2.1
– 138.4
3.1
291.6
0.0
0.0
0.3
3.7
– 2.3
1.7
546.3
0.8
– 0.2
– 0.3
36.7
– 11.5
– 4.0
265.0
Balance as of January 1, 2016
140.3
393.1
155.6
Deconsolidation
Currency effects
Additions
Transfers
0.0
0.2
8.8
0.5
0.0
2.8
21.6
0.0
– 3.5
– 2.2
25.0
0.0
Balance as of December 31, 2016
149.8
417.5
174.9
0.0
0.0
0.0
31.2
0.0
– 2.5
51.3
0.0
0.0
0.1
50.5
– 0.4
– 7.6
93.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
10.3
– 4.6
– 1.4
59.1
– 1.3
3.1
1,261.5
0.8
– 0.2
1.0
93.0
– 152.5
– 6.8
1,196.8
689.0
– 3.5
0.7
55.4
0.5
742.2
– 0.1
0.4
53.5
52.5
1.0
– 45.9
– 4.8
745.1
0.0
0.2
7.1
7.1
0.0
– 34.3
– 0.5
122.3
0.0
0.1
21.7
20.7
1.0
– 1.8
0.0
– 0.1
0.0
24.8
24.8
0.0
– 9.8
– 4.4
437.5
185.4
169.3
274.0
108.8
125.4
79.7
68.6
93.9
51.3
451.7
519.2
120
Deconsolidation
Currency effects
Additions
Thereof depreciation
Thereof impairment losses
Disposals
Transfers
Balance as of December 31, 2017
Carrying amounts
Balance as of December 31, 2017
Balance as of December 31, 2016
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
As of December 31, 2017, property, plant and equip-
ment with acquisition or production cost of € 299.3 mil-
lion (PY: € 298.5 million) were in use, that had already
been fully depreciated.
(6) Investment property
The investment property developed as follows:
At the balance sheet date, property, plant, and equip-
ment amounting to € 37.9 million (PY: € 35.7 million) had
been pledged as security for own liabilities.
As of December 31, 2017, the carrying amount of prop-
erty, plant, and equipment as part of finance leases was
€ 0.2 million (PY: € 0.8 million).
At the End of 2017, the sale of the Axel-Springer-Pas-
sage in Berlin, which was contracted in July 2017, was
completed with payment of the purchase price of € 330
million (before tax payments of approximately € 80 mil-
lion) and the handover of the building. The carrying value
amounted to € 134.6 million and related with
€ 104.8 million to property, plant and equipment and
with € 29.8 million to investment property (see note (6)).
The tax expense, taking into account the reversal of de-
ferred tax liabilities from previous years, amounted to
€ 55.7 million. Axel Springer will use the main part of the
Axel-Springer-Passage as a tenant from January 1, 2018
till the end of 2020.
Additions during the reporting year in construction in pro-
gress amounted to € 48.3 million (PY: € 26.3 million) and
relates to the new Axel Springer building in Berlin (for ad-
ditional information to the construction project see note
(39)).
In July 2017, a contract was signed for the sale of the
new Axel Springer building under construction. The pur-
chase price amounts to € 425 million (before tax pay-
ments of approximately € 30 million). The sale is subject
to the completion of the construction and expected to be
completed by the end of 2019. Axel Springer will rent the
new building starting in 2020 on a long-term basis.
€ millions
Acquisition or production cost
Balance as of January 1, 2016
Transfers
Balance as of December 31, 2016
Transfers
Disposals
Balance as of December 31, 2017
Depreciation, amortization, and impairments
Balance as of January 1, 2016
Additions
Transfers
Balance as of December 31, 2016
Additions
Transfers
Disposals
Balance as of December 31, 2017
Carrying amounts
As of December 31, 2017
As of December 31, 2016
Investment
property
39.4
– 3.1
36.3
0.5
– 36.8
0.0
6.2
0.8
– 0.5
6.5
0.3
0.1
– 6.9
0.0
0.0
29.8
The investment property exclusively concerned office
and retail space leased to third parties in the Axel-
Springer-Passage in Berlin. As a result of the sale of the
Axel-Springer-Passage at the end of December 2017,
the carrying amount has been derecognized (see note
(5)).
Due to lower own use of office space in the reporting
year reclassifications with carrying amounts of € 0.4 mil-
lion from property, plant and equipment to investment
property took place. In the previous year, due to in-
121
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
creased use of office space, reclassifications with carry-
ing amounts totaling € 2.6 million from investment prop-
erty to property, plant and equipment took place.
In the reporting year, rental revenues of € 2.4 million (PY:
€ 2.4 million) were generated, with corresponding di-
rectly attributable operating expenses of € 0.4 million
(PY: € 0.4 million).
from the legal share due to special contractual arrange-
ments with regard to profit participation. The same ap-
plies in the event of the disposal of the investment, for
which our share is 35 %.
Summarized financial information (pursuant to IFRS) re-
garding the investment (including PPA effects and the
goodwill (on a 100 % basis)) are shown below:
The fair value of the investment property on the previous
year's reporting date amounted to € 40.2 million. The
valuation carried out by ourselves took place on the ba-
sis of forecasted net cash flows using the DCF method.
The calculation was based on a discount rate of 5.4 %
and a terminal growth rate of rate of 4.4 %.
€ millions
Revenues
Income after taxes
Other income/loss
Comprehensive income
On the previous year's reporting date the future mini-
mum lease payments from investment property broke
down as follows:
€ millions
Current assets
Non-current assets
€ millions
Due in up to one year
Due in one to five years
Due in more than five years
Total
2016
Current liabilities
Non-current liabilities
Net assets
1.8
4.7
1.0
7.5
2017
206.8
12.7
7.3
19.9
2016
255.2
8.1
– 2.5
5.6
12/31/2017 12/31/2016
61.0
419.0
86.1
525.8
– 108.4
– 106.9
– 86.3
285.3
– 98.5
406.6
(7) Non-current financial assets
(a) Investments recognized using the equity
method
At the beginning of January 2016, we completed - to-
gether with Ringier - the establishment of Ringier Axel
Springer Schweiz AG, Zurich, Switzerland (see note (2c)),
in which we legally hold a 50 % stake. The company
gathers all Swiss-German and West Swiss newspaper ti-
tles (including their associated online portals) and the
West Swiss broadsheet, Le Temps, belonging to Ringier
and the entire business of Axel Springer in Switzerland.
Due to rights granted to Ringier under the shareholder
agreement, we account for our investment in this associ-
ated company using the equity method. The share of the
total comprehensive income attributable to us diverges
Of the total comprehensive income, an amount of
€ 9.0 million (PY: € 3.5 million) is attributable to our
share. Taking into account an impairment loss in the
amount of € 38.7 million during the reporting year, as of
December 31, 2017, thus we disclose a carrying amount
of € 103.0 million (PY: € 143.7 million) for our invest-
ment. The change in the carrying amount of the invest-
ment also resulted from currency translation effects rec-
ognized in accumulated other comprehensive income.
The impairment loss recorded in the News Media seg-
ment is due to the development of the advertising market
and the digitization potential of the segment in Switzer-
land and the resulting earnings expectations for future
years. The recoverable amount of € 103.0 million bases
on the fair value less cost to sell. The calculation based
on non-observable impact factors (Level 3) using a dis-
122
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
counted cash flow method by discounting future ex-
pected dividend payments. The used discount rate after
taxes amounted to 7.07 % (PY: 5.90 %).
(8) Trade receivables
The trade receivables broke down as follows:
€ millions
12/31/2017 12/31/2016
Trade receivables, nominal
Allowances for doubtful trade receivables
Trade receivables
715.5
– 21.6
693.9
640.0
– 25.4
614.6
The changes in the allowances for doubtful trade receiv-
ables are presented below:
€ millions
Balance as of January 1
Additions
Reversals
Utilization
Disposal due to deconsolidation
Other changes
Balance as of December 31
2017
25.4
6.7
– 0.8
– 4.0
0.0
– 5.7
21.6
2016
26.8
4.8
– 2.5
– 2.0
– 1.6
– 0.1
25.4
Other changes mainly relate to reclassifications into as-
sets held for sale (see note (10)).
As of December 31, 2017, receivables in the amount of
€ 569.6 million (PY: € 424.1 million) were neither past
due nor subject to valuation allowances. With regard to
these receivables, there were no indications at the re-
porting date that would suggest that the customers
would not fulfill their payment obligations.
Summarized financial information regarding all compa-
nies which are accounted for using the equity method
and are not individually material are shown below:
€ millions
Carrying amount
Share attributable to Axel Springer SE:
Income from continued operations
Other income/loss
Comprehensive income
2017
64.5
1.1
0.0
1.1
2016
77.2
– 7.9
0.0
– 7.9
In the previous year proportionate net income to be rec-
ognized in income from investments was not recorded in
the amount of € – 0.5 million, since the respective net in-
vestment had been impaired in the previous year.
(b) Other non-current financial assets
The other non-current financial assets particularly in-
cluded an amount of € 155.3 million (PY: € 146.3 million)
relating to options secured by bank guarantees for the
sale of our shares in Do⁄an TV ("put options"). The valu-
ation of the put options at the balance sheet date is
based on the discounted payment claim deriving from
the agreed option rights, minus all costs to be incurred.
The discount rates were determined according to the
duration of the put options and the default risk, taking
into account the granted bank guarantees.
Also included are the shares in Group Nine Media Inc. of
€ 68.5 million (PY: € 72.3 million) which we received in
connection with the disposal of our shares in Thrillist Me-
dia Group Inc. and NowThis Media Inc. in the previous
year.
In addition, other non-current financial assets mainly in-
cluded other investments and other loans.
123
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The past-due trade receivables at the reporting date for
which no valuation allowances have been charged are
presented in the table below:
balances in accounts payable and receivables from the
insolvency proceedings against the Kirch Group.
€ millions
up to 30 days
31 to 90 days
91 to 180 days
181 to 360 days
361 days and longer
(9) Other assets
12/31/2017 12/31/2016
70.6
30.4
3.9
4.2
4.8
46.3
23.1
6.5
3.6
5.0
The other assets broke down as follows:
€ millions
12/31/2017 12/31/2016
Reimbursement claim for pension
obligations
Derivatives
Deposits
Other
Other financial assets
Thereof current
Thereof non-current
Advance payments
Receivables from other taxes
Other
Other non-financial assets
Thereof current
Thereof non-current
Other assets
Thereof current
Thereof non-current
24.8
0.0
10.4
43.1
78.3
42.8
35.5
25.3
30.5
14.6
70.4
61.9
8.5
148.7
104.7
44.0
26.6
0.6
4.8
63.5
90.7
58.1
32.6
33.9
23.7
12.6
70.2
63.2
6.9
160.9
121.3
39.5
Regarding the reimbursement right concerning pension
obligations, see note (13).
The miscellaneous other financial assets particularly in-
cluded a purchase price claim for the final instalment re-
garding the sale of the office building in Hamburg, debit
(10) Assets held for sale
At the balance sheet date, the assets held for sale and
the related liabilities disclosed broke down as follows:
€ millions
auFeminin Group
RAS Slovakia
Infor Biznes
Held for sale
12/31/2017
Assets
Liabilities
285.3
78.8
3.2
367.3
55.7
15.5
0.0
71.2
In December 2017, Axel Springer and Télévision Fran-
çaise 1 (TF1) signed an option agreement and in January
2018 signed an agreement on the sale of Axel Springer's
share in the French aufeminin Group (Marketing Media
segment). Completion of the transaction requires ap-
proval by the relevant antitrust authorities.
As of the reporting date, assets and liabilities of the
aufeminin Group broke down as follows:
€ millions
Goodwill
Other intangible assets
Property, plant, and equipment and non-current
financial assets
Inventories
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Assets held for sale
Trade payables
Other liabilities and provisions
Deferred tax liabilities
Liabilities related to assets held for sale
Carrying
amount
163.1
63.6
1.5
3.8
28.2
9.7
2.1
13.3
285.3
11.2
29.9
14.6
55.7
124
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
In addition to the assets held for sale, as of the reporting
date intragroup receivables by cashpooling of the
aufminin Group towards Axel Springer existed in the
amount of € 52.8 million, which will be derecognized
with the sale as well. The proportion of non-controlling
interests in the net assets amounted to € 43.9 million.
From the accumulated other comprehensive income
from currency translation, € – 2.3 million is attributable to
the assets and liabilities of the auFeminin Group.
In November 2017, the sale of the newspaper and mag-
azine portfolio including the associated online offers of
RAS Slovakia (News Media segment) was contracted.
The disposal is expected after authorization by the local
authorities in the middle of the year 2018.
As of the reporting date, assets held for sale and the re-
lated liabilities of RAS Slovakia broke down as follows:
€ millions
Goodwill
Other intangible assets
Trade receivables
Other assets
Cash and cash equivalents
Assets held for sale
Trade payables
Other liabilities and provisions
Deferred tax liabilities
Liabilities related to assets held for sale
Carrying
amount
19.4
49.8
6.6
1.4
1.6
78.8
3.4
1.7
10.4
15.5
As of December 31, 2017 the proportion of non-control-
ling interests in the net assets amounted to € 4.9 million.
The valuation of the fair value less costs to sale lead to
an impairment loss in goodwill in the amount of
€ 2.0 million (see note (22)).
(11) Equity
The components and changes in consolidated equity are
summarized in the consolidated statement of changes in
equity.
(a) Subscribed capital
The fully paid-in subscribed capital in the amount of
€ 107.9 million remained unchanged and is divided into
107,895,311 registered shares with a calculated ratio of
€ 1.00 per share. The shares can only be transferred
with the company’s consent.
(b) Authorized capital
The Annual General Meeting of April 14, 2015 allowed
the Executive Board, with the approval of the Supervi-
sory Board, to increase the share capital until April 13,
2020 by up to € 11,000,000 through the issue of newly
registered shares in return for cash and/or contributions
in kind (authorized capital). With the approval of the Su-
pervisory Board, the Executive Board can waive the sub-
scription right of the shareholders in case of a capital in-
crease against contributions in kind. As of December 31,
2017 the authorized capital remained un-changed as
compared to the previous year totaling € 8,955,311 with
the result that the remaining authorized capital amounted
to € 2,044,689.
(c) Additional paid-in capital
The additional paid-in capital (€ 501.0 million; PY:
€ 500.1 million) mainly consists of the share premium
achieved from the capital increase against contributions
in kind from the fiscal year 2015 and the equivalent of the
personnel expenses for the share-based payment pro-
grams (see note (12)).
(d) Accumulated retained earnings
The accumulated retained earnings comprised the in-
come of the companies included in the consolidated fi-
nancial statements, to the extent that they have not been
distributed to shareholders. In the reporting year, Axel
Springer SE distributed an amount of € 205.0 million
(PY: € 194.2 million) or € 1.90 (PY: € 1.80) per qualifying
share for the previous reporting year. For the reporting
year 2017, the Executive Board and the Supervisory
Board propose to distribute a dividend of € 2.00 per
share entitled to the dividend, in total representing ap-
proximately € 216 million in expected payments. Pay-
ment of the proposed dividend is contingent upon ap-
proval at the Annual General Meeting on April 18, 2018.
125
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Moreover, transactions with shareholders are recognized
within the accumulated retained earnings. In the report-
ing year, the contribution of 20 % of the shares of AWIN
AG (previously ZANOX AG) related to the acquisition of
the affilinet Group led to an increase of the accumulated
retained earnings in the amount of € 41.5 million (see
note (2c)).
(e) Accumulated other comprehensive income
At the balance sheet date, accumulated other compre-
hensive income mainly comprised actuarial gains and
losses from pension plans of € – 118.9 million (PY:
€ – 120.4 million). In the previous year, this included ac-
tuarial losses (after taxes) of € 5.1 million, which were re-
classified into accumulated retained earnings as a result
of the deconsolidation of the entire Swiss business from
Axel Springer.
Changes in foreign currency translations are primarily
due to conversions of financial statements denominated
in US dollar. In the previous year, changes resulted from
the reclassification of unrealized gains and losses from
foreign currency translations previously recognized under
accumulated other comprehensive income into the in-
come statement due to the disposal of investments (see
note (2c)).
(f) Non-controlling interests
The non-controlling interests mainly related to the follow-
ing companies:
€ millions
12/31/2017 12/31/2016
Ringier Axel Springer Media Group
261.0
243.7
Immowelt Group
Awin Group (previously Zanox Group)
Other companies
Non-controlling interests
74.1
58.8
117.4
511.4
70.9
0.0
106.5
421.2
As of December 31, 2017 the non-controlling interests in
Ringier Axel Springer amounted to 50.0 % (PY: 50.0 %),
whilst their share in the Group net income amounted to
€ 11.4 million (PY: € 13.2 million). As in the previous
year, there were no distributions in the reporting year.
Summarized financial information for the Ringier Axel
Springer Media sub-group are shown in the following ta-
ble:
€ millions
Revenues
Net income
Comprehensive income
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Cash flow from operating activities
2017
273.0
20.0
43.9
187.7
466.8
71.1
51.6
41.2
2016
267.4
24.8
13.6
133.0
503.2
109.4
36.0
44.0
Cash flow from investing activities
– 14.2
– 39.7
Cash flow from financing activities
– 28.6
– 2.9
Regarding the contribution of 20 % of the shares of
AWIN AG (previously ZANOX AG) related to the acquisi-
tion of the affilinet Group see note (2c).
(12) Share-based payment
In the reporting year, the expenses recorded for share-
based payment programs amounted to € – 44.9 million
(PY: € – 7.9 million). These effects were attributable to eq-
uity-settled programs with an amount of € – 1.0 million
(PY: € – 0.2 million) and to cash-settled programs with an
amount of € – 43.9 million (PY: € – 7.7 million). The liability
recorded for share-based payments concerns especially
the following stock option plans and totaled € 55.1 million
(PY: € 15.1 million).
As of May 1, 2016 members of the Executive Board were
granted a new long-term variable remuneration in the
form of a long-term incentive plan ("LTIP") with a dura-
tion - including lock-up periods - until 2023. The LTIP
stipulates a participation in the increase in the company
value, measured on the basis of market capitalization. It
will be distributed in the form of a cash bonus and con-
tains a subsequent obligation to purchase Axel Springer
shares in the corresponding amount.
126
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The compensation entitlement requires market capitaliza-
tion of Axel Springer SE to increase at least 40 % within
three, four, and maximally five years (respective "perfor-
mance periods"). No claim for compensation can be
made below this threshold. In the event of targets being
achieved, the whole Executive Board is entitled to pay-
ment amounting to a total of 4 % of the increase in market
capitalization. The compensation entitlement will increase
only up to a growth in market capitalization by maximally
60 %.
The increase in market capitalization will be calculated
on the basis of the volume-weighted average price of
the Axel Springer share within the last 90 calendar days
before May 1, 2016, or before the end of the respective
performance period, multiplied by the number of out-
standing Axel Springer shares (less treasury shares)
adding dividend payments during the performance peri-
od.
In the event of targets being achieved, an amount in the
value of 50 % of the total amount (“payout amount I“) will
be paid out. On meeting the targets after four or five
years respectively, a lock-up period of two or one year
respectively follows, before the remaining 50 % of the
total amount ("payout amount II") will be paid out.
Should targets be met prematurely after three years,
each Executive Board member will have the option to
request pay-out amount I. Payout amount II will then
only be remunerated after targets are once again met
after four or five years, and after a lock-up period of two,
or one year respectively.
The net amount of all payouts (after the Executive Board
members’ taxes and duties are paid) in each case has to
be fully invested in Axel Springer shares by the Executive
Board member. Regarding the shares acquired with pay-
out amount I, or II respectively, the Executive Board
member has to retain the shares for a minimum of two
years, or one year respectively. The LTIP contains the
usual provisions for early resignation. Thus, all non-con-
tractual claims paid under the LTIP lapse if the member
of the Executive Board leaves the Executive Board at his
own request before expiration of the waiting period.
The LTIP is valued as a share-based compensation pro-
gram with cash settlement at its fair value as of the bal-
ance sheet date and is recorded according to the ex-
pected vesting date.
The value of the LTIP at the grant date was calculated on
the basis of a stochastic model for the valuation of share
option rights at € 32.1 million. The calculated remunera-
tion component for the financial year 2017 recorded in
personnel expenses amounted to € 20.2 million
(PY: € 3.5 million) for all members of the Executive
Board. An accumulated liability was recognized in the
amount of € 23.7 million (PY: € 3.5 million).
127
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Members of the Executive Board and selected executives (beneficiaries) were granted virtual stock option plans, the
fundamental parameters of which are described below:
Grant date
Term in years
Qualifying period in years
Option rights granted
Underlying (€)
Maximum payment (€)
Value at grant date (€)
Total value at grant date (€ million)
Virtual stock option plans
Executive Board Program
Senior Executive Program
2012
2014 I
2014 II
2011 II
2014
01/01/2012
01/01/2014
09/01/2014
10/01/2011
03/01/2014
6
4
6
4
6
4
6
4
5
3
450,000
205,313
675,000
472,500
60,000
30.53
61.06
5.26
2.4
44.06
88.12
6.69
1.4
44.56
89.12
6.26
4.2
35.00
70.00
2.31
1.1
46.80
93.60
8.14
0.5
Provided that the beneficiary is employed by the com-
pany at least until the expiration of the vesting period, all
virtual stock options granted to the relevant senior exec-
utive may become vested. If the authorized senior execu-
tive's employment with the company ends before the
end of the vesting period, but is at least one year after
the grant date, the stock options are vested on a pro-
rated basis in relation to the vesting period (Executive
Board program), up to one half (senior executive pro-
gram 2014), or to one quarter per elapsed year of the
vesting period (senior executive program 2011 II).
A further condition for vesting to take place is that either
the volume-weighted average price of the Axel Springer
share is at least 30 % over the base value or that the per-
centage increase of this average price exceeds that of
the base value of the development of the DAX over a pe-
riod of 90 calendar days (Executive Board program) or
three calendar months (senior executive programs) within
a time period of a year before the end of the waiting pe-
riod.
Exercising stock options is only possible if the volume-
weighted average price of the Axel Springer share 90
calendar days (Executive Board program) or three calen-
dar months (executive programs) before exercising such
options is at least 30 % over the base value and that the
percentage increase exceeds that of the DAX index.
Each option grants a payment claim in the amount of the
growth in value of the Axel Springer share, restricted to a
maximum of 200 % of the base value, which corre-
sponds to the difference between the volume-weighted
average price during the last 90 calendar days or three
months prior to exercise and the base value.
Beneficiaries are obligated to hold one Axel Springer
share for every ten stock options as their own invest-
ment. Disposing of these shares prior to exercising the
stock options would result in the stock options being for-
feited at the same rate.
The value of the options was determined by application
of a Black-Scholes model in a Monte Carlo simulation at
the grant date. The options will be remeasured at each
reporting date and recognized proportionally in accord-
ance with the projected vesting.
128
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The development of the stock options is shown below:
01/01/2016
Exercise
Lapse
12/31/2016
Exercise
Lapse
12/31/2017
Virtual stock option plans
Executive Board Program
Senior Executive Program
2012
2014 I
2014 II
2011 II
2014
393,750
205,313
675,000
472,500
60,000
– 393,750
0
0
0
0
0
0
0
0
0
– 471,650
– 850
205,313
675,000
0
0
0
0
205,313
675,000
0
0
0
0
0
0
60,000
0
0
60,000
The expenses and income in the fiscal year, as well as the portfolio of liabilities and provisions at the reporting date are
shown below:
€ millions
Expenses/revenues 2017
Expenses/Income 2016
Carrying amount as of 12/31/2017
Carrying amount as of 12/31/2016
Virtual stock option plans
Executive Board Program
Senior Executive Program
2012
0.0
1.7
0.0
0.0
2014 I
– 4.2
0.5
4.9
0.7
2014 II
– 10.7
0.9
13.0
2.3
2011 II
0.0
0.5
0.0
0.0
2014
– 1.2
0.2
1.3
0.1
The following major stock option programs existed at our
subsidiaries:
Upon closing date of the acquisition with respect to the
majority shareholding in Business Insider at the end of
2015, both management board members of Business In-
sider were granted a total of 21,952 new stock options
to acquire shares in Business Insider Inc. as a replace-
ment for an existing stock option program. The new
stock options are vested over a period of ten years. 30 %
of these granted stock options become vested after
three years and subsequently, a further 10 % of the
granted stock options become vested each year over the
remaining vesting period. The option rights become ex-
ercisable once they are vested until the end of the total
period of 10 years after grant date. The exercise of the
options is not dependent upon any other earnings or
market conditions. Should the employment relationship
with the two management board members be termi-
nated after the first three years, there is – depending on
the reason for the termination – a purchase obligation on
the side of Axel Springer or rather a right to acquire the
shares arising from the options which have vested.
Within a three-month period after the total period of ten
years, the management board members are entitled to
tender all shares that have been obtained through the
options to Axel Springer at fair value on exercise date,
which leads to an irrevocable obligation to be settled in
cash. Thus, it is a cash-settled share-based payment.
129
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
At grant date, the fair value of these stock options was
€ 12.9 million. A partial amount of € 7.4 million of the fair
value of the options was treated as consideration trans-
ferred in the course of the initial consolidation for the ac-
quisition. The remaining fair value of € 5.5 million was
classified as remuneration for the continuing employment
of the board members of Business Insider. The fair value
was determined on the basis of an option pricing model
using a Monte Carlo simulation, taking into account the
strike price of the options, the risk-free interest rate and
the expected dividends; the volatility was derived using a
peer group comparison. At each reporting date, the op-
tion rights will be remeasured; likewise, the personnel ex-
penses to be recorded over the vesting period will be
calculated.
As of December 31, 2016, one management board
member had resigned from the company, so that a total
of 6,098 options have expired. As of December 31, 2017
15,854 options existed unchanged as compared to the
previous year, none of which are exercisable. The exer-
cise price to be paid for the option per share is kUSD 3.6
(k€ 3.4). The weighted average remaining term of these
options was 7.8 years (PY: 8.8 years).
In the reporting year, the stock option program was ad-
justed. In the event of earnings and revenue targets be-
ing achieved at the end of June 2018, 30 % of the stock
options will be acquired by Axel Springer for USD 4.6
million (€ 3.8 million). In addition, it has been agreed that,
should targets be met in the year 2020, the management
board member of Business Insider will receive an upfront
payment in the amount of USD 15.0 million (€ 12.5 mil-
lion), which will be offset against future payments from
the stock option program. There is no repayment obliga-
tion in case of stock options being forfeited or not exer-
cised. If targets are not achieved, the stock option pro-
gram will continue unchanged at the respective dates.
Due to the adjustment of the stock option program the
fair value of the program increased by approximately
USD 4.2 million (€ 3.5 million). The fair value was still de-
termined on the basis of an option pricing model using a
Monte Carlo simulation.
In the reporting year, an amount of € 4.9 million in per-
sonnel expenses was recorded (PY: 1.7 million in per-
sonnel expenses and € 1.1 million in other operating in-
come). The value of the liability as of December 31, 2017
arising from the option program amounted to € 12.3 mil-
lion (PY: € 8.5 million).
Our subsidiary AUFEMININ SA has granted its senior
executives option rights to be settled with shares in
AUFEMININ SA as well as free shares.
In August 2016, June 2017 and December 2017, senior
executives were given the right to receive a total of 150
thousand free shares in AUFEMININ SA. The fair value of
a free share at the grant or modification date was be-
tween € 26.56 and € 38.34 and was based on the cur-
rent share price on the stock market taking into account
expected dividends. The free shares will become fully
vested two years after the grant date, provided that the
relevant earnings targets have been reached. As of the
balance sheet date, the weighted average remaining
term of the free shares was between one and two years
(PY: two years).
In November 2013, 300 thousand stock options for ac-
quisition of one share of AUFEMININ SA, each with an
exercise price of € 26.19 were issued to senior execu-
tives. These options vested upon expiration of the first
(50 %) and second (50 %) years after the grant date, in-
sofar as the earnings target established for the individual
tranche (EBITDA for the fiscal year prior to the year of
vesting) was achieved. Once they have vested, the op-
tions can be exercised for a total of five (50 %) or four
(50 %) years.
130
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The number of options and the weighted average exer-
cise price developed as follows:
€ 48.6 million) and were shown as social security contri-
butions in personnel expenses.
2017
2016
Options in
thousands
Exercise
price1) in €
Options in
thousands
Exercise
price1) in €
Balance as of
January 1
Lapse
Exercise
Balance as of
December 31
Thereof
exercisable
250
– 30
– 15
26.19
26.19
26.19
441
– 67
– 124
23.32
24.00
17.16
205
26.19
250
26.19
205
26.19
250
26.19
1) Weighted average exercise price.
The weighted average stock price at the date of exercise
of the stock options during the financial year was
€ 26.57 (PY: € 28.94). As in the previous year, the exer-
cise price for options outstanding at the balance sheet
date was € 26.19. The weighted average remaining term
of the options was two years (PY: three years).
The compensation expense for option rights and free
shares recognized in personnel expenses amounted to
€ 1.0 million in the reporting year (PY: € 0.2 million); the
additional paid-in capital was increased accordingly.
Other share-based payment programs were individually
and in total insignificant for the financial position, liquidity,
and financial performance of the Group.
(13) Pension obligations
The pension obligations in the reporting year relate al-
most exclusively to Group companies domiciled in Ger-
many.
Under its defined contribution pension plans, the Group
mainly contributes to public-sector pension insurance
carriers by virtue of the applicable laws. The current con-
tribution payments amounted to € 50.0 million (PY:
Provisions for pensions were created to account for the
obligations arising from vested pension rights and cur-
rent benefits for former and active employees of the Axel
Springer Group and their survivors. The reserves for per-
formance-based pension plans correspond to the cash
value of the obligations on the reporting date less the
time value of the plan assets. Along with general actuarial
risks such as risks from salary and pension increases,
longevity risk, and interest rate risk as well as inflation
risk, capital market and investment risk.
Essentially, four different pension plans exist in the Ger-
man Group companies that are subject to the German
Company Pension Act, and thus to the statutory regula-
tions relating in particular to vesting, compensation for
inflation in the benefit phase, and insolvency protection
by the Pensions Guarantee Corporation. The pension
plans are partially financed by premium reserve funds
that are managed by Axel Springer Pensionstreuhand
e.V. as trustee. Two pension plans provide for an annual
pension for entitled persons based on fixed amounts that
depend for the first pension plan only on the length of
service in the company, and for the second pension plan
additionally on the position in the company, and are
static in the vesting period and dynamic in the benefit
payment period in accordance with the requirements of
the Company Pension Act. The promises to the Execu-
tive Board correspond in their design to the second pen-
sion plan and are additionally dynamic in the vesting pe-
riod depending on inflation. The third pension plan is a
defined-contribution benefit in which a benefit is calcu-
lated using fixed factor tables dependent on converted
compensation components. Ongoing benefits are ad-
justed from the beginning of pension payments at 1 %
p.a. The fourth pension plan includes direct commit-
ments based on subsidized remuneration conversions
which are congruently covered by insurance and usually
grant a one-time payment upon retirement.
131
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The measurement was based on the following parame-
ters:
The changes in the present value of the pension obliga-
tions are almost completely attributable to Germany and
are presented in the table below:
Information in %
2017
2016
Discount rate
Salary trend
Pension trend
1.6
1.5
1.5
1.7
1.5
1.5
As in the previous year, the expected life spans were de-
termined with reference to the guideline tables 2005 G
by Dr. Klaus Heubeck.
The amount of the provision is almost completely at-
tributable to Germany and was calculated as follows:
€ millions
12/31/2017 12/31/2016
Present value of defined benefit
obligations financed by fund
Fair value of plan assets
Present value of defined benefit
obligations not financed by fund
Reclassification into liabilities in
connection with assets held for sale
Provision
Thereof current
Thereof non-current
Reimbursement right
Net obligation
407.4
384.8
– 174.9
– 162.9
131.2
149.6
– 0.2
363.5
20.4
343.2
– 24.8
338.7
0.0
371.5
21.1
350.4
– 26.6
345.0
€ millions
2017
Present value of obligations as of January 1
534.4
Change in consolidated companies
Current service cost
Interest expense
0.0
8.4
8.8
2016
502.5
– 0.3
6.5
11.7
Actuarial gains/losses arising from changes
in demographic assumptions
– 1.9
– 2.9
Actuarial gains/losses arising from changes
in financial assumptions
Payments by employees
Payments to retirees
Plan curtailments
Reclassification into or from liabilities in
connection with assets held for sale
(see note (10))
Present value of obligations as of
December 31
7.2
3.0
36.2
3.0
– 21.4
– 22.3
0.1
– 0.1
– 0.2
0.0
538.4
534.4
In the fiscal year 2018, contributions to fund-financed
defined benefit plans are expected to total € 1.2 million
(PY: € 30.4 million). In addition, as of January 1, 2018
the Axel Springer high-rise (main building) in Berlin was
transferred to Axel Springer Pensionstreuhand e.V., Ber-
lin, on a fiduciary basis (see note (40)).
132
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The fair value of the plan assets is almost completely at-
tributable to Germany and showed the following
changes:
€ millions
Plan assets as of January 1
Income from plan assets
Employee contribution
Employer contribution
Benefits paid
Actuarial gains/losses arising from
changes in demographic assumptions
Actuarial gains/losses arising from
changes in financial assumptions
Additions to plan assets
2017
162.9
2.9
0.3
0.3
2016
163.3
3.9
0.2
0.3
– 18.1
– 0.6
0.2
– 4.2
0.1
26.3
0.0
0.0
Plan assets as of December 31
174.9
162.9
The investment portfolio for the plan assets is almost
completely attributable to Germany and broke down as
follows:
€ millions
Shares
Bonds
Money market instruments
Cash and cash equivalents
Real estate funds
Others
12/31/2017 12/31/2016
53.7
72.5
0.0
21.8
18.3
7.8
36.2
43.0
0.6
75.1
3.5
3.8
Plan assets with market price
quotations
174.1
162.1
Real Estate
Others
Plan assets without market price
quotations
0.5
0.3
0.8
0.5
0.2
0.7
in the income statement, the income from the reim-
bursement was netted with the corresponding pension
expenses. Based on the existing contractual regula-
tions, we do not assume a short-term settlement of the
reimbursement claim and the corresponding pension
obligations any more, and therefore in the reporting pe-
riod, we classified the asset as well as the related pen-
sion liability in an amount of € 22.7 million (PY: € 24.4
million) as non-current. The remaining amount of € 2.1
million (PY: € 2.2 million) was classified as current.
The value of the reimbursement right developed as fol-
lows:
€ millions
Reimbursement right as of January 1
Income from reimbursement rights
Paid-out benefits
2017
2016
26.6
0.4
27.4
0.6
– 2.1
– 2.2
Actuarial gains/losses arising from changes in
demographic assumptions
– 0.3
– 0.2
Actuarial gains/losses arising from changes in
financial assumptions
0.2
1.0
Reimbursement right as of December 31
24.8
26.6
The expenses for defined benefit pension plans are al-
most completely attributable to Germany and broke
down as follows:
€ millions
Current service cost
Interest expense
Employee contribution
Income from plan assets
Income from reimbursement rights
Plan curtailments
2017
2016
8.4
8.8
– 0.1
– 2.9
– 0.4
0.1
13.9
6.5
11.7
0.0
– 3.9
– 0.6
– 0.1
13.5
Total
174.9
162.9
Pension expenses
Axel Springer SE is entitled to reimbursement of pension
obligations or pension expenses arising in connection
with them in the context of the outsourcing of rotogra-
vure printing operations in 2005. The reimbursement
right was presented as an other financial asset, whereas
Service cost is presented within the personnel expenses.
The interest portions contained in the pension expenses
133
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The sensitivity calculations are based on the average
term of the pension obligations calculated as of the bal-
ance sheet date. The calculations were carried out in iso-
lation for the actuarial parameters classified as material.
As the sensitivity analysis is based on the average term
of the expected pension obligations and as a conse-
quence, the expected payment dates are not taken into
account, they only lead to approximate information or to
describe tendencies. In case of changes to the mortality
rates or life expectancies which act as a basis, it is as-
sumed that if life expectancy of the beneficiary increases
by one year as of December 31, 2017, pension obliga-
tions in Germany would have risen by 3.2 % (PY: 3.1 %).
As of December 31, 2017, the weighted average dura-
tion of the defined benefit obligation was 14 years (PY:
15 years).
and the income from the plan assets and interest reim-
bursements are presented as components of interest ex-
penses.
An increase or decrease in the material actuarial as-
sumptions would have the following effects on the pre-
sent value of the total pension obligations as of the bal-
ance sheet date:
Information
in %
Increase by 25 basis
points
Decrease by 25 basis
points
2017
Discount rate
Salary trend
Pension trend
– 3.4
0.1
2.4
3.6
– 0.1
– 2.3
Information
in %
Increase by 25 basis
points
Decrease by 25 basis
points
2016
Discount rate
Salary trend
Pension trend
– 3.4
0.1
2.4
3.7
– 0.1
– 2.3
134
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(14) Other provisions
The other provisions broke down as follows:
€ millions
Other obligations towards
employees
Partial early retirement
program (Altersteilzeit)
Structural measures
Discounts and rebates
Returns
Litigation expenses
Other taxes
Dismantling obligations
Other
Other provisions
Balance
as of
01/01/2017
Utilization Reversals Additions
Other
changes
Balance
as of
12/31/2017
Thereof
current
Thereof
non-
current
98.9
– 65.8
– 3.8
72.0
42.7
28.8
14.4
11.9
5.5
9.4
7.8
33.7
253.0
– 10.0
– 22.5
– 11.8
– 8.9
– 0.2
0.0
– 0.1
– 15.3
0.0
– 1.0
– 0.9
– 0.3
– 0.3
– 2.4
– 0.5
– 1.8
12.2
38.1
14.6
9.6
6.6
1.6
0.1
14.8
– 9.7
0.0
– 0.3
– 0.7
– 0.3
– 0.1
0.0
0.4
– 0.7
91.6
44.9
43.1
15.6
12.0
11.6
8.5
7.7
68.5
11.2
31.8
15.6
12.0
10.5
8.5
1.2
30.8
26.8
23.1
33.7
11.3
0.0
0.0
1.1
0.0
6.5
4.0
– 134.6
– 10.9
169.7
– 11.4
265.8
186.0
79.8
Other obligations towards employees primarily in-
cluded variable compensation tied to performance.
Structural measures were mainly allocated to the
newspaper and magazine as well as distribution and
sales divisions, and printing plants. Provisions for re-
turns comprised the expected sales returns of publish-
ing products. Other provisions mainly involved restruc-
turing measures still to be implemented in connection
with the sale of the office building complex in Hamburg
and the sale of the Axel-Springer-Passage in Berlin
(see note (5)) and guarantee obligations in the context
of the takeover of the domestic regional newspapers,
TV program guides, and women's magazines by
FUNKE Mediengruppe.
The other changes resulted from the initial consolida-
tion of acquired companies, currency translation differ-
ences, compounding and also from reclassifications
into liabilities related to assets held for sale (see note
(10)).
135
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(15) Financial liabilities
The financial liabilities comprised liabilities from promis-
sory notes in the amount of € 817.7 million (PY: € 577.5
million), other liabilities due to banks amounting to
€ 365.1 million (PY: € 681.2 million), as well as from fi-
nance leases of € 0.3 million (PY: € 0.6 million).
The interest rates were mainly equivalent to the effective
rates of interest. In the case of fixed-interest loan
tranches, the interest rates were fixed until the maturity
date.
Furthermore, on the reporting date additional unused
short-term and long-term credit facilities amounted to
€ 855.0 million (PY: € 840.0 million).
The promissory notes (nominal amounts) were character-
ized by the following utilizations, interest rates, and ma-
turities at the reporting date:
(16) Other liabilities
The other liabilities broke down as follows:
Interest rate in %
Maturity
€ millions
12/31/2017 12/31/2016
2017
€ million
2016
€ million
327.5
146.0
0.0
0.0
104.0
162.0
0.0
112.0
177.0
72.0
70.5
69.0
66.5
12.0
11.5
0.0
0.0
1.14
0.73
1.03
0.91
3.06
1.47
05/30/2024
05/30/2022
10/11/2018
05/30/2023
04/11/2018
10/12/2020
0.0
6-month EURIBOR + 0.7
05/30/2024
0.0
6-month EURIBOR + 0.55
05/30/2022
0.0
0.51
05/30/2021
71.5
6-month EURIBOR + 0.9
10/12/2020
58.0
6-month EURIBOR + 0.7
10/11/2018
The other liabilities due to banks (nominal amounts) were
characterized by utilizations, interest rates, and maturities
set forth in the table below. All liabilities were denomi-
nated in euros. Short-term loans are not presented in the
table.
2017
€ million
2016
€ million
Interest rate in %
Maturity
170.0
190.0 1-month EURIBOR + 0.425
07/03/2020
135.0
130.0
Eonia + 0.425
07/03/2020
60.0
60.0
Eonia + 0.475
07/03/2020
0.0
2.4
300.0
3-month EURIBOR + 0.80
07/22/2020
2.9
3-month EURIBOR + 0.30
10/15/2022
Contingent consideration and other put
options for purchase of non-controlling
interests
Debit balances in accounts receivable
Liabilities from derivatives
Other
Other financial liabilities
Thereof current
Thereof non-current
Advance payments from customers
Liabilities from other taxes
Liabilities due to employees
Advance payments
Accrued liabilities
Capital investment subsidies
Liabilities due to social insurance carriers
Liabilities for duties and contributions
Other
297.9
511.5
12.6
0.4
51.9
362.8
233.3
129.5
204.9
55.7
45.4
14.2
20.3
4.3
8.5
5.1
18.5
13.4
12.9
33.7
571.6
379.6
192.0
173.5
68.0
41.8
27.8
19.9
10.0
9.5
4.9
29.7
Other non-financial liabilities
376.9
385.1
Thereof current
Thereof non-current
Other liabilities
Thereof current
Thereof non-current
348.3
365.5
28.6
739.7
581.6
158.1
19.5
956.7
745.1
211.6
Other financial liabilities mainly related to other loan liabili-
ties. Contingent consideration and other put options for
136
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
the purchase of non-controlling interests primarily de-
creased due to payouts and subsequent valuation (see
note (33)). Advanced payments from customers in-
creased due to the development of the operating earn-
ings performance. Liabilities due to employees related to
outstanding wage and salary payments, management
bonuses, and severance award claims. Accrued liabilities
contained liabilities resulting from over-time and unused
vacation.
(17) Maturity analysis of financial liabilities
The contractually agreed (undiscounted) payments related to financial liabilities are presented in the following table:
€ millions
Financial liabilities
Contingent consideration and other put options for purchase of non-controlling
interests
Other non-derivative financial liabilities
Derivative financial liabilities
€ millions
Financial liabilities
Contingent consideration and other put options for purchase of non-controlling
interests
Other non-derivative financial liabilities
Derivative financial liabilities
Undiscounted cash outflows
Carrying
amount as of
12/31/2017
2018
2019-2022
2023 ff.
1,237.0
185.4
633.3
472.2
297.8
547.5
0.4
199.5
516.5
0.2
88.9
15.0
0.2
10.9
16.0
0.0
Undiscounted cash outflows
Carrying
amount as of
12/31/2016
2017
2018-2021
2022 ff.
1,259.3
14.2
1,286.5
511.5
450.0
12.9
333.1
437.2
12.5
177.2
10.5
0.4
0.5
7.0
2.2
0.0
137
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated income
statement
(18) Revenues
The revenues broke down as follows:
€ millions
Advertising revenues
Circulation revenues
Printing revenues
Other revenues
Revenues
2017
2016
2,521.3
2,223.1
633.0
49.2
359.1
646.9
54.6
365.7
3,562.7
3,290.2
During the fiscal year, revenues from barter transactions
amounted to € 54.5 million (PY: € 56.4 million). These
revenues were generated mainly from the bartering of
advertising services.
(19) Other operating income and change in
inventories and internal costs capitalized
The other operating income broke down as follows:
€ millions
2017
2016
Income from disposal of intangible assets,
property, plant, equipment, and investment
property
Subsequent valuation of contingent
purchase price liabilities and other option
liabilities for the acquisition of non-
controlling interests
Income from reversal of provisions
Foreign exchange gains
Gain on disposal of subsidiaries and
business units
Miscellaneous operating income
204.7
71.8
54.9
8.5
4.6
4.2
40.5
1.6
20.2
3.8
207.2
35.2
Other operating income
317.3
339.9
Income from the disposal of intangible assets and prop-
erty, plant and equipment and investment property re-
sulted in € 200.5 million from the sale of the Axel-
Springer-Passage in Berlin (see note (5)). Gains from the
subsequent valuation of contingent purchase price liabili-
ties in the amount of € 50.0 million were attributable to
options to acquire non-controlling interests in Bonial
Holding (see note (33)). Miscellaneous operating income
contained a large number of non-material items.
Change in inventories and internal costs capital-
ized increased to € 87.7 million (PY: € 82.6 million) in
the reporting year and mainly related to IT development
projects to develop and expand our digital business
models.
(20) Purchased goods and services
The purchased goods and services broke down as fol-
lows:
€ millions
2017
2016
Raw materials and supplies and
purchased merchandise1)
Purchased services
114.5
936.8
122.8
848.7
Purchased goods and services
1,051.4
971.5
1) Reclassification of expenses of the previous year into expenses for purchased ser-
vices on a pro-rated basis
Raw materials and supplies and purchased merchandise
comprised paper costs amounting to € 53.3 million (PY:
€ 52.9 million).
The cost of purchased services was predominantly com-
posed of publisher services in the context of perfor-
mance-based marketing, purchased third-party printing
services and professional fees. The purchased third-
party printing services also included paper costs.
The increase in purchased services is mainly attributable
to the Awin Group (previously zanox Group) and is due
to increased revenues and to the acquisition of affilinet in
the reporting year.
138
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(21) Personnel expenses
(22) Depreciation, amortiziation, and impairments
The personnel expenses broke down as follows:
The depreciation, amortization, and impairments broke
down as follows:
€ millions
Impairment losses in goodwill
2017
2.0
2016
0.0
Amortization of other intangible assets
175.8
173.8
Impairment losses in other intangible
assets
Depreciation of property, plant, and
equipment
Impairment losses in property, plant, and
equipment
Depreciation of investment property
Depreciation, amortization, and
impairments
4.5
2.6
52.5
54.3
1.0
0.3
1.1
0.8
236.1
232.6
Impairment losses in financial assets recognized in the fiscal
year are included in the income from investments.
€ millions
Wages and salaries
Social security
Pension expenses
Expenses for share-based payments
Other benefit expenses
2017
995.4
148.7
11.6
44.9
1.5
2016
940.9
138.0
8.7
7.9
4.6
Personnel expenses
1,202.1
1,100.1
The average number of employees in the Group is
shown below:
Salaried employees
Editors
Wage-earning employees
Total employees
2017
2016
12,397
11,797
2,867
2,888
572
638
15,836
15,323
The increase in personnel figures compared to the prior
year resulted besides the initial consolidation of acquired
companies from staff increases in the strongly growing
digital business units.
139
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(23) Other operating expenses
The other operating expenses broke down as follows:
€ millions
Advertising expenses
Expenses for non-company personnel
Mailing and postage expenses
Rental and leasing expenses
Consulting, audit and legal fees
Commissions and gratuities
Maintenance and repairs
Subsequent valuation of contingent
purchase price liabilities and other option
liabilities for the acquisition of non-
controlling interests
Travel expenses
Training of employees
Services provided by related parties
Allowances for doubtful receivables
Other taxes
Foreign exchange losses
Miscellaneous operating expenses
2017
266.8
181.7
94.5
69.9
53.3
38.9
30.7
21.4
26.7
16.3
16.6
7.4
8.4
2.9
76.9
2016
243.1
161.0
77.7
61.0
51.9
36.6
31.1
30.4
30.3
12.5
11.8
10.2
8.2
5.1
80.1
Other operating expenses
912.4
851.2
The miscellaneous operating expenses included addi-
tions to provisions relating to legal and other risks, as
well as other operating expenses.
The following professional fees for the services rendered
by the auditor Ernst & Young GmbH were recognized:
€ millions
2017
2016
Audits of the annual financial statements
Tax advisory services
Other services
Total professional fees
1.4
0.3
0.2
1.9
1.2
0.4
0.4
2.1
The professional fees for the audit of financial statements
included statutory and voluntary audits of the separate fi-
nancial statements of Axel Springer SE and other Ger-
man subsidiaries, the consolidated financial statements,
the auditor's review of the half-year financial report, the
audit of financial statements according to IDW PS 480,
which prescribes the audit of financial statements com-
piled for a special purpose, the audit of internal control
systems in service companies according to IDW PS 951,
as well as the audit of the system implemented in order
to ensure compliance with Section 32 (1) WpHG. The tax
advisory fees were a result of support services regarding
specific tax questions. Other services consisted of due
diligence services as part of acquisitions within the fiscal
year.
(24) Income from investments
The income from companies accounted for using the eq-
uity method amounted to € – 43.9 million (PY: € 23.4 mil-
lion). Besides of our share in the investee’s net income, it
consisted of impairment losses of € 51.1 million (PY:
€ 2.5 million). Impairment losses were mainly attributable
to our investment in Ringier Axel Springer Schweiz AG. In
the previous year, income from investments included in-
come from the disposal of Thrillist Media Group Inc. of
€ 29.2 million (see note (7)).
The other investment income of € 4.9 million (PY: € 16.8
million) included dividends received from other invest-
ments as well as impairment losses from other invest-
ments in the amount of € 4.4 million (PY: € 0.2 million).
In the previous year, the other operating income included
income from the disposal of NowThis Media Inc. in the
amount of € 5.6 million (see note (7b)).
140
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(25) Financial result
The net financial result broke down as follows:
€ millions
2017
2016
Interest income from bank accounts
Interest income from loans and securities
Interest income from taxes
Other interest income
Interest income
0.7
0.9
0.4
7.2
9.2
1.2
8.0
1.7
1.8
12.7
Changes in current and deferred taxes are mainly related
to the sale of the Axel-Springer-Passage (see note (5)) as
well as the disposal of the office building complex in
Hamburg in the previous year. The increase in deferred
tax income resulted from tax rate changes in particular in
the USA.
The expected income tax expense – applying the tax
rate of Axel Springer SE – is reconciled to the income tax
expense recognized in the income statement as follows:
Interest expenses on liabilities due to banks
and on promissory note
– 18.0
– 16.9
€ millions
Income before income taxes
2017
508.3
2016
576.1
Interest expenses on pension provisions,
less reimbursements
Interest expenses from compounding
Miscellaneous interest expenses
– 5.2
– 3.6
– 3.2
– 7.2
– 3.6
– 1.1
Interest and similar expenses
– 30.0
– 28.7
Other financial result
Financial result
2.4
– 5.4
– 18.4
– 21.4
A total of € 2.3 million (PY: € 10.7 million) of the interest
income and € – 19.3 million (PY: € – 16.9 million) of the
interest expense was allocated to financial assets and lia-
bilities that were not measured at fair value through profit
or loss.
(26) Income taxes
The income taxes paid or owed and the deferred taxes
are recognized under income taxes. The income taxes
consist of trade tax, corporate income tax, and solidarity
surcharge, and the corresponding foreign income taxes.
The income tax expenses are broken down below:
€ millions
Current taxes
Deferred taxes
2017
274.6
2016
149.0
– 144.4
– 22.9
Income taxes from discontinued operations
130.2
126.1
Income taxes from continued operations
0.6
0.9
Income taxes
130.8
126.9
Tax rate of Axel Springer SE
31.00%
31.00%
Expected tax expenses
Differing tax rates
Changes in tax rates
Permanent differences
Adjustments to carrying amounts of
deferred taxes
Current income taxes for prior years
Deferred income taxes for prior years
Non-deductible operating expenses
Tax-exempt income
Trade tax additions/deductions
Other effects
Income taxes
157.6
– 3.8
– 55.0
2.8
6.3
27.8
– 19.1
12.5
– 1.2
2.4
– 0.1
130.2
178.6
– 13.8
– 19.3
0.4
10.8
4.2
1.6
9.5
– 43.3
1.6
– 4.1
126.1
Companies with the legal form of a corporation domiciled
in Germany are subject to corporate income tax at the
rate of 15 % and solidarity surcharge of 5.5 % of the cor-
porate income tax owed. In addition, the profits of these
companies are subject to trade tax, for which the
amount is municipality-specific. Companies with the legal
form of a partnership are subject to trade tax exclusively.
The net income is assigned to the shareholder for pur-
poses of corporate income tax. The Group tax rate re-
mains unchanged at 31.0 %.
The effects of different tax rates for partnerships and for
foreign income taxes from the tax rate applicable to Axel
Springer SE are explained in the reconciliation in the item
differing tax rates. In the reporting year, effects from tax
141
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
rate changes mainly resulted from reduced tax rates in
the USA. In the previous year, tax rate changes particu-
larly in France, Great Britain and Israel had a positive im-
pact. The permanent differences result mainly from im-
pairment losses in goodwill and deconsolidation effects
that are not taken into account for tax purposes. The ad-
justments made to the carrying amounts of deferred
taxes included € 21.4 million (PY: € 17.3 million) for the
non-recognition of deferred taxes on tax loss carry-for-
wards. In addition, effects from the first-time recognition
of deferred tax assets are included. In the previous year,
tax-exempt income was mainly attributable to the estab-
lishment of the company Ringier Axel Springer Schweiz
AG (see note (2c)).
Deferred tax assets and liabilities were recognized to ac-
count for temporary differences and tax loss carry-for-
wards, as follows:
€ millions
12/31/2017
12/31/2016
Deferred
tax
assets
Deferred
tax
liabilities
Deferred
tax
assets
Deferred
tax
liabilities
Intangible assets
11.8
374.2
13.3
463.1
Property, plant, and
equipment and
investment property
Non-current financial
assets
Inventories
Receivables and other
assets
Pension provisions
Other provisions
Liabilities
2.2
1.0
0.6
54.9
19.1
11.1
22.9
51.0
0.3
0.0
6.5
0.0
5.9
3.9
1.8
0.8
0.6
52.5
21.4
15.0
11.1
79.2
0.3
0.0
10.2
0.5
5.4
41.0
Temporary differences
123.6
441.8
116.5
599.7
Tax loss carry-
forwards
Total
Offsetting
Amounts as per
balance sheet
3.5
0.0
7.7
0.0
127.1
441.8
124.2
599.7
– 72.5
– 72.5
– 69.3
– 69.3
54.6
369.3
55.0
530.5
The decrease in deferred tax liabilities related to intangi-
ble assets mainly resulted from tax rate changes, amorti-
zations as well as reclassifications into liabilities related to
assets held for sale (see note (10)). The decrease in de-
ferred tax liabilities related to property, plant, and equip-
ment, and investment property and liabilities concerns
mainly the sale of the Axel-Springer-Passage (see note
(5)) as well as the disposal of the office building complex
in Hamburg in the previous year.
The net balance of deferred tax items from January 1 to
December 31, 2017 was derived as follows:
€ millions
Deferred tax assets as of January 1
2017
55.0
2016
46.8
Deferred tax liabilities as of January 1
– 530.5
– 481.2
Net tax position as of January 1
– 475.5
– 434.4
Deferred tax of current year
144.4
22.9
Changes in deferred taxes recognized in
other comprehensive income
Changes due to currency translations
1.6
14.9
11.0
0.0
Changes in consolidation group
– 23.0
– 75.0
Reclassification into assets and liabilities
held for sale
22.8
0.0
Net tax position as of December 31
– 314.8
– 475.5
Deferred tax assets as of December 31
54.6
55.0
Deferred tax liabilities as of December 31
– 369.3
– 530.5
Of the deferred tax assets, an amount of € 22.4 million
(PY: € 9.6 million), and of the deferred tax liabilities, an
amount of € 5.2 million (PY: € 1.0 million) can be real-
ized in the short term.
The amount of deferred tax assets to be disclosed in
accordance with IAS 12.82 was € 3.8 million (PY:
€ 4.5 million). It is expected that this amount can be re-
alized by utilization against the available operating in-
come.
Deferred taxes in the total amount of € 52.2 million (PY:
€ 50.6 million) were recognized directly in equity, as
they relate to matters that were likewise recognized di-
rectly in equity.
142
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(27) Earnings per share
The earnings per share were determined as follows:
Result of continued operations
attributable to shareholders of
Axel Springer SE
Result of discontinued operations
attributable to shareholders of
Axel Springer SE
Net income attributable to
shareholders of Axel Springer SE
Weighted average shares
outstanding
Earnings per share from
continuing operations
(basic/diluted)
Earnings per share from
discontinued operations
(basic/diluted)
Net income attributable to
shareholders of Axel Springer SE
per share (basic/diluted)
2017
2016
€ millions
344.1
425.4
€ millions
1.3
1.9
€ millions
345.5
427.3
000s
107,895 107,895
€
3.19
3.94
€
0.01
0.02
€
3.20
3.96
In the fiscal year, no deferred tax assets were recog-
nized with respect to corporate income tax loss carry-
forwards amounting to € 233.6 million (PY: € 209.6 mil-
lion), and with respect to trade tax loss carry-forwards
amounting to € 87.7 million (PY: € 45.4 million) because
it did not appear probable that sufficient taxable income
could be generated for these amounts in the near fu-
ture. In addition, there are interest carry-forwards
amounting to € 1.9 million (PY: € 1.9 million) for which
no deferred tax assets were recognized. Of these tax
loss carry-forwards, an amount of € 6.1 million (PY:
€ 4.4 million) can be carried forward for up to five years
and an amount of € 0.0 million (PY: € 1.9 million) can be
carried forward for six to ten years. The utilization of tax
loss carry-forwards or interest carry-forwards that had
not previously been recognized as deferred tax assets
caused a reduction in income tax expenses of € 1.9 mil-
lion (PY: € 2.3 million). In the past fiscal year, there were
corrections of recognized tax loss carry-forwards due to
tax audits or differing tax assessments in the amount of
€ – 0.7 million (PY: € 0.3 million).
As a rule, deferred taxes must be recognized to account
for the difference between the Group’s interest in the
equity of the subsidiaries as presented in the consoli-
dated balance sheet and the corresponding investment
balance recognized in the financial statements for tax
purposes, e.g. by retaining profits. Deferred tax liabilities
were not recognized on differences of € 6.0 million (PY:
€ 8.2 million) because a realization is not planned at the
present time. In the case of sale or profit distribution,
5 % of the gain on disposal or the dividend, respectively,
would be subject to taxation in Germany; in addition,
foreign withholding taxes might be incurred.
143
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated statement of
comprehensive income
(28) Other income/loss
The other income/loss broke down as follows:
2017
2016
€ millions
Before tax
Tax effect
Net
Before tax
Tax effect
Net
Actuarial gains/losses from defined benefit pension
obligations
Currency translation differences
Changes in fair value of available-for-sale financial assets
Changes in fair value of derivatives in cash flow hedges
Other income/loss from investments accounted for using
the equity method
Other income/loss
– 5.1
– 80.8
– 17.8
0.1
2.8
– 100.7
1.7
0.0
0.0
0.0
0.0
1.6
– 3.4
– 80.8
– 17.8
0.1
2.8
– 99.1
– 36.4
– 47.0
13.6
0.2
– 1.9
– 71.5
11.0
0.0
0.0
0.0
0.0
11.0
– 25.3
– 47.0
13.6
0.1
– 1.9
– 60.5
Other income/loss from companies accounted for using
the equity method in the reporting year and the previous
year is exclusively attributable to items that may not be
reclassified into the income statement in future periods.
144
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated statement of
cash flows
(29) Other disclosures
The cash and cash equivalents were composed of short-
term available cash in banks, securities, cash on hand,
and checks.
Additions in both intangible assets and property, plant,
and equipment of € 6.6 million (PY: € 5.3 million) were
not yet reflected in cash.
The cash flow from investing activities contains income
taxes paid of € 113.0 million (PY: € 17.1 million). In the
reporting period these resulted from real estate sales.
Together with the income taxes paid in the cash flow
from operating activities disclosed below the cash flow
statement the income taxes paid amount in total to
€ 274.7 million (PY: € 187.4 million).
The acquisition costs, cash payments, and purchased
assets and liabilities for business acquisitions are pre-
sented in the following table (see note (2c) for the major
acquisitions):
€ millions
Intangible assets
Property, plant, and equipment
Non-current financial assets
Trade receivables
Other assets
Cash and cash equivalents
Provisions and other liabilities
Deferred tax liabilities
Net assets
Acquisition cost (preliminary)
Thereof paid
2017
75.9
0.9
0.0
31.0
3.9
21.1
– 49.8
– 22.7
2016
220.6
10.2
1.1
14.2
29.1
22.4
– 53.8
– 80.3
60.2
163.6
181.9
86.2
307.2
293.7
The amounts from the purchases of shares in consoli-
dated subsidiaries and business units less cash and
cash equivalents acquired reported in the cash flow
statement, in addition to the cash payments and ac-
quired funds listed in the table, also include payments for
acquisitions of the previous years (in particular payments
from contingent considerations totaling € 120.0 million
(PY: € 93.4 million); see note (33)).
The following table provides details of sales proceeds,
paid up amounts, and disposed assets and liabilities
arising from transactions with loss of control:
€ millions
Goodwill
Other intangible assets
Property, plant, and equipment and non-
current financial assets
Trade receivables
Other assets
Cash and cash equivalents
Provisions and other liabilities
Deferred tax liabilities
Disposal net assets
Net realizable value
Thereof paid-up
2017
1.7
0.8
0.1
3.6
0.7
0.4
– 5.1
– 0.3
1.9
6.4
5.6
2016
83.3
107.1
5.8
16.7
20.0
13.7
– 97.9
– 16.0
132.6
268.1
90.9
In the previous year, besides the received purchase
prices (after taxes), the proceeds from disposals (after
taxes) comprised in particular the addition of the net as-
sets of € 163.9 million in connection with the establish-
ment of the company Ringier Axel Springer Schweiz AG,
see note (2c). The disclosure of cash inflows from divest-
itures in the cash flow statement is made under pro-
ceeds from disposals of consolidated subsidiaries and
business units less cash and cash equivalents given up.
The proceeds from disposal of intangible assets proper-
ty, plant, and equipment, and investment property in the
amount of € 247.6 million related to the sale of the Axel-
Springer-Passage in Berlin, see note (5). For the pur-
chases of intangible assets and property, plant, and
145
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
equipment in connection with the new Axel Springer
headquarter building in Berlin see note (5) and note (39).
In the previous year the payments from the disposal of fi-
nancial assets, including repayment of the vendor loan,
amounting to € 247.9 million relate to the early repayment
of the subordinated vendor loan including capitalized inter-
est from the FUNKE Mediengruppe, see note (2d).
In the line purchase of non-controlling interests primarily the
payment for the exercise of the option on the acquisition of
non-controlling interests of the Awin Group has been rec-
orded, see note (2c) and note (33).
The change in the statement of financial positions of cur-
rent and non-current financial liabilities related almost exclu-
sively from cash proceeds and cash repayments disclosed
in the cash flow from financing activities.
The cash inflows from other financial transactions resulted
primarily from other non-current loans and correspond to
the change in the statement of financial positions within
other non-current financial liabilities. In the previous year the
other financing activities within the cash flow from financing
activities included the transfer to the plan assets of € 67.5
million, which was part of the purchase price received in
2015 for the sale of the Hamburg office building complex.
Regarding cash inflows and outflows with respect to dis-
continued operations, see note (2d).
Notes to the consolidated segment report
(30) Basic principles of segment reporting
The segment reporting reflects the internal management
and reporting structures. In the fiscal year the names of
our segments have been adjusted. The content compo-
sition of the segments remained unchanged. The report-
ing format is broken down into the three operating seg-
ments, those being News Media (previously Paid
Models), Marketing Media (previously Marketing Models),
and Classifieds Media (previously Classifieds Ad Models).
In addition, there is the Services/Holding segment.
Segmentation of assets, liabilities, and investments
based on the operating segments does not occur as
these measures do not serve as a basis for decision
making at segment level.
(a) Operating segments
All business models which predominantly generate reve-
nues in online classified advertising are summarized in
the Classifieds Media segment. Our portfolio comprises
leading domestic and foreign online classified portals fo-
cusing on real estate, jobs and cars, as well as general
classifieds. Our online classifieds portals include the real
estate portals SeLoger, Immoweb, Immowelt/Immonet,
the job portals of the StepStone Group (including the
portals of Totaljobs, Jobsite and Saongroup), the re-
gional portal meinestadt.de, the portals of @Leisure for
holiday properties (incl. the portals Traum-Ferienwoh-
nungen and DanCenter), as well as the car and general-
ist classified ad portals LaCentrale and Yad2.
The News Media segment includes primarily business
models that are based on content creation and funded
by paying readers and/or advertisers. News Media Na-
tional include the digital and print media of the BILD and
WELT Group, the computer, car and sport magazines of
the BILD brand family, B.Z. and the music magazines.
News Media International include Axel Springer's digital
and printed media services in Europe and the USA. In
Europe our main areas of representation are in Poland,
Slovakia, Serbia, Hungary, Switzerland, Belgium, Spain
and the Baltic States. Onet.pl and azet.sk, the leading in-
ternet portals in Poland and Slovakia, also belong to this
sub-segment. In the USA, we are represented with busi-
nessinsider.com and additionally with eMarketer.
The Marketing Media segment compromises all domes-
tic and foreign business models whose revenues are pri-
marily generated by advertising customers in marketing
based on performance or reach. These include, in partic-
ular, the performance-based activities of the Awin Group
(previously Zanox Group), which have been strengthened
through the offerings of ShareASale.com and the affilinet
Group, as well as the reach-based marketing offers of
146
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Idealo, finanzen.net, Bonial and auFeminin (see for the
planned disposal of auFeminin note (10), (40)).
The Services/Holding segment comprises group services
including IT, printing plants, real estate management,
gastronomy, and financial and personnel services, as
well as holding functions such as accounting, controlling,
finance, law, tax, HR, internal audit, strategy, and com-
munication. Group services are purchased by customers
within the Group and are priced at arm’s length.
(b) Geographical information
The activities of the Axel Springer Group are conducted
mainly in Germany, other European countries, and the
USA.
For purposes of geographical segment reporting, the
revenues are segmented according to the location of the
customer’s registered office and the non-current assets
according to the location of the legal entity.
(31) Segment information
The segment information was compiled on the basis of
the recognition and measurement methods applied in
the consolidated financial statements.
The external revenues comprise circulation revenues
from the sale of publishing products, advertising reve-
nues, and revenues from rendering services. The internal
revenues consist of revenues from the exchange of
goods and services between the various segments. The
transfer pricing is based on cost coverage.
We use the performance figure adjusted EBITDA, which
illustrates earnings before interest, taxes, depreciation
and amortization, as well as adjusted EBIT, which is de-
fined as earnings before interest and taxes, to measure
segment results. In calculating this performance figure,
non-recurring effects and effects of purchase price allo-
cations are eliminated. Non-recurring effects include ef-
fects from the acquisition and disposal (including contri-
bution) of subsidiaries, business units, and investments
(including effects from the subsequent valuation of con-
tingent considerations and other option liabilities for the
acquisition of non-controlling interests), as well as impair-
ment and write-ups of investments, effects from the sale
of real estate, impairments, and write-ups of real estate
used for own operational purposes, plus expenses re-
lated to the long-term incentive plan for the current Exec-
utive Board members (LTIP) granted at the beginning of
May 2016. Purchase price allocation effects include the
expenses of amortization, depreciation, and impairments
of intangible assets, and property, plant, and equipment
from the acquisition of companies and business divi-
sions.
147
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The breakdown of the eliminated non-recurring effects from the adjusted EBITDA and adjusted EBIT into the segments
is shown below:
2017
2016
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
– 2.4
– 10.9
– 1.3
0.0
– 2.6
– 17.0
– 0.4
0.0
– 15.1
– 2.6
52.7
0.0
– 20.2
– 3.0
– 6.6
0.0
€ millions
Effects from acquisitions of subsidiaries and
investments
Subsequent valuation of contingent
purchase price liabilities and other option
liabilities for the acquisition of non-
controlling interests
Effects from initiated and finalized disposals
of subsidiaries, investments and real estate
Impairment on investments
Executive Board Program 2016 (LTIP)
Non-recurring effects
– 17.2
– 66.2
36.8
163.5
54.1
74.0
0.4
0.0
0.0
– 12.4
– 40.3
0.0
0.7
183.7
– 15.3
0.0
0.0
– 20.2
77.4
– 0.5
0.0
94.0
0.0
0.0
50.3
– 2.5
0.0
40.9
69.1
0.0
– 3.5
65.6
The effects from business acquisitions are mainly at-
tributable to the News Media segment, mainly resulting
from effects of purchase price allocations in connection
with the establishment of Ringier Axel Springer Schweiz
AG. In the previous year effects of purchase price alloca-
tions in connection with the acquisition of eMarketer
have been included.
The effects of the subsequent valuation of contingent
consideration and other option liabilities for the acquisi-
tion of non-controlling interests related primarily to Bonial
Holding (Marketing Media) and Immowelt (Classifieds
Media) in the reporting year (PY: Immowelt and Im-
moweb (both Classifieds Media)).
The effects from the sale and disposal of real estate and
companies conducted and initiated are mainly attributa-
ble to the sale of the Axel-Springer-Passage in Berlin
(Services/Holding, see note (5)). In the previous year, the
effects related primarily to the disposal of CarWale (Clas-
sifieds Media), as well as the income from the disposal of
the entire Swiss business in connection with the estab-
lishment of Ringier Axel Springer Schweiz AG jointly with
Ringier (News Media), the income from the disposal of
Smarthouse Media and the disposal of the investment in
Thrillist (both Marketing Media). Furthermore, in the previ-
ous year the gain on the sale of the office building com-
plex in Hamburg was included in the Services/Holding
segment.
The impairments on investments related primarily to the
News Media segment and related to Ringier Axel Sprin-
ger Schweiz AG, see note 7(a).
For the long-term incentive plan for the current Executive
Board members 2016 (LTIP) see further explanations in
note (12).
148
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The reconciliation of the income from investments dis-
closed in the income statement as well as the impair-
ments are shown below:
goals, methods, and processes of our capital manage-
ment are subordinate to the earnings-driven financial key
figures.
€ millions
2017
2016
Income from investments included in
adjusted EBITDA
16.0
18.7
Non-recurring effects included in result
from investments accounted for using the
equity method
Non-recurring effects included in other
investment income
Income from investments
– 51.1
16.8
– 4.0
– 39.0
4.7
40.2
Depreciation, amortization, impairments,
and write-ups (except from non-recurring
effects and purchase price allocations)
Amortization and impairments from
purchase price allocations
Depreciation, amortization, and
impairments
– 141.9
– 124.3
– 94.2
– 108.3
– 236.1
– 232.6
The non-current segment assets include goodwill, intan-
gible assets, property, plant, and equipment as well as in-
vestment properties. The largest share of non-current
segment assets of the other countries is attributable to
France in the amount of € 839.6 million (PY: € 1,024.8
million) and the USA in the amount of € 668.0 million (PY:
€ 733.6 million).
Other disclosures
(32) Capital management
Beyond the provisions of German law applicable to stock
corporations, Axel Springer SE is not subject to any fur-
ther obligations relating to capital preservation, whether
from its own Articles of Incorporation or from contractual
obligations. The financial key figures we used for man-
agement purposes are primarily earnings-driven. The
We can utilize the funds derived from the promissory
notes (€ 879.0 million) and also avail ourselves of our
long-term credit lines (€ 1,200.0 million), both for general
business purposes as well as to finance acquisitions.
In order to optimize our financing conditions, in May
2017, we improved the average rate of interest, ex-
tended the average term and significantly increased the
financing volumes through the partial termination, trans-
formation and subscription of our existing promissory
notes. In this context, the long-term credit lines drawn
down were also repaid, as well the early repayment of
two promissory notes with floating interest rates. The
maturity of our credit lines remained unchanged.
As of December 31, 2017, there were now promissory
notes totaling € 879.0 million with a term to April 2018
(€ 70.5 million), to October 2018 (€ 104.0 million), to Oc-
tober 2020 (€ 69.0 million), to May 2021 (€ 11.5 million),
to May 2022 (€ 158.0 million), to May 2023 (€ 72.0 mil-
lion) and to May 2024 (€ 394.0 million). In addition, on
the balance sheet date credit lines amounting to
€ 1,200.0 million, the utilization of which is due for repay-
ment in July 2020. The utilization of the credit lines is tied
to compliance with covenants. Since the existence of the
credit lines we have fully complied with all credit terms.
For the purpose of maintaining and adjusting the capital
structure, the company can adjust the dividend pay-
ments to its shareholders or purchase treasury shares
representing up to 10.0 % of the subscribed capital as of
the date of the resolution at the Annual General Meeting
on the authorization to acquire treasury shares on April
16, 2014. Treasury shares can be used for acquisition fi-
nancing or they can be retired. At the reporting date and
the prior year's reporting date, we held no treasury
shares.
149
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(33) Financial assets and liabilities
The balance sheet items comprising financial assets and liabilities can be attributed to the measurement categories ac-
cording to IAS 39 as follows:
€ millions
Assets 12/31/2017
Other non-current investments and securities
Loans and advances
Derivatives
Other non-current financial assets
Trade receivables
Receivables due from related parties
Other
Other assets
Cash and cash equivalents
Liabilities 12/31/2017
Financial liabilities
Trade payables
Liabilities due to related parties
Derivatives designated as a hedging instrument
Contingent consideration
Other
Other liabilities
Assets 12/31/2016
Other non-current investments and securities
Loans and advances
Derivatives
Other non-current financial assets
Trade receivables
Receivables due from related parties
Derivatives
Other
Other assets
Cash and cash equivalents
Liabilities 12/31/2016
Financial liabilities
Trade payables
Liabilities due to related parties
Derivatives designated as a hedging instrument
Derivatives not designated as a hedging instrument
Contingent consideration
Other
Other liabilities
Carrying
amount
Loans and
receiv-
ables
Financial
liabilities
Available-
for-sale
financial
assets
Financial
assets and
liabilities
held for
trading
No category
according to
IAS 39 and
non financial
assets and
liabilities
40.1
40.1
693.9
29.3
53.5
53.5
216.8
41.6
41.6
614.6
40.0
63.5
63.5
224.1
1,236.8
462.1
22.9
281.8
281.8
1,258.7
379.8
23.1
249.3
249.3
163.9
163.9
155.3
155.3
154.5
154.5
0.4
0.4
146.3
146.3
0.6
0.6
0.6
12.4
12.4
95.2
95.2
0.3
41.6
80.6
376.9
457.4
96.8
96.8
0.6
6.5
309.3
385.1
695.0
163.9
40.1
155.3
359.3
693.9
29.3
148.7
148.7
216.8
1,237.0
462.1
64.5
0.4
80.6
658.7
739.7
154.5
41.6
146.3
342.3
614.6
40.0
0.6
160.3
160.9
224.1
1,259.3
379.8
29.6
0.6
12.4
309.3
634.4
956.7
150
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
With the exception of the following financial assets and liabilities, the valuation is at amortized cost.
12/31/2017
12/31/2016
Fair value
based on
market price
(level 1)
Fair value
based on
observable
market data
(level 2)
Fair value not
based on
observable
input factors
(level 3)
Fair value
based on
market price
(level 1)
Fair value
based on
observable
market data
(level 2)
Fair value not
based on
observable
input factors
(level 3)
103.7
155.3
0.4
106.0
0.6
146.3
0.6
12.4
80.6
309.3
€ millions
Other non-current investments and
securities
Derivatives not designated as a
hedging instrument (positive fair
value) (see note (35b))
Derivatives designated as a hedging
instrument (negative fair value) (see
note (35a))
Derivatives not designated as a
hedging instrument (negative fair
value) (see note (35b))
Contingent consideration
Besides additions of € 21.1 million (PY: € 77.9 million)
and disposals of € 5.6 million (PY: € 0.0 million) the de-
velopment of other non-current investments and securi-
ties related to fair value changes of € – 17.8 million (PY:
€ 13.9 million) recognized directly in equity. In addition,
fair value changes of € – 0.6 million (PY: € 0.0 million)
have been recognized in other investment income.
In the reporting year, the fair values of liabilities for contingent considerations from business combinations developed as
follows:
€ millions
January, 1
Acquisitions or granting of option rights
Payment
Subsequent valuation affecting net
income
Thereof other operating income
Thereof other operating expenses
Compound
Other
December, 31
2017 Thereof Immoweb
Thereof Bonial
Holding
thereof Awin
Thereof Onet
309.3
13.2
– 187.0
– 43.9
– 56.6
12.6
2.0
– 13.0
80.6
67.4
54.2
63.1
41.9
– 52.8
3.4
3.4
0.2
18.2
– 62.4
– 43.8
– 50.0
– 50.0
0.1
4.3
– 1.1
– 1.1
0.4
0.0
2.0
2.0
0.0
Other effects mainly related to the reclassification of con-
tingent considerations into liabilities related to assets
held for sale, see note (10). The subsequent valuation of
the contingent consideration for the acquisition of non-
controlling interests of the Bonial Holding is connected to
the closing of the business in the USA in the reporting
year and the associated adjustment of the medium-term
planning of the entity.
151
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
€ millions
January, 1
Acquisitions or granting of option rights
Divestment
Payment
Subsequent valuation affecting net income
Thereof other operating income
Thereof other operating expenses
Compound
Other
December, 31
2016
307.8
75.2
0.0
– 93.4
17.2
– 3.1
20.3
2.2
0.3
Thereof
Immoweb
61.2
Thereof
Bonial
thereof Awin
Holding Thereof Onet
Thereof
Car&Boat
Media
0.0
63.1
52.8
42.9
89.8
5.5
5.5
0.7
0.0
1.8
1.8
– 0.4
– 1.9
0.9
– 1.5
2.4
– 89.7
– 0.6
– 0.6
0.5
0.0
309.3
67.4
63.1
54.2
41.9
The fair value measurement of the contingent purchase
price liabilities essentially depends on the estimated re-
sults of the acquired companies in the years before the
possible exercise periods of the option rights or the pay-
ment dates of the earn-outs. The earnings used as a ba-
sis for measurement are generally EBITDA figures ad-
justed for material non-recurring effects. In case of an
increase of the relevant estimated earnings measures by
10 %, the value of the contingent consideration would in-
crease by approximately 23 %. A decrease of the rele-
vant earnings measures by 10 % would result in a reduc-
tion of approximately 2 %.
With the exception of the financial liabilities presented
below, the carrying amounts of the financial assets and
liabilities were identical to their fair values.
€ millions
12/31/2017
12/31/2016
Carrying
amount Fair value
Carrying
amount Fair value
Financial liabilities
793.3
804.1
448.0
456.1
Thereof
promissory note
793.3
804.1
448.0
456.1
The fair value disclosed is determined on the basis of the
advantage between the contractually agreed effective in-
terest rate and the market interest rate taking into ac-
count our credit risk (level 2 of the measurement hierar-
chy, see note (3g)).
The net gains and losses of financial instruments (exclud-
ing interest and income from investments) recognized in
the income statement are presented in the following ta-
ble.
€ millions
Loans and receivables, financial
liabilities
Available-for-sale financial assets
Financial assets and liabilities held for
trading
2017
2016
– 5.2
– 4.5
– 27.3
5.5
4.7
15.0
The net gains and losses in the categories of “loans and re-
ceivables” and “financial liabilities” consisted mainly of the
result from the currency conversion and valuation allow-
ances.
The net gains or losses of available-for-sale financial assets
consisted mainly of impairment losses. In the previous year
gains and losses on the disposal of these financial assets
have been included.
The net gains or losses in the category of “financial assets
and liabilities held for trading” mostly resulted from changes
152
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
in fair value of foreign currency derivatives and gains (PY:
expenses) from other financial derivatives.
In the fiscal year, fair value changes of € – 17,7 million (PY:
€ 14.1 million) before taxes were recognized directly in eq-
uity.
(34) Financial risk management
With respect to its financial assets and liabilities, the Axel
Springer Group is exposed to financial market risks, li-
quidity risks, and credit risks. The task of financial risk
management is to limit these risks by means of targeted
measures.
(a) Financial market risks
Financial market risks for financial assets and liabilities
mainly consist of interest rate risks and exchange rate
risks.
In principle, the effects of these risks on the value can be
assessed promptly and, where applicable, the loss risks
can be reduced.
Selected derivative hedging instruments are used to
hedge risks. The use of financial derivatives is governed
by appropriate guidelines of the Group. These guidelines
define the relevant responsibilities, permissible actions,
reporting requirements and business partner limit, and
prescribe the strict separation of trading and back-office
functions.
To hedge the interest rate risk, we employ in particular
interest rate derivatives such as interest rate swaps, in
addition to increased use of fixed interest agreements.
The degree of hedging specified in the Axel Springer fi-
nance regulations ranges between 30 % and 100 % of
the underlying transaction volume. The use of fixed inter-
est agreements and interest rate derivatives resulted in
an annual average hedging ratio regarding the gross in-
debtedness (promissory notes and liabilities for banks) of
49.0 % (PY: 39.1 %).
The effects of market interest rate changes on variable-
interest financial instruments not hedged with financial
derivatives are calculated using a sensitivity analysis. As-
suming a parallel shift in the yield curve of +50 basis
points, the financial result would decrease by € 0.9 mil-
lion (PY: € 1.8 million). Assuming a parallel shift of the in-
terest curve by – 50 basis points, the financial result
would increase by € 0.4 million (PY: € 0.0 million). The fi-
nancial result reacts less sensitively to interest rate re-
ductions due to variable interest rate financial instru-
ments with an agreed minimum interest rate.
Currency risks from operations are mainly avoided
through the occurrence of operating costs in the coun-
tries in which we sell our products and services. Remain-
ing currency risks from operations are insignificant to the
Group since the majority of adjusted EBITDA is earned in
the euro currency zone. In the reporting period, the share
of adjusted EBITDA not earned in Euros was 13 % (PY:
20 %).
Currency risks from foreign currency claims and liabilities
(without liabilities from contingent consideration) as well
as claims and liabilities in euros in non-euro countries
with net exposures starting at € 5 million per foreign cur-
rency are in principal hedged by means of maturity-con-
gruent forward exchange transactions.
Local-currency cash flows generated in non-euro zone
countries are either reinvested to expand local business
operations, or invested with Axel Springer SE and
hedged by means of forward exchange deals or distrib-
uted in the form of dividends. Therefore, the foreign ex-
change risk from fluctuating exchange rates for foreign
currency cash and cash equivalents is limited.
Effects from the currency translation of statements pre-
pared by subsidiaries in foreign currencies are recorded
directly in accumulated other comprehensive income.
Therefore, Axel Springer does not hedge such currency
effects.
(b) Liquidity risk
We continually monitor the availability of financial re-
sources to fund the company’s operating activities and
investments by means of a Group-wide liquidity plan-
ning system and monthly cash flow analyses. Liquidity
153
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
and financial flexibility of the Axel Springer Group is en-
sured by fixed credit lines in the amount of € 1,200.0
million (until 2020) as well as by the promissory notes
(€ 879.0 million). Note (17) contains a maturity analysis
of our financial liabilities. The payment obligations for fi-
nancial obligations that have been contractually agreed
but not yet recorded are presented in note (39).
(c) Credit risk
Financial assets may be impaired if business partners do
not adhere to payment obligations. The maximum expo-
sure to risk from financial assets, which are fundamental-
ly subject to credit risk, correspond to their carrying
amounts.
Significant risk items are contained in non-current finan-
cial assets (loans) as well as in trade receivables, receiva-
bles due from related parties, and other assets.
The majority of our business models are based on a
widely distributed and heterogeneous customer base.
We therefore estimate the risk of significant defaults to
be low. To the extent that credit risks are discernible, we
reduce them using active management of receivables,
credit limits, and credit checks of our business partners.
Appropriate allowances are formed to account for dis-
cernible default risks.
Investments in securities are made only in instruments
with first-class ratings according to our finance regula-
tions. Investment in time deposits occurs exclusively at
financial institutions that belong to the deposit protection
fund and/or are classified by leading rating agencies as
being at least of Investment Grade Status BBB- (S&P) or
Baa3 (Moody’s).
(35) Financial derivatives
(a) Financial derivatives designated as hedging
instruments
match the corresponding tranches of the variable-inter-
est loans (hedged items). The interest rate swap was
measured at fair value. The changes in the fair value
were recognized in accumulated other comprehensive
income until the hedged item was realized.
The fair value measurement of the interest rate swap on
the reporting date yielded negative fair values of € – 0.4
million (PY: € – 0.6 million). During the reporting period a
profit (after tax) of € 0.1 million was recorded in other
comprehensive income (PY: € 0.1 million).
In addition, in the previous year designated hedging in-
struments were used to hedge against currency risks
from purchase price payments for company acquisitions
in foreign currency. Unrealized gains of € 4.1 million from
foreign exchange transactions and currency options real-
ized during the previous year were initially recorded in
other equity to hedge purchase price payments and
were included in acquisition costs of the acquired non-fi-
nancial assets. On the reporting date as well as in the
previous year, there were no further derivatives desig-
nated as hedging instruments.
(b) Financial derivatives not designated as
hedging instruments
In order to secure our investment in Do⁄an TV, we con-
cluded several put options for a successive sale of all
shares with the seller. With regard to the accounting of
this hedging agreement, see note (7b). From the valua-
tion of these put options we recognized gains of € 6.4
million (PY: losses of € 4.9 million) in the financial result.
Besides the agreed fixed price secured by bank guar-
antees, the valuation of the derivatives depends in par-
ticular on the discounting of the future payment entitle-
ments. A supposed variation of the interest rate by 25
basis points would lead to an opposite change of the
fair value of the put options by approximately € 1.1 mil-
lion (PY: € 1.4 million).
In the reporting period, designated hedging instruments
were used in particular to hedge against the interest rate
risks of long-term liabilities. The cash flows were hedged
through an interest rate swap. Regarding maturity and
nominal amount the interest rate swap was chosen to
Furthermore, as of the balance sheet date of the previ-
ous year for exchange transactions with a nominal
value of € 138.3 million forward exchange transactions
and exchange options with a negative fair value of
€ – 12.4 million and a positive fair value of € 0.6 million;
154
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
these were entered in order to secure against currency
risks in loans from foreign subsidiaries or a contingent
purchase price liability. The profits and losses from the
fair value measurement of these forward exchange
transactions, as well as the opposite profits and losses
from the foreign currency measurement of the hedged
loan claims and obligations were recognized.
(36) Relationships with related parties
Related parties are defined as those persons and com-
panies that control the Axel Springer Group, or that are
controlled, jointly managed, or subject to significant influ-
ence by the Axel Springer Group. Accordingly, the mem-
bers of the Springer family, the companies controlled,
jointly managed, or subject to significant influence by this
family, as well as companies in whose management they
hold a key position have been defined as related parties
for the Axel Springer Group. Control of the Group is ex-
ercised by Axel Springer Gesellschaft für Publizistik
GmbH & Co. or its parent company, Friede Springer
GmbH & Co. KG, a majority of which is attributable to
Dr. h.c. Friede Springer. In addition, the subsidiaries, joint
ventures, and associated companies of the Axel Springer
Group have been defined as related companies. In addi-
tion to the active members of the Executive Board and
Supervisory Board of Axel Springer SE (including their
family members) and their controlled or jointly managed
holdings, the institutions managing the plan assets of the
Axel Springer Group must also be considered related
parties.
Besides the business relationships with the consolidated subsidiaries, the following business relationships existed with
related parties:
€ millions
Balance sheet
Loans
Receivables
Thereof trade
Allowances included
Provisions
Liabilities
Thereof trade
Income statement
Goods and services supplied
Goods and services received
Financial result
Total
Associated
companies
Other related
parties
Total
Associated
companies
Other related
parties
12/31/2017
12/31/2016
0.6
2.2
0.9
1.2
17.5
52.2
2.8
2.5
75.9
0.1
2.7
40.0
6.8
18.3
15.2
29.4
2.4
2016
24.6
40.3
1.0
1.5
37.6
5.6
3.1
0.0
15.5
0.8
17.7
2.2
0.9
1.3
2.3
1.1
15.2
15.2
13.9
1.7
6.8
38.0
0.1
0.7
29.3
3.4
1.2
17.5
64.3
3.7
2017
19.2
78.3
0.1
0.1
27.0
2.5
0.0
0.0
12.0
0.9
16.7
2.5
0.1
155
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The changes in the allowances for receivables due to re-
lated parties are presented in the table below:
€ millions
Balance as of January 1
Additions
Utilization
Reversals
Other changes
Balance as of December 31
2017
18.3
0.2
– 17.0
– 0.4
0.0
1.2
2016
26.5
1.1
– 9.3
0.0
– 0.1
18.3
As of December 31, 2017, receivables in the amount of
€ 2.6 million (PY: € 2.6 million) were neither past due nor
subject to valuation allowances. With regard to these re-
ceivables, there were no indications at the reporting date
that would suggest that the related parties would not ful-
fill their payment obligations.
The receivables and liabilities relating to associated com-
panies mainly relate to Ringier Axel Springer Schweiz AG
and contain outstanding receivables and liabilities in con-
nection with the formation of the company (see note
(2c)).
The provisions referred to pension obligations owed to
members of the Executive Board. The liabilities include
obligations from the share-based compensation pro-
grams granted to the Management Board of Axel
Springer SE in the amount of € 41.6 million (PY: € 6.5
million).
Goods and services provided to related parties were
mostly related to the distribution of newspapers and
magazines as well as other services. The services re-
ceived from related parties mainly regarded Executive
Board or Supervisory Board services, purchased pub-
lishing products and other services.
In the fiscal year 2017, the fixed compensation of the
members of the Executive Board of Axel Springer SE
amounted to € 9.5 million (PY: € 9.1 million). The varia-
ble compensation amounted to € 10.2 million (PY:
€ 10.1 million). The measurement of the share-based
compensation granted to the Executive Board of Axel
Springer SE resulted in personnel expenses of € 35.1
million (PY: personnel expenses of € 3.5 million) and
other operating income of € 3.1million). Furthermore, the
Supervisory Board has granted the Executive Board
members a bonus totaling € 12.0 million, which was part
of a voluntary one-off payment of the global growth in-
vestor General Atlantic in recognition of the outstanding
success of the joint investment in the online classifieds
business and the development of the company and
which did not lead to expenses in the consolidated in-
come statement (see further explanation in the combined
management report, page 79). Guaranteed pension pay-
ments to members of the Executive Board resulted in a
personnel expense of € 1.6 million (PY: € 2.3 million).
The compensation of the members of the Supervisory
Board amounted to € 3.0 million (PY: € 3.0 million). At
the end of 2017, we have founded an investment fund
for media start-ups together with a related party of a Su-
pervisory Board member. Axel Springer's share in the in-
vestment fund is approx. 93 %, which needs to be
treated as a joint venture due to partnership arrange-
ments. For the takeover of the management services the
related party of the Supervisory Board member receives
an annual compensation of USD 0.3 million (€ 0.3 mil-
lion). In the previous year a Supervisory Board member
received compensation of € 0.1 million for services as an
author.
The compensation of the members of the Executive and
Supervisory Board is described in detail in the compen-
sation report, which is part of the notes to the consoli-
dated financial statements. The compensation report is
included in the section “Corporate Governance Report”.
An amount of € 2.5 million (PY: € 2.7 million) was paid to
former Executive Board members and former managing
directors and their survivors. A total amount of € 31.4
million (PY: € 33.6 million) was deferred for pension obli-
gations.
For transactions with the institutions managing the plan
assets of the Axel Springer Group, please find the expla-
nations in note (13).
156
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(37) Contingent liabilities
As of December 31, 2017, contingent liabilities from
guarantees existed in the amount of € 4.3 million (PY:
€ 4.9 million).
(38) Contingent assets
Contingent assets were due from KirchMedia GmbH &
Co KGaA i. L. in the amount of € 211.3 million (PY:
€ 221.0 million). Insofar as advance payments are an-
nounced in the context of the insolvency proceedings
against KirchMedia GmbH & Co. KGaA i.L., we recog-
nize them as receivables. The receivables accepted in
the table of claims by the insolvency administrator origi-
nally totaled € 325.0 million. A total of € 8.1 million (PY:
€ 3.3 million) was paid out in the reporting year.
(39) Other financial commitments
The other financial commitments broke down as follows:
€ millions
12/31/2017 12/31/2016
Purchase commitments for
- intangible assets
- property, plant, and equipment
- inventories
Future payments under operating leases
Future payments under finance leases
Long-term purchase obligations
1.9
193.7
48.9
479.3
0.3
38.4
0.8
228.7
22.9
198.5
0.7
59.9
Other financial obligations
762.5
511.5
In Berlin, the construction of the new Axel Springer build-
ing in direct vicinity of the old headquarter building is cur-
rently taking place. From 2020 on up to 3,500 employ-
ees will be working on about 52,000 m2. Total
construction budget will be approximately € 305 million.
As of the balance sheet date, investments amounted to
around € 90 million (PY: around € 42 million). The pur-
chase commitments for property, plant, and equipment
almost exclusively result from this new construction pro-
ject. In July 2017 a contract for the sale of the new Axel
Springer building under construction was signed (see
note (5)).
The increase in purchase commitments for inventories is
due to new paper delivery contracts.
The increase in future payments under operating leases
primarily relates to the leaseback of the Axel-Springer
high-rise (main building) (see note (40)) and the Axel-
Springer-Passage (see note (5)) (both in Berlin).
Long-term purchase obligations resulted primarily from
contracts for TV productions.
The future minimum lease payments from operating
leases on December 31, 2017 are broken down in the
following table:
€ millions
Due in up to one year
Due in one to five years
Due in more than five years
Total
2017
73.8
208.7
196.8
479.3
2016
58.5
118.9
21.1
198.5
(40) Events after the reporting date
On January 1, 2018, the Axel-Springer high-rise (main
building) in Berlin was transferred with a fair value of
€ 156.0 million for the formation of plan assets to Axel
Springer Pensionstreuhand e.V., Berlin, ("association") on
a fiduciary basis. In return, the association made a pay-
ment in the amount of € 15.6 million, so that the plan as-
sets increased in total by € 140.4 million. For further use
of the building by Axel Springer, a rental contract with a
duration of 30 years and an initial annual rent in the
amount of € 5.9 million was concluded with the associa-
tion. The disposal and leaseback were to be reported as
a so-called sale-and-leaseback transaction according to
the new standard for lease accounting (IFRS 16). Conse-
quently, the remaining carrying amount of the building as
of January 1, 2018 (€ 27.0 million) in the amount of
€ 19.7 million was to be carried forward as a new leasing
right-of-use asset and derecognized in the amount of
157
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
€ 7.3 million. On the basis of the future rent payments, a
leasing liability in the amount of € 113.8 was recognized
as of January 1, 2018. In total, the transaction resulted in
income of € 34.9 million in the fiscal year 2018.
In December 2017, Axel Springer and Télévision Fran-
çaise 1 (TF1) signed an option agreement and in January
2018 an agreement on the sale of Axel Springer's share
in the French aufeminin Group at a price of € 38.74 per
share. This was equivalent to a premium of 45.7 % on
the closing price as of December 8, 2017. Axel Spring-
er's 78.43 %-share was therefore valued at € 286.1 mil-
lion, plus a monthly interest payment until completion of
the transaction. Completion of the transaction requires
approval by the relevant antitrust authorities (for further
information, see note (10)).
At the beginning of February 2018, the acquisition of
100 % of the shares in Concept Multimédia SAS, Aix-en-
Provence/Paris, France, was completed (for further infor-
mation, see note (2c)).
Moreover, there are no further significant events after the
reporting date to be reported.
(41) Declaration of Conformity with the German
Corporate Governance Code
Axel Springer SE published the Declaration of Conformity
with the German Corporate Governance Code issued by
the Management Board and Supervisory Board in ac-
cordance with Section 161 of the German Stock Corpo-
rations Act (AktG) on the company’s website www.axel-
springer.de → Investor Relations → Corporate
Governance, where it is permanently available to share-
holders. The Declaration of Conformity is also printed in
the Corporate Governance section of this Annual Report.
158
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(42) Companies included in the consolidated financial statements and share property
12/31/2017
12/31/2016
No.
Company
1
Axel Springer SE, Berlin
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Fully consolidated subsidiaries
Germany
affilinet GmbH, Munich
AS Osteuropa GmbH, Berlin
AS TV-Produktions- und Vertriebsges. mbH, Hamburg
AWIN AG (previously ZANOX AG), Berlin
Axel Springer All Media GmbH & Co. KG, Berlin
Axel Springer Asia GmbH, Hamburg
Axel Springer Auto-Verlag GmbH, Hamburg
Axel Springer Digital Classifieds GmbH, Berlin
Axel Springer Digital Classifieds Holding GmbH, Berlin
Axel Springer Digital GmbH, Berlin
Axel Springer Digital Ventures GmbH, Berlin
Axel Springer Digital Ventures US GmbH, Berlin
Axel Springer Digital Ventures US II GmbH (previously Sechsundsiebzigste "Media" Vermögensverwaltungsges. mbH), Berlin
Axel Springer Druckhaus Spandau GmbH & Co. KG, Berlin
Axel Springer hy GmbH (previously Axel Springer Transformator Holding GmbH), Berlin
Axel Springer Ideas Engineering GmbH, Berlin
Axel Springer ideAS Ventures GmbH, Berlin
Axel Springer INSIDER Ventures GmbH, Berlin
Axel Springer International GmbH, Berlin
Axel Springer International Holding GmbH, Berlin
Axel Springer Kundenservice GmbH, Hamburg
Axel Springer Liveware IT GmbH, Berlin
Axel Springer Mediahouse Berlin GmbH, Berlin
Axel Springer Medien Accounting Service GmbH, Berlin
Axel Springer Offsetdruckerei Ahrensburg GmbH & Co. KG, Ahrensburg
Axel Springer Offsetdruckerei Kettwig GmbH & Co. KG, Essen
Axel Springer Personalservice GmbH, Berlin
Axel Springer Services & Immobilien GmbH, Berlin
Axel Springer Sport Dienstleistungs-GmbH, Hamburg
Axel Springer Sport Verlag GmbH, Hamburg
Axel Springer Syndication GmbH, Berlin
Axel Springer Teaser Ad GmbH (previously Sechsundneunzigste "Media" Vermögensverwaltungsges. mbH), Berlin
Axel Springer TV Productions GmbH, Hamburg
"Axel Springer Verlag" Beteiligungsgesellschaft mbH, Berlin
B.Z. Ullstein GmbH, Berlin
Bilanz Deutschland Wirtschaftsmagazin GmbH, Hamburg
BILD GmbH & Co. KG, Berlin
Bonial Holding GmbH, Berlin
Bonial International GmbH, Berlin
Bonial Management GmbH, Berlin
Buch- und Presse-Großvertrieb Hamburg GmbH & Co. KG, Hamburg
Buzz Technologies GmbH, Berlin
Casamundo GmbH, Hamburg
Commerz-Film GmbH, Berlin
comparado GmbH, Lüneburg
COMPUTER BILD Digital GmbH, Hamburg
Contact Impact GmbH, Hamburg
Content Factory TV-Produktion GmbH, Berlin
DanCenter GmbH, Hamburg
eprofessional GmbH, Hamburg
finanzen.net GmbH, Karlsruhe
Gofeminin.de GmbH, Cologne
159
Share-
holding
in %
via No.
Share-
holding
in %
-
-
-
-
100.0
100.0
52.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
100.0
-
100.0
100.0
-
100.0
100.0
100.0
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
100.0
100.0
100.0
100.0
100.0
72.5
100.0
100.0
77.1
51.0
100.0
100.0
100.0
100.0
-
5
21
1
11
1
21
1
11
9
1
11
12
12
1
12
35
35
12
130
1
20
1
17
1
1
1
1
1
1
31
1
35
6
1
1
35
35
1
11
39
39
1
1
92
21
56
1
6
via
No.
-
-
21
1
11
1
21
1
11
9
1
11
12
-
1
-
35
35
-
1
20
1
-
1
1
1
1
1
1
31
1
35
-
1
1
35
35
1
11
39
39
1
1
92
21
56
1
-
16)
6)
5)
5)
5)
5)
5)
6)
5)
5)
5)
5)
5)
5)
5)
5)
6)
6)
5)
5)
5)
5)
5)
5)
5)
5)
6)
9)
6)
5)
5)
10)
88
100.0
139
100.0
5
12
100.0
75.0
88
139
5
12
103
100.0
103
100.0
100.0
100.0
80.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
62.1
100.0
100.0
80.1
19.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
72.5
100.0
100.0
77.1
51.0
100.0
100.0
100.0
100.0
75.1
100.0
100.0
100.0
75.0
100.0
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No.
Company
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
hamburg.de GmbH & Co. KG, Hamburg
Idealo International GmbH, Berlin
Idealo Internet GmbH, Berlin
ImmoSolve GmbH, Bad Bramstedt
Immowelt AG, Nuremberg
Immowelt Hamburg GmbH (previously Immonet GmbH), Hamburg
Immowelt Holding AG, Nuremberg
infoRoad GmbH, Heroldsberg
Maz&More TV-Produktion GmbH, Berlin
Media Impact GmbH & Co. KG, Berlin
meinestadt.de GmbH, Cologne
meinestadt.de Holding GmbH, Berlin
meinestadt.de Vertriebs-GmbH, Cologne
MeinProspekt GmbH, Berlin
Newspaper Impact GmbH, Hamburg
PACE Paparazzi Catering & Event GmbH, Berlin
Panther Holding GmbH, Berlin
Sales Impact GmbH & Co. KG, Hamburg
StepStone Continental Europe GmbH, Berlin
StepStone Deutschland GmbH, Dusseldorf
StepStone GmbH, Berlin
t-bee GmbH, Puchheim
Tourismuszentrum GmbH Mecklenburgische Ostseeküste, Kröpelin
TraderFox GmbH, Reutlingen
Transfermarkt GmbH & Co. KG, Hamburg
Traum-Ferienwohnungen GmbH, Bremen
Ullstein Ges. mit beschränkter Haftung, Berlin
Umzugsauktion GmbH & Co. KG, Schallstadt
upday GmbH & Co. KG, Berlin
upday Holding GmbH, Berlin
Vertical Media GmbH, Berlin
Visoon Video Impact GmbH & Co. KG, Berlin
Visual Meta GmbH, Berlin
WeltN24 Club GmbH (previously Sechsundachtzigste "Media" Vermögensverwaltungsges. mbH), Berlin
WeltN24 GmbH, Berlin
YOURCAREERGROUP GmbH, Dusseldorf
Other countries
@Leisure BR B.V., Eindhoven, Netherlands
@Leisure Holding B.V., Rotterdam, Netherlands
AanZee VillaXL B.V., Bergen, Netherlands
Administrationsselskabet af 1.10.2015 ApS, Copenhagen, Denmark
affilinet Austria GmbH, Vienna, Austria
affilinet Benelux B.V., Amsterdam, Netherlands
affilinet España SLU, Madrid, Spain
affilinet France SAS, Saint-Denis, France
affilinet Limited, London, United Kingdom
affilinet Schweiz GmbH, Zurich, Switzerland
alFemminile s.r.l., Milan, Italy
APM Print d.o.o., Belgradee, Serbia
AS-NYOMDA Kft, Kecskemét, Hungary
AUFEMININ SA, Paris, France
auFeminin.com Productions SARL, Paris, France
Autobazar.EU portál s.r.o., Nové Mesto nad Váhom, Slovakia
AWIN AB (previously zanox we create partners AB), Stockholm, Sweden
AWIN B.V. (previously zanox B.V.), Amsterdam, Netherlands
AWIN Global Affiliate Network S.L. (previously ZANOX Hispania SL), Madrid, Spain
AWIN Inc. (previously Digital Window Inc.), Wilmington, USA
AWIN Ltd. (previously Digital Window Limited), London, United Kingdom
AWIN SAS (previously zanox SAS), Paris, France
AWIN Sp. z o.o. (previously zanox Sp. z o.o.), Warsaw, Poland
160
12/31/2017
12/31/2016
Share-
holding
in %
via No.
Share-
holding
in %
via
No.
-
100.0
74.9
100.0
100.0
100.0
55.0
60.4
100.0
74.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.1
51.0
50.0
100.0
100.0
100.0
100.0
88.0
51.0
75.6
100.0
100.0
100.0
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
78.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
56
11
59
60
60
10
8
88
6
65
10
64
40
1
1
56
1
74
72
10
79
44
52
38
90
35
59
1
82
88
6
56
88
1
72
91
10
91
61.9
100.0
74.9
51.0
100.0
100.0
55.0
60.4
100.0
74.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
-
-
51.0
50.0
100.0
100.0
100.0
100.0
88.0
51.0
75.6
-
100.0
100.0
100.0
51.0
100.0
9)
9)
5)
6)
5)
5)
6)
5)
5)
5)
6)
5)
6)
6)
9)
6)
5)
5)
11
56
11
59
60
60
10
8
88
6
65
10
64
40
1
1
56
1
74
74
10
-
-
-
38
90
35
59
1
82
88
6
56
-
1
74
91
10
91
139
100.0
153
2
2
2
2
2
2
103
195
197
21
103
222
5
5
5
-
-
-
-
-
-
100.0
100.0
100.0
78.4
100.0
-
100.0
100.0
100.0
-
-
-
-
-
-
103
195
197
21
103
-
5
5
5
110
100.0
110
5
5
5
100.0
100.0
100.0
5
5
5
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
12/31/2017
12/31/2016
No.
113
114
115
116
117
118
119
120
121
122
123
124
Company
AWIN SRL (previously zanox SRL), Milan, Italy
AWIN VEICULAÇÃO DE PUBLICIDADE NA INTERNET LTDA. (previously ZANOX VEICULAÇÃO DE PUBLICIDADE NA INTERNET LTDA.),
São Paulo, Brazil
Axel Springer Beteiligungen Schweiz AG, Zurich, Switzerland
Axel Springer Digital Classifieds France SAS, Paris, France
Axel Springer España S.A., Madrid, Spain
Axel Springer France S.A.S., Paris, France
Axel Springer International AG, Zurich, Switzerland
Axel Springer International Limited, London, United Kingdom
Axel Springer Norway AS, Oslo, Norway
Axel Springer Schweiz AG, Zurich, Switzerland
Belles Demeures S.A.S., Paris, France
Belvilla Ferienwohnungen GmbH, Kitzbühel, Austria
125
BEMFEMININO.COM.BR, Sao Paulo, Brazil
126
127
128
129
130
131
132
Blikk Kft., Budapest, Hungary
Bonial Enterprises North America Inc., New York, USA
Bonial SAS, Paris, France
Business Insider Europe Limited, London, United Kingdom
Business Insider Inc., New York City, USA
Candidate Manager (US) Inc, Boston, USA
Candidate Manager Ltd, Dublin, Ireland
133
Car&Boat Media SAS, Paris, France
134
135
136
137
CaribbeanJobs Ltd, George Town, Cayman Islands
City-Nav Sp. z o.o., Poznań, Poland
Coral-Tell Ltd., Tel Aviv, Israel
CV Keskus OÜ, Tallinn, Estonia
138
Cybersearch S.A., Guatemala City, Guatemala
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
DanCenter A/S, Copenhagen, Denmark
DanCenter EDB Service ApS, Copenhagen, Denmark
DreamLab sp. z o.o., Krakow, Poland
eMarketer Europe Ltd., London, United Kingdom
eMarketer Inc., New York, USA
ENFEMENINO AUFEMININ S.A, Madrid, Spain
Estascontratadocom S.A., Panama City, Panama
Etoilecasting.com SAS, Paris, France
Gambettes Box SAS, Paris, France
Garantie System SAS, Paris, France
G-Construct SA, Brussels, Belgium
GoBrands Sp. z o.o., Krakow, Poland
Good & Co Labs, Inc., San Francisco, USA
ICI Formations SAS, Paris, France
Land & Leisure A/S, Copenhagen, Denmark
154
ictjob SPRL, Waterloo, Belgium
155
156
157
158
159
160
161
162
Immoweb SA, Brussels, Belgium
Interactive Junction Holdings Proprietary Limited, Rosebank/Johannesburg, South Africa
Jobmagnet Limited, London, United Kingdom
Jobs LU Ltd, Dublin, Ireland
Jobs.ie Ltd, Dublin, Ireland
Jobsite UK (Worldwide) Limited, London, United Kingdom
Les Rencontres aufeminin.com SAS, Paris, France
Livingly Media, Inc., San Carlos, USA
163 Maritimo 101 SL, Malaga, Spain
164 Marmiton SAS, Paris, France
165 MyJob Group Ltd i.L., Sheffield, United Kingdom
166 Media Impact Polska Sp. z o.o., Warsaw, Poland
167 Merci Alfred S.A.S., Paris, France
161
Share-
holding
in %
via No.
Share-
holding
in %
5
5
51
100.0
100.0
0.0
122
100.0
10
100.0
1
1
100.0
100.0
120
100.0
21
100.0
120
100.0
1
100.0
188
100.0
90
103
104
198
39
40
50.0
-
-
100.0
100.0
100.0
130
100.0
12
100.0
132
202
10
116
202
182
100.0
100.0
61.0
39
100.0
-
10
100.0
198
214
202
-
100.0
0.0
91
100.0
100.0
100.0
100.0
93.4
100.0
100.0
100.0
100.0
100.0
-
139
183
143
12
103
214
103
172
133
155
183
via
No.
5
5
51
122
10
1
1
120
21
120
1
188
90
-
-
198
39
40
130
12
132
202
10
116
202
-
10
-
214
202
153
139
183
143
12
103
214
103
172
133
-
7)
11)
7)
9)
9)
100.0
183
74
100.0
208
-
-
100.0
72
209
116
186
74
202
202
212
103
103
139
103
99.0
1.0
80.0
100.0
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
100.0
183
199
103
50.0
50.0
100.0
74
-
91
74
209
116
202
-
202
202
212
103
103
153
103
160
183
199
103
100.0
100.0
0.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
99.9
0.1
100.0
100.0
98.0
100.0
100.0
100.0
100.0
61.0
39.0
100.0
69.3
100.0
100.0
100.0
0.0
100.0
100.0
100.0
100.0
93.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
99.0
1.0
94.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
50.0
50.0
100.0
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
12/31/2017
12/31/2016
No.
Company
168 Milkround Online Ltd., London, United Kingdom
169 My Little Box KK, Tokyo, Japan
170
ofeminin.pl Sp. z o.o., Warsaw, Poland
171 My Little Campus SAS, Paris, France
172 My Little Paris S.A.S., Paris, France
173 My Web Ltd, Ebene, Mauritius
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
NARKS INFOSERVIS, a.s., Bratislava, Slovakia
Netmums Limited, London, United Kingdom
New Digital d.o.o. Belgradee, Belgrade, Serbia
NIJobs.com Ltd, Belfast, United Kingdom
NIN d.o.o., Belgrade, Serbia
Ofertia Colombia Retail Services SAS, Bogotá, Colombia
OfertiaCL Retail Services SpA, Santiago de Chile, Chile
OFERTIAMX RETAIL SERVICES, S. de R.L. de C.V., Mexico City, Mexico
ONET Holding Sp. z o.o., Warsaw, Poland
Onet.S.A., Krakow, Poland
OnetMarketing Sp. z o.o., Krakow, Poland
Opineo Sp. z o.o., Wroclaw, Poland
Pnet (Pty) Ltd, Johannesburg, South Africa
Praxis SARL, Chambery, France
PressImmo On Line S.A.S., Paris, France
profession.hu Kft, Budapest, Hungary
190
RealSoft s.r.o., Nové Mesto nad Váhom, Slovakia
191
192
193
Residence de Monbrison A/S, Copenhagen, Denmark
SeLoger Finances S.A.S., Paris, France
Seloger Solutions SAS, Paris, France
194
SeLoger.com SAS, Paris, France
195
196
197
198
199
200
201
202
203
204
205
206
207
208
Ringier Axel Springer d.o.o., Belgrade, Serbia
Ringier Axel Springer Inwestycje Sp. z o.o., Warsaw, Poland
Ringier Axel Springer Magyarország Kft, Budapest, Hungary
Ringier Axel Springer Media AG, Zurich, Switzerland
Ringier Axel Springer Polska Sp. z o.o., Warsaw, Poland
Ringier Axel Springer Slovakia a.s., Bratislava, Slovakia
Saknai Net Ltd., Tel Aviv, Israel
Saongroup Limited, Dublin, Ireland
ShareASale.com Inc., Chicago, USA
Skapiec Sp. z o.o., Wroclaw, Poland
soFeminine.co.uk Limited, London, United Kingdom
SOKOWEB TECHNOLOGIES, S.L., Barcelona, Spain
SPORT.SK s.r.o., Zilina, Slovakia
StepStone France SAS, Paris, France
209
StepStone NV, Brussels, Belgium
210
211
212
StepStone Austria GmbH, Vienna, Austria
StepStone Services Sp. z o.o., Warsaw, Poland
StepStone UK Holding Limited, London, United Kingdom
213
Tecoloco El Salvador S.A. de C.V., San Salvador, El Salvador
214
215
Tecoloco International Inc, Panama City, Panama
Traveezee Insurance N. V., Eindhoven, Netherlands
216
Tecoloco S.A. de C.V. Honduras, Tegucigalpa, Honduras
217
Tecoloco.com S.A. de C.V. Nicaragua, Managua, Nicaragua
218
219
220
Topic Travel B.V., Den Haag, Netherlands
Topreality.sk s.r.o., Nové Mesto nad Váhom, Slovakia
Totaljobs Group Limited, London, United Kingdom
162
Share-
holding
in %
100.0
100.0
-
100.0
91.7
100.0
100.0
100.0
100.0
100.0
99.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
50.0
73.2
-
-
100.0
-
100.0
99.0
100.0
50.0
100.0
89.0
70.0
100.0
100.0
100.0
100.0
70.0
66.7
100.0
100.0
0.0
100.0
100.0
100.0
100.0
0.0
100.0
-
99.6
0.4
95.0
3.0
2.0
100.0
100.0
100.0
Share-
holding
in %
via No.
220
172
-
172
103
186
222
103
195
202
195
206
206
206
198
182
183
182
202
188
194
198
219
222
139
-
-
116
-
198
199
198
120
198
198
136
212
109
182
103
40
200
100.0
100.0
51.0
49.0
100.0
70.0
100.0
100.0
100.0
100.0
100.0
99.7
-
-
100.0
75.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
73.2
100.0
100.0
97.7
2.3
100.0
99.0
100.0
50.0
100.0
89.0
70.0
100.0
-
100.0
100.0
63.6
66.7
72
100.0
72
210
73
72
74
214
202
202
100.0
0.0
100.0
100.0
100.0
100.0
0.0
100.0
-
100.0
214
202
214
213
138
99.6
0.4
95.0
3.0
2.0
91
100.0
9)
9)
3)
9)
12)
9)
7)
via
No.
220
172
103
199
172
103
186
222
103
195
202
195
-
-
206
198
182
183
182
202
188
194
198
-
153
188
194
116
10
198
199
198
120
198
198
136
212
-
182
103
40
200
74
74
210
73
74
74
214
202
202
91
214
202
214
213
138
91
-
222
212
-
100.0
212
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No.
221
222
223
224
225
226
227
228
Company
Turijobs Tourism Services S.L., Barcelona, Spain
United Classifieds s.r.o., Bratislava, Slovakia
upday France SARL, Paris, France
upday Italia S.r.l., Milan, Italy
upday Nederlands B.V., Amsterdam, Netherlands
upday Nordics AB, Stockholm, Sweden
upday Polska Sp. z o.o. Sp.k., Warsaw, Poland
upday UK Ltd., London, United Kingdom
229 WEBIMM SAS, Paris, France
230
231
232
wewomen.com Inc., Wilmington, USA
YOURCAREERGROUP Austria GmbH, Vienna, Austria
YOURCAREERGROUP Switzerland GmbH, Kloten, Switzerland
No. Company
Other subsidiaries1)
Germany
12/31/2017
12/31/2016
Share-
holding
in %
via No.
100.0
60.0
100.0
100.0
100.0
100.0
100.0
100.0
65.0
100.0
100.0
100.0
72
200
83
83
83
83
83
83
194
103
72
72
Share-
holding
in %
-
60.0
100.0
-
-
-
100.0
100.0
65.0
-
-
100.0
via
No.
-
200
83
-
-
-
83
83
194
-
-
74
12/31/2017
Share
hol-
ding
in %
via
No.
No. Company
12/31/2017
Share
hol-
ding
in %
via
No.
233 Achtundachtzigste "Media" Vermögensverwaltungsges. mbH, Berlin 100.0
234 Achtundsiebzigste "Media" Vermögensverwaltungsges. mbH, Berlin 100.0
1
1
235 AS Buchversand GmbH, Munich
100.0
35
236 Axel Springer All Media Verwaltungs-GmbH, Berlin
100.0
1
237
Axel Springer Audio GmbH (previously Neunundachtzigste "Me-
dia" Vermögensverwaltungsges. mbH), Berlin
100.0
1
238 Axel Springer Financial Media GmbH, Munich
239 Axel Springer Print Management GmbH, Ahrensburg
240 Axel Springer Security GmbH, Berlin
241 BILD Multimedia Verwaltungs GmbH, Berlin
242 Bonial Ventures GmbH, Berlin
243 CEO Event GmbH, Berlin
244
Dreiundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
100.0
100.0
100.0
100.0
74.9
1
1
1
1
1
100.0
84
100.0
1
245 Dreizehnte "Media" Vermögensverwaltungsges. mbH, Hamburg
100.0
246 Einhundertdritte "Media" Vermögensverwaltungsges. mbH, Berlin 100.0
247 Einhunderterste "Media" Vermögensverwaltungsges. mbH, Berlin 100.0
248 Einhundertste "Media" Vermögensverwaltungsges. mbH, Berlin
100.0
249 Einhundertzweite "Media" Vermögensverwaltungsges. mbH, Berlin 100.0
250 Einundneunzigste "Media" Vermögensverwaltungsges. mbH, Berlin
100.0
251 Finanzen Corporate Publishing GmbH, Berlin
100.0
252 Fünfundachtzigste "Media" Vermögensverwaltungsges. mbH, Berlin
100.0
1
1
1
1
1
1
1
1
253
Fünfundneunzigste "Media" Vermögensverwaltungsges. mbH, Ber-
lin
100.0
1
254 Fünfundsiebzigste "Media" Vermögensverwaltungsges. mbH, Berlin
100.0
35
260 Media Impact Management GmbH, Berlin
74.9
6
261 meinestadt.de Vermögensverwaltungsgesellschaft mbH, Cologne 100.0
64
262 myPass GmbH, Berlin
100.0
1
263
Neunundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
100.0
1
264 Room 49 GmbH, Berlin
265 Sales Impact Management GmbH, Hamburg
266 Scubia GbR, Berlin
267 Shop Now GmbH i.L., Berlin
100.0
18
100.0
1
50.0
50.0
90.0
56
70
18
268
Siebenundachtzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
100.0
269
SPRING Axel Springer Digital News Media GmbH & Co. KG, Ber-
lin
100.0
270
SPRING Axel Springer Digital News Media Management GmbH
(previously Zweiundachtzigste "Media" Vermögensverwaltungs-
ges. mbH), Berlin
100.0
1
1
1
271 Tarif24 GmbH, Berlin
272 TOPS Online Publications GbR, Lüneburg
273 Transfermarkt Verwaltungs GmbH, Hamburg
274 TunedIn Media GmbH i.L., Berlin
275 Umzugsauktion Verwaltungs GmbH, Schallstadt
276 upday Management GmbH, Berlin
277
Varsavsky Axel Springer Management GmbH (previously Sie-
benundneunzigste "Media" Vermögensverwaltungsges. mbH),
Berlin
278
Vierundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
279 Visoon Video Impact Management GmbH, Berlin
100.0
56
90.0
10.0
51.0
86.4
46
56
38
1
100.0
59
100.0
1
100.0
12
100.0
1
51.0
6
100.0
35
255
Hammerich & Lesser Zeitschriften- und Buchverlag GmbH, Ham-
burg
100.0
1
280 Zuio GmbH, Berlin
256 Hauptstadtsee 809. VV GmbH, Berlin
257 hy! GmbH, Berlin
258
Informationsmedien Handels GmbH, Hamburg
259 kinkaa GbR, Berlin
100.0
100.0
100.0
50.0
50.0
1
1
1
56
70
281
Zweiundsechzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
100.0
1
Other countries
282 Alpha Real spol. s.r.o., Zilina, Slovakia
283 AUTOVIA, s.r.o., Bratislava, Slovakia
100.0
200
100.0
222
163
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No. Company
12/31/2017
Share
hol-
ding
in %
via
No.
No. Company
284 Axel Springer Hírszolgálat Kft, Tatabánya, Hungary
100.0
197
324 Project A Ventures GmbH & Co. KG, Berlin
285
Axel Springer International Group Limited, London, United King-
dom
100.0
1
286 Axel Springer Media France S.A.R.L., Neuilly-sur-Seine, France
100.0
63
287 Axel Springer Media Italia s.r.l., Milan, Italy
100.0
63
288
Axel Springer Publishing International Limited, London, United
Kingdom
100.0
284
289 Axel Springer Services Inc., Wilmington, USA
100.0
12
290 Axel Springer TV International Limited, London, United Kingdom
100.0
284
291 Azet.sk – katalóg s.r.o., Zilina, Slovakia
292 BILD Inc., City of Wilmington, USA
293 Car Price List Yad2 Ltd., Tel Aviv, Israel
294 CompuTel Telefonservice AG, Chur, Switzerland
295 Cpress Media s.r.o., Zilina, Slovakia
296 Digitalni klik d.o.o., Zagreb, Croatia
297 ETSBA Ltd., Tel Aviv, Israel
298 Euro Blic Press d.o.o., Banja Luka, Bosnia-Herz.
299 eurobridge Inc., New York, USA
300 Flyers 24hs S.A., São Paulo, Brazil
100.0
200
100.0
38
100.0
136
100.0
122
100.0
200
60.0
58
100.0
136
100.0
195
100.0
1
58.3
242
301
Gemini Moon Trading 343 Proprietary Limited i.L., Cape Town,
South Africa
100.0
156
302
ICI JOB SAS, Paris, France
303
Immostreet ES, Barcelona, Spain
304 Jean Frey AG, Zurich, Switzerland
305 Jobcity Ltd., Tel Aviv, Israel
306 Media Impact Inc., New York, USA
307 Novy cas, a.s., Bratislava, Slovakia
308 Realty Media House s.r.o., Bratislava, Slovakia
309 Ringier Axel Springer SK, a.s., Bratislava, Slovakia
100.0
152
100.0
188
100.0
122
100.0
136
100.0
63
89.0
198
100.0
174
89.0
198
310 Saongroup Caribbean (Jamaica) Ltd, Kingston, Jamaica
100.0
134
325 Radio Hamburg GmbH & Co. KG, Hamburg
326 Varsavsky Axel Springer GmbH & Co. KG, Berlin
327 Verimi GmbH, Frankfurt on the Main
Other countries
328 AC3 SAS, Guipavas, France
329
Editions Mondadori Axel Springer (EMAS) S.E.N.C., Montrouge
Cedex, France
330
INFOR BIZNES Sp. z o.o., Warsaw, Poland
331 Ozy Media, Inc., Mountain View, USA
332 QWANT SAS, Paris, France
333 Ringier Axel Springer Schweiz AG, Zurich, Switzerland
50.0
115
Other associated companies and joint ventures2)
Germany
334 Berliner Pool TV Produktion Gesellschaft mbH, Berlin
50.0
88
335
Blitz-Tip Radio Hessen Beteiligungsges. mbH & Co. KG, Bad
Soden am Taunus
33.3
1
336 Dalim Software GmbH, Kehl
337 Filmgarten GmbH, Berlin
338
Ges. für integr. Kommunikationsforschung mbH & Co. KG, Mu-
nich
339
Ges. für integr. Kommunikationsforschung Verwaltungs GmbH,
Munich
340
Intermedia Standard Presse-Code GmbH, Hamburg
341
InterRed GmbH, Haiger
342
ISPC Intermedia Standard Presse-Code GmbH & Co.KG, Ham-
burg
343 LAUT AG, Constance
344 Marina Wendtorf Invest II GmbH & Co. KG, Kiel
345 Mont Ventoux Media GmbH, Berlin
346 Project A Management GmbH, Berlin
12/31/2017
Share
hol-
ding
in %
26.3
35.0
93.3
11.1
via
No.
11
1
12 4)
1 8)
40.0
116
50.0
118
49.0
196
16.8
18.4
12 8)
12 8)
21.9
42.0
20.0
20.0
32.0
24.0
1
56
1
1
1
1
32.0
1
25.0
1
49.0
139
50.0
26.3
37.5
33.3
30.0
34
11
11
1
56
1
1
311
Saongroup Caribbean (Trinidad) Ltd, Port of Spain, Trinidad,and
Tobago
100.0
134
347 Project A Services GmbH & Co. KG, Berlin
312 Saongroup.com India Pvt Ltd, Pune, India
313 Tecoloco Holding S.A. de C.V., San Salvador, El Salvador
100.0
202
100.0
0.0
214
202
348 Qivive GmbH i. L., Bad Homburg
349 Sparheld International GmbH, Berlin
350 V.V. Vertriebs-Ver. Berl. Zeitungs- und Zeitschr. Grossisten, Berlin
48.5
314 Tecoloco.com S.A. de C.V. Panama, Panama City, Panama
100.0
214
351 Zeitungs- und Zeitschriften Vertrieb Berlin GmbH, Berlin
35.5
315 Turijobs México S DE RL DE CV, Mexico-Stadt, Mexico
316 upday Polska Sp. z o.o., Warsaw, Poland
317 Yad2 Internet Ads Ltd., Haifa, Israel
318 Yad2Pay Ltd., Tel Aviv, Israel
319 zanox Switzerland AG i.L., Zurich, Switzerland
320 Zivot Publishing, a.s., Bratislava, Slovakia
Investments accounted for using the equity method
Germany
85.0
15.0
221
72
100.0
83
100.0
136
100.0
136
100.0
5
89.0
198
Other countries
352 Asocijacija Privatnih Media, Belgrade, Serbia
353 BULGARPRESS OOD, Veliko Tarnovo, Bulgaria
354 EMAS Digital SAS, Montrouge Cedex, France
20.0
195
25.5
1
50.0
118
355 HUNGAROPRESS Sajtóterjesztö Kft, Budapest, Hungary
24.0
1
356
Inoveo Holding SA, Sugiez, Switzerland
20.0
194
357 Real Estate Media S.A., Esch-sur-Alzette, Luxembourg
35.0
155
358 SereniPay SAS, Paris, France
359 VINA WOMAN UK LTD., London, United Kingdom
19.4
133
30.0
103
321 AS TYFP Media GmbH & Co. KG, Berlin
322 Axel Springer Plug and Play Accelerator GmbH, Berlin
323 mytic myticket AG, Frankfurt on the Main
50.0
50.0
24.9
1
12
1
164
Annual Report 2017
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No. Other significant investments
Germany
360 ANTENNE BAYERN GmbH & Co. KG, Ismaning
361 RADIO/TELE FFH GmbH & Co. Betriebs-KG, Bad Vilbel
Other countries
362 Airbnb, Inc., San Francisco, USA
363 Do⁄an TV Holding A.S., Istanbul, Turkey
364 Group Nine Media, Inc., New York, USA
365 Lakestar II LP, Guernsey, Guernsey
12/31/2017
Shareholding
in %
via No.
Equity
€ million 13)
Net Income
€ million 13)
16.0
15.0
0.1
7.0
13.0
6.6
1
1
1
45
12
12
-
-
-
303.7
-
143.4
- 15)
- 15)
- 15)
– 36.0
- 14)
– 3.2
1) No full consolidation due to immaterial impact (relation of net income and balance sheet total
9) Due to option rights in the reporting year and/or in the prior year a share
for the company to net income and balance sheet total of the Group).
of 100 % consolidated.
2) No at-equity consolidation due to immaterial impact (relation of net income of the company to
10) Due to option rights in the reporting year and in the prior year a share
net income of the Group).
of 89.99 % consolidated.
3) Control due to existing option rights exercisable at any time.
4) In the reporting year and/or the previous year, no control due to the lack of contractual agree-
ments, which exclude the power of control and the possibility to influence the variable out-
flows.
5) The company has exercised the exemption rights of Section 264 (3) of the German Commer-
cial Code (Handelsgesetzbuch - HGB).
6) The company has exercised the exemption rights of Section 264b of the German Commercial
11) Control due to contractual agreements and rights to obtain power.
12) Applying rules of Section 357(1) of the Companies Act 2014.
13) Unless otherwise stated, equity and profit for the year according to local annual financial
statements for the financial year 2016. Values translated into foreign currency using the
closing rate as at December 31, 2017.
14) The company was recently founded. There is no financial statement yet.
15) No statement of equity and profit for the year as the annual financial statements are not
Code (Handelsgesetzbuch – HGB).
7) Shares less than 0.1 %.
8) Significant influence on the basis of contractual agreements.
published.
16) Due to option rights in the prior year a share of 100 % consolidated (see note (2c)).
165
Responsibility Statement
To the best of our knowledge, and in accordance with
the applicable reporting principles, the consolidated fi-
nancial statements give a true and fair view of the finan-
cial position, liquidity, and financial performance of the
Group, and the Group management report includes a fair
review of the development and performance of the busi-
ness and the position of the Group, together with a de-
scription of the principal rewards and risks associated
with the expected development of the Group.
Berlin, February 20, 2018
Axel Springer SE
Dr. Mathias Döpfner
Jan Bayer
Dr. Julian Deutz
Dr. Andreas Wiele
166
Independent Auditor’s
Report
To Axel Springer SE
Report on the audit of the consolidated financial
statements and of the Group management report
Opinions
We have audited the consolidated financial statements of
Axel Springer SE, Berlin, and its subsidiaries (the Group),
which comprise the consolidated statement of financial
position as at December 31, 2017, and the consolidated
income statement, consolidated statement of compre-
hensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the
fiscal year from January 1 to December 31, 2017, and
notes to the consolidated financial statements, including
a summary of significant accounting policies. In addition,
we have audited the management report of Axel
Springer SE and the Axel Springer Group (hereinafter
“Group management report”) for the fiscal year from Jan-
uary 1 to December 31, 2017. With respect to the sec-
tion “Corporate Governance Report”, we have solely au-
dited the information contained in its subsection
“Compensation Report”. In accordance with the German
legal requirements, we have not audited the content of
the other information included in the section “Corporate
Governance Report”.
In our opinion, on the basis of the knowledge obtained in
the audit,
the accompanying consolidated financial statements
comply, in all material respects, with the IFRSs as
adopted by the EU, and the additional requirements
of German commercial law pursuant to Section 315e
(1) HGB [“Handelsgesetzbuch”: German Commercial
Code] and, in compliance with these requirements,
give a true and fair view of the assets, liabilities, and fi-
nancial position of the Group as at December 31,
2017, and of its financial performance for the fiscal
year from January 1 to December 31, 2017, and
the accompanying Group management report as a
whole provides an appropriate view of the Group’s
position. In all material respects, this Group manage-
ment report is consistent with the consolidated finan-
cial statements, complies with German legal require-
ments and appropriately presents the opportunities
and risks of future development. Our opinion on the
Group management report does not cover the con-
tent of the section “Corporate Governance Report” re-
ferred to above.
Pursuant to Section 322 (3) Sentence 1 HGB, we de-
clare that our audit has not led to any reservations relat-
ing to the legal compliance of the consolidated financial
statements and of the Group management report.
Basis for the opinions
We conducted our audit of the consolidated financial
statements and of the Group management report in ac-
cordance with Section 317 HGB and the EU Audit Regu-
lation (No 537/2014, referred to subsequently as “EU
Audit Regulation”) and in compliance with German Gen-
erally Accepted Standards for Financial Statement Audits
promulgated by the Institut der Wirtschaftsprüfer [Insti-
tute of Public Auditors in Germany] (IDW). Our responsi-
bilities under those requirements and principles are fur-
ther described in the “Auditor’s responsibilities for the
audit of the consolidated financial statements and of the
Group management report” section of our auditor’s re-
port. We are independent of the group entities in accord-
ance with the requirements of European law and German
commercial and professional law, and we have fulfilled
our other German professional responsibilities in accord-
ance with these requirements. In addition, in accordance
with Art. 10 (2) f) of the EU Audit Regulation, we declare
that we have not provided non-audit services prohibited
under Art. 5 (1) of the EU Audit Regulation. We believe
that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinions on
the consolidated financial statements and on the Group
management report.
167
Annual Report 2017
Axel Springer SE
Independent Auditor’s Report
Key audit matters in the audit of the consolidated
financial statements
Key audit matters are those matters that, in our profes-
sional judgment, were of most significance in our audit of
the consolidated financial statements for the fiscal year
from January 1 to December 31, 2017. These matters
were addressed in the context of our audit of the consol-
idated financial statements as a whole, and in forming
our opinion thereon; we do not provide a separate opin-
ion on these matters.
Below, we describe what we consider to be the key au-
dit matters:
[1] Goodwill impairment test
Reasons why the matter was determined to be a key au-
dit matter
In the consolidated financial statements of Axel Springer
SE, the balance sheet item "Intangible assets" showed
goodwill in the amount of € 2.280 million, which repre-
sented approximately 35 % of the balance sheet total,
and approximately 83 % of the Group's balance sheet
equity.
On November 30 of each year, the company carries out
a goodwill impairment test in order to determine whether
there are impairment loss requirements. The result of
these valuations depends to a large extent on how the
executive directors estimate future cash inflows and de-
rive relevant discount rates.
Given the complexity in connection with the valuation as
well as the professional judgment that can be exercised
as part of the valuation process, the impairment test for
goodwill constitutes a key audit matter within the scope
of our audit.
Auditor’s response
As part of our audit, we have examined the process im-
plemented by the executive directors of Axel Springer
SE, as well as the accounting and valuation guidelines
that have been used to calculate the recoverable
amounts from cash-generating units or groups of such
units to which goodwill has been allocated, in order to
determine the possible risk of errors. In addition, we have
gained an understanding of the steps involved in the pro-
cess and of the internal controls implemented.
We have determined that the approach adopted by the
executive directors of Axel Springer SE is in accordance
with IAS 36.
We have analyzed the business plans by comparing ac-
tual past earnings with the current performance of busi-
ness figures. As part of our analysis, we have also exam-
ined the market performance of comparable companies
based on figures from the actual financial year and fore-
casted figures for future financial years. We have re-
viewed the key assumptions made in the business plans
for development and growth of the business by discuss-
ing these in detail with the executive directors of Axel
Springer SE. This is the basis on which we have as-
sessed the appropriateness of these assumptions.
The appropriateness of the various key valuation as-
sumptions, such as the discount rate and the terminal
growth rate, was examined with the support of our inter-
nal valuation experts based on an analysis of market indi-
cators. We have analyzed the parameters that were ap-
plied when calculating the discount rates to ensure
correct derivation, and have verified that the calculation
is in accordance with the corresponding IAS 36 require-
ments.
By means of sensitivity analyses, we have assessed the
risk of impairments in the event of changes to key valua-
tion assumptions. Further, we have verified the mathe-
matical correctness of the valuation model taking into ac-
count the requirements of IAS 36.
Based on our audit procedures, no reservations apply in
relation to the valuation of goodwill.
168
Annual Report 2017
Axel Springer SE
Independent Auditor’s Report
Reference to related disclosures
Auditor’s response
Information relating to the accounting and valuation
methods applied to goodwill can be found in the notes to
the consolidated financial statements in section (3) "Ex-
planation of significant accounting and valuation meth-
ods", regarding impairments of intangible assets to sec-
tion (f). Related information concerning the exercise of
professional judgment by the executive directors and the
sources of uncertainties in relation to estimates as well
as disclosures relating to goodwill can be found in the
notes to the consolidated financial statements in the sec-
tion "Notes to the consolidated statement of financial po-
sition", note (4) "Intangible assets". This note also in-
cludes information with respect to sensitivity.
[2] Revenue recognition
Reasons for classification as a key audit matter
For the fiscal year 2017, the Axel Springer Group recog-
nized total revenues of € 3,563 million, predominantly
from circulation and advertising activities. Circulation rev-
enues are generated from the sales of newspapers and
magazines ("print media") as well as digital subscription
models. Advertising revenues are generated from the
marketing of advertisements and advertising space in
online and print media. Of the total revenue figure,
€ 1,759 million originate from revenues generated out-
side of Germany, which represents a share of 49 %.
The executive directors of Axel Springer SE issued de-
tailed accounting guidelines for the recognition of reve-
nues and implemented corresponding processes.
Given the large number of different contractual agree-
ments for the various services in the different segments
and countries included in the consolidated financial
statements of Axel Springer SE, our view is that revenue
recognition is complex. As the issues concerning reve-
nue recognition are considered material and complex,
we consider revenue recognition as a key audit matter.
As part of our audit, we have assessed the accounting
and valuation guidelines applied in the consolidated fi-
nancial statements of Axel Springer SE for revenue
recognition with respect to the criteria defined in IAS 18.
We have verified the processes implemented by the ex-
ecutive directors of Axel Springer SE in relation to reve-
nue recognition, particularly by ensuring that returns and
further sales discounts have been taken into account
correctly; we have also reviewed the controls imple-
mented as part of these processes.
In addition, we have analyzed the key revenues for the
fiscal year 2017 to determine whether, inter alia, there is
a correlation with the associated trade receivables and
with payments received. Furthermore, we have randomly
verified appropriate revenue recognition on the basis of
contractual agreements in regard to the requirements of
IAS 18. We have audited the revenues for the fiscal year
2017 on a random basis with regard to accrual account-
ing by performing case-by-case assessments of revenue
transactions shortly before and after the reporting date.
In addition, we obtained balance confirmations from cus-
tomers on a random basis.
Based on our audit procedures, no reservations apply in
relation to revenue recognition from the sale of circulation
and advertising services.
Reference to related disclosures
For information concerning the accounting and valuation
methods used for revenues, see the notes to the consoli-
dated financial statements, section (3) "Explanation of
significant accounting and valuation methods", in section
(b) "Recognition of income and expenses". For the effect
on revenues regarding changes to companies included
in the consolidation of financial statements, see section
(2) “Consolidation”, in section (c) "Acquisitions and di-
vestitures". Detailed information concerning the compo-
sition of revenues can be found in the notes to the con-
solidated financial statements, in the "Notes to the
consolidated statement of comprehensive income" sec-
tion, note (18) "Revenues".
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[3]
Internally generated rights
Reasons for classification as a key audit matter
In its consolidated financial statements, under the bal-
ance sheet item "Intangible assets," Axel Springer SE
discloses internally generated rights with a carrying
amount of € 132 million. The consolidated income state-
ment item "Change in inventories and internal costs capi-
talized" amounts to € 88 million and mainly comprises IT
development projects for upgrading and expanding the
digital business model. The costs attributable to develop-
ment, in particular those relating to software solutions
and websites were capitalized in accordance with the re-
quirements of IAS 38.
The criteria for capitalizing internally generated rights pur-
suant to IAS 38 are subject to professional judgment in
regard to, inter alia, future economic benefits and the
clear distinction from the further development of existing
projects, since these criteria are, to a large degree, de-
pendent on the assessments and assumptions of the ex-
ecutive directors.
In light of the material importance, the complexity of the
valuation models and the assumptions of the executive
directors which are subject to professional judgment, we
consider the determination of the fair values as a key au-
dit matter.
Auditor’s response
During the course of our audit, we analyzed the process
implemented by the legal representative of Axel Springer
SE as well as the accounting and valuation guidelines for
capitalizing internally generated rights in order to deter-
mine the types of error risks that these may present. We
have obtained an understanding of the relevant process
steps and internal controls implemented.
We have verified the accounting and valuation guidelines
applied in the consolidated financial statements of Axel
Springer SE regarding the capitalization of internally gen-
erated rights on the basis of the criteria defined in IAS 38
including the implementation by the executive directors.
We have verified compliance with the capitalization re-
quirements defined by IAS 38 by means of random
checks. On the basis of documentation substantiating
the existence of significant improvements relating to ex-
isting software solutions and websites, we have verified
the recognition criterion relating to the economic benefit
of the individually capitalized IT development project. In
addition, we have verified the capitalized amounts for key
projects based on the reported costs, capitalization date
as well as estimated useful life.
Overall, as a result of our audit procedures, no reserva-
tions apply in relation to the capitalization of internally
generated rights.
Reference to related disclosures
Information relating to internally generated intangible as-
sets can be found in the notes to the consolidated finan-
cial statements under section (3) "Explanation of signifi-
cant accounting and valuation methods," note (c), and
section (4) "Intangible assets", "Notes to the consoli-
dated statement of financial position."
[4] Contingent considerations arising from earn-
out agreements and option liabilities for the
acquisition of non-controlling interests
Reasons for classification as a key audit matter
As a result of Contingent considerations arising from
earn-out agreements and option liabilities for the acquisi-
tion of non-controlling interests agreed within the context
of business combinations, the consolidated statement of
financial position of Axel Springer SE as of December 31,
2017, showed contingent considerations and other op-
tions liabilities amounting to € 81 million. During the fiscal
year, these liabilities decreased due to payments in the
amount of € 187 million and of reclassifications into liabil-
ities related to assets held for sale in the amount of € 12
million, and had a positive effect on the consolidated in-
come statement in the amount of € 42 million. The valu-
ation of contingent considerations mainly depends on
the expected earnings of acquired companies in the
years prior to possible exercise dates of the option
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Independent Auditor’s Report
rights. The earnings performance projected by executive
directors of the company is associated with non-observ-
able market inputs and thus is largely dependent on pro-
fessional judgment of the executive directors of Axel
Springer SE.
In light of the material importance, the complexity of the
valuation models and the assumptions of the executive
directors which are subject to professional judgment, we
consider the determination of the fair values as a key au-
dit matter.
Auditor’s response
As part of our audit, we have, inter alia, verified the meth-
odological approach used for the valuation of contingent
considerations. The initial recognition and the valuation of
the contingent considerations were carried out as part of
the relevant acquisition. To ensure appropriate disclosure
in the balance sheet, we have critically reviewed the con-
tractual regulations and shareholder agreements for the
respective option rights to acquire non-controlling inter-
ests.
We have reviewed the valuation model used for calculat-
ing contingent considerations in order to verify compli-
ance with the relevant IFRSs including the implementa-
tion by the executive directors of Axel Springer SE.
We have analyzed the business plans by comparing ac-
tual past earnings with the current performance of busi-
ness figures. As part of our analysis, we have also exam-
ined the market performance of comparable companies
based on figures from the actual financial year and fore-
casted figures for future financial years. We have re-
viewed the key assumptions made in the business plans
for development and growth of the business by discuss-
ing these in detail with the executive directors of Axel
Springer SE. This is the basis on which we have as-
sessed the appropriateness of these assumptions.
Based on our audit procedures, no reservations apply in
relation to the valuation of contingent considerations.
Reference to related disclosures
Information relating to contingent considerations, can be
found in the notes to the consolidated financial state-
ments under section (3) "Explanation of significant ac-
counting and valuation methods", note (g). Additional in-
formation, in particular information relating to maturities,
can be found in section (16) "Other liabilities" and in sec-
tion (17) "Maturity analysis of financial liabilities". Infor-
mation with respect to valuation and sensitivity is con-
tained in section (33) "Financial assets and liabilities" of
the notes to the consolidated financial statements.
Other information
The Supervisory Board is responsible for the Report of
the Supervisory Board; the executive directors are re-
sponsible for the other remaining information. This other
remaining information comprises the information stated
in section “Corporate Governance Report” of the Group
management report with the exception of the content of
the Compensation Report; furthermore these contain
other parts stipulated for the annual report of which we
have received a version up until the issuing of this Audi-
tor's Report:
the section “Group Key Figures“,
the section “Foreword“,
the section “Executive Board“,
the section “The Axel Springer Share“,
the section “Report of the Supervisory Board“,
the section “Responsibility Report“ and
the section “Boards“.
Our opinions on the consolidated financial statements
and on the Group management report do not cover the
other information, and consequently we do not express
an opinion or any other form of assurance conclusion
thereon.
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Independent Auditor’s Report
In connection with our audit, our responsibility is to read
the other information and, in so doing, to consider
whether the other information
is materially inconsistent with the consolidated finan-
cial statements, with the Group management report
or our knowledge obtained in the audit, or
the executive directors are responsible for such arrange-
ments and measures (systems) as they have considered
necessary to enable the preparation of a Group manage-
ment report that is in accordance with the applicable
German legal requirements, and to be able to provide
sufficient appropriate evidence for the assertions in the
Group management report.
otherwise appears to be materially misstated.
Responsibilities of the executive directors and the
Supervisory Board for the consolidated financial
statements and the Group management report
The executive directors are responsible for the prepara-
tion of the consolidated financial statements that comply,
in all material respects, with IFRSs as adopted by the EU
and the additional requirements of German commercial
law pursuant to Section 315e (1) HGB, and that the con-
solidated financial statements, in compliance with these
requirements, give a true and fair view of the assets, lia-
bilities, financial position, and financial performance of
the Group. In addition, the executive directors are re-
sponsible for such internal control as they have deter-
mined necessary to enable the preparation of consoli-
dated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the
executive directors are responsible for assessing the
Group’s ability to continue as a going concern. They also
have the responsibility for disclosing, as applicable, mat-
ters related to going concern. In addition, they are re-
sponsible for financial reporting based on the going con-
cern basis of accounting unless there is an intention to
liquidate the Group or to cease operations, or there is no
realistic alternative but to do so.
Furthermore, the executive directors are responsible for
the preparation of the Group management report that, as
a whole, provides an appropriate view of the Group’s po-
sition and is, in all material respects, consistent with the
consolidated financial statements, complies with German
legal requirements, and appropriately presents the op-
portunities and risks of future development. In addition,
The Supervisory Board is responsible for overseeing the
Group’s financial reporting process for the preparation of
the consolidated financial statements and of the Group
management report.
Auditor’s responsibilities for the audit of the con-
solidated financial statements and of the Group
management report
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and whether the Group management re-
port as a whole provides an appropriate view of the
Group’s position and, in all material respects, is con-
sistent with the consolidated financial statements and the
knowledge obtained in the audit, complies with the Ger-
man legal requirements and appropriately presents the
opportunities and risks of future development, as well as
to issue an auditor’s report that includes our opinions on
the consolidated financial statements and on the Group
management report.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with Section 317 HGB and the EU Audit Regulation and
in compliance with German Generally Accepted Stand-
ards for Financial Statement Audits promulgated by the
Institut der Wirtschaftsprüfer (IDW) will always detect a
material misstatement. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on
the basis of these consolidated financial statements and
this Group management report.
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Independent Auditor’s Report
We exercise professional judgment and maintain profes-
sional skepticism throughout the audit. We also
identify and assess the risks of material misstatement
of the consolidated financial statements and of the
Group management report, whether due to fraud or
error, design and perform audit procedures respon-
sive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our
opinions. The risk of not detecting a material misstate-
ment resulting from fraud is higher than for one result-
ing from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the over-
ride of internal control.
obtain an understanding of internal control relevant to
the audit of the consolidated financial statements and
of arrangements and measures (systems) relevant to
the audit of the Group management report in order to
design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing
an opinion on the effectiveness of these systems.
evaluate the appropriateness of accounting policies
used by the executive directors and the reasonable-
ness of estimates made by the executive directors
and related disclosures.
conclude on the appropriateness of the executive di-
rectors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or condi-
tions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to
draw attention in the auditor’s report to the related
disclosures in the consolidated financial statements
and in the Group management report or, if such dis-
closures are inadequate, to modify our respective
opinions. Our conclusions are based on the audit evi-
dence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the
Group to cease to be able to continue as a going
concern.
evaluate the overall presentation, structure and con-
tent of the consolidated financial statements, including
the disclosures, and whether the consolidated finan-
cial statements present the underlying transactions
and events in a manner that the consolidated financial
statements give a true and fair view of the assets, lia-
bilities, financial position and financial performance of
the Group in compliance with IFRSs as adopted by
the EU and the additional requirements of German
commercial law pursuant to Section 315e (1) HGB.
obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business ac-
tivities within the Group to express opinions on the
consolidated financial statements and on the Group
management report. We are responsible for the direc-
tion, supervision and performance of the group audit.
We remain solely responsible for our audit opinions.
evaluate the consistency of the Group management
report with the consolidated financial statements, its
conformity with [German] law, and the view of the
Company’s position it provides.
perform audit procedures on the prospective infor-
mation presented by the executive directors in the
Group management report. On the basis of sufficient
appropriate audit evidence we evaluate, in particular,
the significant assumptions used by the executive di-
rectors as a basis for the prospective information, and
evaluate the proper derivation of the prospective infor-
mation from these assumptions. We do not express a
separate opinion on the prospective information and
on the assumptions used as a basis. There is a sub-
stantial unavoidable risk that future events will differ
materially from the prospective information.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we
identify during our audit.
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We also provide those charged with governance with a
statement that we have complied with the relevant inde-
pendence requirements, and communicate with them all
relationships and other matters that may reasonably be
thought to bear on our independence and where appli-
cable, the related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated fi-
nancial statements of the current period and are there-
fore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes
public disclosure about the matter.
German Public Auditor responsible for the engagement
The German Public Auditor responsible for the engage-
ment is Nathalie Mielke.
Berlin, February 21, 2018
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Other legal and regulatory requirements
Ludwig
Wirtschaftsprüfer
Mielke
Wirtschaftsprüferin
Further information pursuant to Art. 10 of the EU
Audit Regulation
We were elected as group auditor by the Annual General
Meeting on April 26, 2017. We were engaged by the Su-
pervisory Board on April 26, 2017. We have been the
group auditor of Axel Springer SE without interruption
since fiscal year 2007.
We declare that the opinions expressed in this auditor’s
report are consistent with the additional report to the au-
dit committee pursuant to Art. 11 of the EU Audit Regu-
lation (long-form audit report).
In addition to the financial statement audit, we have pro-
vided to group entities the following services that are not
disclosed in the consolidated financial statements or in
the Group management report: due diligence services,
mandatory audits of financial statements, services relat-
ing to enforcement examinations, review of interim finan-
cial statements, the audit of the system implemented in
order to ensure compliance with Section 32 (1) WpHG,
the audit of financial statements according to IDW PS
480, which prescribes the audit of financial statements
compiled for a special purpose as well as the audit of in-
ternal control systems in service companies according to
IDW PS 951.
174
Boards
Supervisory Board
The Supervisory Board is composed of the following persons:
Name, occupation
Seats on other mandatory
supervisory boards in Germany
Seats on comparable boards
in Germany and abroad
Dr. Giuseppe Vita
Chairman of the Supervisory Board of
Axel Springer SE
Dr. h. c. Friede Springer
Vice Chairwoman of the Supervisory Board
of Axel Springer SE
William E. Ford
CEO General Atlantic
Oliver Heine
Attorney at law and partner in the
law firm Heine & Partner
Rudolf Knepper
Entrepreneur
Lothar Lanz
Member of various Supervisory Boards
UniCredit S.p.A., Italy (Chairman of the Board of Directors)
Authentic Brands Group L.L.C., USA (Board of Directors, since October 2017)
IHS Markit Ltd., United Kingdom (Board of Directors)
Oak Hill Advisors, L.P., USA (Partnership Committee)
TBG AG, Switzerland (Board of Directors)
Tory Burch LLC, USA (Board of Directors)
YooApplications AG, Switzerland (Board of Directors)
Bauwert AG (Vice Chairman, Chairman,
until March 2017)
Dermapharm Holding SE (since January
2018)
Home24 AG (Chairman)
TAG Immobilien AG (Vice Chairman)
Zalando SE (Chairman)
Do⁄an TV Holding A.S., Turkey (Supervisory Board, until March 2017)
Kinnevik AB, Sweden (Board of Directors)
Dr. Nicola Leibinger-Kammüller
President and Chairwoman of the Managing
Board of TRUMPF GmbH + Co. KG
Siemens AG
Voith GmbH & Co. KGaA, previously Voith
GmbH
TRUMPF Schweiz AG, Switzerland (Board of Directors)
Prof. Dr.-Ing. Wolfgang Reitzle
Entrepreneur
Martin Varsavsky
CEO Prelude Fertility Inc.
Continental AG (Chairman)
Hawesko Holding AG (Vice Chairman,
until June 2017)
Linde AG (Chairman)
Medical Park AG (Chairman)
Ivoclar Vivadent AG, Liechtenstein (Board of Directors)
Fon Wireless Ltd., United Kingdom (Chairman of the Board of Directors)
175
Annual Report 2017
Axel Springer SE
Executive Board
The Executive Board is composed of the following persons:
Executive Board member
Seats on mandatory
supervisory boards in Germany
Seats on comparable boards
in Germany and abroad
Boards
Dr. Mathias Döpfner
Chairman and Chief Executive Officer
Journalist
Jan Bayer
President News Media
Media scholar
Dr. Julian Deutz
Chief Financial Officer
Master’s Degree in Business Administration
AWIN AG (since June 2017)
Dr. Andreas Wiele
President Classifieds and Marketing Media
(since March 1, 2018
President Classifieds Media)
Lawyer
AWIN AG (Chairman), previously
ZANOX AG
Immowelt AG (Chairman)
Immowelt Holding AG (Chairman)
Dr. Stephanie Caspar
(since March 1, 2018)
Chief Technology and Data Officer
Master’s Degree in Business Administration
Axel Springer Schweiz AG, Switzerland (Chairman of the Board of Directors)
Business Insider Inc., USA (Chairman of the Board of Directors)
eMarketer Inc., USA (Chairman of the Board of Directors)
Ringier Axel Springer Schweiz AG, Switzerland (Board of Directors)
Time Warner Inc., USA (Board of Directors)
Vodafone Group Plc., United Kingdom (Board of Directors)
Warner Music Group Corp., USA (Board of Directors)
Business Insider Inc., USA (Board of Directors)
eMarketer Inc., USA (Board of Directors)
Media Impact GmbH & Co. KG, Germany (Chairman of the Advisory Board)
ONET S.A., Poland (Supervisory Board, since July 2017)
Ringier Axel Springer Media AG, Switzerland (Vice Chairman of the Board of
Directors, since July 2017, previously Board of Directors)
Ringier Axel Springer Schweiz AG, Switzerland (Chairman of the Board of
Directors, since June 2017)
Axel Springer Beteiligungen Schweiz AG, Switzerland (Board of Directors, since
September 2017)
Axel Springer Digital Classifieds France SAS, France (Supervisory Board)
Axel Springer International AG, Switzerland (Chairman of the Board of
Directors, since June 2017, previously Board of Directors)
Axel Springer Schweiz AG, Switzerland (Board of Directors)
CompuTel Telefonservice AG, Switzerland (Chairman of the Board of Directors,
since September 2017)
Do⁄an TV Holding A.S., Turkey (Supervisory Board, since March 2017)
Jean Frey AG, Switzerland (Chairman of the Board of Directors, since
September 2017)
Ringier Axel Springer Media AG, Switzerland (Board of Directors, since July
2017)
Ringier Axel Springer Schweiz AG, Switzerland (Board of Directors, until June
2017)
SeLoger.com SAS, France (Supervisory Board)
StepStone GmbH, Germany (Supervisory Board)
@Leisure Holding B.V., Netherlands (Chairman of the Board of Directors)
Aufeminin S.A., France (Board of Directors)
Axel Springer Digital Classifieds France SAS, France (Chairman of the
Supervisory Board)
Business Insider Inc., USA (Board of Directors)
Car & Boat Media SAS, France (Chairman of the Supervisory Board)
Coral-Tell Ltd., Israel (Chairman of the Board of Directors )
Elvaston Capital Management GmbH, Germany (Advisory Board, since January
2017)
Immoweb SA, Belgium (Chairman of the Board of Directors)
Magnolia AG, Switzerland (Board of Directors, since December 2017)
Media Impact GmbH & Co. KG, Germany
(Advisory Board, until September 2017)
meinestadt.de GmbH, Germany (Chairman of the Supervisory Board)
SeLoger.com SAS, France (Chairman of the Supervisory Board)
StepStone GmbH, Germany (Chairman of the Supervisory Board)
Media Impact GmbH & Co. KG, Germany (Advisory Board, since October 2017)
Visoon Video Impact Management GmbH, Germany (Advisory Board, since
November 2017)
176
Financial Calendar
March 8, 2018
Annual Report 2017
Annual results press conference, telephone conference
for investors and analysts, audio webcast
April 18, 2018
Annual General Meeting
Video webcast of the speech of the CEO
May 8, 2018
Quarterly Statement as of March 31, 2018
Telephone conference, audio webcast
July 27, 2018
Interim Financial Report as of June 30, 2018
Telephone conference, audio webcast
November 7, 2018
Quarterly Statement as of September 30, 2018
Telephone conference, audio webcast
December 12, 2018
Capital Markets Day
Video webcast
Imprint
Address
Axel Springer SE
Axel-Springer-Straße 65
10888 Berlin, Germany
Phone: +49 30 2591-0
Investor Relations
ir@axelspringer.de
Phone: +49 30 2591-77421/-77425
Fax: +49 30 2591-77422
Corporate Communications
information@axelspringer.de
Phone: +49 30 2591-77600
Fax: +49 30 2591-77603
Design
Axel Springer SE, Corporate Communications
Photos
Andreas H. Bitesnich / Matti Hillig / Sergio Rinaldi
The Annual Report and up-to-date information about
Axel Springer are available on the Internet at:
www.axelspringer.de
The English translation of the Annual Report is provided
for convenience only. The German original is legally
binding.