Annual Report
18 Foreword
88
Report of the Supervisory Board
Executive Board
97 Consolidated Financial Statements
Contents
4
6
8
The Axel Springer share
10 Combined Management Report
13
24
43
47
60
67
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
72
Corporate Governance Report
98
Consolidated Statement of
Financial Position
100 Consolidated Income Statement
101 Consolidated Statement of
Comprehensive Income
102 Consolidated Statement of
Cash Flows
103 Consolidated Statement of
Changes in Equity
104 Consolidated Segment Report
105 Notes to the Consolidated Financial
Statements
179 Responsibility Statement
180
Independent Auditor’s Report
187 Boards
2
Group Key Figures
in € millions
Group
Revenues1)
Digital revenue share1) 2)
EBITDA, adjusted3) 4)
EBITDA margin, adjusted1) 3)
Digital EBITDA share2)
EBIT, adjusted3)
EBIT margin, adjusted 1) 3)
Net income5)
Net income, adjusted3) 5)
Segments
Revenues
Classifieds Media
News Media
Marketing Media1)
Services/Holding
EBITDA, adjusted3)
Classifieds Media
News Media
Marketing Media
Services/Holding
EBIT, adjusted3)
Classifieds Media
News Media
Marketing Media
Services/Holding
Liquidity and financial position
Free cash flow (FCF)3)
FCF excl. effects from headquarter real estate transactions3) 6)
Capex7)
Capex excl. effects from headquarter real estate transactions6) 7)
Net debt/liquidity3) 8) 9)
Share-related key figures
Earnings per share, adjusted (in €)3) 5) 10)
Earnings per share (in €)5) 10)
Dividend (in €)11)
Closing price (in €)12)
Market capitalization12) 13)
Average number of employees
Change yoy
2018
2017
4.1 %
3,180.7
3,055.5
70.6 %
66.7 %
14.3 %
737.9
645.8
23.2 %
21.1 %
84.3 %
80.0 %
4.7 %
527.9
504.0
16.6 %
16.5 %
– 44.9 %
2.5 %
208.4
335.7
378.0
327.5
20.3 %
– 0.9 %
– 12.4 %
– 11.5 %
17.9 %
4.3 %
– 6.3 %
−
1,212.5
1,496.2
418.3
53.7
487.2
228.2
89.6
– 67.0
12.7 %
406.7
– 13.6 %
– 14.7 %
158.2
66.0
1,007.7
1,509.8
477.3
60.7
413.2
218.8
95.6
– 81.7
361.0
182.9
77.4
−
– 103.0
– 117.4
– 30.3 %
23.0 %
−
−
−
5.1 %
– 47.4 %
5.0 %
346.9
419.6
– 225.3
– 149.3
497.4
341.1
– 200.9
– 152.5
– 1,249.2
– 1,020.2
2.73
1.68
2.10
2.60
3.19
2.00
– 24.2 %
49.38
65.13
– 24.2 %
5,327.9
7,027.2
3.2 %
16,350
15,836
1) Adjustments of prior-year figures due to the retrospective application of IFRS 15, see section 3(o) in the notes to the consolidated financial statements.
2) Based on the operating business (without the segment Services/Holding).
3) Explanations regarding relevant key performance indicators on page 37 et seq. Regarding the first-time application of IFRS 16, see section 3(o) in the notes to the consolidated
financial statements.
4) Including the increase in adjusted EBITDA of € 45.1 million from the first-time application of IFRS 16, see section 3(o) in the notes to the consolidated financial statements.
5) For 2017 continuing operations, for the portion attributable to discontinued operations see section 2(d) in the notes to the consolidated financial statements.
6) Referring to the new building in Berlin as well as the sale of the new building and the Axel-Springer-Passage as well as the sale of the office building complex in Hamburg.
7) Capital expenditures for intangible assets and property, plant and equipment.
8) As of December 31, 2018, and December 31, 2017, respectively.
9) Incl. leasing liabilities in the amount of € 379.6 million (PY: € 0.3 million), see section 3(o) in the notes to the consolidated financial statements.
10) Calculation based on average weighted shares outstanding in the reporting period (107.9 million; PY: 107.9 million).
11) The dividend for the financial year 2018 is subject to the condition of approval by the annual shareholders´ meeting.
12) Quotations based on XETRA closing prices.
13) Based on shares outstanding as of December 31, 2018, excluding treasury shares (107.9 million; PY: 107.9 million).
Foreword
Annual Report 2018
Axel Springer SE
Foreword
in case of Business Insider in the second half of the
year to break even and finally
to boost further potential in the Technology and
Data segment.
All of these goals have been achieved.
First of all, we were able to meet our forecast for the
past financial year. Revenues increased by 4.1 % to
€ 3.2 billion, while adjusted EBITDA increased by 14.3 %
to € 737.9 million and adjusted earnings per share
increased by 5.1 % to € 2.73. Axel Springer is a digital
company. By now, 70.6 % of revenue and 84.3 % of
adjusted EBITDA come from digital activities. Revenues
of digital activities increased organically by 9.6 %. We will
continue this successful path.
The Classifieds Media segment continued its excellent
development. The key drivers are the job portals of the
StepStone Group, which have enjoyed pleasant growth,
especially in continental Europe. At almost 17 %, organic
revenue growth in the jobs segment reached the high
level of the previous year. In the UK, StepStone's leading
job boards Totaljobs and Jobsite have started a close
cooperation. Customers can now benefit from the bun-
dled reach of the two already strong job platforms. An
excellent example of how our brands can profit from
one another. Overall, StepStone continues with strong
investments in brand, traffic, products and technology to
further expand its strong market position.
Real Estate also performed excellently during the
past financial year. In January 2018, the acquisition of
Logic-Immo was approved. The successful French real
estate portal will now be merged with SeLoger, the
first integration steps have already been successfully
completed in 2018. Together, the two portals hold a
strong position in the French real estate market. There is
also good news from the German market: Immowelt was
able to reach the target of 40 % EBITDA margin a year
ahead of schedule. In addition, we are now active in the
area of transaction-based digital real estate platforms. In
the first step, through the investment in innovation leader
Purplebricks, and in the second step, by acquiring
2018 started with a very good message. After more than
a year in Turkish custody, most of the time in solitary
confinement, innocent and without indictment, the
WORLD correspondent Deniz Yücel was finally released
in February. However, only a few days later our great joy
and relief about it were replaced with sadness and
horror: Ján Kuciak, the investigative journalist working for
actuality.sk, the news portal belonging to Ringier Axel
Springer Slovakia, and his partner were cruelly murdered.
Probably purely because of his critical investigations.
These cases, of which only one ended well, show how
necessary it is to defend the rule of law every day, to
defend freedom. And they make it clear in a terrible way
how important the work of our journalists is. As a
company, we do everything to protect our journalists
and strengthen their work.
Economically, Axel Springer is in a strong position. For
the past year, we had planned to follow the course we
had set and to continue on it. Concrete, related projects
were:
continuing two-digit growth in the Classifieds
Business,
a stable adjusted EBITDA in the News Media segment,
4
Annual Report 2018
Axel Springer SE
Foreword
The Technology and Data segment is becoming
increasingly important. For this reason, since last year,
Dr. Stephanie Caspar as a member of the Executive
Board is engaged in this topic and is driving it forward
with all her strengths.
At the end of the upcoming Annual General Meeting,
our long-serving Chairman of the Supervisory Board,
Dr. Giuseppe Vita, will retire from the Board of which he
has been a member since 2001 and its Chairman since
2002. An extraordinary Chairman in every respect.
Although initially from outside the industry, he was an
expert in the field from the start, who intuitively recog-
nised the sensitivities of the media world and encorpo-
rated them into his thinking and actions. At the same
time, he always remained apolitical, and acted exclusive-
ly on the matters at hand, with composure, confidence
and a vast wealth of experience. He accompanied the
company through decisive years of transformation. For
his work, his commitment and his wise and far-sighted
advice the Executive Board is very grateful to him.
Thank you kindly for the trust and confidence you have
placed in our company.
Yours faithfully, Mathias Döpfner
shares in Homeday, in turn in strategic partnership with
Purplebricks. This shows: We will not rest on our
achievements in the Real Estate segment, and instead
will invest in further growth potential.
In the News Media segment, as announced, we
succeeded in keeping adjusted EBITDA stable despite
the structural challenges. In 2018, our traditional core
brands BILD and WELT took a decisive step forward:
In the meantime, both titles together have over half a
million paying subscribers. BILDplus is thereby the
largest journalistic paid-content offering in continental
Europe and is now in the fifth place worldwide. This
shows that the way we have chosen to rely on digital
paid offers is the right one.
The following is also very satisfying: The success story of
Business Insider continues. After an extremely strong
prior year, Insider Inc., as the company is now called,
achieved very good growth in the past fiscal year. The
average annual growth since the acquisition of Business
Insider in 2015 was around 33 % and is higher than
expected at the time of the acquisition. In addition, we
are increasingly managing to diversify our revenue
streams. And last but not least, the company reached
the break-even point as planned last year. In addition,
we are also very pleased with the development of upday,
the news aggregator developed especially for Samsung
devices. upday is growing steadily, the reach is out-
standing, and by 2019 we intend to reach the break-
even point.
In the future, we will focus fully on our two pillars, the
Classifieds Media segment on the one hand, and the
News Media Segment on the other. In this sense, we
have already completed the sale of aufeminin in 2018 in
the Marketing Media segment. We thereby succeeded in
achieving a very attractive purchase price. At the same
time, we have begun to strengthen the cooperation
between idealo and the News Media sector. The inter-
sections are large. A stronger cooperation with the news
offerings will enable us to strengthen and expand the
business of idealo.
5
Executive Board
Dr. Mathias Döpfner
Jan Bayer
Chairman and CEO
President News Media International
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. Stephanie Caspar
Dr. Julian Deutz
Dr. Andreas Wiele
President News Media National &
Chief Financial Officer
President Classifieds Media
Technology
Born 1973, Master’s degree in
Born 1968, Master’s degree in
Born 1962, lawyer.
business administration. Career
business administration. Career
Career milestones: Editor,
milestones: Engagement Manager
milestones: OC&C Strategy
Hamburger Morgenpost; Head
McKinsey; Director Consumer
Consultants; head of M&A/Investor
of Publishing Capital and Geo,
Categories eBay; Member of the
Relations Pixelpark AG; CFO
Gruner+Jahr, Paris/France;
Management Team/Leiterin UX
Venturepark AG; CFO Steilmann-
Execu tive Vice President and Chief
Immobilien Scout; CEO Mirapodo;
Gruppe; Axel Springer International;
Operating Officer of Gruner+Jahr
Managing Director WeltN24;
Head of Group Controlling/Corporate
USA Publishing, New York.
Managing Director Spring GmbH.
Development Axel Springer SE.
Member of the Executive Board
Member of the Executive Board
Member of the Executive Board
since 2000.
since 2018.
since 2014.
7
The Axel Springer share
Annual Report 2018
Axel Springer SE
The Axel Springer share
Stock market year 2018
Performance Axel Springer Share in €
The stock exchanges look back on a difficult year. The
leading German index, the DAX (price index), closed the
reporting year with a decline of 20.6 %, while the MDAX
(price index), which also includes the Axel Springer
share, decreased by 19.6 %. At the end of the year, the
European media sector index DJ EuroStoxx Media was
8.1 % below the prior-year closing rate. The value of the
Axel Springer share declined by 24.2 % for the full year,
thus showing a development below the comparable
indices. Market capitalization at the end of 2018 was
around € 5.3 billion.
Axel Springer
1)
DAX
MDAX
1)
DJ EuroStoxx Media
1)
80
70
60
50
40
Closing price: € 49.38
01/01/18
12/31/18
1)
Indexed on the year-end share price of Axel Springer SE as of December 31, 2017.
Share Information1)
€
2018
2017
Change
Analysts coverage
Earnings per share, adjusted2) 3) 4)
Earnings per share3) 4)
Dividend5)
Total dividend payout
(€ millions)5)
2.73
1.68
2.10
2.60
5.1 %
3.19
– 47.4 %
2.00
5.0 %
226.6
215.8
5.0 %
Year-end share price
49.38
65.13
– 24.2 %
Highest price
Lowest price
74.00
68.10
8.7 %
49.14
46.34
6.0 %
Market capitalization (€ millions)6)
5,327.9
7,027.2
– 24.2 %
Daily traded volume (Ø, €
thousands)
9,997.3
9,371.7
6.7 %
Dividend yield5) 6)
4.3 %
3.1 %
Dividend yield per share per
year7)
– 21.1 %
45.3 %
-
-
1) Quotations based on XETRA closing prices.
2) Explanations with respect to the relevant key performance indicators
on page 37 et seq.
3) For 2017 continuing operations, for the portion attributable to discontinued opera-
tions see section 2(d) in the notes to the consolidated financial statements.
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 2018 is subjedt to the condition of approval by
the annual shareholders´ meeting.
6) Based on shares outstanding as of December 31, 2018, excluding treasury shares
(107.9 million; PY: 107.9 million).
7) Share price development plus dividend payment.
The number of analysts publishing ratings for our share
decreased from 18 to 16 in the 2018 financial year. At
the time of preparation of the annual financial statements,
nine brokers recommend our share for purchase,
six classify it as "hold/neutral" and one analyst firm
recommends 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.com.
Investor Relations
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 21 days. In addition, we held regular
dialogues with investors, analysts, and other capital
market players in numerous discussions and telephone
conferences throughout the year. As usual, the
telephone conferences held in connection with the
publication of our financial reports were broadcast
live on the Internet as audio webcasts and will continue
to be available on our website.
8
Annual Report 2018
Axel Springer SE
The Axel Springer share
Share participation program
In 2017, the new share participation program
for employees initially started with a six-month pilot
phase for Axel Springer SE, and all 100 % (subsidiary)
companies in Germany, France, UK and Belgium. Since
January 2018, the program takes place with the regular
attendance period of twelve months. 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, employees receive a
share grant of 30 % of the converted base salary.
The subsequent holding period is two years.
Information on Listing
Share type
Registered share with
restricted transferability
Stock exchange
Germany (Prime Standard)
Security Identification
Number
ISIN
Capital stock
550135, 575423
DE0005501357, DE0005754238
€ 107,895,311.00 / divided up into
107,895,311 registered shares
with no par value
Thomson Reuters
SPRGn.DE
The eleventh Capital Markets Day was held on
December 12, 2018, to which we invited analysts,
institutional investors and bank representatives to
London. This event was broadcast live as a video
webcast and together with the presentations shown
at the event is available online under
go.axelspringer.com/cmd2018.
Shareholder Structure
figures rounded
Axel Springer Gesellschaft für Publizistik1
Axel Sven Springer
Dr. h.c. Friede Springer
Ariane Melanie Springer
Dr. Mathias Döpfner
Other shareholdings
44.8 %
2.4 %
2.8 %
37.5%
7.4 %
5.1 %
Status: December 2018
1 Company solely owned by Dr. h.c. Friede Springer
Annual shareholders’ meeting
The annual shareholders' meeting of Axel Springer SE
took place in Berlin on April 18, 2018. Around 460
shareholders or 89.1 % of capital carrying voting rights
participated. All resolutions proposed by the Manage-
ment - including the proposal to increase the dividend by
5.3 % to € 2.00 (PY: € 1.90) per qualifying share - were
approved by majorities of at least 83.1 %. Based on the
2017 year-end price, our share achieved a dividend yield
of 3.1 %. A total of € 215.8 million (PY: € 205.0 million)
was distributed to our shareholders.
9
Annual Report 2018
Axel Springer SE
Combined Management
Report
Combined Management Report
13 Fundamentals of the Axel Springer Group
24 Economic report
43 Economic Position of Axel Springer SE
47 Report on risks and opportunities
60 Forecast Report
67 Disclosures and explanatory report on the
Executive Board pursuant to takeover law
72 Corporate Governance Report
10
Annual Report 2018
Axel Springer SE
Combined Management Report
Summary of business performance and
operating results in 2018
Axel Springer looks back on a successful financial
year 2018. The forecast published for the Group in
March 2018 and partially adjusted during the year
was fulfilled (see page 63).
In the reporting year, revenues of € 3,180.7 million were
4.1 % higher than the prior year (€ 3,055.5 million). Both
the value in the reporting period and the corresponding
figure in the prior year take into account the first-time
application of the new IFRS 15 accounting standards
(see section 3(o) in the notes to the consolidated financial
statements). The significant part of this growth can be
attributed to good operational development. In addition,
consolidation effects also contributed, while currency
effects had a negative impact overall. Organically, i. e.
adjusted for consolidation and exchange rate effects,
revenues were 3.8 % higher than in the prior year.
Once again, growth was driven by our activities in the
Classifieds Media segment. Overall, Axel Springer
generated 70.6 % of the revenues in the digital segment
in 2018.
The adjusted EBITDA was € 737.9 million and there-
fore up by 14.3 %, compared with the prior year
(€ 645.8 million). The margin increased from 21.1 % to
23.2 %. The increase in revenue was primarily attributa-
ble to the operational improvement in the Classifieds
Media segment. In addition, the application of the new
IFRS 16 accounting standard, which has been in force
for the first time since January 2018 (see section 3(o)
in the notes to the consolidated financial statements),
also had a positive effect. Organically, i.e. adjusted for
consolidation and currency effects, as well as the effects
of IFRS 16, the adjusted EBITDA increased by 8.5 %.
Overall, we generated 84.3 % of EBITDA with digital
activities in the past fiscal year.
Compared with the prior year, adjusted EBIT increased
by 4.7 % to € 527.9 million (PY: € 504.0 million).
The lower increase compared to EBITDA resulted, in
particular, from the higher scheduled depreciation,
amortization and impairments due to the introduction of
the new IFRS 16 accounting standards. EBIT increased
organically by 6.4 %. The margin at 16.6 % was at the
same level as in the prior year (16.5 %).
The adjusted earnings per share from continuing
operations of € 2.73 were 5.1 % above the prior-year
figure of € 2.60. Organically, adjusted earnings per share
increased even more sharply with 8.3 %.
At the annual shareholders' meeting to be held on
April 17, 2019, the Executive Board and Supervisory
Board will propose a dividend of € 2.10 (PY: € 2.00)
per qualifying share.
Outlook 2019
For the financial year 2019, we expect Group revenues
to increase in the low single-digit percentage range.
Organically, we assume growth in the low to mid
single-digit percentage range.
We expect the adjusted EBITDA to remain on the prior-
year level. Organic growth of adjusted EBITDA should be
in the low to mid single-digit percentage range.
For adjusted EBIT, we expect a decline in the low
single-digit percentage range due to higher depreciation,
amortization and impairments. Organically, we expect
growth in the low single-digit percentage range.
We expect the development of the adjusted earnings
per share between a stable development and a decline
in the low single-digit percentage range. We expect an
organic increase in the single-digit percentage range.
For detailed information on the forecast see page 65.
11
Annual Report 2018
Axel Springer SE
Combined Management Report
In the 2018 financial year, changes resulted from the
first-time application of IFRS 9 "Financial Instruments",
IFRS 15 "Revenue from Contracts with Customers" and
IFRS 16 "Leases". Please refer to section 3(o) in the
notes to the cnsolidated financial statements for
information on the changes resulting from the new
accounting standards.
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 43.
For explanations of the key performance indicators used
and the adjustments of our operating results, please refer
to page 37 et seq. of the combined management report
and section (31) in the notes to the consolidated financial
statements.
12
Annual Report 2018
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
Axel Springer is a leading digital publisher with an em-
phasis on digital classifieds and journalism. Already today,
70.6 % of total revenues and 84.3 % 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 Insider Inc.
in the USA. The Marketing Media segment comprises all
business models that generate revenues predominantly
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 (41) in the notes to the consolidated financial
statements.
Segments of the Axel Springer Group
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.
Classifieds Media
The Classifieds Media segment encompasses all
business models that generate their revenues primarily
through advertisers paying for advertising of jobs,
real estate, cars, etc.
Portfolio and market position
Axel Springer has built up one of the world's largest
portfolios of leading online classified portals in the last
ten years. The activities of the Classifieds Media segment
are divided into three subsegments: Jobs, Real Estate
and General/Other. The following graph gives an over-
view of the main brands in the Classifieds Media portfolio.
13
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Portfolio Classifieds Media
Jobs
Real Estate
General/
Other
StepStone
Totaljobs/Jobsite
Saongroup
SeLoger/Logic-Immo
Immowelt
Immoweb
LaCentrale
Yad2
@Leisure
Activities in the Jobs subsegment are organized centrally
under the management of StepStone Germany and thus
realize synergies within the Group. Examples of this are
new products and offers that are made available to all
companies in Jobs Classifieds, as well as the coordina-
tion of development projects. Currently, a joint group is
being formed with the Aviv Group for the activities in Real
Estate as well as General/Other (with the exception of
@Leisure). Across the individual companies involved,
a long-term strategy for the development from purely
listing-based to more transaction-based marketplaces is
being pursued. In the implementation, this includes
the joint development of new products as well as the
improvement of efficiencies by e.g. the interchange of
the existing technical components or algorithms.
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, which specialize in ex-
pert and executive personnel, according to the market
research institute TNS, StepStone delivers around two
and a half times more applications per ad than its near-
est 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 with
SeLoger and Logic-Immo in France and with Immoweb
in Belgium. 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 and an expansion of its
offering in recent years, reaching an average value of
€ 765 in 2018 (PY: € 724) per month. The SeLoger
portfolio also includes some highly specialized niche
portals such as: belles-demeures.com for luxury real
estate. Since the first quarter of 2018 Logic-Imo.com
has also been part of the portfolio (see page 26). In
Belgium, Immoweb achieved average revenue per agent
of € 541 per month (PY: € 514). The Real Estate
subsegment also includes the German Immowelt Group,
which was created from the merger of Immowelt and
Immonet and is the clear number two of the German real
estate portals. In 2018, the migration of customers to the
DUO offering was completed, which allows agents to
place their properties on both portals. In the course of
the year, a further step was taken to increasingly focus
marketing activities on customers with higher advertising
volumes. This resulted in another overall significant
increase in average revenue per agent. In 2018, this
averaged € 332 per month (PY: € 294).
General/Other includes Car&Boat Media, based
in Paris. With LaCentrale, the company operates the
leading specialist classifieds portal for used cars in
France as well as other portals related to cars and boats.
Car&Boat Media’s average revenue per dealer in 2018
was € 454 per month (PY: € 410). The Yad2 Group
includes the leading generalist classifieds portal in
Israel for real estate, cars and classified ads, as well as a
leading job board (Drushim). The subsegment also
includes @Leisure, a leading operator of online holiday
property rental portals. The group of companies based in
Amsterdam includes, among others, the portal Belvilla as
well as the company Traum-Ferienwohnungen and the
DanCenter Group (formerly Land & Leisure Group),
which, among others, operates the portal DanCenter.
14
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Business model and key factors
The offerings in the Classifieds Media segment mainly
generate revenue from the sale of classified ads.
Companies pay a certain price per ad for placing job
ads, estate agents for advertising real estate, or car
dealerships for publishing car ads. In addition, revenues
are generated through the supply of qualified contacts
or prospects (lead generation), marketing of online ad-
vertising spaces and cooperations as well as through the
provision of software functionalities for customers. Long-
term growth drivers are, among others, the continuing
relocation of classified ads to the Internet, the acquisition
of new customers, and the extension of the product offer
e.g. in the field of lead generation. Moreover, business
developments are significantly determined by the eco-
nomic environment in the respective market segments,
the market position in the respective segment, and online
usage behavior of advertisers and seekers.
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
developers, housing agencies, or private individuals.
In the General/Other section, revenues are oriented
upon the customer focus of the respective portal. These
include, among others, commercial automobile retailers,
landlords of vacation homes, real estate agents and
project developers. The portals are also partially aimed at
private individuals who predominantly 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
BILD-Group
WELT-Group
Ringier Axel Springer Media
Insider Inc.
eMarketer
upday
Politico
The digital portfolio in the News Media National
subsegment mainly comprises BILD.de and WELT.de
including affiliated online portals such as Stylebook and
Gründerszene, as well as the digital appearances of the
magazines (among others Autobild.de). In addition, with
WELT (previously N24) a TV news channel belongs to
the WELT Group. N24 was renamed to WELT in
January 2018.
BILD.de is German news and entertainment portal with
the highest reach, reaching an average of 4.9 million
unique users per day and 22.9 million unique users per
month in December 2018. BILD.de is represented on all
digital devices with its offerings and is available via its
apps for almost all smartphones, tablet PCs and smart
TVs as well as for voice-based products on new mobile
assistants. The digital offers of the BILD Group also
include other theme-specific portals such as fitbook.de,
stylebook.de, techbook.de or travelbook.de.
15
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
In the segment of German quality media, WELT's digital
products, with about 20 million unique users per month,
are among the most successful in stationary and mobile
Internet. They are also available on tablet PCs,
smartphones and e-readers as well as a digital subscrip-
tion. WELT (previously N24) is the leader in the News
channel segment and reaches with N24 Doku among
the 14- to 49-year-old advertising-relevant audience
group a market share of 1.3 %.
The willingness to pay for digital journalism is increasing.
Thus, in October 2018 Axel Springer's digital paid con-
tent offerings were able to register more than 500,000
subscribers for the first time with BILDplus and
WELTplus. BILDplus is thus also the largest journalistic
paid-content offering in Continental Europe and is
now in fifth place worldwide.
The print portfolio in the News Media National
segment comprises the newspapers of the family
brands BILD and WELT as well as our magazines.
BILD is Europe's largest daily newspaper with the
highest reach and by far the number one newsstand
newspaper in Germany with a share of 79.6 % (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, 2018). BILD am SONNTAG is Germany's
best-selling national Sunday newspaper in 2018 with a
share of 57.0 %. B.Z. is one of the largest newspapers in
Berlin. The automotive, computer and sports media of
the BILD brand family make up a magazine portfolio
around the core brands AUTO BILD, COMPUTER BILD
and SPORT BILD.
In terms of circulation, WELT AM SONNTAG is the
clear number one national quality newspaper. 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 75.9 % of
the country’s Internet users with the leading Polish
online group Onet. In Hungary the leading job portal,
profession.hu, belongs to the portfolio. As the leading
online publisher, Ringier Axel Springer Media reached
77.3 % of Internet users in Slovakia. In Estonia, Latvia
and Lithuania, Ringier Axel Springer Media operates
leading job portals. 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 car segments. Print offers include
the largest Polish newspaper FAKT, the leading tabloid
BLIKK in Hungary, as well as other newspapers and
magazines. In Slovakia, the sale of the print business that
was agreed upon in 2017, was carried out in July 2018.
In the US, Axel Springer is represented by the leading
digital business and financial news provider Business
Insider. In order to accommodate the growing and
diverse brand group, the family brand Insider Inc. was
founded. Its portfolio includes Business Insider, Markets
Insider, BI Intelligence and INSIDER, which together
reach about 350 million readers and viewers worldwide.
In cooperation with finanzen.net, Business Insider has
also been running a German portal. Insider Inc. has also
added a digital B2C subscription offering BI- Prime to its
paid product for business customers 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.
16
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
The mobile news aggregator upday, developed in
partnership 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 2018, the platform reached a total of 561.4
million visits (IVW) in 16 countries, one fifth of them in
Germany. upday aggregates content from more than
4,000 different sources. In addition to “Top News”
selected and summarized by journalists, news is
displayed by algorithm that reflect the individual interests
of users in the section of "My News".
The Europe joint venture with POLITICO in Brussels
continued its growth course in 2018 and has strength-
ened its position as the most widely read and influential
EU media brand. In 2018, 69 % of EU decision-makers
read POLITICO at least once a week. The digital paid
offer POLITICO PRO, which was supplemented by five
cross-industry products (so called PRO Horizontals)
and the data-based monitoring platform PRO Intelligence,
contributed to the growth trend.
Business model and key factors
Revenues in the News Media segment mainly
comprise advertising and circulation revenues.
Advertising revenues are generated by marketing the
reach of our online and print media. The circulation
revenues come from the sale of classic print products
and digital subscriptions. The value chain, however, is
cross-media oriented. 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 journalistic content is collected in integrated news-
rooms, 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, one of 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 9.4 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 printing plants in Ahrensburg (near Hamburg),
Essen-Kettwig and Berlin-Spandau. We therefore carry
out all crucial 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 just
under 100 thousand retail shops where our newspapers
and magazines are sold.
In the digital business, industry circulation revenues
are still much lower than in the print business but are
recording strong growth. Digital advertising revenues
continue to be highly competitive due to the reach-based
market power of Facebook, Google, and increasingly
also Amazon. For example, Facebook and Google
accounts alone create more than one half of the digital
advertising market in the USA today. A key driver of this
development 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. Due to the often viral distribution of
fake news, digital platforms were increasingly criticised
for exposing brands of advertising customers to a
reputation-damaging environment.
17
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
aufeminin and its affiliates provide online portals, forums
and product subscriptions for predominantly female audi-
ences. 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 transaction
was completed in April 2018 (see page 26).
kaufDA.de and MeinProspekt.de operate under the
umbrella of the Bonial Holding Group as Germany's
leading consumer information portals regarding local
shopping. The offerings distribute digitized advertising
retail leaflets predominantly via mobile Internet at a
regional level. The services are offered under local
brands also in France and Sweden (both Bonial), Spain,
Mexico and Colombia (all Ofertia). In December 2017,
Bonial announced the closure of US activities under the
Retale brand, as profitability targets were not met.
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. As part of
its internationalization strategy, the portal is, among
others, also represented with an offer in Switzerland, the
US, Austria, Russia and the Netherlands. In addition,
finanzen.net operates two portals in cooperation with
Insider Inc., 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 largest private radio
portfolios in Germany. In the second quarter of 2018,
Axel Springer sold its remaining stake of around 7 % in
Do⁄an TV, one of the leading private television and
broadcasting companies in Turkey, to Do⁄an Holding
(see page 27).
The production process of the digital offerings in the
news media segment 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 webpages or
download platforms such as the app stores of Apple
and Google.
Cross-media, this segment is influenced by the political
situation in the relevant markets, the economic environ-
ment and in particular the performance of the advertising
markets, in particular. 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.
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) Disposal completed in April 2018.
Reach Based Marketing includes idealo.de, Germany's
leading portal for product search and price comparison.
idealo accesses around 2.4 million products with
more than 329 million offers from online retailers
(status: average December 2018) and is also represented
internationally with numerous offers. The product
comparison portal ladenzeile.de is also part of the
idealo Group.
18
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Services/Holding
Group services, which also include the three domestic
printing plants, as well as the holding functions are
reported within the Services/Holding segment. Group
services are purchased by in-house customers at standard
market prices.
Management and control
Executive Board divisions
At the beginning of the reporting year, the Executive
Board of Axel Springer SE consisted of four members;
since March 1, 2018 it comprises five members. In its
management of the company, the Executive Board is
supported and supervised by a Supervisory Board c
omposed of nine members.
The Performance Marketing activities are bundled
within the Awin-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.
Business model and key factors
In Reach Based Marketing, advertising space is mar-
keted to advertising customers and charged on the
basis of the reach generated by the given media
offerings (number of users or listeners) or the interaction
generated by the reach. Attractive content generates
high reach values and topic-specific environments
enable advertisers to precisely reach the desired target
groups.
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
websites through advertising such as text links,
banner ads, or online videos. The advertisers pay
only a performace fee to the publishers if the advertising
materials have actually been used and resulted in the
desired transaction for the advertising customers. Our
platforms provide the infrastructure for this efficient form
of marketing, recording data traffic and transactions,
and providing a variety of services to advertisers and
publishers.
19
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Dr. Andreas Wiele, as President of Classifieds Media
(until March 1, 2018: Executive Board member
Classifieds and Marketing Media) is responsible for the
classifieds and performance-based marketing offers
(until March 1, 2018: classifieds and marketing offers)
including the associated investments.
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 "essentials", which are laid down in a separate
Axel Springer corporate constitution. For more infor-
mation on our internal rules, see the section entitled
"Important Management Practices" in the declaration of
corporate governance law pursuant to Section 289f HGB
(commercial law) on page 73 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 and – for
qualifying employees an additional – variable component.
Axel Springer uses variable compensation on the basis
of performance- and success-oriented target agree-
ments, which are concluded annually and include indi-
vidual divisional targets in addition to the Group targets.
With regard to the Group targets for 2018, 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 Governance" under "Compensation
Report" (from page 83). We also provide information
on the remuneration of our Supervisory Board (from
page 86).
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 of Corporate Communications,
Public Affairs, Strategy, Executive Personnel as well as
the Axel Springer Academy report to him.
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 People & Culture, Law and Compliance,
Group Procurement, Group Security and Corporate
Audit & Risk Management.
Jan Bayer was responsible for the News Media segment
in the 2018 financial year, and for the national activities
thereof together with Dr. Stephanie Caspar. In addition
to the journalistic product portfolio, this division also
includes Media Impact (Marketing) Sales Impact (Sales),
IT, and the printing plants also belong to this segment.
Since March 1, 2018, Jan Bayer also took over the
responsibility for reach-based offers of Marketing Media
segment from Dr. Andreas Wiele. As of the beginning of
2019, Jan Bayer, as President of News Media Interna-
tional, is responsible for the Group's activities in the US
(especially Insider Inc., eMarketer, Group Nine Media),
Eastern Europe, Switzerland, as well as for the media
brands in France, Spain, for the joint venture with
POLITICO and for upday. finanzen.net and Bonial will
continue to be his executive responsibilities.
Since March 1, 2018, Dr. Stephanie Caspar as Chief
Technology and Data Officer has been responsible for
the overall technology and data strategy and together
with Jan Bayer for the national digital media business.
Since January 1, 2019, being President News Media
National & Technology, she has also been responsible
for the media brands of Axel Springer in Germany,
including marketing (Media Impact), sales (Sales Impact)
and for the printing plants, as well as for idealo.
20
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Goals and Strategies
Axel Springer pursues a strategy of profitable growth,
with the overarching 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.
Strategic priorities lie in the area of Classifieds Media
and News Media.
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 and acquired selected
minority interests (see page 26), 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
national brands in digital and print as well as the potential
of international brands, such as e.g. Business Insider.
At the beginning of 2018, Axel Springer rebuilt the so far
brand-based organization of the News Media National
product portfolio and organized the publishing area
across print and digital brands. The editors continue to
work together brand-linked and cross-medially. In this
way, the very different requirements in the publishing
area of the print and digital business should be taken into
account. The print area is about limiting the circulation
decline and aligning our products even more consistently
with the readers in order to consolidate the strong posi-
tion of our titles. The digital sector, on the other hand,
requires greater investment across the brand in techno-
logical innovations in the future. With the digital brand
subscriptions BILDplus and WELTplus, the basis of
paying readers on the Internet is established and ex-
panded. 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 reach in younger target groups, above all
through social media channels.
The WELT Group is the leading multimedia provider of
quality journalism that can optimally serve both print,
digital, TV and out of home. For this the respective
strengths are used: the digital offerings of the WELT
Group, in particular, uses the moving image inventory of
the TV news channel WELT (formerly N24), while the
quality news channel in conjunction with the other
offers of the WELT Group can further assert its market
position. Furthermore, the WELT Group will use its digital
subscription model to further increase the base of paying
readers on the Internet.
21
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
Via the central marketer Media Impact, the segment
offers advertisers an attractive, cross-media and
high-reach platform for advertising campaigns. As one of
the leading cross-media marketing firms (based on gross
market shares), Media Impact continues to expand its
external marketing portfolio in the print and digital
segments. The TV portfolio, together with Viacom's
portfolio, is marketed by the video image marketer
Visoon Video Impact.
While at the same time paying attention to the overarch-
ing strategic priorities of Axel Springer, the strategy
in the Marketing Media segment aimed towards the
sustainable growth in Reach Based Marketing and
Performance Based Marketing alike. In Reach Based
Marketing, the strategy focuses on financial and con-
sumer information portals. It is important to increase
the reach and use of offers, increase advertising utiliza-
tion and develop new advertising, pricing and business
models. In Performance Based Marketing, the focus is
on the closer integration of the activities bundled in the
Awin Group, primarily through the standardization of the
technical platform and the expansion of 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, including those that are
still in an early phase of their development. Alongside
the indirect participations 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. In addition,
Axel Springer also holds an interest in the LAKESTAR II
investment fund. The investment fund concentrates 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 estab-
lished an early-phase portfolio in the USA that focuses on
digital journalism. In the Classifieds Media segment, a
complementary focus was placed on real estate in 2018
with minority interests in Purplebricks and Homeday.
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.
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.
22
Annual Report 2018
Axel Springer SE
Combined Management Report
Fundamentals of the Axel Springer Group
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
profitability 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
adjusted EBITDA and the adjusted EBIT are the basis for
the performance-related compensation of the Executive
Board and executives (more about our compensation
system can be found starting on page 83). These
performance indicators and the adjusted EBITDA and
EBIT margin are anchored in our internal planning and
control system.
Financial Control Parameters
Selected financial control
parameters on the Group level,
€ millions
Revenues1)
EBITDA, adjusted2) 3)
2018
2017
3,180.7
3,055.5
737.9
645.8
EBITDA margin, adjusted1) 2)
23.2 %
21.1 %
EBIT, adjusted2)
527.9
504.0
EBIT margin, adjusted1) 2)
16.6 %
16.5 %
1) Adjustments of prior-year figures due to the retrospective application of IFRS 15,
see section 3(o) in the notes to the consolidated financial statements.
2) Explanations with respect to the relevant key performance indicators
on page 37 et seq.
3) Including the increase in adjusted EBITDA of € 45.1 million from the first-time
application of IFRS 16, see section 3(o) in the notes to the consolidated financial
statements.
Non-financial performance indicators
In addition to the financial performance indicators,
the following non-financial performance indicators are
relevant 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
23
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Economic Report
General economic conditions and business development
General economic conditions
The International Monetary Fund (IMF) notes in its
Outlook published at the beginning of 2019 a slowdown
in the global economy. Accordingly, growth in 2018
should have been 3.7 % in real terms. The third quarter
of 2018 was below expectations in significant national
economies (Germany, Japan). The fourth quarter also
showed weaker economic momentum.
According to calculations by the Federal Statistical Office,
the German economy grew by 1.5 % in price-adjusted
terms in 2018. However, growth has lost momentum. In
the two preceding years, the real growth rate was 2.2 %
per year. The German economy has thus grown for the
ninth year in a row. Positive impulses for growth in 2018
came again mainly from the domestic market. Private
consumption increased by 1.0 % in real terms and was
thus weaker than in the prior year. Price-adjusted
investments increased by 4.8 % compared to the prior
year. German exports also developed positively.
Price-adjusted exports of goods and services were 2.4 %
higher than in the prior year. Imports increased by 3.4 %
in real terms during the same period.
The Ifo Business Climate Index fell continuously in the
last four months of 2018. The mood was clouding both
in the area of trade and in the area service providers, as
well as in the industry. According to surveys by GfK,
consumers showed a mixed picture in the last quarter of
the year in 2018. The positive income prospects of
Germans continued to defy the falling economic
expectations.
According to calculations by the Federal Statistical Office,
consumer prices increased in 2018 compared to the
previous year by 1.9 %. The Federal Employment Agency
recorded 2.3 million unemployed on an annual average
in 2018. This was 7.6 % less than the corresponding
prior-year figure. The average annual unemployment
rate in 2018 was 5.2 %.
According to calculations by the German Institute for
Economic Research (DIW), the British economy grew
by 1.3 % in real terms in 2018. In particular, the foreign
trade, public investments and private consumption
supported growth. Business investment, however,
declined ahead of the Brexit.
For France, the DIW expects price-adjusted economic
growth in 2018 of 1.6 %. At 2.0 %, the inflation rate is
expected to be slightly higher than in the rest of the euro
area (1.9 %).
According to the DIW, the countries of Central and
Eastern Europe once again achieved a strong
economic upturn in 2018, with a growth rate of 4.4 % in
real terms – especially in the major national economies of
Poland and Romania. Economic development in Central
and Eastern Europe was based on private consumption.
In some countries investment also increased – partly due
to co-financing by EU funds. Demand from the Eurozone
has also increased exports.
The USA achieved real economic growth of 2.9 % in
2018 according to the DIW analysis. In the third quarter,
the economy was sustained by a significant increase in
private consumer spending. The contribution of business
investment, on the other hand, has decreased.
Industry-specific environment
Advertising market
According to the latest advertising market forecast of
ZenithOptimedia (“Advertising Expenditure Forecast“,
December 2018), the advertising market in Germany in
2018 grew by nominal 2.0 % over the prior-year figure.
According to these surveys, net revenues of the total
advertising market during the reporting period was
€ 20.5 billion (including classified ads and leaflets, less
discounts and agency commissions and excluding
production costs).
24
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
In the online sector in Germany (display, keyword
marketing and affiliate), net advertising revenues
increased by 8.8 % to € 7.4 billion in 2018. The digital
advertising expenditure thus represents a share of the
total advertising expenditure of 36.0 %. 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.
In the print media, net advertising revenues of
newspapers (newspapers, advertising papers and
newspaper supplements) totaled € 4.2 billion in the
reporting period, a 4.8 % decrease from the prior-year
figure. Magazines (consumer magazines, directory
magazines, directory media) also showed a decline
compared to the previous year, with net advertising
revenues falling by 7.0 % to € 2.1 billion.
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 or Netflix but also our own paid content offers
prove that media content can be monetized not only via
reached based models, but also via subscriptions. While
digital newspaper distribution, at € 386 million, is not
nearly as high as print distribution (€ 4.6 billion), overall
market growth in distribution will take place online over
the next few years. The print market will continue to
decline. On the other hand, the online distribution
market is projected to grow on average by around 7 %
each year until 2022. The Axel Springer products in this
segment, BILDplus and WELTplus, pioneers with their
respective founding years of 2013 and 2012, have been
recording strong growth in subscriber numbers for years.
Commercial television in Germany recorded an
increase of 3.6 % to € 4.8 billion in 2018 and net
advertising revenues on radio were € 784 million
at the prior-year level. Net advertising revenues
in outdoor advertising slightly increased in 2018
by 0.3 % to € 1.2 billion.
The German press distribution market declined
somewhat further. The total paid circulation of newspa-
pers and magazines was 4.3 % below the corresponding
prior-year figure. Thanks to the price increases
implemented in the past four quarters, however,
circulation revenues declined by only 0.5 %.
According to ZenithOptimedia, the following digital ad-
vertising revenue development is expected in 2018 for
selected countries:
Advertising Activity 2018 (selection)
Change in net ad revenues compared to prior year
(nominal)
Germany
Central and Eastern Europe
USA
United Kingdom
Online
8.8 %
15.6 %
13.1 %
10.8 %
Source: ZenithOptimedia, Advertising Expenditure Forecast, December 2018;
preliminary estimates.
The 329 IVW registered daily and Sunday newspapers
achieved total sales of 15.7 million copies per publication
date. Compared to the prior-year figure, this corre-
sponds to a decrease of 4.7 %. Newsstand sales
(– 11.5 %) – as in the prior year – suffered a much
greater decline than subscription sales (– 3.6 %). Within
the press distribution market, the demand for daily and
Sunday newspapers – as weighted for their respective
publication frequencies – declined by 3.6 %.
25
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Total sales of general-interest magazines including
membership and club magazines came to 86.1 million
copies per publication date. Compared to the prior-year
figure, this corresponds to a decline of 5.3 %. IVW
tracked a total of 736 titles (– 2.6 % compared with
the prior-year figure). The demand for general-interest
magazines – weighted for their respective publication
frequencies – declined by 6.7 %.
Business performance
At the beginning of January 2018, we transferred the
Axel Springer high-rise building in Berlin to the Axel
Springer Pensionstreuhandverein. Thereby the plan
assets to cover our pension obligations increased by
€ 140.4 million. As part of a long-term lease, we will
continue to use the property as headquarters.
Following the approval of the French antitrust authorities
at the end of January 2018, the purchase of 100 % of
shares of Concept Multimédia, which had already been
contractually agreed in 2017, was completed at the
beginning of February. The purchase price amounted to
€ 95.3 million. In particular, Concept Multimédia, head-
quartered 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 luxury real
estate and new builds.
The agreement between Axel Springer and Télévision
Française (TF1) for the sale of Axel Springer's stake in
the French aufeminin Group in January 2018, was
completed by the end of April 2018. The purchase price
amounted to € 291.5 million. The financial resources of
the aufeminin Group at the time of the transaction
amounted to € 72 million.
In April 2018, Axel Springer acquired 11.5 % of the British
company Purplebricks as part of a capital increase and
the purchase of existing shares from the shareholders.
Purplebricks was established in April 2014 in the UK and
operates purplebricks.co.uk, the leading British transac-
tion-based digital real estate platform. The company is
also active in Australia, the USA and Canada. Since
December 2015, Purplebricks has been listed on the
London Stock Exchange. The purchase price for the
equity investment amounted to € 143.2 million, corre-
sponding to a price per share of £ 3.60. In July 2018,
Axel Springer acquired additional shares at a price per
share of £ 3.07 and a total value of € 10.4 million and
increased its stake to around 12.5 %. As of December 31,
2018, we wrote down the investment to its year-end
market capitalization of € 62.3 million. In the course of
the equity investment, Dr. Andreas Wiele, Executive
Board member Classifieds Media of Axel Springer SE,
took over a seat on the Board of Directors of the
company. In December 2018, Axel Springer and
Purplebricks concluded an agreement on a joint invest-
ment in Homeday. Homeday, based in Berlin, operates
homeday.de, a transaction-based digital real estate
platform for the German market. Axel Springer and
Purplebricks each hold 50 % of a joint investment
company that acquired 22 % of Homeday GmbH.
In connection with this transaction, Axel Springer's
existing shareholding of just under 5 % was transferred
to the joint investment company.
At the beginning of May 2018, StepStone acquired
the employer branding specialist Universum. The
acquisition cost amounted to € 41.0 million and may in
the future, due to contingent purchase price liabilities,
increase in total by a maximum of SEK 75.0 million
(approximately € 7.2 million). Based in Stockholm,
Universum is one of the world's leading employer brand-
ing specialists, assisting companies to analyze, define,
develop and communicate their own employer brand. The
Swedish company was founded in 1988 and now serves
around 2,000 customers in more than 35 countries.
26
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
In the second quarter, Axel Springer sold its remaining
share of about 7 % in the Turkish Do⁄an TV to Do⁄an
Holding. For this purpose, we had received put options
for the staggered back-sale of our equity investment
from the Do⁄an Holding, on the basis of which we
expected proceeds of around € 171 million in the years
2020/2022. During the first quarter of 2018, Do⁄an
Holding initiated the sale of all media activities to the
Turkish media group Demirören. In the event of such a
sale, Axel Springer has agreed with Do⁄an Holding in
April on the early exercisability of the put options for a
total purchase price of € 160 million. Axel Springer then
exercised the put options in May 2018. The sale has not
produced any material earnings effects.
At the end of July 2018, the sale of our newspaper
and magazine portfolio in Slovakia, including the
associated online offerings, was completed following
approval by the relevant authorities. The purchase
price amounted to € 60.5 million.
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 of media companies. This is
reflected in the development of the segments of the
Axel Springer Group. The overall positive business
development in the financial year confirms our strategy of
rigorously digitizing the company. The organic revenue
growth was driven primarily by the good performance of
the Classifieds Media segment. The increase in earnings
was also primarily attributable to the good development
of the Classifieds Media segment. Furthermore, business
performance was influenced by acquisitions in digital
business models and by active portfolio management.
27
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Financial performance, liquidity and financial position
Financial performance of the Group
In the reporting year, revenues of € 3,180.7 million
were 4.1 % higher than the prior-year value of € 3,055.5
million. In organic terms as well, i.e. adjusted for consoli-
dation and currency effects, revenues increased by
3.8 %. While consolidation effects had a positive effect,
in particular as a result of the inclusion of Logic-Immo,
Universum and affilinet and in opposite terms due to the
deconsolidation of aufeminin, currency effects had an
overall negative effect. The prior-year figures were
adjusted retrospectively due to the first-time application
of IFRS 15 (see section 3(o) in the notes to the consoli-
dated financial statements).
Revenues from digital activities increased from
€ 1,996.5 million by 10.5 % to € 2,206.5 million.
The digital portion of revenues related to the operating
business was 70.6 % (PY: 66.7 %).
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
2018
2017
9.6 %
12.5 %
11.4 %
12.7 %
11.8 %
12.0 %
2.1 %
12.4 %
While the growth rates in the Classifieds Media and
News Media segments again increased in the low
double-digit percentage range in the year under
review, growth slowed in the Marketing Media
segment (see page 33).
International revenues increased by 5.8 % from
€ 1,329.8 million to € 1,406.5 million. The share of
total revenues increased from 43.5 % to 44.2 %.
Advertising revenues increased by 7.2 % to
€ 2,159.4 million (PY: € 2,014.1 million). Here, too,
consolidation effects had an impact due to the integra-
tion of in particular Logic-Immo and affilinet, as well as
the deconsolidation of aufeminin from the end of
April 2018. The organic increase was 6.3 %. The share of
advertising revenues in total revenues increased slightly
to 67.9 % (PY: 65.9 %). Of the total advertising revenues,
86.4 % (PY: 83.8 %) were generated by digital activities.
The decline in circulation revenues by 6.5 % from
€ 633.0 million to € 591.7 million was mainly due to
market-conditions. In addition, the consolidation effects
at Ringier Axel Springer Media in Slovakia and Serbia
also had an impact. The organic decline in circulation
revenues was 4.8 %. Overall, the increase in digital
circulation revenues could not compensate for the
decline in circulation revenues from printed publications.
The share of circulation revenues in total revenues
slightly declined to 18.6 % (PY: 20.7 %).
Other revenues amounted to € 429.6 million and were
5.2 % above the prior-year value of € 408.3 million.
In addition to operating improvements in the News
Media and Marketing Media segments, consolidation
effects from the inclusion of Universum and Logic-Immo
contributed to this. The deconsolidation of aufeminin had
a counteracting effect. The organic increase was 4.7 %.
Overall, other revenues represented an almost un-
changed share of 13.5 % (PY: 13.4 %) of total revenues.
Other operating income amounted to € 169.5 million
(PY: € 317.3 million) and included, in addition to the
profit from the sale of the aufeminin Group (€ 49.4 million
before sale-related costs), income from the transfer of
the Axel Springer high-rise building in Berlin to the Axel
Springer Pensionstreuhandverein (€ 34.9 million). The
prior-year figure was mainly affected by the sale of the
Axel-Springer-Passage in Berlin (€ 200.5 million) and
effects from the revaluation of contingent purchase price
liabilities (€ 56.6 million).
28
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Changes in inventories and other internal
costs capitalized increased to € 93.5 million
(PY: € 87.7 million) in the reporting year and mainly
relate to IT development projects for the development
and expansion of our digital business models.
Compared to the prior-year figure, total
expenses increased by 3.8 % to € 3,003.9 million
(PY: € 2,894.8 million; for the adjustment of the
prior-year figure see section 3(o) in the notes to the
consolidated financial statements.)
Purchased goods and services increased slightly
by 1.0 % to € 549.7 million due to consolidation effects
(PY: € 544.2 million; for the change in the reporting
of cost of materials as well as for the corresponding
adjustment of the prior-year figure see section 3(o) in
the notes to the consolidated financial statements). The
ratio of purchased goods and services to total revenues
decreased to 17.3 % (PY: 17.8 %).
Personnel expenses were € 1,224.4 million
(PY: € 1,202.1 million) and 1.9 % above the prior-year
level. The increase is mainly attributable to an increase in
personnel in the digital business models as well as to the
overall effects resulting from the acquisition and sale of
subsidiaries. Partly compensating for this were lower
expenses for restructuring measures and long-term
compensation programs. The average number of
employees increased in 2018 by 3.2 % to 16,350.
The increase in depreciation, amortization and im-
pairments to € 347.9 million (PY: 236.1 million) resulted
in particular from the first-time application of the new
standard for lease accounting (IFRS 16) from January 1,
2018 and the associated recognition of depreciation,
amortization and impairments on rights of use of lease
agreements (see section 3(o) in the notes to the consoli-
dated financial statements). The depreciation, amortiza-
tion and impairment of the contractual rights of use re-
sulting from the lease of the Axel-Springer-Passage and
the Axel Springer high-rise building in Berlin, which has
taken place since January 1, 2018, also had an increas-
ing effect. In addition, we recognized impairment losses
on goodwill in the Marketing Media segment
(€ 42.3 million) in the year under review.
Other operating expenses were € 882.0 million and,
in particular due to the change in the disclosure of lease
expenses (see first-time application of the new standard
for lease accounting IFRS 16 in section 3(o) in the notes to
the consolidated financial statements), below the prior-
year level (PY: € 912.4 million). Partially compensating was
the inclusion of acquired subsidiaries as well as additional
advertising measures for our digital business models.
Income from investments came to € – 62.2 million
(PY: € – 39.0 million) and was impacted in the prior year
by impairment losses of financial assets; in the reporting
year, we wrote off our investment in Purplebricks by
€ 82.9 million to the market capitalization as of Decem-
ber 31, 2018 (PY: impairment of our share in Ringier Axel
Springer Schweiz AG). The operating income from in-
vestments included in adjusted EBITDA amounted to
€ 15.5 million (PY: € 16.0 million).
The financial result amounted to € – 21.1 million
(PY: € – 18.4 million). In the reporting period,
due to the introduction of the new standard for lease
accounting, the interest expense from the compounding
of lease liabilities also increased (see section 3(o) in the
notes to the consolidated financial statements).
Income taxes in the reporting year amounted to
€ – 147.9 million (PY: € – 130.2 million.). The tax rate
was 41.5 % (PY: 25.6 %) and was characterized in the year
under review by tax-neutral write-downs on financial assets
(in the previous year characterized by the reversal of de-
ferred taxes due to tax rate changes, especially in the US).
Compared with the prior year, adjusted EBITDA
increased by 14.3 % to € 737.9 million
(PY: € 645.8 million). The margin increased to 23.2 %
(PY: 21.1 %). Organically, adjusted EBITDA was 8.5 %
above the prior year.
29
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
The non-recurring effects in the reporting period mainly
related to income from the sale of business activities and
real estate in the amount of € 74.4 million (PY: € 172.4
million) and were almost exclusively related to the gains
(before disposal-related costs) from the sale of our inter-
est in the aufeminin Group (€ 49.4 million), as well as
to the transfer of the Axel Springer high-rise building in
Berlin to the Axel Springer Pensionstreuhandverein
(€ 34.9 million); in the prior year, these effects were
particularly related to the sale of the Axel-Springer-
Passage in Berlin. In addition, equity investment valuation
effects of € – 76.9 million particularly from the write-down
of our investment in Purplebricks (PY: € – 55.5 million
mainly related to our interest in Ringier Axel Springer
Schweiz AG), effects from the subsequent valuation of
contingent purchase price liabilities from options on non-
controlling interests of € – 7.4 million (PY: income of
€ 34.9 million) as well as other effects from first-time
consolidations of € – 9.8 million (PY: € – 14.6 million),
which mainly resulted from acquisition-related expenses
and further effects from purchase price allocations.
Income from the valuation of the long-term incentive
program (LTIP) was adjusted by € 7.2 million
(PY: expense € – 20.2 million).
Adjusted EBITDA of digital activities increased by
16.6 % from € 582.0 million to € 678.5 million. In terms
of operating business, the share of digital business in
adjusted EBITDA was 84.3 % (PY: 80.0 %).
Due to increased scheduled depreciation, adjusted
EBIT increased by 4.7 % to € 527.9 million
(PY: € 504.0 million) compared to the prior-year.
Again, consolidation and currency effects had an
impact. The organic increase was 6.4 %. The margin
of 16.6 % was on the prior-year level (16.5 %).
The adjusted net income increased by 2.5 % to
€ 335.7 million (PY: € 327.5 million). As a result of a
decline in minority interests, adjusted earnings per
share increased by 5.1 %; organically, adjusted earn-
ings per share were 8.3 % higher than in the prior year.
Net income1)
€ millions
Net income
2018
208.4
2017
Change
378.0
– 44.9 %
Non-recurring effects
12.5
– 117.0
−
Depreciation, amortization, and
impairments of purchase price
allocations
Taxes attributable to these
effects
Net income, adjusted2)
Attributable to non-controlling
interest
Adjusted net income2)
attributable to shareholders
of Axel Springer SE
Earnings per share, adjusted
(in €)2) 3)
Earnings per share (in €)3)
137.8
94.2
46.3 %
– 23.1
335.7
– 27.8
327.5
−
2.5 %
41.0
47.1
– 12.8 %
294.7
280.4
5.1 %
2.73
1.68
2.60
5.1 %
3.19
– 47.4 %
1) For 2017 continuing operations, for the portion attributable to discontinued
operations see section 2(d) in the notes to the consolidated financial statements.
2) Explanations regarding relevant key performance indicators on page 37 et seq.
3) Calculation based on average weighted shares outstanding in the reporting period
(107.9 million; PY: 107.9 million).
30
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Financial performance of the operating
segments
Classifieds Media
In the Classifieds Media segment 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. Since 2018,
we disclose meinestadt.de in the subsegment Jobs
(previously General/Other). The prior-year figures have
been adjusted accordingly.
Key Figures Classifieds Media
€ millions
Revenues
2018
2017
Change
1,212.5
1,007.7
20.3 %
Advertising revenues
1,167.4
990.4
17.9 %
Other revenues
Jobs
Real Estate
General/Other
EBITDA, adjusted1)
Jobs
Real Estate
General/Other
45.1
602.6
375.3
234.6
487.2
245.5
172.6
79.9
17.3
>100 %
495.9
21.5 %
290.1
29.4 %
221.7
5.8 %
413.2
17.9 %
203.1
20.9 %
146.2
18.1 %
72.3
10.5 %
EBITDA margin, adjusted
40.2 %
41.0 %
Jobs
Real Estate
General/Other
EBIT, adjusted1)
Jobs
Real Estate
General/Other
40.7 %
41.0 %
46.0 %
50.4 %
34.1 %
32.6 %
406.7
197.5
151.3
68.7
361.0
12.7 %
167.6
17.9 %
135.5
11.6 %
66.4
3.6 %
EBIT margin, adjusted
33.5 %
35.8 %
Jobs
Real Estate
General/Other
32.8 %
33.8 %
40.3 %
46.7 %
29.3 %
29.9 %
1) Segment EBITDA/EBIT, adjusted include non-allocated costs of € 10.9 million
(PY: € 8.5 million).
Revenues in the Classifieds Media segment increased
significantly compared to the prior-year period by 20.3 %
to € 1,212.5 million (PY: € 1,007.7 million). In addition to
an improvement in the operational performance of the
job portals in particular, consolidation effects also con-
tributed to this, mainly due to the inclusion of Logic-
Immo in Real Estate and Universum in Jobs. The organic
increase in revenues, i.e. adjusted for consolidation and
currency effects, was 11.4 %. The job portals achieved a
revenue increase of 21.5 %, organically they increased by
16.9 %. Again, business in continental Europe primarily
contributed to this growth. The real estate portals
showed an increase of 29.4 %. The strong growth result-
ed particularly from the consolidation of Logic-Immo.
Organically, growth was 6.1 %. In the subsegment Gen-
eral/Other, the reported revenue increase was 5.8 %,
almost entirely due to the organic growth of 5.9 %.
The adjusted EBITDA of the segment increased consid-
erably by 17.9 % to € 487.2 million (PY: € 413.2 million).
A significant part of this increase can be attributed to
operational improvements in earnings. In addition, the
first-time application of the new accounting standard
IFRS 16 and consolidation effects, especially the inclu-
sion of Logic-Immo and Universum, contributed to the
increase. Organically, i.e. adjusted for the above as well
as for currency effects, the increase was at 11.4 %. The
margin of 40.2 % came in slightly under the prior-year
value (41.0 %). The main reasons for this were capital
expenditures in marketing, product and technology, as
well as the inclusion of companies whose margins were
below the segment average, especially in the first half of
the year. The adjusted EBITDA for the job portals in-
creased by 20.9 % compared to the prior year. As in the
case of revenues, the increase is primarily attributable to
business in continental Europe. In addition, consolidation
effects from the acquisition of Universum contributed to
the increase in earnings. But the organic growth of 14.0 %
was considerable as well. The real estate portals record-
ed an increase in adjusted EBITDA of 18.1 %, particularly
driven by improved operating results of the Immowelt
Group. In addition, consolidation effects from the first-
time inclusion of Logic-Immo contributed to the increase
in earnings, while the investment in Purplebricks resulted
in negative earnings contributions. Organically, the ad-
31
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
justed EBITDA of the subsegment increased by
11.7 %. The 10.5 % increase in adjusted EBITDA in
the General/Other subsegment was a result of the
improvement in operating earnings as well as effects
from the first-time application of the new IFRS 16 ac-
counting standard. Organically, the increase was 5.2 %.
The adjusted EBIT in the Classifieds Media segment
increased by 12.7 % from € 361.0 million to € 406.7
million, organically it increased by 10.6 %. Depreciation,
amortization and impairments / write-ups increased by
54.2 % to € 80.5 million (PY: € 52.2 million), in particular
due to the first-time application of the new accounting
standard IFRS 16.
News Media
The News Media segment mainly comprises the
BILD and WELT Group in the national segment, and in
the international area primarily digital media offerings in
Europe and the USA.
Key Figures News Media
€ millions
Revenues
Advertising revenues
Circulation revenues
Other revenues
2018
2017
Change
1,496.2
1,509.8
– 0.9 %
678.5
592.0
225.7
666.1
1.9 %
633.1
– 6.5 %
210.6
7.2 %
National
1,070.4
1,109.2
– 3.5 %
Advertising revenues
Circulation revenues
Other revenues
International
Advertising revenues
Circulation revenues
Other revenues
EBITDA, adjusted
National
International
432.4
474.6
163.4
425.7
246.1
117.4
62.3
228.2
161.2
67.0
448.3
– 3.5 %
504.7
– 6.0 %
156.2
400.7
4.6 %
6.3 %
217.8
13.0 %
128.4
– 8.6 %
54.4
14.6 %
218.8
4.3 %
164.5
– 2.0 %
54.3
23.5 %
EBITDA margin, adjusted
15.3 %
14.5 %
National
International
EBIT, adjusted
National
International
15.1 %
14.8 %
15.7 %
13.5 %
158.2
126.6
31.5
182.9
– 13.6 %
150.7
– 16.0 %
32.2
– 2.1 %
EBIT margin, adjusted
10.6 %
12.1 %
National
International
11.8 %
13.6 %
7.4 %
8.0 %
Revenues in the News Media segment amounted to
€ 1,496.2 million and were thus slightly below (– 0.9 %)
the prior-year figure (€ 1,509.8 million). The print activi-
ties were unable to escape the market trend and gener-
ated revenues below the previous year's level. The digital
share of revenues was 38.5 % (PY: 33.9 %). Organically,
i.e. adjusted for consolidation and currency effects, reve-
nues reached almost the same level as in the prior year
(– 0.3 %). At € 1,070.4 million, revenues of News Media
National were 3.5 % below the prior year (organically –
4,2 %). Here, the digital share of revenues was 27.8 %
(PY: 24.1 %). Revenues at News Media International
32
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
increased by 6.3 % to € 425.7 million. The organic
growth was 10.9 %. The development of digital
offerings continued to be good, with Insider Inc. leading
the way and recording strong growth. The digital share
of revenues from News Media International was 65.3 %
(PY: 60.9 %).
The adjusted EBITDA of € 228.2 million was 4.3 % above
the value of the prior year (€ 218.8 million). Organically,
i.e. adjusted for consolidation and currency effects and
effects from the application of IFRS 16, the adjusted
EBITDA was 3.5 % below the corresponding prior-year
figure, which was characterized by positive non-recurring
effects and an exceptionally successful BILD special
edition in the second quarter and strong advertising
revenues in the third quarter. The margin of the segment
of 15.3 % came in slightly above the value for the prior-
year period (14.5 %). The adjusted EBITDA in the sub-
segment News Media National amounted to € 161.2
million and was 2.0 % below the prior-year level
(€ 164.5 million), organic EBITDA was 8.9 % below the
prior-year figure. In addition to the above-mentioned
effects, higher marketing expenses also had an effect
here. In the international segment, the adjusted
EBITDA increased significantly (23.5 %) to € 67.0
million (PY: € 54.3 million). The organic increase was
also significant at 14.2 %. This was mainly attributable to
the improvement of earnings at upday and Insider Inc.
Contrary to the adjusted EBITDA, the adjusted EBIT in
the News Media segment declined by 13.6 % from
€ 182.9 million to € 158.2 million; also organically it
declined by 12.5 %. Depreciation, amortization and
impairments / write-ups increased by 95.5 % to
€ 70.0 million (PY: € 35.8 million), which was in particular
due to the first-time application of the new IFRS 16
accounting standard.
Marketing Media
In the Marketing Media segment, it is mainly idealo, the
Bonial Group and finanzen.net as well as aufemin, until
its disposal at the end of April 2018 that are included in
the reach-based marketing subsegment. The perfor-
mance-based marketing consists of the Awin Group.
Key Figures Marketing Media
€ millions
Revenues1)
Advertising revenues1)
Other revenues
Reach Based Marketing1)
Performance Marketing1)
EBITDA, adjusted2)
Reach Based Marketing
Performance Marketing
2018
418.3
313.4
104.8
235.2
183.1
89.6
66.7
31.2
2017
Change
477.3
– 12.4 %
357.5
– 12.3 %
119.8
– 12.5 %
317.7
– 26.0 %
159.6
14.7 %
95.6
– 6.3 %
71.2
32.4
– 6.3 %
– 3.8 %
EBITDA margin, adjusted1)
21.4 %
20.0 %
Reach Based Marketing1)
28.4 %
22.4 %
Performance Marketing1)
17.0 %
20.3 %
EBIT, adjusted2)
Reach Based Marketing
Performance Marketing
66.0
55.6
18.7
77.4
– 14.7 %
61.4
– 9.4 %
24.1
– 22.3 %
EBIT margin, adjusted1)
15.8 %
16.2 %
Reach Based Marketing1)
23.7 %
19.3 %
Performance Marketing1)
10.2 %
15.1 %
1) Adjustments of prior-year figures due to the retrospective application of IFRS 15
(in the amount of € 507.2 million), see section 3(o) in the notes to the consolidated
financial statements).
2) Segment EBITDA/EBIT, adjusted include non-allocated costs of € 8.3 million
(PY: € 8.1 million).
The revenues in the Marketing Media segment
decreased by 12.4 % to € 418.3 million, mainly due to
consolidation effects (PY: € 477.3 million). Organically, i.e.
adjusted for consolidation and currency effects, the
segment recorded an increase in revenues of 2.1 %.
Revenues in Reach Based Marketing declined by 26.0 %
to € 235.2 million. Adjusted for consolidation and cur-
rency effects, which resulted in particular from the
sale of aufeminin, the revenue reached the prior-year
level (– 0.1 %). The discontinuation of Bonial's US
activities at the end of 2017 in particular had a negative
impact here. In addition, finanzen.net could not quite
match the extraordinarily strong prior year. Revenues in
Performance Marketing increased by 14.7 % to € 183.1
million. The increase was influenced particularly by the
the positive effect of the first-time consolidation of affilinet.
Organic growth was 5.3 %.
33
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Key Figures Services/Holding
€ millions
Revenues
2018
53.7
2017
Change
60.7
– 11.5 %
EBITDA, adjusted
– 67.0
– 81.7
EBIT, adjusted
– 103.0
– 117.4
Revenues in the Services/Holding segment decreased
by 11.5 % compared to the comparable prior-year period
and were € 53.7 million (PY: € 60.7 million). In addition to
a market-related decline in the business of printed prod-
ucts, the decline in revenues is partly due to changes in
the recognition of rental incomes in connection with the
first-time application of IFRS 16.
Adjusted EBITDA improved from € – 81.7 million to
€ – 67.0 million, among other things, due to positive
effects from stock option programs, lower project
expenses and lower restructuring expenses.
The adjusted EBIT in the Services/Holding segment was
at € – 103.0 million (PY: – 117.4 million). Depreciation,
amortization and impairments / write-ups of € 36.0
million remained at the prior-year level (€ 35.7 million).
With a value of € 89.6 million, the adjusted EBITDA in
the segment was below the prior-year figure by 6.3 %
(PY: € 95.6 million). Organically, i.e. adjusted for consoli-
dation and currency effects, as well as the effects from
the first-time application of the new IFRS 16 accounting
standard, the decline was 2.5 %. Due to the higher
revenue declines, the margin in the segment increased
slightly by 21.4 % (PY: 20.0 %). The adjusted EBITDA in
Reach Based Marketing amounted to € 66.7 million and
was 6.3 % below the prior-year level of € 71.2 million. In
organic terms, the subsegment posted a rise in earnings
of 14.7 %, due in particular to the discontinuation of
Bonial's US operations at the end of 2017. On the other
hand, adjusted EBITDA in the Performance Marketing
subsegment declined by 3.8 %, or 29.5 % organically.
Among other things, higher integration costs of the
merger of Awin and affilinet affected adjusted EBITDA.
The adjusted EBIT in the Marketing Media segment
decreased by 14.7 % from € 77.4 million to € 66.0
million, while organically adjusted EBIT was on the
prior-year level (+0.5 %). Depreciation, amortization and
impairments / write-ups increased by 29.8 % to € 23.6
million (PY: € 18.2 million), in particular due to the
first-time application of the new accounting standard
IFRS 16.
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
standard market prices.
34
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Liquidity
Financial management
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 essential 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) 2)
2018
281.5
2017
216.8
1,530.8
1,237.0
– 1,249.2
– 1,020.2
1) Explanations regarding relevant key performance indicators on page 37 et seq.
2) Incl. lease liabilities in the amount of € 379.6 million (PY: € 0.3 million), see section
3(o) in the notes to the consolidated financial statements).
In May 2018, we adjusted the financing conditions for
our credit lines and, in this context, reduced the average
interest rate, extended the term and increased the
financing volume. Thus, were able to avail ourselves of
long-term credit lines in the amount of € 1,500.0 million
(previously € 1,200.0 million), of which its utilizations will
be due for repayment in July 2023 (previously July 2020).
As of December 31, 2018, € 453.0 million (December 31,
2017: € 365.0 million) had been utilized. For interest-
optimizing satisfaction of short-term capital requirements,
we are able - starting in the reporting year - to issue
certain forms of short-term bearer bonds (commercial
paper) with a maximum volume of € 750.0 million and a
term of up to one year. As of the reporting date, no
commercial paper had been issued. In addition, there
existed Schuldscheindarlehen (promissory note) totaling
€ 704.5 million as of the reporting date (December 31,
2017: € 879.0 million), whose financing conditions were
optimized in the prior year by partial termination, conver-
sion and re-issuance. The promissory note run until
October 2020 (€ 69.0 million), May 2021 (€ 11.5 million),
May 2022 (€ 158.0 million), May 2023 (€ 72.0 million),
and May 2024 (€ 394.0 million). The credit lines, the
short-term commercial paper program and the promis-
sory notes may be used either for general business pur-
poses or for financing acquisitions.
Cashflows
Consolidated Cash Flow Statement (Condensed)
€ millions
Cash flow from continuing operations
2018
565.7
2017
490.7
Cash flow from investing activities
– 120.7
– 194.5
Cash flow from financing activities
– 395.0
– 281.7
Change in cash and cash equivalents
50.0
14.5
Cash and cash equivalents as of
December 31
281.5
216.8
Cash flow from operating activities in the reporting period
was € 565.7 million and therefore 15.3 % above the
value of the prior-year period (€ 490.7 million). Among
other factors, this development was due to the first-time
application of the new lease accounting standard and
the associated disclosure of the repayment portion of
lease payments in cash flow from financing activities
(see section 3(o) in the notes to the consolidated financial
statements), an increase in prepayments received
for services to be rendered, as well as due cut-off
date-related payment effects. This was offset by higher
net tax payments.
Cash flow from investing activities amounted to
€ – 120.7 million (PY: € – 194.5 million). The capital
expenditures in intangible assets and property, plant
and equipment, increased in particular due to the new
building in Berlin (total investment volume of about
€ 310 million, of which € 166 million has been called up).
The sale of the new building (sales price of € 425 million
(before tax payments of around € 30 million)) remains
conditional on the completion of the construction and is
anticipated to take place at the end of 2019 or beginning
of 2020. In addition, cash flow from investing activities
includes payments (less cash acquired) for the acquisi-
tion of 100 % of the shares in Concept Multimédia
(Logic-Immo) and Universum (€ 92.8 million and € 39.5
million respectively) during the reporting year as well as
€ 153.7 million for the acquisition of a non-controlling
interest in Purplebricks. On the other hand, this was
35
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
offset by proceeds from the sale of our shares in the
aufeminin Group (€ 291.5 million less cash and cash
equivalents of € 72.0 million), the sale of the print busi-
ness in Slovakia (€ 60.5 million) and the early exercise of
option rights to sell all remaining shares in Do⁄an TV
(€ 160.0 million). Besides the capital expenditures in
intangible assets, property, plant and equipment the
prior-year value contained in particular payments (less
cash acquired) for the acquisition of shares in
ShareASale, as well as for the exercise of option rights to
acquire non-controlling interests in Immoweb, Onet and
MyLittleParis. In addition, the prior year was character-
ized by the sale of the Axel-Springer-Passage in Berlin
(purchase price of € 330.0 million less attributable tax
payments of € 79.9 million).
The cash flow from financing activities of €– 395.0 million
(PY: € – 281.7 million) was characterized in particular by
the payment of the dividend to the shareholders of Axel
Springer SE, the repayment of financial liabilities and the
first-time recognition of the repayment portion of lease
payments in cash flow from financing activities (see sec-
tion 3(o) in the notes to the consolidated financial state-
ments). In addition, the prior-year figure included pay-
ments for the exercise of option rights for the acquisition
of remaining non-controlling interests in Awin.
Financial position
Consolidated Balance Sheet (Condensed)
€ millions
Non-current assets
Current assets
Assets
Equity
Non-current liabilities
Current liabilities
Equity and liabilities
12/31/2018 12/31/20171)
5,267.7
4,994.1
1,211.2
1,442.3
6,479.0
6,436.4
2,884.2
2,802.4
2,190.3
2,036.1
1,404.4
1,598.0
6,479.0
6,436.4
1) Adjustments of prior-year figures due to the retrospective application of IFRS 15
(each by € 0.9 million), see section 3(o) in the notes to the consolidated financial
statements.
The development of non-current assets was character-
ized in particular by the increase in property, plant and
equipment, which resulted primarily from the first-time
application of the new lease accounting standard (see
section 3(o) in the notes to the consolidated financial
statements). In this context, as of January 1, 2018, right-
of-use assets were initially recognized in the balance
sheet, the carrying amount as of December 31, 2018,
was € 261.5 million (including the right-of-use assets
with respect to the lease of the Axel-Springer-Passage
and the Axel Springer high-rise building in Berlin). This
was counteracted by the derecognition of the remaining
carrying amount of the Axel Springer high-rise building in
Berlin due to the transfer to the Axel Springer Pen-
sionstreuhandverein. In addition, intangible assets in-
creased primarily as a result of the first-time consolida-
tion acquired businesses of Logic-Immo and Universum,
which were partially offset by the impairment of goodwill
in the Marketing Media segment. The development of
financial assets included the acquisition of a total of 12.5 %
of the shares in Purplebricks for € 153.7 million (the
investment was written off to its market capitalization of
€ 62.3 million as of December 31, 2018) as well as the
premature exercise of our options to sell all remaining
shares in Do⁄an TV for a total purchase price of
€ 160.0 million.
36
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Current assets decreased mainly due to the reduction in
assets and liabilities held for sale as a result of the sale of
the aufeminin Group and our print activities in Slovakia at
the end of April and at the end of July 2018, respectively.
The increase in equity mainly stems from the consolidat-
ed net income generated and the result-neutral increase
in equity from the derecognition of liabilities from existing
put options for 35 % of Immowelt Group's non-
controlling interests (€ 159.8 million), which lapsed in the
reporting year due to non-exercise. As part of the merger
of the Immowelt and Immonet groups in June 2015,
minority shareholders were granted put options -
exercisable at any time until the second quarter of 2018 -
regarding the 35 % of non-controlling interests; the re-
sulting obligation was recognized directly in equity with
no effect to income. In addition to dividend distributions
to shareholders of Axel Springer SE and to other mem-
bers, the derecognition of existing minority interests in
other companies in connection with the sale of the
aufeminin Group had a reducing effect on equity. The
equity ratio increased to 44.5 % (PY: 43.5 %).
The increase in non-current liabilities is mainly related to
the increase in lease liabilities reported under financial
liabilities due to the first-time application of the new lease
accounting standard (see section 3(o) in the notes to the
consolidated financial statements); in this context, lease
liabilities were recognized for the first time as of January
1, 2018, the carrying amount as of December 31, 2018
was € 379.6 million (of which € 317.6 was non-current,
including lease liabilities from the leasing of the Axel-
Springer-Passage and the Axel Springer high-rise build-
ing in Berlin). On the other hand, the reduction in provi-
sions for pensions was related to the increase in plan
assets as a result of the transfer of the Axel Springer
high-rise building in Berlin to Axel Springer Pensionstreu-
handverein; consequently, plan assets increased by
€ 140.4 million. Furthermore, other liabilities decreased
particularly as a result of the reclassification of liabilities
for contingent considerations due in the second quarter
of 2019 to current other liabilities.
The development of current liabilities was characterized
in particular by the partial repayment of our promissory
notes and the derecognition of liabilities held-for-sale in
connection with the finalized disposal of the aufeminin
Group and the print activities in Slovakia during the
reporting year. Furthermore, current other liabilities
decreased as a result of the lapse of put options over
35 % of the non-controlling interests in the Immowelt
Group. The first-time recognition of the current portion of
the lease obligations (see section 3(o) in the notes to the
consolidated financial statements), as well as the
reclassification of liabilities for contingent considerations
in business combinations due in 2019 from non-current
other liabilities had an increasing effect.
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 share-
based long-term incentive plan (LTIP). Purchase price
allocation effects include the expenses of amortization,
37
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
depreciation, and impairments of intangible assets, and
property, plant, and equipment from the acquisition of
companies and business units.
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 (capital expenditures),
plus payments received for the disposal of intangible
assets, property, plant and equipment. 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 had an average of 16,350 (PY: 15,836)
employees (excluding vocational trainees and journalism
students/interns). The 3.2 % increase resulted mainly
from the increase in the number of employees in the
Classified Media segment, due to acquisitions and
organic growth in these segments. Abroad, Axel
Springer had an average of 7,835 employees (PY: 7,425);
this corresponds to a share of 47.9 % (PY: 46.9 %). The
group employed an average of 7,255 women and 9,095
men. The proportion of women with 44.4 % is almost
equal to the prior-year level (44.1 %). Mainly due to the
sale of the aufeminin Group and the print activities in
Slovakia, the number of editors decreased by 3.3 %
to 2,773 during the reporting period. In contrast, the
number of employees increased by 5.6 % to 13,093,
mainly due to the expansion of digital business activities
and new investments.
Employees by segments
Average number per year
Classifieds Media
News Media
Marketing Media
Services/Holding
2018
5,203
7,006
2,641
1,500
2017
Change
4,431
17.4 %
6,959
0.7 %
2,822
– 6.4 %
1,623
– 7.6 %
Group
16,350
15,836
3.2 %
The increase in employees in the Classifieds Media
segment was mainly due to acquisitions but also to
organic growth, especially with StepStone and by
acquisition of Logic-Immo. The slight increase in the
News Media segment is mainly due to the organic
growth at Insider Inc. On the other hand, the decrease in
workforce at Ringer Axel Springer Media is a result of
the sale of the printing business in Slovakia. For the
38
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Marketing Media segment, the decline in the number
of employees mainly resulted from the sale of the
aufeminin Group; on the other hand, the Awin Group
and the idealo Group have increased their number of
employees. The decline in the Services/Holding
segment can be explained by the reduction in staff at
offset print shops and by structural effects.
Length of service and age structure
As of the reporting date in 2018, the average length of
service with Axel Springer was 10.0 (PY: 10.1) years;
37.2 % (PY: 37.2 %) 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 to 32 %. As of
March 1, 2018, the Supervisory Board appointed
Dr. Stephanie Caspar to be a member of the Executive
Board so that since then the proportion of women in the
company's Executive Board has been 20.0 %. In order to
further improve the share of women in leading positions,
the following topics should be in focus: Creating the best
possible conditions for reconciling work and family life,
promoting the potential of young women, as well as
promoting women in management positions and devel-
oping 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,
(cross-company) 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 LGBTI network queer: seite!. This is also supported,
for example, by the annual participation of the Executive
Board in Berlin's Christopher Street Day.
Human resource development
Axel Springer has consistently aligned its qualification
activities in recent years with the requirements of
digitization and the workplace of tomorrow.
In addition to established seminars and funding
programs, the range of shorter, unconventional and
flexible, usable learning formats has been greatly
expanded, which in addition to the mere transfer of
knowledge, leads also to greater interlinking among each
other. In this context, the collaboration platform
moveoffice (Office 365) was introduced to Axel Springer.
Networking of employees, simultaneous and location-
independent work in a team, open and transparent
communication and the sharing of knowledge are thus
supported and promoted. Axel Springer thus creates the
prerequisites for developing into a permanent "learning
and learning-from-each-other organization" that will cope
well with change of processes.
Increasing synergies, sharing knowledge between
various Axel Springer Group companies, teaching new
knowledge content, and guiding teams to adopt new
work techniques such as agile process work, as well
as preparing the employees for the workplace of
tomorrow, are equally important.
With the Talent Management division, Axel Springer
is investing in the development and retention of high
potentials. Through network events and so-called talent
dialogs at division and board levels, the Group creates
transparency in terms of talent, development opportuni-
ties and vacancies within the Axel Springer Group.
39
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
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, in the reporting year we have
capitalized internal costs of € 93.2 million (PY: € 87.0
million) in connection with IT development projects in
order to improve and expand our digital business model,
as well as reported € 64.5 million (PY: € 59.3 million) as
planned depreciation, amortization and impairments on
software and technologies that were developed in-house.
SeLoger has further developed the offers available to
those looking for real estate by integrating the artificial
intelligence-based algorithms. In this way, the searcher
will be offered even more personalized real estate offers,
which have significantly increased the conversion rates in
practice. Likewise, the offer of geo-based search criteria
was expanded. Strategically, the introduction of offers for
real estate agents is in focus, which will lead them to the
real estate owners willing to sell. This gives agents,
especially in competitive real estate markets, the oppor-
tunity to increase their inventory, which is crucial for them
to earn their commissions.
For example, Immowelt has also further increased the
comfort for the real estate seeker through the introduc-
tion of video-based sightseeing opportunities. Agents
can use an app-based live video stream to show rooms
and answer live questions. This eliminates, among other
things, the necessity of those searching for an apartment
to travel for inspection.
Further development of Classifieds Media
The development of new offers plays an important role in
the Classifieds Media sector. The following examples
illustrate this:
Further development of News Media
Our journalistic products, both digital and printed, were
consistently expanded in the reporting year.
In the digital division, we have made progress on the
product and technology side. Numerous video docu-
mentations expand the contents of BILD.de; with its new
offers such as Snapchat Shows, BILD opens up a new,
young target group. We have established a technology
partnership with Taboola, to further develop the recom-
mended technology in order to improve the optimization
of the application of paid content offer BILDplus and to
enable the utilization of live data for the editors. The
use of an internally developed editor for the content
management system allows editors a simpler and more
efficient way to work.
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. With the acquisition of Universum
(see page 26), StepStone has also taken the first step in
a new business segment "Data & Insights". Universum's
offerings enable employers to get market-relevant infor-
mation which are increasingly important in the recruiting
process on, for example, salary levels in particular job
profiles or employee-perceived attractiveness of high-
value businesses. It is intended to further expand the
offer. StepStone has also developed additional function-
alities in the continuing education sector. Users who are
interested in additional qualification, in order to improve
their chances at the job market, can find the desired
trainings and courses, optimized to their existing
knowledge.
40
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
At the same time, Verimi, of which Axel Springer is one
of the founding shareholders, has launched a cross-
industry initiative for identity services and payments in
Europe, launching a single sign-on service in April 2018.
The aim is to make the use of Internet services much
easier and safer.
Some important innovations for the Group also took
place in the field of News Media International. Business
Insider recorded comprehensive successes through new
formats like Insider TV and BI Today - one of the most
viewed Facebook news shows. Furthermore, invest-
ments into subscription models helped to show a growth
path beyond 2018. The platform business was further
strengthened through important cooperations. As was
the case for the national titles, a technology partnership
was entered into with Taboola. upday was able to
expand its existing offering to additional end user devices
like tablets and smart TVs. In order to aggregate audio
content an agreement was concluded with a renowed
German car manufacturer. In Eastern Europe, Ringier
Axel Springer Media rolled out an inter-country platform
for editing and publishing of journalistic content (content
management system) in 2018. In Poland, Onet together
with partners successfully launched a content-commerce
platform, through which journalistic content will be
monetarised in future.
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 reach and use of offers and their monetization
have a high priority for our investments. For example,
idealo further expands its direct-purchase functionality
and intensifies its cooperation with the digital services
offered by the BILD and WELT Group, which should,
among other things, increase traffic and make offerings
that are more tailor-made. The Bonial Group is working
to supplement the classic display of brochures with
reach offerings for the advertisers and thus to increase
their added value.
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. This is how sustainability is integrated
into the business processes. The Sustainability depart-
ment accompanies respective activities throughout the
company – from measures to improve resource efficien-
cy to social engagement initiatives. The department falls
under the responsibility of the Chairman and Chief Exec-
utive Officer. With our sustainability strategy, we take
responsibility 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 every two years, which follows
the full list of indicators in the Global Reporting Initiative
(GRI), the internationally relevant format for sustainability
reporting. The current Sustainability Report 2017 was
also prepared in accordance with the Sustainability
Reporting Standards of the Global Reporting Initiative
(GRI).
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.
Axel Springer has set itself the goal of significantly reduc-
ing plastic waste in the company. Therefore, the use of
disposable plastics is currently being reviewed. Likewise,
controlling processes are developed that make the use
of electrical energy transparent at all company locations
worldwide. With the help of key figures, the energy and
CO2 efficiency of the company will gradually improve.
41
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic Report
Axel Springer’s sustainability reports are audited
by independent auditors. The current sustainability
report was published in November 2018 and is available
at www.sustainability.axelspringer.com. The next
sustainability report will be published in 2020.
liabilities. With a very strong cash flow, an as before solid
balance sheet structure, and the favorable financing
options available to us, we continue to be in a good
position to make the necessary investment to realize
future growth.
Combined separate non-financial report
Pursuant to the Section 289b and Section 315b of the
German commercial Code (HGB), both Axel Springer SE
and the Axel Springer Group are obliged to extend the
combined management report by a non-financial state-
ment and a non-financial Group statement for the 2018
financial year. We make use of our option to publish a
combined separate non-financial report outside the
combined management report, rather than expanding
the combined management report to include the non-
financial statement and non-financial Group statement.
The separate report will be available for download on our
website at go.axelspringer.com/NonfinancialReport.
General assessment of the company’s
financial performance, liquidity, and
financial position by the Executive
Board
In the 2018 financial year, the strategy of digital trans-
formation through organic growth and acquisitions
continued to be at the forefront. The strength of the
operating business was reflected in the repeatedly strong
organic revenue growth of the digital activities of 9.6 %.
Important steps towards non-organic growth were the
acquisition of the employer branding specialist Univer-
sum by StepStone and the French real estate portal
Logic-Immo by SeLoger. In addition, active portfolio
management influenced the business development,
including the sale of aufeminin and the remaining stake in
Do⁄an TV. The revenues, the adjusted EBITDA, the
adjusted EBIT and the adjusted earnings per share from
continuing operations were higher than in the previous
year. Net debt increased due to the first-time application
of IFRS 16 and the corresponding recognition of lease
We continue to believe that the path of systematic
digitization is the right strategy for further improving the
company’s profitability in the future.
Financial performance, liquidity, and financial position
Selected Group Key Figures (in €
millions)
Revenues1)
EBITDA, adjusted2) 3)
2018
2017
3,180.7
3,055.5
737.9
645.8
EBITDA margin adjusted1) 2)
23.2 %
21.1 %
EBIT, adjusted2)
Tax rate
Net income4)
Net income, adjusted2) 4)
Earnings per share, adjusted (in €)2) 4) 5)
Dividend per share (in €)6)
527.9
504.0
41.5 %
25.6 %
208.4
335.7
2.73
2.10
378.0
327.5
2.60
2.00
Total dividends6)
226.6
215.8
Net debt/liquidity2) 7)
– 1,249.2
– 1,020.2
Free cash flow2)
346.9
497.4
1) Adjustments of prior-year figures due to the retrospective application of IFRS 15,
see section 3(o) in the notes to the consolidated financial statements.
2) Explanations regarding relevant key performance indicators on page 37 et seq.
3) Including the increase in adjusted EBITDA of € 45.1 million from the first-time
application of IFRS 16, see section 3(o) in the notes to the consolidated financial
statements.
4) For 2017 continuing operations, for the portion attributable to discontinued opera-
tions see section 2(d) in the notes to the consolidated financial statements.
5) Calculation based on average weighted shares outstanding in the reporting period
(107.9 million; PY: 107.9 million).
6) The dividend for the financial year 2018 is subject to the condition of approval by
the annual shareholders´ meeting.
7) As of December 31, 2018, and December 31, 2017, respectively.
42
Annual Report 2018
Axel Springer SE
Combined Management Report
Economic position of Axel Springer SE
Economic position of Axel Springer SE
€ millions
Revenues
Net income
Withdrawal from / transfer to retained earnings
Total dividends1)
Dividend per share (in €)1)
2018
851.1
124.3
102.3
226.6
2.10
1) The dividend for the financial year 2018 is subject to the condition of approval by the annual shareholders’ meeting.
2017
823.2
271.9
56.1
2016
833.1
296.4
91.4
215.8
205.0
194.2
2.00
1.90
1.80
2015
2014
925.9
1,174.6
213.5
19.3
590.8
412.7
178.1
1.80
Introductory remarks
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 opportuni-
ties as the entire group. These are presented in the
Report on risks and opportunities (see page 47 et seqq.).
Also, the anticipations regarding the development of Axel
Springer SE correspond to the essential expectations
described in the forecast report (see page 65).
The following explanations are based on the annual
financial statements of Axel Springer SE, which was
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 operationally active in the News
Media National segment and publishes in particular
national daily and weekly newspapers. As a result of
the reorganization of the national publishing divisions
completed in the reporting year, the operating business
activity since the beginning of 2018 also includes offers
from the digital portfolio of newspapers as well as car,
computer and sports magazines. 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 general economic conditions
of Axel Springer SE correspond essentially to those of
the Group and are described in the economic report
(see page 24 et seqq.).
Financial performance
Income statement (Condensed)
€ millions
Revenues
Other operating income
2018
851.1
190.3
2017
823.2
312.4
Purchased goods and services
– 221.6
– 199.9
Personnel expenses
– 210.0
– 240.4
Amortization, depreciation and
impairments of intangible assets and
property, plant and equipment
– 10.0
– 19.0
Other operating expenses
– 467.3
– 422.5
Net income from non-current financial
assets
Net interest income
Income taxes
Net income
68.2
– 22.3
216.8
– 33.2
– 54.1
– 165.7
124.3
271.9
Revenues increased by € 27.9 million, i.e. 3.4 % in the
reporting year, mainly due to the expansion of business
activity. The increase in advertising revenues and other
revenues by € 34.3 million or € 17.1 million was offset by
a decline in circulation revenues by € 23.5 million.
Other operating income fell by € 122.1 million compared
to € 190.3 million compared to the prior-year. This was
particularly due to lower income from property trans-
actions. At the beginning of 2018, the Axel Springer
high-rise (main building) in Berlin was transferred to the
43
Annual Report 2018
Axel Springer SE
Combined Management Report
Axel Springer Pensionstreuhand e.V. to further secure
the pension obligations by building plan assets. This
resulted in a profit of € 148.3 million. In the prior year,
the sale of the Axel-Springer-Passage in Berlin, which
was completed at the end of 2017, resulted in a profit of
€ 281.8 million.
The cost of purchased goods and services increased
by € 21.7 million to € 221.6 million, primarily as a result
of increased services provided by subsidiaries for the
production of the additional digital offerings.
The personnel expenses decreased to € 210.0 million
(PY: € 240.4 million). Lower expenses resulted in
particular from the valuation of share-based compen-
sation programs and restructuring measures. At the
same time, the average number of employees fell by
6.0 % from 1,427 in the prior year to 1,341 in the
reporting year. This was offset by higher pension
expenses resulting from the measurement of pension
obligations due to a lower discount interest rate.
The depreciation, amortization and impairments
declined in the reporting year particularly based on real
estate transactions at the end of 2017, i.e. beginning of
2018 to € 9.0 million from € 10.0 million.
The increase in other operating expenses to
€ 467.3 million (PY: € 422.5 million) resulted in
particular from lease expenses for the lease back of
the Axel-Springer-Passage and the Axel Springer
high-rise (main building) as well as marketing and
publishing expenses in connection with the additional
offering of digital products.
The net income from non-current financial assets
(€ 68.2 million; PY: € 216.8 million) included in
particular the profit transfers from subsidiaries, which
amounted to € 211.3 million, which is € 19.7 million
lower than in the prior year. Furthermore, the valuation
of investments and loans resulted in impairments of
€ 177.8 million (PY: € 37.2 million), and write-ups of the
carrying amount of investments to the amount of
€ 13.3 million (PY: € 1.1 million).
The net interest income for the reporting year was
€ – 22.3 million (PY: € – 33.2 million) and mainly
comprised interest expenses from the utilized revolving
credit facility and the promissory note loan as well as
the valuation of the pension obligations. The decline
compared to the prior year is mainly due to lower interest
expenses from pension accounting due to higher income
from plan assets. In addition, the net interest income of
the prior year included prepayment fees in connection
with the restructuring of existing promissory note loans.
Income taxes amounted to € 54.1 million (PY: € 165.7
million). The decline compared to the previous year is
particularly related to the real estate transactions of the
reporting and prior year.
The 2018 financial year ended with a net income of
€ 124.3 million (PY: € 271.9 million).
Liquidity
The net debt (liabilities due to banks and promissory note
less cash and cash equivalents) amounted to € 1,097.4
million as of December 31, 2018 (December 31, 2017:
€ 1,198.8 million).
Long-term revolving credit facilities were increased by
€ 300.0 million in the reporting year to € 1,500.0 million
and € 453.0 million had been utilized at the reporting
date (December 31, 2017: € 365.0 million). Furthermore,
there were liabilities from promissory notes of € 704.5
million (December 31, 2017: € 879.0 million), whose
financing conditions were optimized in the prior year
through partial termination, conversion and redrafting.
For interest-optimized coverage of short-term capital
requirements, Axel Springer was able to issue certain
forms of short-term bearer bonds (commercial paper)
with a maximum volume of € 750.0 million and a term of
up to one year starting from the reporting year. As of the
reporting date, no commercial paper had been issued.
44
Annual Report 2018
Axel Springer SE
Combined Management Report
Financial position
Balance Sheet (Condensed)
€ millions
12/31/2018 12/31/2017
Intangible assets and property, plant and
equipment
218.7
153.8
Non-current financial assets
5,781.2
5,643.5
Receivables from affiliated companies
124.5
171.2
Cash and cash equivalents
Other assets
Total assets
Equity
Provisions
61.2
49.7
45.2
63.9
6,235.3
6,077.6
2,541.2
2,632.7
168.6
333.2
Liabilities due to banks and promissory
note
1,158.6
1,244.0
Liabilities to affiliated companies
2,286.1
1,796.6
Other liabilities
80.8
71.1
Total equity and liabilities
6,235.3
6,077.6
The balance sheet total increased by € 157.7 million to
€ 6,235.3 million in the reporting year. Non-current as-
sets amounted to € 5,999.9 million (December 31, 2017:
€ 5,797.3 million) and represented 96.2 % (December
31, 2017: 95.4 %) of total assets. 42.4 % of total assets
(December 31, 2017: 45.4 %) were covered by equity.
The increase in intangible assets and property, plant and
equipment of € 64.9 million to € 218.7 million as at
December 31, 2018 is particularly attributable to the
construction of the new Axel Springer building in Berlin.
Non-current financial assets increased by € 137.7 million
to € 5,781.2 million in the reporting year. This increase
was mainly due to loans granted and additional pay-
ments in capital reserves of subsidiaries to finance com-
pany acquisitions. This was offset by impairment losses
on investments and loans due to lower fair values as of
the balance sheet date.
Receivables from affiliated companies (€ 124.5 million;
December 31, 2017: € 171.2 million) and liabilities to
affiliated companies (€ 2,286.1 million; December
31, 2017: € 1,796.6 million) resulted mainly from group-
wide liquidity management. This increase in liabilities in
the reporting year was mainly due to cash inflows from
the sale of investments.
Equity as of December 31, 2018 decreased by
€ 91.5 million compared to the prior year's reporting
date and amounted to € 2,541.2 million (December
31, 2017: € 2,632.7 million). The net income for the
reporting year (€ 124.3 million) only partially compen-
sated for the reduction in equity due to the dividend
payment for the past financial year (€ 215.8 million).
The equity ratio fell to 40.8 % as of the reporting date
(December 31, 2017: 43.3 %).
Compared with the prior-year balance sheet date
other provisions fell by € 164.6 million to € 168.6 million
(December 31, 2017: € 333.2 million). The main reasons
for the decline were lower pension provisions due to
increased plan assets and lower obligations from
share-based compensation programs.
45
Annual Report 2018
Axel Springer SE
Combined Management Report
Profit utilization proposal
Dependency Report
The Supervisory Board and Executive Board propose
that the company applies the full amount of the distribut-
able profit of € 226.6 million (PY: € 215.8 million) to pay
a dividend of € 2.10 (PY: € 2.00) per qualifying share for
the 2018 financial year.
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:
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 € 2.10 per qualifying share.
“According to the circumstances known to the
management at the time of each transaction with an
affiliated company, Axel Springer SE received adequate
consideration 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.”
46
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
Report on risks and opportunities
In addition, the respective divisional and senior manage-
ments of our companies are required to participate in the
regular, systematic and standardized risk surveys.
Significant ad-hoc changes in the risk situation must
be reported to central Corporate Risk Management
immediately.
Central Corporate Risk Management provides overarch-
ing standards, methods and tools, manages both
semi-annual and annual risk surveys and ensures report-
ing to the Audit Committee of the Supervisory Board and
the Executive Board. It coordinates the risk management
activities at the Group level and plausibility testing of the
reported risks against completeness. In addition, central
Corporate Risk Management continuously develops the
risk management system of Axel Springer.
Insofar as it is appropriate and quantifiable risks are
assessed with reference to the parameters “loss amount”
(impact) and “probability of occurrence”, quantitatively or
on the basis of qualitative criteria. A qualitative assess-
ment of the potential damage is based on criteria such
as operational effects, impact on our reputation or legal
consequences. Since the risk survey 2018, measures for
counteracting or reducing risk have been taken into
account directly in the risk assessment (net assessment).
The net risk determined in this way is assessed in terms
of its probability of occurrence. The subsequent classifi-
cation of the risks takes place in a graded risk matrix
introduced in this reporting year.
As an international group, Axel Springer is exposed to a
large number of internal and external influences that can
have a significant effect on the achievement of our goals.
We define risks as the possibility of a negative deviation
of the company's development from our goals, while
opportunities represent the possibility of a deviation in a
positive sense. Based on this, upcoming chances to
increase our return and our enterprise value shall be
used whereas risks shall only be taken in case they seem
acceptable and appropriate for the company.Thus, risks
should be limited to a level deemed acceptable 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.
Risk management system
The risk management process is aligned to identify and
assess all material risks and risks that are potentially
existence-threatening as early as possible in order to be
able to take appropriate countermeasures. The general
form of structures and processes in the risk manage-
ment system at Axel Springer are based on the interna-
tionally recognized "Enterprise Risk Management
Framework", a framework developed by the Committee
of Sponsoring Organizations of Treadway Commission
(COSO).
Overall responsibility for an effective risk management
lies with the Executive Board of Axel Springer SE, the
operational management of the individual risks falls pri-
marily within the area of responsibility of the respective
company divisions or holdings of Axel Springer. This
includes the early detection, identification and assess-
ment of sector- or company-specific risks, the definition
of suitable measures, their management and control as
well as adequate documentation and reporting.
47
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
opportunities arise from product innovations or quality
improvements. Basis for the opportunity identification are
e.g. market and competition monitoring, analysis and
regular dialog with experts. In considering the risks
involved, identified opportunities are fundamental to
corporate decision-making and the introduction of
corresponding measures, such as measures regarding
investments in new markets or technologies. The
management of opportunities throughout the Group
is the responsibility of the Executive Board and is
decentralized by the operational divisions and their
management or divisional heads.
Internal audit system
Corporate Audit is organizationally assigned to the
Corporate Audit & Risk Management division, which is
functionally subordinate to the Executive Board and
under the Executive Board member in charge of
Personnel and Finance in disciplinary terms. It is
subdivided into the teams Operational Audit and IT Audit,
which are separated by organization and personnel from
the team Corporate Risk Management.
Corporate Audit provides risk-oriented consulting and
audits in all Group companies and divisions, aligning its
activities with the relevant national and international
professional standards. In particular, the department has
the task of systematically reviewing the adequacy and
functionality of the internal control and monitoring system
in a risk-oriented manner and, if necessary, to undertake
measures for remedying the weaknesses. In order to
maintain independence, the audit mandate of Corporate
Audit with regard to risk management extends only to
the decentralized components. Central risk management
is regularly subject to an effectiveness review by qualified,
external audit service providers.
Risk Matrix of Axel Springer SE
Risk not relevant to the group
Significant risks
Other risks
Risks to be monitored
Existentially threatening
risks
almost
certain
75%
very
likely
likely
5 0%
25%
y
t
i
l
i
b
a
b
o
r
P
possible
5 %
unlikely
Extent of damage in kEUR (qualitative/quantitative)
low
medium
high
very
high
existentially
threatening
≥ 1.000
5.000
10.000
20.000
To assess the priority of the overall risk portfolio, the risks
are categorized as threatening the continued existence,
relevant, to monitor, other, or not relevant to the Group.
The Group auditor examines the risk early warning
system in accordance with Section 91 Para. (2) of the
German Stock Corporation Act (AktG) for its suitability for
early detection of developments that could jeopardize
the continued existence of Axel Springer SE and reports
the results to the Audit Committee of the Supervisory
Board of Axel Springer SE.
Opportunity management system
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
exploited. As part of the management, strategy and
planning processes, potential internal and external
opportunities are identified and analysed for the business
units and shareholdings of Axel Springer. External
opportunities are offered, for example, by changing
market structures or customer requirements; internal
48
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
Corporate Audit monitors the correct and timely
implementation of the agreed measures to eliminate the
identified vulnerabilities based on a systematic process
(follow-up).
The results of individual audit or consultancy mandates
are typically reported to the Executive Board and
periodically summarized to the Audit Committee of the
Supervisory Board.
To ensure the effectiveness of the internal audit system,
a quality assurance and improvement process is set up,
which includes amongst other things external quality
assessments in accordance with professional guidelines.
Report on the financial reporting related
risk management system and internal
control system
An integral part of the internal monitoring system of
Axel Springer SE is the financial reporting-related risk
management system and the connected internal control
system, which is also based on the COSO framework
(see page 47). The effective interaction of these systems
should ensure the regularity, completeness and reliability
of accounting and financial reporting. The financial
reporting is therefore 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, and standards. The
financial reporting-related risk management and the
internal control system include all organizational
regulations and measures aimed at the detection and
management of risks related to accounting and financial
reporting. However, even an effective and therefore
adequate and functional risk management system
and internal control system does not provide absolute
certainty to prevent or detect any irregularities or
inaccuracies.
Key elements of the financial reporting-related risk
management and internal control system are:
Processes for identifying, assessing, and document-
ing all significant financial reporting-related processes
and risk areas, as well as the corresponding key
controls.
Process-integrated controls (computer-aided
controls, validation of report data, dual control
principle, separation of functions, analytical controls).
Standardized financial accounting processes, through
the use of an internal, intra-group shared services
center in which a large part of the consolidated
German Group companies are integrated.
Group-wide requirements for accounting guidelines,
charts of accounts and reporting processes.
Quarterly communication of information to all
consolidated Group companies on developments
related to accounting, and the process of preparing
the financial statements.
Assuring the requisite expertise of employees involved
in the financial accounting and financial reporting
process by means of appropriate selection proce-
dures and training. Use of external experts, e.g. for
pension accounting and selected valuation tasks.
Centralized preparation of the consolidated financial
statements (including management report) using
manual and system-specific controls with regard to
accounting-specific relationships.
Protection of financial reporting-related IT systems
from unauthorized access by authorization restrictions.
Monthly internal Group reports including analysis
and reporting of significant developments and budg-
et/actual variances. Regular, group-wide
reporting to the persons responsible for reporting, the
Executive Board and the Supervisory Board.
49
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
The effectiveness of the financial reporting-related risk
management system and the internal control system is
monitored by means of process integrated controls.
As a process-independent authority, Group Auditing will
inspect at regular intervals randomly selected elements
of the financial reporting-related internal control system
organized at central level and in the Group companies,
in order to uncover weaknesses and thus contribute
towards improving the legal conformity with rules and
regulations (compliance). In addition, the Audit Commit-
tee of the Supervisory Board monitors the financial
reporting processes and the effectiveness of the
financial reporting-related internal control system and risk
management system.
Risks and opportunities
If not stated elsewhere, all risks and opportunities which
have a considerable effect on reaching our company-
wide targets will be mentioned in the following. Within
the areas described below, risks and opportunities are
typically presented in the order of their priority for the
Group. In order to avoid repetition and in interest of
readability it was deviated from it, if necessary.
The risks and opportunities indicated at the balance
sheet date and illustrated below are primarily based on
the 2019 forecast period, unless they relate to long-term
objectives.
Market and competition risks
Market and competition risks basically relate to
changes in sales and purchasing conditions as well as
the development of competing suppliers. Since Axel
Springer operates and acquires globally, a large number
of economic factors must be taken into account to
determine market risks. Economic forecasts, above all
for the important sales markets of Germany, Europe and
the USA, serve as overarching indicators for assessing
market and competition risks.
Details of the economic development and growth
assumptions in 2019, especially for our relevant sales
markets, are described in detail in the "Forecast report"
section of the management report. According to details
stipulated there, the following risks may occur.
The trade dispute between USA and China in 2019
could also have negative effect on global growth and
investment, resulting in losses in wealth in the countries
involved.
Great uncertainties may also occur from the progress of
Brexit. An unregulated Brexit would have far-reaching
consequences and would fundamentally transform the
European value chains.
The development of the general macroeconomic
conditions will continue to be critically observed in 2019
due to the identified economic-political risks.
Classifieds Media and Marketing Media
The Classifieds Media and Marketing Media segments as
well as News Media (see page 13 et seqq.) continue to
be subject to strong market and competitive dynamics,
which could lead to market share losses for our business
models and thus to lower revenues and earnings.
Especially the competition by the global Internet
corporations Google, Apple, Facebook and Amazon,
called GAFA for short, is steadily increasing. These
companies not only pool specialized knowledge in their
corporations, but also point the way in the course of
digitized globalization, penetrating new market segments
and possibly even competing with our activities.
Start ups with innovative or disruptive business models,
missing (market) trends and new technologies, as well as
generally the lack of further development of our products,
could also potentially jeopardize our existing market
position and lead to lower sales and earnings.
50
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
In order to limit the market and competition risks, a
systematic and continuous monitoring of the relevant
market and competitive environment and emerging
trends is carried out. Control measures for operational
management are derived on the basis of this information.
We enhance the attractiveness of our business models
by investing in innovative products development and
customization and new high-quality services, the use
of new technologies, target-oriented marketing and
increase in brand awareness. With these measures,
we want to meet the changing needs of our customers
while at the same time maintaining or expanding our
competitive edge. The hiring and further development
of highly qualified specialists and the expansion of long-
term customer relationships also reduces risk.
In addition, new business models are constantly being
tested, and our product portfolio supplemented both
nationally and increasingly internationally.
Many of our Classifieds Media and Marketing Media, as
well as News Media (see page 13) offerings continue to
be constantly faced with the risk of a sudden loss of
visibility resulting from the dominance of large internet
search engines. The ever-changing and sometimes
non-transparent criteria of the search algorithms lead to
unexpected loss of visibility and can therefore 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 professional search engine
marketing, the improvement of the online page structure
and the expansion of alternative traffic sources. 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.
In the field of real estate, our national offerings face the
risk of introducing the “Bestellerprinzip” for purchase real
estate. The "Bestsellerprinzip" had already been intro-
duced in the year 2015 in the area of rental apartment
agencies and states that those who commissioned the
agent should pay the agent's costs – so in the field of
real estate purchase it is usually the seller. This could
result in sellers forgoing an agent, so that the individual
agent earns less profit. As a result, micro-agents could
give up their business and would be replaced by larger
agencies. Our real estate portal Immowelt would be
confronted with changes on the customer side. In
addition, customers would have lower revenues, which
could potentially affect our sales performance. However,
the experience from other countries, where similar
regulations apply and the mandating seller pays the
agent fees, shows that the impact on the leading
providers remains manageable, as the corresponding
marketing of real estate objects is still a prerequisite for a
successful sale. In addition, Immowelt currently provides
also the offers for private customers, who might be able
to market their object more intensively themselves. In
order to minimize risk, it is necessary to increase
investments in the development of digital distribution
channels in the following years. Increasing the user
experience, i.e. the experience of a user in interacting
with a product, service or an establishment, as well as
investing in products and brands, is also in the
foreground.
51
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
A slowdown or reduction in personnel recruitment due to
economic difficulties may pose a risk to our job portals in
corresponding macroeconomic conditions. Uncertainties
about the economic development could be transferred
to our customers and therefore lead to a decline in
revenues. These risks can only be approached through a
strict cost discipline, such as a reduction in marketing
measures or a hiring freeze, on the basis of regular
monitoring of market indicators.
News Media
Digitization has significantly changed consumer and
reader behavior. The increased importance and use of
digital offerings are steadily leading to revenue reductions
in the field of printed publications, which cannot yet be
compensated by the revenues of the digital services.
Unpredictable market developments could further in-
crease the already factored in decrease due to the struc-
tural change. Enterprises from other industries are enter-
ing the market faster than ever with innovative and
disruptive technologies or business models, posing
potential threats to our existing products and services.
To counteract these risks, we realigned our publishing
structures for German media brands last year. With the
re-organizing into two separate publishing areas for print
and digital, we can adapt even more individually to the
different market requirements.
In addition, our advertising revenues in the print and
online sectors are exposed to the risk that annual
contracts with major media agencies 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 commercial customers to other
forms of advertising such as television, radio or other
online media also pose a serious risk.
The priority for all market and competitive risks is to
identify the changing needs of our customers at an early
stage through continuous market analysis and intensive
customer support, and to align our product offerings with
market trends and customer requirements.
Our Digital offerings in the News Media segment, as well
as our offerings in the Classifieds Media and Marketing
Media section, are at risk of sudden loss of visibility on
Google as well as increasing competition from GAFA
(see also section Classifieds Media and Marketing Media).
In order to counter these risks, we continuously analyze
the market and competition environment and invest in
product development and the development of alternative
sources of traffic.
The marketing of audiovisual content also confronts risks.
Further fragmentation of the market through new TV
channels and online offerings pose the immediate danger
of redistribution of sales potential. As a result, agency
fees could increase to compensate for these revenue
losses. Should the broadcasting performance deteriorate,
this means a loss of attractiveness of the program for the
viewers. As a result, fewer viewers lead to lower prices
that can be achieved in the market, even losing their
relevance as an advertising medium.
Market and competition opportunities
If the global economy develops better than predicted,
this could have a positive impact on our sales perfor-
mance. The deciding factor will be the impact that
regional conflicts and crises will have on our core
markets when the world economy is highly interconnect-
ed. Nonetheless, Axel Springer is in a good position to
capitalize on the opportunities its early investment in
regional and digital growth markets places brings. Even a
negative macroeconomic development can open up
opportunities: This could eliminate competitors 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.
52
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
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.
In the US, the media market is in transition. This gives
our journalistic offerings the chance to expand their
market position. Our US subsidiary Insider Inc. already
offers Business Insider, the largest website for business
news and analysis in the US. It now has its own portals
in 22 countries and, as the world's largest business
portal by reach, offers tailor-made real-time information
for the digital generation. Insider Inc. may emerge as
one of the winners from the tendency towards radical
changes in the US.
All divisions and companies of Axel Springer are working
on the continuous improvement of technologies and
processes. This includes an intensive cross-company
exchange on successful business models, as well as
innovative start-ups. This could help to strengthen and
expand Axel Springer's competitive position.
In the field of real estate marketing, transaction-based
digital real estate platforms are gaining market share.
These combine the expertise of classic agents such as
the personal support of customers on site with efficien-
cy-enhancing software solutions such as state-of-the-art
marketing and communication technology. Due to the
efficiency advantages being created professional real
estate marketing can be offered at much more favoura-
ble conditons. Through our acquisition together with
Purplebricks of a minority stake in Homeday (see page
26), a transaction-based digital real estate platform that
brings customers together with traditional agents and
supports the purchase and sale of real estate, in
December 2018, Axel Springer is offered the opportunity
to participate in a rapidly growing business model.
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.
This risk affects activities in all three operating segments.
Overall, however, the business fields and models of our
investments are diverse, so that so-called cluster risks
are limited by means of diversification. 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-
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 dependency
on strategically significant cooperation partners is also
subject to risks. Active key account management, legal
support in the negotiation and renegotiation of contracts
and continuous monitoring of the business activities of
our cooperation partners contribute to reducing this risk.
Strategic opportunities
In a constantly changing environment, we continue to
develop our company to meet the global and industry-
specific challenges in the future with innovative and
tailored solutions.
53
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
Axel Springer's strategy of international digitization
continues to offer good opportunities due to the very
positive development of digital markets. Axel Springer
exploits these developments by strategic investments in
new or future-oriented technologies, entering into new
forms of cooperation, the ongoing digital transformation
and monetization of journalistic products.
On the one hand, acquiring interests in companies with
promising digital business models in early stage and
growth phases in their lifecycle provides us with the
option of establishing contacts within the industry and to
other founders and investors, and also grants access to
new ideas and business models. On the other hand, this
opens up the possibility of minority investments, which
may also be available to us for a later majority acquisition.
In the event of substantial development of the associate
companies, we can also profit from a significant appreci-
ation in value. We see further growth opportunities in our
international digitization and the associated entry into
new or expanding existing markets.
Information security risks
Due to the high degree of integration of information
technologies into business processes and business
models, Axel Springer relies on a high availability of IT
components, to avoid interruption of business with far-
reaching consequences for revenue and reputation.
External factors in the form of cyber crime represent
an increasing risk for the company. Examples include
malicious software that prevents access to company
data through encryption (ransomware) or targeted
denial of service (DDoS attacks). Possible causes for
an impairment of availability may also be of an internal
nature, such as for example the increasing complexity of
the systems and the infrastructure that has grown over a
longer period of time.
Additional IT risks are classified as important if the
confidentiality of information or data integrity can be
compromised as a consequence. In consideration of the
growing importance of paid digital content offerings,
programmatic online-advertising as well as the
General Data Protection Regulation (GDPR)-compliant
processing of personal data, the protection against theft
or loss of data is of great importance. For this reason,
targeted measures have been and are being taken to
limit to the greatest possible extent the effects of criminal
acts and the failure of IT components. The risk reduction
measures include e.g. DDoS protection, backup data
centers, vulnerability analysis, use of encryption, network
access control, consolidation and standardization,
and improving of systems. The stated measures are
continuously analyzed and expanded or improved if
necessary.
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 2019 risks continue to exist from two European
legislation. On the one hand, this is the European
General Data Protection Regulation (GDPR), which
applies from May 2018. In addition to numerous
substantive 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) brought the GDPR two
fundamental changes, which significantly increase
the risks for data processing companies: There is a
corporate 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 annual
turnover are possible, based on antitrust law. With
regard to the entry into force of the GDPR, we have
taken numerous measures across the Group. These
include among others the definition of responsibilities
concerning data protection, training courses and the
introduction of a new directive. For the measures taken
by Axel Springer in the area of IT security, please refer to
the section "Information security risks".
54
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
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
profiles on the Internet for Axel Springer. In contrast to
the GDPR, the ePrivacy Regulation has not yet been
decided. Also, a concrete date of entry into force and
any transition periods are not finalized (as of February
2019). Axel Springer deals with possible consequences
and possible measures at an early stage. These include
internal projects, such as the programming of a so-called
“opt-in layer” (OIL) and participation in the Transparency
& Consent Framework of IAB Europe, but in the broader
sense also the participation as a founding partner in
Verimi. (see page 41)
In addition, Axel Springer is informed about these
developments at an early stage, also through the
associations representing 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. Regarding chances in
European law 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.
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.
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
integration of advertising networks and "retargeting" in
the areas of web, mobile and app. The obtaining of
consents, so-called "opt-ins", warnings and potential
legal violations bring with it the risk of reputational
damage, particularly to well-known brands of Axel
Springer such as BILD and WELT, alongside direct
legal and commercial consequences.
Following the failure of the EU-wide introduction of a
digital tax, which provided for taxation of revenues from
certain digital services, individual countries are now
planning to introduce this tax in 2019. At present,
however, there are no legal justifications that would
unequivocally suggest that our revenues from digital
business models, such as those in France, could actually
be met in 2019 with a digital tax of 3 % of digital revenue
to be charged. As far as the solutions proposed at
national level are based on the draft EU Directive
of March 21, 2018, it cannot be ruled out that, in particu-
lar, the proceeds from the sale of online advertising
space, the brokerage of transactions via digital platforms
and the sale of user-generated data will be affected.
Further potential risks or uncertainties for the Axel
Springer Group arise from the business activities in
Eastern Europe. These activities are combined in Ringier
Axel Springer Media and form part of the News Media
segment. The political situation in individual countries,
especially the Polish and Hungarian media scene, is
decisively influenced by the political influence of the
national-conservative governments; currently already on
public media, but also by possible future attempts of
influencing private media. For example, government-
influenced companies could reduce or even stop their
advertising activities in our products, which would lead to
a significant decline in our advertising revenues. We
counter this risk with targeted cost-saving measures and
income security programs.
55
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
Political and legal opportunities
In the political and legal environment, the ancillary copy-
right could be an opportunity for press publishers. This
should further strengthen the protection of intellectual
property. It stipulates that royalties may be charged for
the internet use of publisher content by aggregators and
search engine providers, unless they are "single words"
or "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 (copyright collecting
agency), which represents more than 200 digital publish-
ers, including those of Axel Springer, has filed an infor-
mation and payment claim against Google at the District
Court Berlin, which is currently pending before the Euro-
pean Court of Justice after a referral order of the District
Court Berlin; depending on the outcome of the legal
dispute or the agreement reached, this can have a posi-
tive effect on Axel Springer and its digital journalistic
offerings. Regardless of the above, the European Union
is currently negotiating a reform of European copyright
law, which will for the first time also provide for a new
ancillary copyright for press publishers at Union level.
The European Parliament gave the mandate on Septem-
ber 12, 2018 to launch the legislative proposal in the
so-called trilogue procedure with the European Commis-
sion and the European Council, after the Member States
had already given such a mandate to the Council in May.
On February 13, 2019 three institutions under the
Romanian Council Presidency agreed on a common text,
which also anticipates an ancillary copyright law across
Europe. This has paved the way for a confirmation of the
agreement by the Council of Ministers of the Member
States and the plenary of the European Parliament
before the European elections in May 2019. The
adoption of the planned directive could strengthen
Axel Springer's legal position for its publishing products
in the EU.
Reputation risks
In addition to the reputation risks mentioned above,
additional secondary risks or secondary effects may arise
in connection with a primary risk. For example, a violation
of law and order can cause high attention and damage
our reputation due to Axel Springer's prominent position
and its contribution to social opinion making. Further
potential reputation risks may arise, for example, from
the violation of journalistic independence if the journalistic
work is endangered due to personal advantage, inade-
quate 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.
Axel Springer has instituted an advanced sustainability
management program that meets international standards.
In addition to the use of energy-efficient IT equipment
(e.g. computers, printers) and the regularly successful
participation in energy audits, our printers in particular
have optimized energy management, e.g. energy-
efficient ventilation systems for cooling or heating in the
printing premises. For further details, please refer to our
Sustainability Report.
However, if we were to recognize potential environmental
and social conflicts in the procurement of resources too
late, this could damage our image. In order to effectively
minimize this risk, we work closely with experts and
environmental organizations. In addition, we use
monitoring measures along the value chain. Our
internal and external communication is characterized by
openness and transparency.
Violations of confidentiality agreements and insider
regulations 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 campaigns in social media channels, even if
there is no legal violation from a legal perspective.
56
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
The indicated reputation risks are counteracted, among
other things, by employee sensitivities through, for
example, eLearning, guidelines and corporate principles
as well as our Code of Conduct, which defines group-
wide standards of conduct.
Furthermore, our International Social Policy, a catalog of
social standards, counteracts potential reputational 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. For further infor-
mation, please refer to the section "Principal corporate
governance practices" from page 73 et seqq.
Personnel risks
The individual skills, professional competences and the
commitment of our employees contribute significantly 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 counteract this professionally and
actively. One focus of our HR management is the target-
ed and forward-looking development and motivation of
employees through individual training and further educa-
tion measures, regular feedback discussions, attractive
bonus programs, flexible working time models and a
comprehensive 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.
In addition, the difficult situation in recruiting junior
executives and executives represents a continuously
growing risk. Due to demographic change and increas-
ing competition in the personnel market, it is increasingly
difficult to recruit qualified personnel. 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 recruit-
ing 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
Due to the degree of internationalization of Axel Springer,
the Group is exposed to a number of market price risks.
These include in particular interest rate risks and curren-
cy risks. These risks are largely managed by the Group
Finance department on the basis of a guideline laid down
by the Axel Springer Executive Board. Derivative financial
instruments are used exclusively for hedging purposes.
Currency risks are 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 (transaction risks) are rather 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 discussed in a
Treasury Committee. Currency effects arising from the
translation of financial statements denominated in foreign
currencies (translation risk) are recognized directly in the
equity item of comprehensive income. Therefore,
Axel Springer generally does not hedge against such
currency risks. The existing interest rate risk results pri-
marily from financial assets or liabilities with variable
interest rates. However, this risk is limited due to well-
defined financing principles and regular monitoring of the
57
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
variable interest component, or, if necessary, minimized
through the use of interest rate derivatives.
The liquidity risk is regularly monitored on the basis of
medium-term planning. The completed credit line and
the promissory note loans form a sufficient risk buffer for
unplanned payments.
The investment of cash and cash equivalents generates
only minor default risks in the Group. In order to counter-
act these risks, investment is made according to prede-
fined criteria that are specified in a Group guideline.
Potential risks arising from global climate change have
also been investigated. However, there are currently no
signs that climate change would have a direct impact on
Axel Springer's business models.
Terrorist attacks continue to pose a serious risk to Axel
Springer. We counter this, among others, with increased
security standards, significantly tightened access regula-
tions and controls as well as a detailed education and
training of the safety-relevant group of people. The finan-
cial risk due to possible property damage and business
interruption is covered by appropriate insurance.
The risks arising from financial instruments and hedging
activities are explained in detail in note (34) of the ex-
planatory notes to the consolidated financial statements.
Overall, the financial risks are considered to be low.
Other risks
In order to support the cultural change to the leading
digital publishing house, work is under way with high
pressure on the construction of the new publishing
house of Axel Springer SE, which should enable employ-
ees 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 such as unplanned project
delays as well as cost overruns due to planning, tender-
ing or procurement errors, or raw material price increas-
es such as steel, glass or concrete. To reduce the
aforementioned risks, a corresponding general contrac-
tor agreement was concluded, professional project con-
trolling, and reporting structures were established. Also,
the development of supplier relationships and their early
contractual commitment help us to minimize these risks.
Our joint venture with Ringier is facing a highly concen-
trated press distribution business in Poland. This holds
the risk of dependence on a small number of distribution
partners and poses the risk that, in the event of payment
defaults by individual companies, higher shares of out-
standing receivables may remain outstanding and result
in substantial losses. To limit this increasingly growing
risk, a portion of the potential loss of receivables is cov-
ered by insurance. In addition, there is an active receiva-
bles management.
Operational and other opportunities
The ongoing cultural change at Axel Springer brings
additional opportunities in various areas. Firstly, the re-
duction of strict hierarchies and restructuring will ensure
faster reaction and decision-making capacity to chang-
ing market and competition conditions. On the other
hand, it offers the opportunity to increase Axel Springer's
attractiveness as an employer through a contemporary,
modern and increasingly digital work environment and, in
particular, to make our house attractive as an employer
brand for young professionals from the start-up environ-
ment and other relevant target groups.
58
Annual Report 2018
Axel Springer SE
Combined Management Report
Report on risks and opportunities
Overall view on the risk and opportunity situation
The overall picture of the risk and opportunity situation of
the Axel Springer Group consists of the individual risks
and opportunities of all risk and opportunity categories of
the consolidated majority interests and the central areas.
and the media industry and, consequently, a significant
deterioration in the earnings position of the Group. In
addition, risk concentrations are reduced through
continuous diversification, internationalization, optimiza-
tion of the brand and product portfolio and digitization.
There are currently no risks that could jeopardize the
continued existence of the Axel Springer Group or could
significantly influence its asset, earnings and financial
position. This applies to the condition that there is no
significant deterioration of the economy in our markets
Compared to the disclosures in the 2017 Annual Report,
there are slight changes in risk positions. However, these
changes did not materially change the overall risk and
opportunity situation of the company.
59
Annual Report 2018
Axel Springer SE
Combined Management Report
Forecast report
Forecast report
Anticipated economic environment
Anticipated Economic Development (selection)
General economic environment
The International Monetary Fund (IMF) expects global
weakness in growth to continue in the coming quarters
and forecasts global economic growth of 3.5 % in 2019.
This reflects, above all, a sustained slowdown in growth
momentum in the industrialized countries.
The German Institute for Economic Research (DIW)
sees an end to the above-average growth of the German
economy. However, according to the economic
researchers, there is no danger of an immediate
recession. Accordingly, economic growth in 2019
should be at 1.6 %, adjusted for price. Rising wages are
expected to boost private consumption by 1.5 %. In view
of the continuing high level of utilization in the industry,
the DIW expects a significant increase in price-adjusted
equipment investment of 3.0 % in 2019. After a weaker
growth in foreign demand in 2018, stronger export
growth is expected again in 2019. However, the export
growth of 2.8 % in real terms expected by the DIW in
2019 is likely to be offset by an even higher rise in im-
ports of 3.9 % in real terms.
The DIW expects consumer prices to increase by 2.0 %
in 2019. Companies should make better use of their
pricing scope with well-utilized capacity. The number of
persons in employment is expected to increase by
around 350,000 to an annual average of 45.2 million.
At the same time, the unemployment rate is expected
to fall to 4.8 % due to the continued high growth in
employment.
Change in gross domestic product compared to
prior year (real)
Germany
United Kingdom
France
Central and Eastern Europe
USA
Source: DIW, December 2018.
2019
1.6 %
1.3 %
1.7 %
3.7 %
2.4 %
According to a forecast by the DIW, the British
economy will expand by 1.3 % in 2019. In particular,
uncertainty in view of Brexit is likely to continue to burden
the investment activities of the companies. Overall,
domestic demand is expected to contribute only
moderately to growth. Despite a continued good
situation in the labor market, income growth in 2019 is
likely to be increasingly spent on saving and thus not
benefiting private consumption.
For France, the DIW forecasts a real growth rate of 1.7 %
in 2019. The unemployment rate should fall to 8.6 %. The
DIW expects only a modest price increas of 1.6 %.
According to the DIW forecast, consumers in Central
and Eastern Europe are somewhat less confident than
in the summer of 2018. Overall, private households are
likely to be more restrained with their spending. The
situation at the labor market continues to improve, but
the unemployment rate is falling less rapidly. Nominal
income should continue to rise; however, prices increase
gradually. The growth rate in Central and Eastern
European is expected to decrease in 2019 to 3.7 %
in real figures.
60
Annual Report 2018
Axel Springer SE
Combined Management Report
Forecast report
According to the DIW forecast, the development of the
US economy remains upward. The growth of the US
economy is initially based also on an expansionary fiscal
policy. However, the effects of tax cuts and government
overspending will slowly come to an end. In this context,
the labor market situation will improve somewhat more
slowly than in recent years. According to the DIW, the
growth rate of gross domestic product will decrease to
2.4 % in real terms.
Industry environment
According to the current advertising market forecast of
ZenithOptimedia, a worldwide increase of 3.8 % (nominal)
is expected for the year 2019. 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 43.1 % in 2019.
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
commissions) in Germany for 2019 to increase by 1.7 %
(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 3.8 % (+ 1.6 % in real terms)
according to the DIW.
Growth in the advertising market is driven by digital
(+7.0 %), TV (+2.0 %), outdoor (+2.6 %) and radio
(+0.9 %). ZenithOptimedia is predicting a drop in net
advertising revenues for newspapers (-4.2 %) and
magazines (– 5.5 %).
The forecast data continue to reflect the structural
redistribution of advertising expenditure in favour of
digital offers. In 2019, the share of online and mobile in
Germany should rise to 37.8 %. This puts Germany
below the global average (43.1 %). ZenithOptimedia says
publishers are unlikely to benefit from the additional
online ad revenue. The reason for this is the dominance
of the big tech companies from the US.
The digital advertising market is about to recover from
the impact of the new EU General Data Protection
Regulation (GDPR). It remains to be seen to what extent
data protection discussions will have an impact on digital
advertising investment in view of the announced ePrivacy
regulation.
Global trends also set the tone for Germany. The growth
of the advertising market is technology-driven, especially
in the growth fields of mobile, online moving images
(video), social media, digital audio advertising and
programmatic. Thanks to the continued proliferation
of mobile devices, technical advances in advertising
formats, increased variety of ad formats, and technical
innovations in driving multi-device campaigns, a
significant increase in digital advertising investment is
expected (see page 55).
The progressive automation of the 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 target
consumers more accurately – and thus more effectively.
61
Annual Report 2018
Axel Springer SE
Combined Management Report
Forecast report
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
are the key to personalized customer approach.
Anticipated Advertising Activity 2018 (selection)
Change in net ad revenues compared to prior year
(nominal)
Germany
Central and Eastern Europe
USA
United Kingdom
Online
7.0 %
11.6 %
11.5 %
7.0 %
Source: ZenithOptimedia, Advertising Expenditure Forecast, December 2018.
The digital foreign markets in which Axel Springer
engages with its own corporate activities will develop
differently according to the prognosis of ZenithOptimedia:
In the online market in Western Europe, net advertising
volume will increase by 8.6 % to USD 49.1 billion in 2019
– based on the assumption of constant exchange rates.
While in the UK (+7.0 %) digital advertising spending will
grow with the same strength as in Germany, France
(+12.5 %) and the US (+11.5 %) are expected to achieve
higher growth.
62
Annual Report 2018
Axel Springer SE
Combined Management Report
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. Where possible and appropriate, we
reinvest income from existing business in growth areas
in order to leverage medium- and long-term potential.
Comparison of forecast with actual business performance
Group forecast / adjustments during the year
reported
2018 organic
Revenues
Low to mid single-digit percentage increase
4.1 % Low to mid single-digit percentage increase
EBITDA, adjusted
Low double-digit percentage increase
14.3 % Mid to high single-digit percentage increase
EBIT, adjusted
Low single-digit percentage increase
4.7 % Low to mid single-digit percentage increase
Earnings per share,
adjusted
Low to mid single-digit percentage increase /
mid single-digit percentage increase
Mid to high single-digit percentage increase /
high single-digit percentage increase
5.1 %
2018
3.8 %
8.5 %
6.4 %
8.3 %
The forecast published in March 2018 for Group key
figures and raised in November 2018 for adjusted
earnings per share was met and partly exceeded.
The forecast for revenue and adjusted EBITDA and the
forecast for adjusted earnings per share raised during
the year were met. The forecast for the development of
adjusted EBIT was exceeded, for the organic develop-
ment of adjusted EBIT the upper end of the forecast
range was reached.
63
Annual Report 2018
Axel Springer SE
Combined Management Report
Forecast report
Segment forecast / adjustments during the year
reported
2018 organic
Revenues
Classifieds Media
Double-digit percentage
increase
News Media
Low to mid single-digit percentage
decrease
High single-digit to low double-digit
percentage increase / low double-digit
percentage increase
Low single-digit percentage decrease
20.3 %
– 0.9 %
Marketing Media
High single-digit percentage decrease / low
double-digit percentage decrease
– 12.4 %
High single-digit percentage increase /
roughly on prior year level
2018
11.4 %
– 0.3 %
2.1 %
Services/Holding
Mid single-digit percentage decrease
– 11.5 % Mid single-digit percentage decrease
– 11.3 %
EBITDA, adjusted
Classifieds Media
Double-digit percentage increase
News Media
Mid single-digit percentage increase
17.9 %
High single-digit to low double-digigt
percentage increase
Low to mid single-digit percentage
decrease
4.3 %
Marketing Media
High single-digit percentage increase / mid
to high single-digit percentage decrease
– 6.3 %
Low double-digit percentage increase / low
to mid single-digit percentage decrease
Services/Holding
Low to mid single-digit percentage increase
(improvement)
17.9 %
Low to mid single-digit percentage increase
(improvement)
11.4 %
– 3.5 %
– 2.5 %
19.3 %
EBIT, adjusted
Classifieds Media
below the development of adjusted EBITDA
12.7 %
News Media
below the development of adjusted EBITDA
– 13.6 %
Marketing Media
below the development of adjusted EBITDA
– 14.7 %
Services/Holding
below the development of adjusted EBITDA
12.2 %
Business development in the segments largely met
and in some cases exceeded expectations for revenues,
adjusted EBITDA and adjusted EBIT.
In the Classifieds Media segment, the guidance for
revenues, adjusted EBITDA and adjusted EBIT published
in March 2018 as well as the increased organic revenue
guidance published in August 2018 were met.
In the News Media segment, the forecast for the
revenue development was slightly exceeded. The
forecast for adjusted EBITDA and adjusted EBIT
were met.
In the Marketing Media segment, the revenue
development confirmed the forecast adjusted in
November 2018. Organic development was slightly
better than expected. The development of adjusted
EBITDA and adjusted EBIT met the forecast.
In the Services/Holding segment, revenues were below
the forecast, while adjusted EBITDA exceeded the
forecast. The development of adjusted EBIT confirmed
the forecast.
64
Annual Report 2018
Axel Springer SE
Combined Management Report
Forecast report
Anticipated business developments and financial
performance of the Group
The forecast for the 2019 financial year takes into
account the consolidation effects from the transactions
in the 2018 financial year, mainly the sales of aufeminin
at the end of April 2018 and the print portfolio in Slovakia
at the end of July 2018, as well as the first-time consoli-
dation of Logic-Immo from February 2018 and Univer-
sum from May 2018. The earnings effects from the ac-
quisition of shares in Purplebricks in April 2018 and
Homeday in December 2018 are also taken into account.
In order to better assess operating performance, we also
provide an expectation for the organic development of
our key performance indicators, which results from the
adjustment for consolidation and currency effects.
For the financial year 2019, we expect Group revenues
to increase in the low single-digit percentage range.
Organically, we assume growth in the low to mid single-
digit percentage range.
We expect the adjusted EBITDA to remain on the prior-
year level. Organic growth of adjusted EBITDA should be
in the low to mid single-digit percentage range.
For adjusted EBIT, we expect a decline in the low single-
digit percentage range due to higher depreciation, amorti-
zation and impairments, organically, we expect growth in
the low single-digit percentage range.
We expect the development of the adjusted earnings
per share between a stable development and a decline
in the low single-digit percentage range. We expect an
organic increase in the single-digit percentage range.
Anticipated business developments and financial
performance of the segments
The revenues of the Classifieds Media segment are
expected to grow in the high single-digit to low double-
digit percentage range. Consolidation effects include the
first-time consolidation of Logic-Immo as of February
2018 and Universum as of May 2018 and deconsolida-
tion effects of casamundo within the @Leisure Group as
of October 2018. Organic growth is also expected to be
in the high single-digit to low double-digit percentage
range. Adjusted EBITDA is expected to increase in
the low to mid single-digit percentage range due to
increased investments in future growth. The organic
increase should be in the mid single-digit percentage
range. In the case of adjusted EBIT, we expect earnings
to be on the prior-year level due to higher depreciation,
amortization and impairments, and organic growth to be
in the low to mid single-digit percentage range.
In the News Media segment, we expect revenues to
decline in the low to mid single-digit percentage range in
the 2019 financial year. This reflects deconsolidation
effects from the sale of the print portfolio in Slovakia as of
the end of July 2018. Organically, we expect revenues to
decline in the low single-digit percentage range. We
expect adjusted EBITDA to be on the prior-year level. We
also expect a stable organic development. For adjusted
EBIT, we anticipate a decline in the low single-digit
percentage range; organically, we expect the adjusted
EBIT to be on the prior-year level.
65
Annual Report 2018
Axel Springer SE
Combined Management Report
Forecast report
In the Marketing Media segment, we expect a decline
in revenues in the low single-digit percentage range.
This includes deconsolidation effects from the sale of
aufeminin at the end of April 2018. Organic growth is
expected to be in the high single-digit percentage range.
For adjusted EBITDA, we expect an increase in the low
to mid single-digit percentage range, and organic growth
in the high single-digit to low double-digit percentage
range. For adjusted EBIT, we expect a decline in the low
single-digit percentage range due to rising depreciation,
amortization and impairments, and organic growth in the
high single-digit percentage range.
For the Services/Holding segment, we anticipate a
market-related decline in revenues in the low double-digit
percentage range. We also expect organic development
to decline at a low double-digit percentage rate. We
expect adjusted EBITDA to decline (deterioration) in the
double-digit percentage range, organically also a decline
in the double-digit percentage range. In the case of
adjusted EBIT, we expect a decline (deterioration) in the
high single-digit to low double-digit percentage range
due to lower depreciation, amortization and impairments.
Organically, we expect the same development.
Anticipated liquidity and financial position
With regard to liquidity and financial position, invest-
ments in property, plant and equipment and intangible
assets will continue to 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. The sale is expected to be completed at the end of
2019 or beginning of 2020. Excluding the investments
for the new building in Berlin, investments are also ex-
pected to be significantly above the prior-year figure.
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
payout, while also allowing for the financing of growth.
Anticipated development of the workforce
The annual average number of employees in the Group
for 2019 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 revenues, adjusted EBITDA,
adjusted EBIT and adjusted earnings per share
include the expected effects of known acquisitions and
divestments (see above) as well as planned restructuring
expenses at the time of the publication of the Annual
Report. The additional information on organic
development is adjusted for consolidation and
currency effects.
66
Annual Report 2018
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
As a listed company whose shares are listed on an
organized market pursuant to Section 2 (7) of the
German Securities Trading Act, Axel Springer SE is
required to include in the management report and group
management report the information pursuant to Sections
289a para. 1, 315a para. 1 of the German Commercial
Code (HGB). In addition to the information required by
law, the following section also contains the explanatory
report of the Executive Board in accordance with section
176 (1) sentence 1 of the German Stock Corporation Act
in connection with Art. 9 para. 1 lit. c) ii) SE-VO.
Composition of subscribed capital
The subscribed capital of the company as of December
31, 2018, amounts to € 107,895,311.00 and is divided
into 107,895,311 registered 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 70), 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 47,432,202 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. The previous level of pool-linked shares in
the amount of 52,826,967 was reduced to the
abovementioned number of shares through the
transfer of shares of Axel Springer SE in Novem-
ber 2018 on the part of Axel Springer Gesellschaft für
Publizistik GmbH & Co to the retired ex-shareholders
of that company Axel Sven Springer and Ariane
Melanie Springer.
67
Annual Report 2018
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
In addition, Axel Springer shares were pledged to a
bank by Brilliant 310. GmbH and Dr. Mathias Döpfner;
the same applies to the shares of Axel Springer SE
held by Dr. Giuseppe Vita.
In addition, there are debt transfer restrictions in
connection with the share participation programs for
employees of Axel Springer carried out in the financial
years 2015, 2017, 2018 and 2019; the minimum holding
period for shares acquired in previous years' share
participation programs has already expired. The shares
acquired under the 2015 Share Participation Program
are generally subject to a minimum holding period of four
years (i.e. until May 31, 2019), the shares acquired under
the 2017, 2018 and 2019 Share Participation Programs,
have a minimum holding period of two years from the
end of the participation period (i.e. until December
31, 2019, 2020 and 2021, respectively). During the
minimum holding period, the shares for the employees
are held in a blocked custody account with Deutsche
Bank AG or a collective custody account of BNP Paribas
in the name of Computershare Investor Services PLC.
Under the virtual Executive Board stock option plan 2018,
the eligible member of the Executive Board is required to
make a personal investment in shares of Axel Spring-
er 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 the
virtual Executive Board stock option plan 2018 see
page 85).
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 further guide-
lines for trading in shares of Axel Springer SE, which
should be followed by board members and executives.
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 interest
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. Securities Trading Act
(Wertpapierhandelsgesetz, "WpHG").
Shareholdings that represent more than
10 % of voting rights
At the end of the 2018 financial year, the following direct
and indirect shareholdings in the capital of Axel Spring-
er 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, 2018
in accordance with Sections 33, 34 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).
68
Annual Report 2018
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
Board are appointed for a maximum period of five years;
reappointments are allowed. If several persons are
appointed as members of the Executive Board, the
Supervisory Board may appoint a member as Chairman
of the Executive 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 (Section 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
majority, 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
Association 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
another 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 re-
quires a majority of at least four-fifths of the votes cast
(see Section 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).
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 2018 of Axel Springer SE, see
go.axelspringer.com/financialpublications, as well as in
the section "Voting Rights Announcements" on the
Company's website at go.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 the
year 2009 and the share participation programs for the
years 2011 to 2015, as well as 2017, 2018 and 2019,
Deutsche Bank AG was initially entered in the share
register as the third-party holder of the shares transferred
to employees, and since the 2019 financial year Com-
putershare Inverstor Services PLC is entered for the
employees from abroad. However, each employee is free
to register himself as a shareholder in the share register,
if applicable after expiry of the minimum holding period.
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
Section 46 (1) SE-VO, the members of the Executive
69
Annual Report 2018
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
Authority of the Executive Board to issue
or buy shares back
The company held no treasury shares at the end of
the 2018 financial year.
The Executive Board is authorized, pursuant to Section 5
(4) of the Articles of Association and based on the reso-
lution of the annual shareholders’ meeting of April 18,
2018, (Agenda Item 14) to increase the capital stock by
April 17, 2023, subject to the approval of the Supervisory
Board, by issuing new registered no-par value shares
against contributions in cash and/or in kind (including
mixed contributions in kind) on one or more occasions
by a total of up to € 10,500,000.00 (authorized capital).
In principle, the shareholders must be granted a sub-
scription right. However, the Executive Board is author-
ized, with the approval of the Supervisory Board, to
exclude the subscription right of the shareholders in
certain cases. The authorization granted by the Annual
General Meeting on April 14, 2015, to increase the share
capital and to exclude subscription rights in Section 5 (4)
of the Articles of Association of the company was can-
celled with the new authorized capital taking effect.
By resolution of the Annual General Meeting on April 18,
2018 (Agenda Item 7), the Executive Board was author-
ized, with the approval of the Supervisory Board, until
April 17, 2023 to acquire treasury shares of up to 10 %
of the share capital existing at the time of the resolution,
by revoking the corresponding previous authorization
given by the annual shareholders’ meeting on April 16,
2014. Acquisition must only take place on the stock
exchange or via a public offer directed to all shareholders
or a public invitation to submit an offer to buy. Along with
the shares held by the company or attributable to the
company in accordance with Section 5 SE-VO in con-
nection with Section 71a ff. of German stock Corporation
Act, the shares acquired on the basis of the above au-
thorization may at no time exceed 10 % of the share
capital of the company. Details concerning this authori-
zation are provided in the invitation to the annual share-
holders’ meeting of April 18, 2018, which is available on
the website of Axel Springer SE (see Agenda Item 7 and
the Executive Board’s report on this subject).
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 85 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. Currently, the promissory
notes have a total volume of € 704,500,000.00. 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.
A change of control within the meaning of the promissory
note loans occurs - subject to individual, more precisely
defined exceptions that are linked to the currently con-
trolling shareholders of Axel Springer SE - if one person
alone or several persons acting jointly holds more than
50 % of the share capital of Axel Springer SE or the
voting rights.
With regard to the syndicated loans renegotiated in May
2018 and totaling € 1,500,000,000.00, 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.
70
Annual Report 2018
Axel Springer SE
Combined Management Report
Disclosure and explanatory report of the Executive
Board pursuant to takeover law
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
of 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 their base salary for the most recently
agreed remaining contractual term or a severance pay-
ment in the amount of the total remuneration for the
duration of the most recently agreed contractual term
or the original remaining term (some of the entitled
Executive Board members are entitled to payment of at
least one year's base salary); 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 employment due to a change
of control. Corresponding compensation agreements
with other employees of the company do not exist.
71
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
Corporate Governance Report
In this chapter, the Executive Board and the Supervisory
Board report on corporate governance at Axel Springer,
in conformity with the recommendation set out in Section
3.10 of the German Corporate Governance Code
("GCGC", "Code"). This section also contains the
management declaration pursuant to Section 289f
of the German Commercial Code ("HGB") and the
Compensation 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
Corporate Governance Officer is the Executive Board
member in charge of Finance and Personnel. The
implementation of and adherence to the recommenda-
tions 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 6, 2018, the Executive Board and
Supervisory Board published the following Declaration
of Conformity:
"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
German 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 announcements 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
compensation of the Executive board and that of
senior management and the staff overall, particu-
larly in terms of its development over time (Item
4.2.2 sentence 6 DCGK)
The Supervisory Board pays close attention to the
appropriateness 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
sentence 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
compensation 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 “opting-out“ resolutions of the company’s
Annual General Meetings of April 16, 2014 and April 18,
2018. Accordingly, 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 and 2018 to (and including) 2022. As
long as a corresponding valid opting-out resolution of the
Annual General Meeting is at hand, the company will not
72
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
include the representations recommended according to
item 4.2.5 sentences 5 and 6 DCGK in the Compensa-
tion Report.
3. Setting of a general limitation to the length of
membership in the Supervisory Board, and taking it
into account when making recommendations to
the competent election bodies (item 5.4.1 sentenc-
es 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 in 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 company, in election recommenda-
tions to the Annual General 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
Annual 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
compensation (item 5.4.6 sentences 5 and 6 DCGK)
The compensation granted to the members of the
Supervisory Board, and the payments made by the
Company to the members of the Supervisory Board
for services provided personally, are not individually
disclosed in the Notes or the Management Report
(item 5.4.6 sentences 5 and 6 DCGK).
This information is not individually disclosed because the
Articles of Association of Axel Springer SE do not regu-
late the individual distribution of compensation between
the Supervisory Board members. Rather, it expressly
assigns the responsibility for this to the Supervisory
Board; the individualized disclosure of the Supervisory
Board compensation would undermine such assignment
of competence by the Annual General Meeting. Further-
more, the company’s Annual General Meetings decided
on 16 April 2014 and on 18 April 2018 that no details of
the individual compensation of the Executive Board will
be given in the company’s stand-alone and consolidated
annual financial statements to be prepared for financial
years 2014 to (and including) 2018 and 2018 to (and
including) 2022 so that, for the sake of consistency, the
individual compensation of the Supervisory Board mem-
bers is neither disclosed individually.
II. Retrospective section
Since issuance of the latest annual Declaration of
Conformity on 07 November 2017, the company has
followed the recommendations of the German Corporate
Governance Code (DCGK) as amended on 07 February
2017 and published by the German Federal Ministry of
Justice in the official announcements section of the
Federal Gazette of 24 April 2017, with the exception of the
deviations justified and stated above under I. 1 through I. 5.
Berlin, 6. November 2018
Axel Springer SE
The Supervisory Board
The Executive Board”
The Declaration of Conformity from November 6, 2018
can, just like previous versions, also be seen via the link
go.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
companies in a democracy in a transparent manner. The
73
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
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.
Axel Springer maintains a Compliance division as well as
Corporate Auditing & Risk Management department.
These support the corporate departments and subsidiar-
ies in complying with the rules that apply to them and in
dealing responsibly with risks, among other things by
means of approaches and guidelines for a risk manage-
ment, internal control, and compliance management
system.
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
components are the Compliance Committee and the
Chief Compliance Officer. Compliance officers in individ-
ual subsidiaries are appointed on a decentralized basis.
Compliance, Corporate Audit & Risk Management and
the Legal Department work closely together to fulfil their
tasks in a cross-functional approach.
As part of the compliance organization, Axel Springer has
a binding Code of Conduct that can be downloaded from
go.axelspringer.com/coc_en. This is to be understood 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, integrat-
ed the existing Corporate Principles and Values, Leader-
ship Principles, Journalistic Guidelines, International
Social Policy, and Environmental Policy.
The corporate values of Axel Springer guide every
employee 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
framework that creates transparency regarding the
requirements and expectations of management roles.
In addition, Axel Springer has established appropriate
guidelines to ensure journalistic independence. These
guidelines specify and expand the professional ethics of
the press, as laid down by the German Press Council in
cooperation with the press associations in the journalistic
principles (Press Code) and to which Axel Springer is
committed. The chief editors are responsible for compli-
ance with the guidelines and their implementation in day-
to-day business.
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
74
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
also expected of our business partners. In addition, the
company has established an environmental guideline
comprising four points, which is a practical orientation for
the various measures at Axel Springer that are relevant to
environmental protection and is also part of the Code of
Conduct.
In addition to the Code of Conduct as a superordinate
code, internal guidelines regulate individual business and
procedural practices, such as how to fight corruption or
data protection. In order to ensure decentralized compli-
ance with legal requirements and governance minimum
standards, so-called corporate principles are introduced
for selected, primarily sensitive regulatory areas such as
tax compliance and anti-corruption. These principles
contain minimum requirements that must be individually
implemented and adhered to in the respective subsidiary.
The respective managers are responsible for this.
Issues such as Code of Conduct or Privacy are taught
through comprehensive communication and training in
both face-to-face and online training. Other key elements
of compliance management include the analysis of com-
pliance-risks and the advisory services for the operation-
al areas. In order to further strengthen good corporate
governance and effective compliance management,
there are various reporting channels for compliance-
information, including an electronic whistleblower system.
This allows both employees and external persons to
provide confidential and, if desired, anonymous infor-
mation about violations and malfunctions. The electronic
whistleblower system can be accessed via
go.axelspringer.com/whistleblower.
With regard to the entry into force of the European
General Data Protection Regulation (GDPR), effective
as of May 2018, we have taken numerous measures
group-wide. These include the definition of responsibili-
ties concerning data protection, carrying out training
courses and the introduction of a new directive.
Finally, every two years, the company submits a sustain-
ability report that complies with the criteria set out in the
"Global Reporting Initiative" (GRI).
Regarding material non-financial aspects with regard to
the 2017 financial year, in order to fulfill the requirements
of the CSR Directive Implementation Act in accordance
with Sections 315b, 315c with regard to 289c to 289e of
the German Commercial Code (HGB), a summarized
separate non-financial statement and group report
("NFB") (see page 42) was published.
Following a pilot phase in 2017, Axel Springer SE
launched a "Global Employee Share Plan" for Axel
Springer SE and certain majority stakes in Germany,
France, the United Kingdom and Belgium during the
reporting year. The regular participation period is twelve
months; eligible employees determine an amount of their
base salary, with which the corresponding number of
shares is acquired each month. At the end of the year,
employees receive a share grant of 30 % of the convert-
ed base salary. The subsequent holding period is two
years.
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
company under its own responsibility. The Supervisory
Board appoints the members of the Executive Board, and
monitors and advises the latter in the conduct of the busi-
ness. The two boards work closely together in an atmos-
phere of trust and confidence to sustainably enhance the
company’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
75
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
affairs in compliance with the relevant laws, the Articles
of Association, and its rules of procedure.
in spite of being opposed by the Chairman and Chief
Executive Officer is deemed to be invalid, also subject to
the limits of the applicable laws.
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
include, above all, the creation or discontinuation of
business 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
Executive 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 78.
As a general rule, the full Executive Board adopts
resolutions by a simple majority of the votes cast; in the
case of resolutions adopted by a simple majority, the
Chairman casts the deciding vote. A resolution adopted
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.
The Executive Board of the company initially consisted of
four members in the reporting year and from March 1,
2018, of five members:
Dr. Mathias Döpfner, Chairman and Chief Executive
Officer
Jan Bayer, President News Media, from January 1,
2019 President News Media International
Dr. Stephanie Caspar (from March 1, 2018), President
Technology and Data, since January 1, 2019, Presi-
dent News Media National & Technology
Dr. Julian Deutz, Chief Financial Officer
Dr. Andreas Wiele, President Classifieds Media (until
March 1, 2018 President Classifieds and Marketing
Media)
76
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
Procedures of the Supervisory Board
As per the company’s Articles of Association, the
Supervisory Board of Axel Springer SE is composed of
nine members, who are elected by the AGM. 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 Executive 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 corre-
spondence, telephone 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
Supervisory 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 Spring-
er 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 (see
page 88 et seqq.) for additional information on the specific
activities of the Supervisory Board in financial year 2018.
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:
Election and duties of the Chairman and Vice
Chairman of the Supervisory Board
Calling of meetings
Adoption of resolutions at meetings or by voting by
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 current members of the Supervisory Board are:
Dr. Giuseppe Vita, Chairman
Dr. h. c. Friede Springer, Vice Chairwoman
Oliver Heine
Dr. Alexander Karp
Iris Knobloch
Lothar Lanz
Dr. Nicola Leibinger-Kammüller
Prof. Dr. Wolfgang Reitzle
Martin Varsavsky
William E. Ford and Rudolf Knepper resigned from
their positions at the Annual General Meeting on
April 18, 2018. Iris Knobloch and Dr. Alexander Karp
have been elected by the Annual General Meeting as
their successors.
As scheduled, the mandate of the current acting
members of the Supervisory Board of Axel Springer SE
ends at the end of the next ordinary shareholders’ meet-
ing scheduled for April 17, 2019. The current Chairman
of the Supervisory Board Giuseppe Vita and Lothar Lanz
will be replaced in the interest of further rejuvenation of
the Supervisory Board and they are scheduled to leave
the Supervisory Board by April 17, 2019. Based on the
recommendation of the Nominating Committee of the
Supervisory Board of Axel Springer SE, Ralph Büchi,
COO and Deputy CEO of the Swiss Ringier Group, is to
take over as new Chairman of the Supervisory Board
from Dr. Giuseppe Vita, and Ulrich Plett, longtime partner
at Arthur Andersen and Ernst & Young, since 2015 self-
employed auditor and consultant at UPW7 GmbH
Wirtschaftsprüfungsgesellschaft, is to newly replace
Lothar Lanz. The remaining currently acting members
are to retake their positions on the Supervisory Board on
the basis of the recommendation of the Nomination
77
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
Committee and have already signaled their willingness to
do so.
The requirements for expertise in the areas of prepara-
tion and audit of the financial statements (financial expert)
pursuant to Art. 9 (1) lit. c) ii) SE Regulation in connection
with Section 100 para. 5 1st Var. German Stock Corpo-
ration Act (financial expert), among others, are meet by
the Chairman of the Supervisory Board Dr. Giuseppe
Vita and Lothar Lanz, who chairs the Audit Committee;
Ulrich Plett who is to be proposed to the annual share-
holders’ meeting as successor to Lothar Lanz, also fulfills
these requirements. In addition, the members of the
Supervisory Board are, in accordance with Section 100
para. 5.2 var. of the Var. AktG know in its entirety the
sector in which the company operates; this would apply
unchanged to the intended new appointment of the
Supervisory Board.
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 88 et seq.) 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
Committee 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) 1st
var. AktG (financial expert), and the requirements of the
recommendations in Section 5.3.2 Sentences 4 and 5
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
39 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
targets for the proportion of women acting on the
Supervisory Board, Executive Board and the two
management levels beneath the Executive Board, and
specify 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
Supervisory Board of Axel Springer SE under Section 96
para 2 of the German Stock Corporation Act for the
replacement of vacating Supervisory Board mandates,
pursuant to Section 111 para. 5 of the German Stock
Corporation Act the Supervisory Board itself must set a
target size.
78
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
proportion of women in both committees was until the
first deadline on June 30, 2017 maintained, thereby
achieving the set targets.
Target sizes in the first two management levels
Effective July 1, 2017, Axel Springer SE decided to
increase the target figures for the first two management
levels beneath the Executive Board for the women's
share to 30.0 % each with a transposition period of 3
years, i.e. until June 30, 2020.
Previously, in May 2015, the Executive Board of the
company had a target of 25.0 % for each of the first and
second management levels of Axel Springer SE beneath
the Management Board, and a deadline for implementa-
tion of no later than June 30, 2017; at the time the
targets were set, the proportion of women in the first
management 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 25.0 % and in the
second management level 23.9 %. The set target was
thus achieved on the first management level of Axel
Springer SE; in the second management level of Axel
SpringerSE, a substantial increase of 4.4 percentage
points was recorded within the short term, despite vari-
ous measures aimed at increasing the proportion of
women in the long term and sustainably, the goal was
missed by just 1.1 percentage points. The main reason
for this is that in spite of all the measures taken and the
objectives set, the specific occupation of open posts will
ultimately focus on the suitability and qualifications of the
candidates and will always select the most suitable
candidate for the specific position during the relevant
period. On the other hand, the fluctuation on the first two
management levels is very low and the increase is slow
in this respect, but sustainable.
Target number of members in the Executive Board and
Supervisory Board
By resolution of the Supervisory Board as of April 2017,
the target values of 22.2 % (Supervisory Board) and
0.0 % (Executive Board) already set in 2015 and thus the
status quo were confirmed at the time of the resolution,
with a target achievement period until the end of the day
of the Annual General Meeting in the financial year 2019,
but no later than April 30, 2019.
In accordance with the objectives for the composition of
the Supervisory Board, according to which a female
proportion of 22.2 % is considered appropriate in any
case, and due to the fact that no regular Supervisory
Board elections are due within the implementation period
until 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 %. Similarly, no changes in the composition of the
Executive Board were planned at the time the target size
was set within the set deadline, so that the status quo,
and therefore 0.0 %, was also set here.
Of course, these targets do not preclude a further increase
in the proportion of women in the Executive Board and
Supervisory Board of Axel Springer SE, even within the
implementation deadlines; thus, the Supervisory Board
has on March 1, 2018 appointed Dr. Stephanie Caspar as
member of the Executive Board, so that since then the
proportion of women in the Executive Board of the com-
pany at the reporting date amounts 20.0 % and thus is
already above the objective. In addition, Iris Knobloch was
elected a member of the company's Supervisory Board by
the Annual General Meeting held on April 18, 2018, mean-
ing that the proportion of women in the Supervisory Board
was exceeded at the reporting date at 33.3 %.
Previously, in September 2015, the Supervisory Board of
Axel Springer SE had already set targets for the pro-
portion of women in the Supervisory Board and in the
Executive Board of Axel Springer SE in accordance with
its legal obligations, each with a deadline of June 30,
2017. With the specified target figures of 22.2 %
(Supervisory Board) and 0.0 % (Executive Board), the
status was recorded at the time of the resolution. The
79
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
Description of the Diversity Concept for the Execu-
tive Board and Supervisory Board.
For several years now, Axel Springer SE has been
pursuing diversity concepts with a view to filling positions
in 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, this has
set the goals listed below. The objectives are to observe
the diversity of the members of the Supervisory Board,
especially with regard to their knowledge training, their
professional background and previous activities, the
origin, gender and age of the Supervisory Board mem-
bers. There 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.
The Supervisory Board also pursues a concept of diver-
sity in terms of the composition of the Executive Board,
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
to the age of the Executive Board members. These prin-
ciples of diversity are kept in mind in long-term succes-
sion planning and are taken into account when new
appointments 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. The Supervisory Board as-
sumes a proportion of at least two womean out of the
total of nine seats (22.2 %) as appropriate. According-
ly, the legally required target for the proportion of
women on the Supervisory Board of Axel Springer SE
was set at 22.2 % (see page 78).
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.
80
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
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 regulato-
ry limit fails to take into account individual factors that may
justify an extended length of membership for individual
Supervisory Board members (for more information regard-
ing this see the deviation declared in the Declaration of
Conformity of November 6, 2018, see page 72).
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
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 the aforementioned goals. In particular, the num-
ber of independent members exceeds the above-
mentioned objective. From the point of view of the Su-
pervisory Board (or with regard to the departed mem-
bers), it must be considered as independent: Dr.
Giuseppe Vita, William E. Ford, Dr. Alexander Karp, Iris
Knobloch, Rudolf Knepper, Lothar Lanz, Dr. Nicola
Leibinger-Kammüller, Prof. Dr. Wolfgang Reitzle and
Martin Varsavsky. With regard to its proposals on the
election of new Supervisory Board members, the Super-
visory Board shall make sure that the respective candi-
dates 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 of diversity and
should strive in particular to give appropriate consid-
eration to women. In this context, the Supervisory
Board also complied with its statutory obligation to
set a target for the proportion of women in the Execu-
tive Board and resolved to set a target of 0 % with a
deadline of implementation before the Annual General
Meeting in the 2019 financial year, but no later than
April 30, 2019; see page 79.
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 39 of the Annual Report, and to
the stipulated targets in the two top management levels
of the company beneath the Executive Board on page
78 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
81
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
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
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
go.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.
For any conflicts of interest of interest which arose during
the financial year, please see the Report of the Supervi-
sory Board on page 88 et seqq.
Memberships on other supervisory bodies
A summary of the seats held by the Executive Board and
Supervisory Boards members of Axel Springer SE in
other statutory supervisory boards in Germany and/or
comparable domestic and foreign supervisory bodies is
presented on page 187.
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
statements, in addition, a combined separate non-
financial report and group report has been published
annually since the reporting year 2017 (see page 42).
The company also regularly uses the transmission paths
on the Internet. Axel Springer also takes part in numer-
ous conferences at important international stock ex-
changes or carries out corresponding road shows; Fur-
ther 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
communications. In addition, it informs the interested
public about press releases, the company's websites or
events such as a Capital Markets Day.
82
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
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 Sec-
tion 40 of the German Securities Trading Act (Wertpa-
pierhandelsgesetz, WpHG), and on the purchase and
sale of shares by persons who exercise management
duties at Axel Springer (directors’ dealings), in accord-
ance with Article 19 of the Market Abuse Regulation.
Preparation and audit of the financial statements
On April 18, 2018, the Annual Shareholders’ Meeting re-
elected Ernst & Young GmbH Wirtschaftsprüfungsgesell-
schaft as the auditors of the consolidated financial
statements and the individual financial statements of Axel
Springer SE for the financial year 2018, upon proposal of
the Supervisory Board. The auditor responsible for the
audit has been Nathalie Mielke since the 2015 financial
year.
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. All com-
ponents of compensation are appropriate, both individu-
ally 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 Sec-
tion 87 of the German Stock Corporation Act (“AktG”)
and Section 4.2.2 sentences 4 and 5 of the GCGC, such
as information about the tasks of an individual Executive
Board member, the personal performance and the eco-
nomic 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.
83
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
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.
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. Group objectives in the 2018
financial year were the adjusted Group EBITDA and
adjusted Group EBIT. The Group objective in the prior
year was the adjusted Group EBITDA. Individual objec-
tives for measuring performance of individuals and Group
objectives are decided 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 established for an assessment period of three
years. Achievement of objectives is initially established by
the Supervisory Board members and chairman with the
relevant Executive Board member and then reviewed
and finalized 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.
The compensation entitlement requires market capitali-
zation 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 pay-
ment amounting to a total of 3.63 % of the increase in
market capitalization. The compensation entitlement will
increase only up to a growth in market capitalization by
maximally 60 %. In the reporting year, the LTIP was
adjusted to the extent that the payment entitlement was
initially reduced from 4.0 % to 3.63 %. In the amount of
the difference of 0.37 %, selected executives were grant-
ed an LTIP substantially under the same terms (see
information in attachment to the notes to the consolidat-
ed financial statements, Section (11)).
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. On the basis of the adjustment made
84
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
retroactively to the grant date in the reporting year, the
value amounts to € 29.1 million.
this average price compared to the base value exceeds
the development of the DAX.
Until the LTIP was introduced in May 2016, 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. The
Executive Board Programs 2014 I and 2014 II were fully
exercised during the year under review and thus com-
pleted. The non-LTIP Executive Board member was
granted a virtual stock option plan in the reporting year.
The main parameters of the plan still in operation in the
reporting year are shown below:
Executive Board Program
Grant date
Term in years
Vesting period in years
2014 I
2014 II
2018
01/01/2014 09/01/2014 10/01/2018
6
4
6
4
6
4
Stock options granted
205,313
675,000
225,000
Underlying (€)
Maximum payment (€)
Value at grant date (€)
Total value at grant date
(€ millions)
44.06
88.12
6.69
44.56
62.06
89.12
124.12
6.26
4.35
1.4
4.2
1.0
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
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 (11).
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
85
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
amount of the aforementioned payments is typically
limited. 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.
In the reporting year 2018, the total compensation of
the Executive Board was € 21.4 million plus the long-
term share-based compensation component for the
2018 stock option plan in the amount of € 1.0 million (PY:
€ 19.7 million excl. recognition premium). The fixed
components totaled € 10.1 million (PY: € 9.5 million);
this figure also includes components for fringe benefits
(company car or company car allowance, the assump-
tion of premiums for insurance against the risk of invalidi-
ty and death and security expenses). The variable cash
component came to a total of € 11.3 million (PY: € 10.2
million). According to this, the fixed compensation includ-
ing fringe benefits in the financial year amounts to a
proportion of 45 % (PY: 48 %) of total compensation
including long-term stock-based compensation compo-
nents (in the prior year excl. recognition premium).
In the prior 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 provison to grant a special
payment to the Executive Board as well as to selected
executives essential to the success of the investment. In
2012, General Atlantic entered into a strategic partner-
ship with a 30 % stake in Axel Springer's online classi-
fieds business and in connection with the sale of its
stake in the online classifieds business, and in connec-
tion with the subsequent sale of this stake, acquired a
direct interest in Axel Springer SE The Supervisory Board
of Axel Springer SE has granted the Executive Board
members a recognition bonus totaling € 12.0 million
(gross) from the special payment in the previous year,
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, includ-
ing statutory fees, were borne by the special purpose
special payment made by General Atlantic. The Execu-
tive Board thus received € 31.7 million in the prior year,
including the recognition premium.
Guaranteed pension payments to members of the Exec-
utive Board resulted in a personnel expense of
€ 1.4 million in financial year 2018 (PY: € 1.6 million).
The cash value of the guaranteed pension payments in
pension provisions totaled € 20.0 million (December 31,
2017: € 17.5 million). Loans or advances were not
granted to members of the Executive Board in the 2018
financial year. In the case of guaranteed pension pay-
ments to Executive Board members, which became
effective with the relevant recommendation in Section
4.2.3 sentence 11 GCGC on June 10, 2013, the Super-
visory Board established the pension level desired in
compliance with the previously stated Code recommen-
dation and considered the annual and long-term
expense for the company derived from this.
Axel Springer SE does not disclose the total compen-
sation of individual Executive Board members by name,
given that Sections 314 Para. 3 and 286 Para. 5 HGB
expressly place the disclosure of Executive Board com-
pensation 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 General
Meeting of Axel Springer SE passed a resolution on
April 16, 2014, and again on April 18, 2018 with the
required majority.
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
distributed among its members, with appropriate con-
sideration given to their activities as chairman and in the
86
Annual Report 2018
Axel Springer SE
Combined Management Report
Corporate Governance Report
committees. 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
account for this purpose. The compensation is payable
after the close of the given financial year.
For the reporting year 2018, 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
German Corporate Governance Code, the compensation
paid to members of the Supervisory Board, as well as
the compensation paid by the company to them for
services rendered personally, because the Articles of
Association of Axel Springer SE do not regulate the
individual distribution of compensation 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 Annual
General Meeting. Also on April 16, 2014, as well as on
April 18, 2018 the company's Annual General Meeting
resolved that the disclosure of the individualized
compensation of the members of Executive Board in the
annual and consolidated financial statements of the
company, which are to be prepared for the financial
years 2014 to 2018 (inclusive), i.e. 2018 to 2022
(inclusive) should be avoided, so that the compensation
of the Supervisory Board members is not published in
individualized form.
87
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
Dr. Alexander Karp
CEO Palantir Technologies Inc.
Iris Knobloch
Président Warner Bros. France S.A.
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
Entreprenuer
88
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
In the financial year, 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.
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,
and matters pertaining to compliance. The Executive
Board informed the Supervisory 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 adviso-
ry 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 doc-
uments to an appropriate extent. It was not necessary
for the Supervisory Board to inspect company books
and documents in the financial year.
The Supervisory Board discussed with the Executive
Board all matters of crucial importance for the company,
especially the company’s business plan, business
structure, business strategy, major investment and
desinvestment plans, and personnel matters; the
strategic orientation 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 discussed specific transactions of importance to
the company’s future development. It adopted reso-
lutions on all transactions and measures for which the
participation 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.
Composition and meetings
of the Supervisory Board
As per the company’s Articles of Association, the
Supervisory Board is composed of nine members (see
page 77 of the Annual Report regarding the individual
members of the Supervisory Board). William E. Ford,
CEO of General Atlantic, and Rudolf Knepper have
stepped down from their offices as members of
the Supervisory Board at the end of the annual share-
holders’ meeting on April 18, 2018. Iris Knobloch and
Dr. Alexander Karp were elected to the Supervisory
Board of Axel Springer SE at the annual shareholders’
meeting for the remaining term of office of William E.
Ford and Rudolf Knepper, respectively.
The term of all current members of the Supervisory
Board will end with the expiry of the ordinary annual
shareholders' meeting in the 2019 financial year that is
decisive for the ratification of actions by the company's
Boards for the 2018 financial year, which will be held on
April 17, 2019. Dr. Giuseppe Vita and Lothar Lanz will
resign from the Supervisory Board at the end of the
upcoming 2019 annual shareholders’ meeting in the
interest of further rejuvenation of the Supervisory Board.
The remaining current members of the Supervisory
Board have declared their willingness to run again. The
Nominating Committee of the Supervisory Board of Axel
Springer SE has prepared a proposal for the re-election
of the Supervisory Board. Following this recommenda-
tion, Ralph Büchi, COO and Deputy CEO of the Swiss
Ringier Group, should join the Supervisory Board for the
89
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
office of Dr. Giuseppe Vita and Ulrich Plett, longtime
partner at Arthur Andersen and Ernst & Young, since
2015 self-employed auditor and consultant at UPW7
GmbH Wirtschaftsprüfungsgesellschaft, for Lothar Lanz.
Ralph Büchi is to be proposed as candidate for the
chairmanship of the Supervisory Board in the event of his
election to the Supervisory Board. The other members
currently in office are to join the Supervisory Board again
following the recommendation. The Supervisory Board
submitted the corresponding appointments to the annual
shareholders’ meeting on March 6, 2019 in accordance
with the recommendations of the Nominating Committee.
on business development in the expired financial
year 2017. The Supervisory Board was informed about
the auditing activities regarding the new Axel Springer
building and also focused on the development of WELT
TV. In addition, the Supervisory Board appointed with
effect from March 1, 2018 Dr. Stephanie Caspar as a
member of the Management Board of the company and
passed a resolution on the conclusion of the Executive
Board service contract. The Supervisory Board also
adopted a resolution deciding to extend the term of
office of a member of the Executive Board and the relat-
ed extension of the Executive Board service contract.
The Supervisory Board thanks Lothar Lanz for his work
on the Executive Board and Supervisory Board of Axel
Springer SE.
With his vast experience in the management of business
enterprises, his diverse contacts and his outstanding
financial expertise, he comprehensively and sustainably
supported and promoted our company.
In total, seven plenary sessions were held during the
reporting period, five in the first and two in the second
half of the calendar year, with extraordinary meetings
held on March 7 and March 26, 2018 respectively. In
addition, two resolutions were passed in circulation
proceedings.
William E. Ford did not participate in four of the five ple-
nary sessions held during the reporting year until his
resignation from the Supervisory Board. In addition, only
one Supervisory Board member did not attend two
meetings and two Supervisory Board members did not
attend one plenary meeting. The non-present, and ex-
cused Supervisory Board members quite predominantly
participated in resolutions by written vote.
Important matters addressed by the
Supervisory Board
In its meeting on March 7, 2018, 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 of December 31,
2017 (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
companies (dependency report), along with the respec-
tive audit reports. In accordance with the recommenda-
tions of the Audit Committee, it approved the annual
financial statements of Axel Springer SE, the consolidat-
ed financial statements and the combined management
and group management report and approved the
dependency report. It followed the Executive Board’s
profit utilization proposal for 2017 financial year and
agreed to the Corporate Governance Report issued
jointly with the Executive Board. In addition, the Super-
visory Board adopted a resolution regarding its report for
the 2017 financial year which was submitted at the
annual shareholders' meeting. It also approved the
achievement of objectives in 2017 (in addition to
multi-year targets 2015-2017) for the calculation of the
cash component of the variable compensation of the
Executive Board and set targets for 2018 (along with
multi-year targets for 2018-2020). Furthermore, the
Supervisory Board was informed about the current
status of investment projects of the company.
At the meeting on February 13, 2018, the Supervisory
Board dealt with the financial plan 2018 presented by the
Executive Board and approved it. The Executive Board
informed the Supervisory Board about prelimnary figures
In addition, during this and a subsequent extraordinary
meeting of the same day, the Supervisory Board dealt
with the agenda for the 2018 annual shareholders’ meet-
ing, including the issue of the creation of authorized
90
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
capital; among other things, the agenda included the
proposed resolutions for the annual shareholders’ meet-
ing, the proposals for the election of the auditors for the
2018 financial year and the election of Iris Knobloch and
Dr. Alexander Karp as members of the company's
Supervisory Board, the proposal for the renewal of the
authorization to acquire and use treasury shares and
renewing the exemption from the obligation to disclose
the remuneration of the Executive Board individually.
In the extraordinary session held on March 26, 2018,
the Supervisory Board dealt in particular with the sup-
plementary request filed in the meantime by Axel Spring-
er Gesellschaft für Publizistik GmbH & Co on the agenda
for the annual shareholders’ meeting on April 18, 2018
concerning the creation of authorized capital; the Super-
visory Board decided to support this supplementary
request.
At the meeting held on April 18, 2018, the Supervisory
Board focused on preparing for the upcoming annual
shareholders’ meeting. In addition, the Supervisory
Board addressed the combined separate non-financial
report for the 2017 financial year and approved it on the
basis of its final audit. The Supervisory Board was also
informed about the preliminary business developments in
the first quarter of 2018, as well as the status of the
negotiations for the sale of the interest in Do⁄an TV.
At the meeting held on September 5, 2018, the Execu-
tive Board reported on the planned refinancing of the
credit line. The Supervisory Board also passed a resolu-
tion on the share participation program planned for the
2019 financial year for employees of the company and of
certain affiliated companies. In addition, the Supervisory
Board was informed about the current status of the real
estate projects and the progress of the new Axel Spring-
er building in Berlin, as well as the preliminary business
development up to and including July 2018. Furthermore,
the Supervisory Board approved the assumption of
internal management positions by the Executive Board
members. The CEO of SeLoger and the Executive Board
informed about the company and the business activities
of SeLoger. The Supervisory Board also rendered a
resolution on granting a long-term share-based compen-
sation component in the form of virtual stock options
for Dr. Stephanie Caspar (see page 68). Finally, the
Supervisory Board decided on the adjustment of the
Long-Term Incentive Plan (LTIP) of the Executive Board
members in the office in 2016 with regard to the LTIP for
company executives.
At its meeting on November 6, 2018, the Supervisory
Board dealt with the corporate strategy of Axel Springer
with a focus on the development of the StepStone
Group. The Supervisory Board also passed resolution on
the regular Declaration of Conformity published on the
same day. It also carried out a self-assessment of its
efficiency and, on the basis of an in-depth discussion,
assessed its activity as still efficient. The Supervisory
Board was also informed about the preliminary business
developments in the third quarter of 2018. In addition,
the Supervisory Board decided to adjust the business
allocation plan for the Executive Board.
Conflicts of interest
In the reporting year, the following potential conflicts of
interest occurred on the Supervisory Board. These were
related to the granting of consent under the Section 114
of the German Stock Corporations Act (AktG) on the
conclusion of cooperation agreements, in each case with
a company affiliated to the relevant Supervisory Board
member. The affected Supervisory Board members
abstained from voting in the resolution procedure.
Furthermore, one member of the Supervisory Board did
not participate in the deliberations nor votes on the issue
of the creation of an authorized capital on March 7, 2018.
Finally, one member of the Supervisory Board did not
participate in the decision of the Presidium to grant
approval for the transfer of shares by Axel Springer
Gesellschaft für Publizistik GmbH & Co to Axel Sven
Springer and Ariane Melanie Springer.
Corporate governance
The Executive Board and Supervisory Board issued their
common Declaration of Conformity (pursuant to Sec-
tion 161 of the German Stock Corporations Act (AktG))
in November 2018. This explanation with information on
91
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
exceptions to the recommendations made in the GCGC
is made permanently available on the company's website.
It is also available on page 72 of the Annual Report.
The Executive Committee held nine meetings during the
reporting period, four of which were extraordinary. In
addition, two resolutions were passed in circulation
proceedings.
Additional information on corporate governance in the
Axel Springer Group may be found in the joint Corporate
Governance Report of the Executive Board and Supervi-
sory Board (see page 72).
Work of the committees of the
Supervisory Board
In the interest of performing its duties in an efficient
manner, 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
Committee is Lothar Lanz, in the Corporate Structure
Committee Martin Varsavsky, and in the other commit-
tees 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 decisions taken by the committees.
Notwithstanding the general responsibility of the full
Supervisory Board, the Executive Committee is
responsible for matters that are exclusively or pre-
dominantly related to publishing and journalism and for
matters of strategy, financial planning, capital expen-
ditures, and the financing of investment. It is in particular
responsible, instead of the Supervisory Board, for
approving significant management actions undertaken
by the Executive Board concerning investments or
operative business operations. Finally, the Executive
Committee prepares decisions regarding the organiza-
tion of the Executive Board and takes decisions, within
stipulated limits, regarding the approval to sell shares of
the company and subscription rights to such shares. The
members 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.
The Executive Committee agreed upon the following
transactions: In March 2018, the acquisition of Univer-
sum Communications Sweden AB by StepStone GmbH
and the acquisition of a non-controlling interest in
Purplebricks Inc., in April 2018 of the change and
exercise of put options in connection with the interest
in Do⁄an TV and in August 2018 the increase of the
interest in Homeday GmbH together with Purplebricks.
Among other things, the company deliberated and de-
cided on the renegotiation of the company's credit line
and the launch of a commercial paper program. Further
subject matters were decisions about granting approval
to conclude control and profit and loss transfer agree-
ments within the Group as well as to transfer shares of
the company in accordance with Section 5 (3) of the
company’s Articles of Association, in particular in con-
nection with the transfer of shares by Axel Springer Ge-
sellschaft für Publizistik GmbH & Co to Axel Sven
Springer and Ariane Melanie Springer.
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
represents the company in transactions with individual
Executive Board members. Finally, if the Personnel
92
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
Committee 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
resolutions to be adopted by the Supervisory Board
regarding such business matters. The members of the
Personnel Committee are Dr. Giuseppe Vita, acting as
the Chairman, and Dr. h. c. Friede Springer, acting as the
Vice Chairwoman.
The Personnel Committee met seven times during the
reporting period. Among other things, it prepared the
decision of the plenary on the appointment of the new
member of the Executive Board Dr. Stephanie Caspar
and the determination of her remuneration – including
the long-term share-based compensation component. It
also prepared the resolutions to be adopted by the full
board regarding extension of the term of a member of
the Executive Board alongside the associated extension
of the respective employment contract as a member of
the Executive Board. It also dealt with the individual
goals and corporate goals for the cash component of the
variable compensation of the Executive Board. It also
prepared the plenary decision on the adjustment of the
Long-Term Incentive Plan (LTIP) of the Executive Board
members in the office in 2016 with regard to the LTIP for
company executives. Finally, it dealt with changes to the
business allocation plan for the Executive Board.
The Audit Committee, notwithstanding the responsibil-
ity of the full Supervisory Board, is, among other things,
responsible for preparing the decisions to be made by
the Supervisory Board on the adoption of the separate
financial statements 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
management report for the company and the manage-
ment report for the Group, the review of the profit utiliza-
tion proposal, the discussion of the audit report with the
independent auditor, as well as the monitoring of the
accounting process and the audit, in this regard in par-
ticular the independence of the auditor, the monitoring of
the effectiveness of the internal control system, the risk
management system, the internal auditing system and
compliance. In addition, the Audit Committee monitors
the non-audit services provided by the auditor and ap-
proves them if necessary. It is also responsible for audit-
ing the interim financial statements and interim reports
and discussing the auditor's report on a possible audit
review of the interim financial statements. With regard to
the audit of the financial statements, the Audit Commit-
tee is responsible, among other things, for preparing the
proposal of the Supervisory Board to the annual share-
holders’ meeting on the election of the independent
auditor and the engagement of the independent 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 and Dr. h. c. Friede Springer
as additional members. Until he left the Supervisory
Board in April 2018, Rudolf Knepper was also a member
of the Audit Committee.
The Audit Committee held four meetings during the
course of the reporting year. It has been informed of the
scope, course, and result of the 2017 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. Along-
side this, in February 2018, 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 2018 financial year. To this effect, the Supervisory
Board was also in receipt of written confirmation from
Ernst & Young GmbH regarding their independence. In
addition, the Audit Committee dealt with the audit priori-
ties of the independent auditor for the 2018 financial year
and issued the auditor with the audit assignment for
the 2018 financial year. In addition, the Audit Committee
dealt with monitoring the effectiveness of the internal
control system, the risk management system, the internal
auditing system, the compliance management system
and other compliance related issues. Among other things,
93
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
the Audit Committee dealt with the auditors' assignment
of 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, among others, of the
competency profiles, and the diversity and independence
criteria adopted by the Supervisory Board. It develops
and reviews the job profiles relative to the qualifications
expected of Supervisory Board members by the compa-
ny, and continually adapts them to suit changing com-
pany requirements. The members of the Nominating
Committee are Dr. Giuseppe Vita, acting as the Chair-
man, and Dr. h. c. Friede Springer, acting as the Vice
Chairwoman.
The Nominating Committee met twice in the reporting
year and dealt with the upcoming appointments to Su-
pervisory Board positions.
The Advisory Committee on Corporate Structure
didn’t hold a meeting in the reporting year. The commit-
tee consists of Martin Varsavsky as chairman and Lothar
Lanz as a member. Until he left the Supervisory Board in
April 2018, William E. Ford was also a member of the
Corporate Structure Committee.
Annual and consolidated financial
statements, as well as management
report and group management report,
non-financial report
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 2018 financial year
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 imple-
mented a risk management system that fulfills the re-
quirements 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. The auditor responsible for the audit has been
Nathalie Mielke since the 2015 financial year.
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 5, 2019. 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 6, 2019 on the
investigations 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 recommen-
dations of the Audit Committee and the reports of Ernst
& Young GmbH Wirtschaftsprüfungsgesellschaft, and
having discussed them with the independent auditor,
who was in attendance.
94
Annual Report 2018
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
company 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
distributable profit and concurred with that proposal, in
consideration 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:
“Based on the audit and evaluation conducted in
accordance with our professional duties, we hereby
confirm that
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 6, 2019, the independent auditor also
reported orally on the principal findings of the audit and
provided additional information, as requested. The
Supervisory 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 declaration on the report pursuant to
Section 312 (3) AktG.
For the first time for the 2017 financial year, the company
also had to reimburse a separate non-financial report.
This one was combined for the Axel Springer SE and the
Axel Springer Group. On April 18, 2018, the report was
discussed by the plenum of the Supervisory Board and
in discussion with representatives of the company, and it
was reviewed by the Supervisory Board itself without an
external audit. Following the final result of its own review,
the Supervisory Board raised no objections and took
note of the combined separate non-financial report with
approval. The publication of the combined separate
non-financial report took place on April 30, 2018 on the
company's website and is available there under
go.axelspringer.com/NonfinancialReport.
A summarized separate non-financial report was
also prepared for the financial year 2018; in turn, the
Supervisory Board decided to forgo an external audit of
this report. At the balance sheet meeting of March 6,
2019, the Supervisory Board, after having inspected the
documants on non-financial reporting, discussed with
representatives of the company, advised and examined
the combined separate non-financial report. The
Supervisory Board did not raise any objections after
concluding its audit and has approved the report. The
report for the 2018 financial year will also be available for
download on the company's website.
95
Annual Report 2018
Axel Springer SE
Report of the Supervisory Board
Thanks to the members of the Executive
Board and to all employees
The Supervisory Board wishes to thank all members
of the Executive Board and all employees for their
outstanding work in the past year.
As you have heard, in the interest of further rejuvenation
of the Supervisory Board, I will leave the Supervisory
Board at the end of this year's annual shareholders’
meeting. I would therefore like to say goodbye to all
shareholders and to thank you all for the many years of
trusting cooperation. I have found it an honorable task to
be able to accompany Axel Springer in this position as
Chairman of the Supervisory Board in these exciting and
challenging times over the last 17 years.
Berlin, on March 6, 2019
The Supervisory Board
Dr. Giuseppe Vita
Chairman
96
Consolidated Financial
Statements
98
Consolidated Statement of
Financial Position
100 Consolidated Income Statement
101 Consolidated Statement of
Comprehensive Income
102 Consolidated Statement of Cash Flows
103 Consolidated Statement of
Changes in Equity
104 Consolidated Segment Report
Notes to Consolidated Financial Statements
105 General information
126 Notes to the consolidated
statement of financial position
149 Notes to the consolidated
income statement
156 Notes to the consolidated
statement of comprehensive income
157 Notes to the consolidated
statement of cash flows
159 Notes to the consolidated
segment report
162 Other disclosures
97
Annual Report 2018
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 assets1)
Inventories
Trade receivables
Receivables due from related parties
Receivables from income taxes
Other assets1)
Cash and cash equivalents
Assets held for sale
Total assets1)
Note 12/31/2018 12/31/2017 01/01/2017
(4)
(5)
(6)
(36)
(8)
(26)
(7)
(36)
(8)
(29)
(2c), (9)
5,267.7
4,994.1
5,393.0
3,938.6
3,904.4
4,162.3
748.3
451.7
0.0
478.0
237.4
240.6
6.4
0.0
39.7
56.7
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
1,211.2
1,442.3
1,064.1
27.5
782.9
16.5
23.6
79.2
281.5
0.0
19.8
693.9
17.2
21.7
105.6
216.8
367.3
21.6
614.6
16.6
65.0
122.2
224.1
0.0
6,479.0
6,436.4
6,457.1
1) Adjustment of prior-year figures as of January 1, 2017 and December 31, 2017 due to the retrospective application of IFRS 15 (by € 0.9 million); see note (3o).
98
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Consolidated Statement of Financial Position
€ millions
EQUITY AND LIABILITIES
Equity1)
Shareholders of Axel Springer SE1)
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 liabilities1)
Note 12/31/2018 12/31/2017 01/01/2017
(10)
2,884.2
2,802.4
2,639.5
2,423.6
2,291.0
2,218.3
460.6
511.4
421.2
2,190.3
2,036.1
2,427.2
209.1
343.2
86.0
79.8
350.4
69.8
1,467.0
1,062.0
1,258.3
1.4
14.6
48.3
363.9
0.1
23.7
158.1
369.3
0.2
6.5
211.6
530.5
1,404.4
1,598.0
1,390.4
20.6
170.8
63.8
510.4
20.9
61.4
20.4
186.0
175.1
462.0
40.8
60.9
21.2
183.2
1.0
379.6
23.1
37.3
(12)
(13)
(14)
(36)
(15)
(26)
(12)
(13)
(14)
(36)
(15)
556.4
581.6
745.1
(2c), (9)
0.0
71.2
0.0
6,479.0
6,436.4
6,457.1
1) Adjustment of prior-year figures as of January 1, 2017 and December 31, 2017 due to the retrospective application of IFRS 15 (by € 0.9 million); see note (3o).
99
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Consolidated Income Statement
Consolidated Income Statement
€ millions
Revenues1)
Other operating income
Change in inventories and internal costs capitalized
Purchased goods and services1)
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
Financial income
Financial expense
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
1) Adjustment of prior-year figures due to the retrospective application of IFRS 15 (by € 507.2 million); see note (3o).
Note
2018
2017
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
3,180.7
3,055.5
169.5
93.5
317.3
87.7
– 549.7
– 544.2
– 1,224.4
– 1,202.1
– 347.9
– 236.1
– 882.0
– 912.4
– 62.2
– 86.9
24.7
– 21.1
10.5
– 31.6
– 39.0
– 43.9
4.9
– 18.4
15.1
– 33.5
(26)
– 147.9
– 130.2
208.4
378.0
(2d)
(27)
(27)
0.0
208.4
181.0
27.4
1.68
0.00
1.3
379.3
345.5
33.9
3.19
0.01
100
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Consolidated Statement of
Comprehensive Income
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)
2018
208.4
– 6.5
– 6.5
9.0
-
0.1
– 2.6
6.5
– 0.1
208.4
184.6
23.8
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
101
Annual Report 2018
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 investment properties
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
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
Repayments of lease liabilities
Proceeds from financial liabilities
Repayments of 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 in the previous year, 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)
(2c)
(29)
2018
208.4
347.9
86.9
9.1
– 81.7
15.6
– 23.5
– 16.4
– 71.7
44.1
47.0
565.7
6.4
285.7
169.1
0.0
2017
379.3
236.1
43.9
4.8
– 207.2
3.1
– 104.2
0.5
– 86.5
69.7
151.2
490.7
207.7
8.7
19.5
3.3
– 225.3
– 200.9
– 153.1
– 203.7
– 120.7
– 215.8
– 23.1
– 3.0
– 60.5
363.5
– 185.1
– 47.6
– 194.5
– 205.0
– 10.5
– 63.7
– 0.4
639.0
– 450.8
– 660.7
– 5.3
19.6
(29)
– 395.0
– 281.7
50.0
– 0.3
0.1
216.8
14.9
281.5
14.5
– 7.0
0.2
224.1
– 14.9
216.8
(9)
(29)
2018
2017
(29)
– 184.9
– 161.8
16.2
– 23.1
1.1
17.3
63.0
– 20.1
4.6
13.9
102
Balance as of
01/01/20171)
Net income
Other income/loss
Dividends paid
Change in consolidated
companies
Purchase of non-
controlling interests
Other changes
Balance as of
12/31/20171)
Annual Report 2018
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
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
500.1
1,707.6
– 5.0
26.0
– 0.2
– 119.2
2,217.4
421.2
2,638.8
€ millions
Balance as of
01/01/2017
Adjustment IFRS 15
0.9
0.9
0.9
107.9
500.1
1,708.5
– 5.0
26.0
– 0.2
– 119.2
2,218.2
421.2
2,639.7
Comprehensive income
345.5
– 86.2
345.5
– 86.2
– 18.0
– 18.0
0.1
0.1
345.5
– 0.7
– 104.9
33.9
5.8
379.3
– 99.1
– 0.7
240.6
39.6
280.2
– 205.0
– 9.8
– 214.8
1.1
41.7
58.1
99.8
– 5.0
0.4
2.1
0.2
– 2.9
0.6
8.0
– 8.0
– 0.1
– 119.9
2,291.0
511.4
2,802.4
2.5
2.5
Adjustment IFRS 9
10.5
107.9
501.0
1,884.1
– 90.1
Balance as of
01/01/20181)
Net income
Other income/loss
Comprehensive income
Dividends paid
Change in consolidated
companies
Purchase and disposal of
non-controlling interests
Non-excercise of
Immowelt option rights
Other changes
Balance as of
12/31/2018
107.9
501.0
1,894.6
– 90.1
–
– 0.1
– 119.9
2,293.5
511.4
2,804.8
181.0
181.0
– 215.8
5.4
1.0
159.8
0.1
– 5.5
0.6
12.6
12.6
0.1
0.1
– 9.1
– 9.1
–
181.0
3.6
184.6
27.4
– 3.6
208.4
– 0.1
23.8
208.4
– 215.8
– 22.7
– 238.5
– 0.1
– 51.1
– 51.2
1.0
– 0.7
0.3
159.8
0.7
159.8
0.7
0.0
107.9
496.0
2,026.2
– 77.6
–
0.0
– 129.0
2,423.6
460.6
2,884.2
1) Regarding effects due to new accounting standards see note (3o).
103
– 205.0
40.7
– 5.0
– 0.6
1.0
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Consolidated Segment Report
Consolidated Segment Report
Operating segments (30)
Classifieds Media
News Media
Marketing Media
Services/Holding
Consolidated totals
€ millions
Revenues1)
2018
2017
2018
2017
2018
2017
1,212.5
1,007.7
1,496.2
1,509.8
418.3
477.3
Internal revenues
1.0
0.9
7.6
6.7
15.9
4.8
Segment revenues1)
1,213.6
1,008.6
1,503.7
1,516.5
434.2
482.1
2018
53.7
134.9
188.6
2017
2018
2017
60.7
3,180.7
3,055.5
161.4
222.0
EBITDA, adjusted2)
487.2
413.2
228.2
218.8
89.6
95.6
– 67.0
– 81.7
737.9
645.8
40.2 %
41.0 %
15.3 %
14.5 %
21.4 %
20.0 %
23.2 %
21.1 %
– 3.1
1.0
12.7
10.0
– 3.3
1.0
9.3
6.3
6.3
1.5
5.7
0.2
– 0.4
– 0.7
15.5
16.0
– 0.5
– 0.4
7.0
7.2
– 80.5
– 52.2
– 70.0
– 35.8
– 23.6
– 18.2
– 36.0
– 35.7
– 210.1
– 141.9
406.7
361.0
158.2
182.9
66.0
77.4
– 103.0
– 117.4
527.9
504.0
EBITDA margin,
adjusted1),2)
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, adjusted3)
Amortization and
impairments from
purchase price
allocations
Non-recurring effects
– 95.4
– 17.2
– 12.6
– 54.5
– 55.6
– 12.5
– 21.9
– 66.2
– 70.9
– 16.7
57.3
36.8
0.0
38.2
0.0
– 137.8
– 94.2
163.5
– 12.5
117.0
Segment earnings before
interest and taxes
Financial result
Income taxes
Income from continued
operations
Income from
discontinued operations
Net income
256.9
288.2
133.0
94.8
52.5
97.6
– 64.8
46.1
377.5
526.7
– 21.1
– 18.4
– 147.9
– 130.2
208.4
378.0
0.0
1.3
208.4
379.3
Geographical information (30)
€ millions
Revenues1)
Non-current segment assets
Germany
Other countries
Consolidated totals
2018
2017
2018
2017
2018
2017
1,774.1
1,725.7
1,406.5
1,329.8
3,180.7
3,055.5
1,487.9
1,411.1
3,199.0
2,945.0
4,686.9
4,356.1
(31)
(31)
1) Adjustment of prior-year figures due to the retrospective application of IFRS 15 in the Marketing Media segment (by € 507.2 million); see note (3o).
2) Adjusted for non-recurring effects, see Annual Report 2018, p. 37f. and note (31).
3) Adjusted for non-recurring effects and amortization and impairments from purchase price allocations, see Annual Report 2018, p. 37f. and note (31).
104
Annual Report 2018
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 21, 2019, the Executive Board of Axel
Springer SE authorized the consolidated financial state-
ments for fiscal year 2018 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
euro amounts before rounding and may differ from a cal-
culation 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 consolidated financial 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. To
this extent, non-controlling interests are not disclosed.
The contingent consideration for these shares is ac-
counted for as a financial liability measured at fair value.
The effects 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 IFRS consolidated financial state-
ments of these companies as at the Axel Springer
Group’s reporting date, respectively, serve as the basis
for applying the equity method (for exception of this prin-
ciple see note (6a)). Goodwill as well as assets and liabili-
ties included in the amortized carrying amount are ac-
counted for using the accounting principles applied to
business combinations. Losses that exceed the carrying
amount of the investment, or any other long-term receiv-
ables related to the financing of these companies, are
not recognized, unless the Axel Springer Group is bound
by additional contribution requirements. Intercompany
profits and losses are eliminated on a pro-rated basis.
The carrying amounts of investments are tested for im-
pairment; if impairments exist, they are written down to
the lower recoverable amount.
105
Annual Report 2018
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:
12/31/2018
12/31/2017
Fully consolidated companies
Germany
Other countries
Investments accounted for using the
equity method
Germany
Other countries
86
123
7
7
88
136
7
6
Consolidated companies are listed in note (41). Essen-
tially, the following major changes occurred in 2018:
At the beginning of February, we acquired 100 % of the
shares in Concept Multimédia SAS, Aix-en-Provence/
Paris, France. The company has been included in our
consolidated financial statements by means of full con-
solidation since then.
At the end of April, we acquired 11.5 %, and in July an
additional 1.0 % of the shares in Purplebricks Group plc,
Solihull, United Kingdom. As a consequence, the com-
pany has been included in the consolidated financial
statements using the equity method since its acquisition.
At the end of April, the disposal of 78.31 % of AUFMEN-
ININ SA, Paris, France, was completed. Thus, AUFEMI-
NIN SA and its 18 fully consolidated subsidiaries were
deconsolidated.
At the beginning of May, we accomplished the acquisi-
tion of 100% of the shares in Universum Communica-
tions Sweden AB, Stockholm, Sweden. Universum Com-
munications Sweden AB and its nine foreign subsidiaries
have been included in our consolidated financial state-
ments by means of full consolidation since then.
At the end of July, the disposal of our newspaper and
magazine portfolio in Slovakia, including its associated
online offers, has been completed. As a result, two for-
eign subsidiaries have been deconsolidated.
The other changes relate to mergers, foundations and in-
itial consolidations which are immaterial for the consoli-
dated financial statements.
(c) Acquisitions and divestures
At the beginning of February, we acquired 100 % of the
shares in Concept Multimédia SAS, Aix-en-Pro-
vence/Paris, France, via Axel Springer Digital Classifieds
France SAS, and have since then fully consolidated the
company. Concept Multimédia operates particularly a
real estate portal in France under the core brand of
Logic-Immo.com as well as further online portals for lux-
ury real estate and new builds.
Acquisition costs, taking into account purchase price ad-
justments based on net debt and net working capital,
amounted to € 95.3 million and were fully paid in the re-
porting year. The acquisition-related expenses, included
in other operating expenses, amounted to € 1.2 million in
the reporting year and were adjusted as a non-recurring
effect (see note (31)).
106
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Based on the purchase price allocation, the acquisition
costs were allocated to the purchased assets and liabili-
ties on the acquisition date as follows:
The gross amount of the acquired trade receivables was
€ 10.3 million. Corresponding valuation allowances in the
amount of € 1.3 million were recognized.
€ millions
Intangible assets
Property, plant and equipment
Trade receivables
Inventories
Other assets
Cash and cash equivalents
Trade payables
Financial liailities
Provisions and other liabilities
Deferred tax liabilities
Net assets
Acquisition cost
Goodwill
Carrying
amount after
acquisition
55.6
5.5
8.9
0.1
1.9
2.5
– 7.9
– 4.8
– 12.0
– 14.0
35.9
95.3
59.5
Of the intangible assets acquired, intangible assets with
carrying amounts of € 37.9 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 Classifieds Media segment.
Since first inclusion at the beginning of February 2018,
Concept Multimédia contributed to total revenues in the
amount of € 67.8 million and to consolidated net income in
the amount of € 3.9 million. If Concept Multimédia had al-
ready been fully consolidated on January 1, 2018, the total
revenues 2018 would have changed by € 73.1 million and
consolidated net income 2018 would have changed by
€ 3.9 million.
At the beginning of May 2018, through StepStone GmbH,
a company of StepStone Group owned by Axel Springer,
we have acquired and consolidated 100 % of the shares in
Universum Communications Sweden AB, Stockholm,
Sweden, as well as their subsidiaries. Universum Group is
one of the world's leading employer-branding specialists,
assisting companies to analyze, define, develop and com-
municate their own employer brand.
The acquisition costs amounted to € 41.0 million and con-
tained the purchase price of € 37.9 million paid in 2018 (in-
cluding a purchase price adjustment and an earnout pay-
ment for earnings targets 2017) and the repayment of a
loan taken over by the company in the amount of € 3.0 mil-
lion. In addition, further earnouts were agreed, which are
measured based on future EBIT targets, which can in-
crease the acquisition costs by a maximum of
SEK 75.0 million (currently around € 7.3 million), and which
were valued at € 0.0 million at acquisition date. The acqui-
sition-related expenses, recognized under other operating
expenses, amounted to € 0.5 million in the reporting period
and were adjusted as a non-recurring effect (see
note (31)).
107
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The acquisition costs were allocated to the purchased as-
sets and liabilities on the acquisition date as follows:
€ millions
Intangible assets
Trade receivables
Other assets
Cash and cash equivalents
Provisions and other liabilities
Deferred tax liabilities
Net assets
Acquisition cost
Goodwill
Carrying
amount after
acquisition
24.9
6.1
3.4
1.5
– 14.3
– 5.2
16.5
41.0
24.5
Of the intangible assets acquired, intangible assets with
carrying amounts of € 16.8 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 Classifieds Media segment.
The gross amount of the acquired trade receivables was
€ 6.1 million. Corresponding valuation allowances did
not have to be recorded hereupon.
Since first inclusion at the beginning of May 2018, Uni-
versum Group contributed to total revenues in the
amount of € 23.0 million and to consolidated net income
in the amount of € 4.4 million. If the Universum Group
had already been fully consolidated on January 1, 2018,
total revenues 2018 would have changed by € 27.8 mil-
lion and the consolidated net income 2018 would have
changed by € 0.9 million.
At the end of April 2018, we acquired 11.5 % of the
shares in Purplebricks Group plc, Solihull, United
Kingdom, through a capital increase and purchase of ex-
isting shares from shareholders for a total purchase price
of € 143.2 million and has since then been included in
the consolidated financial statements using the equity
method due to contractual and shareholder rights (see
note (6a)). In July, we acquired further shares with a total
value of € 10.4 million and increased our stake to around
12.5 %. As of December 31, 2018, the investment was
impaired to its stock-market value of € 62.3 million (see
note (6a)). Purplebricks was established in April 2014 in
the UK and operates purplebricks.co.uk, a transaction-
based digital real estate platform. The company is also
active in Australia, the USA, and since July 2018 also in
Canada. Since December 2015, Purplebricks has been
listed on the London Stock Exchange.
For the disposal of our shares in Do⁄an TV to Do⁄an
Holding for a total purchase price of € 160.0 million see
note (6b).
108
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
At the end of April 2018, we have completely disposed
our fully consolidated (78.31 %) shares in AUFEMI-
NIN SA, Paris, France, and all related subsidiaries of the
aufeminin Group for a total price of € 291.5 million. The
gain reported in other operating income attributed to the
Marketing Media segment amounted to € 49.4 million
and was adjusted as a non-recurring effect (see
note (31)). The results from the disposal include ex-
penses from foreign currency translations in the amount
of € 2.5 million previously recognized as other compre-
hensive expenses reported under equity. In the course of
the transaction, non-controlling interests of € 44.5 million
were derecognized. As part of the divestment process,
disposal-related costs of € 7.0 million were incurred, rec-
ognized in other operating expenses and adjusted as a
non-recurring effect (see note (31)). The carrying
amounts of the assets and liabilities disposed of were as
follows:
At the end of July 2018, we have completed the sale of
our newspaper and magazine portfolio in Slovakia,
including the associated online services. For this pur-
pose, all of the business units of Ringier Axel Springer
Slovakia were transferred into three companies; thereof
two companies were completely disposed for a total
price of € 60.5 million. The loss on disposal recognized
in other operating expenses and attributed to the News
Media segment amounted to € -0.8 million and was ad-
justed as a non-recurring effect (see note (31)). In the
course of the sale, non-controlling interests of € 6.6 mil-
lion were derecognized. As part of the transaction, dis-
posal-related costs of € 0.9 million incurred, which were
recognized in other operating expenses and adjusted as
a non-recurring effect (see note (31)). The carrying
amounts of the assets and liabilities disposed of were as
follows:
€ millions
Goodwill
Intangible assets
Property, plant and equipment and non-current
financial assets
Trade receivables
Other assets
Cash and cash equivalents
Assets related to investments held for sale
Trade payables
Financial liabilities
Provisions and other liabilities
Deferred tax liabilities
Liabilities related to investments held for sale
Disposal net assets
Share of non-controlling interests in net assets
Cumulative translation differences
Selling price
Gain on disposal
Carrying
amount
162.9
64.4
9.8
19.6
20.4
72.0
23.6
– 12.2
– 7.4
– 48.4
– 15.2
– 5.3
284.2
– 44.5
– 2.5
291.5
49.4
€ millions
Goodwill
Intangible assets
Property, plant and equipment
Trade receivables
Other assets
Deferred tax assets
Cash and cash equivalents
Trade payables
Provisions and liabilities
Deferred tax liabilities
Disposal net assets
Share of non-controlling interests in net assets
Selling price
Gain on disposal
Carrying
amount
21.0
49.8
0.5
10.4
1.0
0.2
1.0
– 3.5
– 2.2
– 10.4
67.9
6.6
60.5
– 0.8
Additional transactions carried out in the reporting year,
as well as finalizations of purchase price allocations aris-
ing from acquisitions of companies in the prior year, had
no material effects individually and collectively on the fi-
nancial position, liquidity, and financial performance of
the Axel Springer Group.
109
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Acquisitions and divestitures in the prior year:
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 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, which were recorded
in other operating expenses of financial year 2017 and
eliminated as a non-recurring effect, amounted to
€ 0.2 million (see note (31)).
Based on the purchase price allocation, the acquisition
costs were allocated to the purchased assets and liabilities
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 2017
in the amount of € 14.0 million and to consolidated net
income 2017 in the amount of € 6.1 million.
As of October 1, 2017, Axel Springer and United Internet
have merged their respective companies Awin and affil-
inet to create a common affiliate network. Axel Springer
thereby strengthens its market position in affiliate market-
ing 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-
controlling 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,
which were recorded in other operating expenses of the
financial year 2017 and eliminated as a non-recurring ef-
fect, amounted to € 0.5 million (see note (31)).
110
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Based on the preliminary purchase price allocation as of
December 31, 2017, the preliminary acquisition costs were
allocated to the purchased assets and liabilities at the ac-
quisition 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
Goodwill
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 as of December 31, 2017.
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 2017 in the amount of € 37.5 million and to con-
solidated net income 2017 in the amount of € 0.6 million.
If the affilinet Group had already been fully consolidated
on January 1, 2017, the affilinet Group would have con-
tributed to consolidated revenues 2017 in the amount of
€ 155.9 million and to consolidated net income 2017 in
the amount of € 4.7 million.
Further business combinations that occurred in the
reporting period 2017 related in particular to the acquisi-
tion of 100 % of the shares in CV Keskus OÜ, Tallinn,
Estonia, Tourismuszentrum GmbH Mecklenburgische
Ostseeküste, Kröpelin, ICI Formations SAS, Paris,
France, t-bee GmbH, Puchheim, Turijobs Tourism Ser-
vices 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 generally 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
2017 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, which were recorded in other operating ex-
penses of the reporting period 2017 and eliminated as a
non-recurring effect, amounted to € 0.2 million (see
note (31)).
The contingent considerations resulted from earn-out
agreements and were recorded at their fair values on the
acquisition date. The fair value predominantly depends
on the earnings performance of the acquired companies
in the years prior to possible payment dates or exercise
dates.
111
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The cumulative acquisition costs of the business combi-
nations in 2017 – which were partly preliminary as of De-
cember 31, 2017 – were allocated to the purchased as-
sets and liabilities based on the partly preliminary
purchase price allocations as of December 31, 2017 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 balance sheet date as of December 31,
2017, and have not yet been completed for some acqui-
sitions because of the closeness in time to the publica-
tion of the consolidated financial statements 2017.
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.
Additional transactions carried out in the financial year
2017, as well as finalizations of purchase price alloca-
tions arising from acquisitions of companies in 2016, had
no material effects individually and collectively on the fi-
nancial 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 previous
year, the resulting subsequent income and expenses were
shown separately as discontinued operations.
We have not disclosed any results from discontinued op-
erations in the reporting year.
The results of the discontinued operations of the previ-
ous year were as follows:
€ millions
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)
2017
1.9
– 0.6
1.3
1.3
In the previous year, cash outflows attributed to the dis-
continued operations were only included in the cash flow
from investing activities and amounted to € -2.1 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.
112
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Items of the income statement of these subsidiaries have
been translated at the weighted average exchange rate.
Equity components have been translated at the historical
exchange rate at the date of origination. Foreign ex-
change differences resulting from the translation have
been recognized within accumulated other comprehen-
sive income and/or non-controlling interests.
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
2018
2017 12/31/2018 12/31/2017
4.26
1.15
1.18
4.26
1.11
1.13
4.30
1.13
1.15
4.18
1.17
1.20
318.84
309.29
321.07
310.03
British pound
0.88
0.88
0.90
0.89
(3) Explanation of significant accounting and
valuation methods
(a) Basic Principles
The accounting and valuation principles applied uniformly
across the Axel Springer Group in fiscal year 2018 have
changed due to the new accounting standards IFRS 9
“Financial Instruments”, IFRS 15 “Revenue from Con-
tracts with Customers” and IFRS 16 “Leases” (see note
(3o)). Apart from that, they are basically the same as
those applied in the previous year.
(b) Revenue recognition
Axel Springer Group is a leading digital publisher whose
core business is digital classified ad models and journal-
ism. We generate revenues primarily from advertising
and circulation.
Revenues are basically recognized with fulfillment of the
identified performance obligations, i.e. when the cus-
tomer obtains control over the agreed goods and bene-
fits from them or the agreed services have been pro-
vided. The revenues are calculated on the basis of the
amount of the respective compensation we expect to re-
ceive for the transfer of promised goods or the provision
of services ("transaction price") resulting from published
price lists or individual agreements. Contracts with cus-
tomers are either concluded for individual deliveries and
services or have terms that are predominantly short-
term. Compensation is due either in advance, at the time
the service is rendered or under the provision of short-
term payment targets. Expenses for initiating contracts
with customers are generally of minor importance or re-
late to short-term contracts and are therefore recognized
immediately in profit or loss for reasons of simplification.
In case we have already fulfilled part of our performance
obligation, but our entitlement to payment depends on
other performances, we recognize a contract asset in
other non-financial assets. If the customer has already
paid, but the performance obligation has not yet been
fulfilled by us, we recognize a contract liability in other
non-financial liabilities.
Advertising revenues include, in particular, revenues from
digital classifieds, from the marketing of online and print
media as well as from reach and performance-based
marketing. Advertising revenues from digital classifieds
are mainly generated by the sale of job, real estate and
car ads. In accordance with the provision of services, the
revenues are always realized linearly over the period of
the respective advertisement. The corresponding remu-
neration is often received in advance or at the beginning
of the service provision, so that we recognize contract li-
abilities in respect of outstanding performances.
The marketing of online and print media leads to revenue
from the sale of advertisements in newspapers and mag-
azines, from TV advertising and from the sale of advertis-
113
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
ing in our online media. Revenues are recognized with
the publication or reproduction of the advertisement. Dis-
counts and bonuses granted are taken into account, as
they diminish sales revenues.
In reach-based marketing, we market advertising space
to advertisers, which are compensated based on the
generated reach or the interaction generated by the
reach. In terms of performance-based marketing, we of-
fer platforms, as a marketplace, that bring together ad-
vertisers and online publishers. The advertisers only pay
a success-based compensation to the publisher if the
advertising materials have actually been used and re-
sulted in the desired transaction for the advertising cus-
tomers. Our service consists, in particular, in the techno-
logical and financial settlement between the two parties.
Since we regularly do not gain control over the advertis-
ing space offered, we primarily act as an agent in the
area of performance-based marketing and only report
our revenues in the amount of our commission claim.
Circulation revenues primarily include the sale of printed
newspapers and magazines to retailers, wholesalers,
subscribers and the sale of digital subscriptions. Reve-
nues from the sale of printed offers are generally recog-
nized at the time of delivery to the customer. Expected
sales returns are taken into account on the basis of em-
pirical values and reduce revenue. Digital subscription
sales are realized on a linear basis over their term, as the
performance obligations are successively fulfilled with the
continuous update of the contents. Payments to sub-
scribers for conclusion of subscriptions reduce the trans-
action price and are distributed over the subscription pe-
riod to reduce revenue. Subscription compensations are
generally collected in advance, so that contract liabilities
are recognized for the outstanding fulfilments.
Revenues from barter transactions are recognized if the
goods or services exchanged are dissimilar and the
amount of revenue can be measured reliably. They are
measured at the fair value of services received. If the fair
value of the service received under barter transactions
cannot be measured reliably, the fair value is determined
on the basis of the service rendered.
For offers containing several service components ("bun-
dle offers"), the breakdown of the transaction price is al-
ways based on the relative stand-alone selling prices of
the individual performance obligations. If stand-alone
selling prices are not directly derivable from the market,
they are estimated at the beginning of the contract.
(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
114
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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, with the exception of
leasing rights, are measured at acquisition or production
cost and depreciated over their expected useful lives us-
ing the straight-line method. Any gains or losses on the
disposal of property, plant and equipment were reported
as other operating income or expenses. For depreciation
purposes, the following useful lives are essentially ap-
plied:
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 accounted for in a de-
ferred income item within other liabilities. In subsequent
periods, the deferred income item is released and recog-
nized as income over the useful life of the corresponding
assets.
Rights-of-use assets resulting from leases are disclosed
under property, plant and equipment. A lease exists if we
are entitled to use, for a certain period of time, an identifi-
able asset over which we have gained control, against
payment. Leases mainly relate to office space, leased ve-
hicles and other operating and office equipment at Axel
Springer.
At the beginning of the lease term ("provision date"),
lease rights-of-use assets are valued at acquisition costs,
which in particular arise from the corresponding lease lia-
bilities and lease prepayments, taking into account leas-
ing incentives received. Current depreciations are calcu-
lated on a linear basis.
Lease liabilities are recognized at the present value of the
lease payments that have not yet been made and re-
ported under financial liabilities. Discounting is always
calculated using term-specific and currency-specific in-
cremental borrowing rates, as we are unable to deter-
mine the interest rates underlying the leases on a regular
basis. The lease liabilities are updated in accordance
with the effective interest method. We report the corre-
sponding interest expenses in the financial result.
For reasons of simplification, lease payments in connec-
tion with lease contracts with a maximum term of twelve
months and leases for so-called low-value assets (new
value of up to € 5,000) are included in other operating
expenses over the respective term of the leasing con-
tracts.
As a lessor, we operate, in particular, in the context of
subletting office space. On the provision date, we evalu-
ate as to whether an operating or finance lease exists. If
all material risks and rewards are transferred, this is a fi-
nance lease. In that case, a receivable in the amount of
the net investment in the lease is accounted for in other
financial assets. We report the corresponding interest in-
come in the financial result. Lease payments from oper-
ating lease activities are recognized as revenue in the in-
come statement. Until December 31, 2017, lease
accounting was carried out in accordance with the previ-
ous accounting standard IAS 17. Accordingly, only fi-
nance leases were accounted for. Leased assets whose
economic benefits were attributable to us were recog-
nized 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 re-
sidual value into consideration. When it was reasonably
certain that ownership would pass to Axel Springer at
the end of the lease period, such assets are depreciated
115
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
over their useful economic lives. The present value of the
payment obligations associated with the minimum future
lease payments were recognized as a liability. Lease
payments in connection with operating lease activities
were recognized immediately in profit or loss.
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.
(e) 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.
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 (3f)).
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.
116
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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.
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.
(f) 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.
At initial recognition, trade receivables are measured at
transaction price, all other financial assets and liabilities
are measured at fair value. Transaction costs are in-
cluded if the financial assets and liabilities are subse-
quently valued at amortized costs. Otherwise they are
immediately recognized as expenses.
The initial recognition and derecognition of purchases
and disposals of financial assets conducted at arm’s
length are carried out at settlement date.
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.
Subsequent to initial recognition, financial assets are rec-
ognized at fair value or at amortized costs, in case they
are not part of a hedging relationship. We basically do
not make use of the option to value certain financial as-
sets at fair value through other comprehensive income in
equity. The subsequent valuation depends on the busi-
ness model for managing the financial assets and the
characteristics of the contractual cash flows. Financial li-
abilities are measured at amortized costs or at fair value
through profit and loss.
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:
117
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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.
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. Pro-
vided that after reasonable assessment, we cannot as-
sume that a financial asset is completely or partly realiza-
ble any more, a depreciation and thus a derecognition of
this asset is made. If the financial assets are overdue
more than one year, we do not assume a realizability any
more. A financial liability is derecognized when the obli-
gation underlying the liability is settled or annulled or has
expired.
Investments
Subsequent valuation for investments that have not been
consolidated or accounted for using the equity method in
the consolidated financial statements, is made at fair
value through profit and loss. The fair value is determined
on the basis of stock exchange or market prices by
means of generally accepted valuation methods. The val-
uation methods employed include especially the dis-
counted cash flow method (DCF method) based on the
expected investment income. Any unrealized gains or
losses resulting from the changes in fair value are recog-
nized directly in income from investments.
Up to December 31, 2017, investments that have not
been consolidated or accounted for using the equity
method in the consolidated financial statements, have
basically been assessed at fair value through other com-
prehensive income, or if a fair value could not be reliably
determined, at amortized costs. Unrealized profits and
losses due to the fair value valuation have, under consid-
eration of tax implications, principally been recognized in
accumulated other comprehensive income. Changes in
fair value were not recognized in profit or loss until the
corresponding investments were sold or an impairment
loss was recognized. The carrying amounts of invest-
ments and securities were reviewed on every reporting
date to determine whether there were objective indica-
tions of a permanent impairment. We have assumed a
permanent impairment when the impairment was signifi-
cant, i.e. the impairment was at least 20 % of the carry-
ing amount of the investment, or if the impairment al-
ready existed for twelve months.
118
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Loans, receivables, and other non-derivative financial as-
sets
With the exception of convertible loans which are as-
sessed at fair value through profit or loss, all other loans,
receivables, and other non-derivative financial assets are
recorded at amortized costs after initial recognition by
applying the effective interest method and under deduc-
tion of allowances, as they are exclusively held for the
contractually agreed receipt of principal and interest pay-
ments. Profits and losses from the derecognition, impair-
ments and currency translation effects are recognized in
profit and loss and reported in other operating income,
other operating expenses or in the financial result.
Allowances are recognized under consideration of future-
oriented information, in general in the amount of the ex-
pected bad debt losses, based on probability-weighted
default events in the following twelve months. If the risk
of a default, which is assumed at latest after an overdue
period of 90 days, has increased significantly after initial
recognition, all the default events of the entire remaining
term of the financial asset are considered for the valua-
tion of the allowance. A significant increase of the default
risk is especially assumed in case of an overdue period
of 30 days.
Interest income is basically determined on the basis of
gross receivables under application of the effective inter-
est rate and recorded in the financial result. In case the
default risk increased since its initial recognition and ad-
ditionally objective indications for an impairment are
given, especially a downgrade in credit rating of the fi-
nancial asset, interest income is only determined on the
basis of the impaired receivable under application of the
initial effective interest rate. The credit rating of the finan-
cial asset is especially affected in case of significant fi-
nancial difficulties or breach of contracts by the debtor,
as for example outstanding payments for a period of 90
days, or in case of impending bankruptcy.
For trade receivables, contract assets and lease receiva-
bles, the simplified method for the determination of im-
pairments is applied. Regardless of the actual change of
the credit risk, all events of default of the entire remaining
term are considered. The allowance is identified on the
basis of historical bad debt losses and future-oriented in-
formation. By using provision matrices, bad debt rates
for different overdue periods are calculated separately for
individual business models and geographical regions and
are applied to the actual value of receivables on the bal-
ance sheet date.
Up to December 31, 2017, all loans, receivables and
other financial non-derivative assets were basically rec-
orded at amortized cost under application of the effective
interest rate method, taking into account deductions of
impairments. An impairment was recognized, when ob-
jective indications were given that the due receivables
were not completely realizable.
Under other financial non-derivative assets, we addition-
ally disclose finance lease receivables and a reimburse-
ment right which is associated with pension obligations.
For accounting see note (3d), and (3i) respectively.
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.
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.
119
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Contingent consideration arising from acquisitions (see
note (2a)) and from earn-out agreements in the context
of acquisitions as well as from the acquisition of non-
controlling interests are recognized at fair value after ini-
tial recognition and are shown under other financial liabili-
ties. To the extent it can be reliably measured, this value
is derived from the estimated earnings of the acquired
companies in the years prior to the possible exercise
dates of the options or the payment dates of the earn-
outs. Changes in the fair value are recognized in income
through profit and loss. The discount rates are deter-
mined on the basis of the Group’s cost of debt. The
earnings used as a basis for measurement are generally
EBITDA figures adjusted for material non-recurring ef-
fects.
Further items recorded under other financial liabilities are
liabilities arising from put options written over non-con-
trolling interests, which are not recognized as contingent
consideration. They are initially measured at the present
value of the redemption amount, and subsequently ac-
counted for through profit or loss.
(g) Inventories
Inventories are measured at production or purchase
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 pro-
duction-related overhead costs. Inventories are meas-
ured at the reporting date at the lower of the purchase or
production cost and the net realizable value. The net re-
alizable 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 finished goods and services
less remaining costs of completion. Impairments are re-
versed whenever the reasons justifying an earlier write-
down no longer exist.
(h) 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 relate to the continued operations of the Group.
(i) Pension provisions
Pension obligations under defined benefit plans and a re-
imbursement right referring to this disclosed in the other
financial assets, are determined using the projected unit
credit method under which future changes in compensa-
tion and benefits are taken into account. Plan assets are
recognized at fair value. In order to calculate the pension
provisions, the present value of the obligations is netted
against the fair value of the plan assets.
120
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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.
(j) Other provisions
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.
(k) 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-
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.
(l) 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
121
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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.
(m) 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 profit or
loss.
(n) 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 (3e)) as well as companies ac-
counted for using the equity-method (see note (2a)), for
purchase price allocations (see note (2c)) and assessing
contingent considerations (see note (3f)), setting actuarial
parameters in the context of the valuation of pension ob-
ligations (see note (3i)), determining the amount of de-
ferred tax assets to be capitalized (see note (3k)), deter-
mining fair values of financial assets (see note (3f)),
accounting for other provisions (see note (3j)), assessing
share-based compensation programs (see note (3l)), and
the determination of the useful lives of intangible assets
(see note (3c)) and property, plant and equipment (see
note (3d)). Information concerning the carrying amounts,
which are based on estimates and assumptions, can be
found in the comments on the specific line items.
(o) New accounting standards
In the fiscal year 2018 the first-time application of IFRS 9
"Financial Instruments", IFRS 15 "Revenue from Con-
tracts with Customers" and IFRS 16 "Leases" lead to
changes for Axel Springer. In addition to the following ex-
planations see note (3f) "Financial assets and liabilities",
note (3b) "Revenue recognition" and note (3d) "Property,
plant and equipment".
IFRS 9 "Financial Instruments"
As of January 1, 2018, we initially applied the new ac-
counting standard, IFRS 9 “Financial Instruments” and
recognized the cumulative effect directly in equity at the
date of initial application, without adjusting the compara-
tive period.
IFRS 9 provides a standardized approach for classifica-
tion and valuation 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 includes a new impairment model, which also de-
mands the recording of expected losses in addition to in-
curred losses. Finally, IFRS 9 also contains new guide-
lines for the use of hedge accounting, targeted
particularly at better illustration of the risk management
activities of a company and the monitoring of non-finan-
cial risks.
122
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The initial application of IFRS 9 as of January 1, 2018,
resulted in only minor changes for both in the classifica-
tion and valuation of financial assets, as well as in the ac-
counting for financial liabilities. We have made the follow-
ing reclassifications based on the accounting as of
December 31, 2017:
The financial assets classified as "Loans and receivables"
as of December 31, 2017, were almost entirely allocated
to the measurement category "amortized cost" as of
January 1, 2018, since they are held to collect contrac-
tual cash flows that are payments of principal and inter-
est on the principal amount outstanding.
Valuation categories
according to IFRS 9
At fair
value
through
profit or
loss
At
amortized
cost
€ millions
12/31/2017
Valuation categories
according to IAS 39:
Loans and receivables
Trade receivables1)
Cash and cash equivalents
Others
Available-for-sale financial
assets
693.9
216.8
122.9
697.3
216.8
122.7
0.2
Investments
163.9
163.9
Financial assets and
liabilities held for trading
Derivatives
155.3
155.3
1) Change of the carrying amount (€ 3.4 million) resulted from the initial application of
the new impairment model as of January 1, 2018.
Investments classified as available-for-sale, which are not
consolidated or not included in the consolidated financial
statements using the equity method (€ 163.9 million),
were reclassified as financial assets at fair value through
profit or loss as of the date of initial application. The fair
value adjustments (€ 8.0 million) recorded in accumu-
lated other comprehensive income as of December 31,
2017, were reclassified into accumulated retained earn-
ings.
For trade receivables, we apply the simplified approach
for the determination of impairments. Thus, a risk provi-
sioning shall be recorded amounting to the credit losses,
which are expected throughout the entire term of the re-
lated asset. This is measured based on historical credit
losses and forward-looking information. To calculate the
risk provision for trade receivables, credit default rates for
various overdues are determined with the support of im-
pairment matrices, separately for each business model
and geographical region.
The initial application of the new impairment model as of January 1, 2018, resulted in the following provision matrix:
€ millions
Expected loss rate
Trade receivables, nominal
Allowances for doubtful trade receivables
Overdue
Non
overdue
up to 30
days
31 to 90
days
91 to 180
days
> 180 days
past due 01/01/2018
0.2 %
495.2
0.3 %
137.5
– 0.9
– 0.4
5.9 %
18.8 %
42.9 %
44.6
– 2.7
10.2
– 1.9
28.0
– 12.2
715.5
– 18.1
123
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The decrease of the recorded impairments as of Decem-
ber 31, 2017, by € 3.4 million, and taking into account
deferred taxes, led to an increase in retained earnings of
€ 2.5 million (see note (10d)).
IFRS 15 "Revenue from Contracts with Customers"
As of January 1, 2018, we initially applied the new reve-
nue recognition standard, IFRS 15 "Revenue from Con-
tracts with Customers", using the full retrospective
method. The comparative period was adjusted accord-
ingly.
IFRS 15 replaces the existing regulations for the recogni-
tion of revenue, including related interpretations, in ac-
cordance with IAS 18 “Revenue” and IAS 11 “Construc-
tion Contracts”. Consequently, revenues shall be
recognized, 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:
Identification of the customer contract, identification of
the individual performance obligations, determination of
the transaction price, allocation of the transaction price
to the separate contractual obligations, and the recogni-
tion of revenue when individual contractual obligations
are fulfilled.
At Axel Springer, IFRS 15 has an impact particularly on
contracts that can give rise to a new classification,
whether a principal or agent activity exists. Under con-
sideration of the newly introduced control principle as
well as the modified indicators, the contractual relation-
ships of our business model in the area of Performance
Marketing are to be accounted for as agent relationships.
This change reduced both the revenues of the Perfor-
mance Marketing subsegment and the cost of materials.
Correspondingly sales revenues and cost of materials in
the comparative period were adjusted by € 507.2 million.
Our Group performance figures adjusted EBITDA, ad-
justed EBIT and adjusted EPS, as well as the balance
sheet disclosure are not affected. The adjusted EBITDA
margin of the Group as well as of the Marketing Media
segment increased accordingly.
In addition, IFRS 15 leads to an adjustment in offerings
with more than one performance component (“bundle of-
ferings”) to the extent that in general the transaction price
for a bundle offer shall be allocated based on the stand-
alone selling prices. In some cases, these contracts lead
to an earlier recognition of revenues, since in comparison
to the previously applied residual value method, a dis-
count in the bundle offer shall not only be allocated to
goods or services that have already been transferred but
also to goods still to be delivered or services still to be
rendered in proportion to their fair values. The retrospec-
tive application of the new standard resulted in an in-
crease of other financial assets by € 0.9 million and a
corresponding adjustment in equity as of Janu-
ary 1, 2017. Our Group performance figures were not
significantly affected.
IFRS 16 "Leases”
As of January 1, 2018, we early-adopted and applied the
new lease accounting standard, IFRS 16 “Leases”, for
the first time using the modified retrospective method,
without adjusting the comparative period. There was no
impact on equity.
IFRS 16 replaces the previous standard IAS 17 “Leases”
and the associated interpretations. According to
IFRS 16, lessees are required to account for all leases in
the form of a right-of-use asset and a corresponding
lease liability. A leasing relationship exists if the fulfillment
of the contract depends on the use of an identifiable as-
set and the customer simultaneously obtains control of
124
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
this asset. At Axel Springer, the new regulations particu-
larly affect the accounting and valuation of rental and
lease contracts, which were previously classified as op-
erating leases. These mainly comprise office spaces,
leased vehicles and other leased operating and office
equipment, which in principle lead to the recognition of
right-of-use assets and corresponding lease liabilities.
As of January 1, 2018, the first-time adoption of IFRS 16
had the following effects on the consolidated financial
statements based on the existing leases (without consid-
ering the lease contracts for renting the Axel-Springer-
Passage in Berlin and the Axel Springer high-rise (main
building) with commencement of the leases as of Janu-
ary 1, 2018; see note (5)): For the first time, right-of-use
assets amounting to € 199.2 million and net-debt-in-
creasing lease liabilities of € 215.8 million were recog-
nized. The difference of € 16.6 million resulted from pro-
visions and liabilities in accordance with the previous
lease accounting as of December 31, 2017, which were
offset against the recognized right-of-use assets. The
recognition of depreciation of right-of-use assets and ef-
fects of compounding the lease liabilities, instead of rec-
ognizing lease expenses as operating expenses, in-
creased the adjusted Group EBITDA for the financial year
2018 by € 45.1 million, which was allocated to the oper-
ating segments as follows: News Media (44 %), Classi-
fieds Media (38 %) and Marketing Media (18 %). There
were no significant impacts on the adjusted Group EBIT
and net income. The cash flow from operating activities
as well as the free cash flow increased by € 42.2 million
due to the presentation of lease payments in the cash
flow from financing activities.
The following table shows the reconciliation of the future
minimum lease payments from operating leases reported
as of December 31, 2017 in accordance with IAS 17, to
the lease liabilities accounted for in accordance with
IFRS 16 as of January 1, 2018:
€ millions
Future minimum lease payments under operating
leases as of 12/31/2017
Lease agreements concluded in 2017 with lease
beginning in 20181)
Short-term leases
Other
Additional gross lease liabilities
Discounting
Additional net lease liabilities
Lease liabilities under finance lease as of 01/01/2017
Lease liabilities as of 01/01/2018
479.3
– 241.9
– 4.1
– 4.6
228.7
– 12.9
215.8
0.3
216.1
1) For the renting of the Axel-Springer-Passage in Berlin and the Axel Springer high-
rise (main building), see note (5).
The initial application of IFRS 16 resulted in additional
lease liabilities of € 215.8 million. The calculation was
based on a weighted average incremental borrowing rate
of 1.9 %.
In the context of the initial application, leases with a re-
maining lease term of up to one year were classified as
short-term leases. Furthermore, direct costs have not
been included in the determination of the right-of-use as-
set. Subsequent knowledge about extension and termi-
nation options have been considered for determining the
lease term.
Furthermore, no material changes for Axel Springer re-
sulted from IFRS Standards or IFRIC Interpretations to
be applied for the first time in the fiscal year 2018. More-
over, IASB and IFRS IC have not published any manda-
tory applicable statements, that will have material influ-
ence on the Axel Springer consolidated financial
statements.
125
Annual Report 2018
Axel Springer SE
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 01/01/2017
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Reclassifications
Balance as of 12/31/2017
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Reclassifications
Balance as of 12/31/2018
Depreciation, amortization, and impairments
Balance as of 01/01/2018
Deconsolidation
Currency effects
Additions
Thereof depreciation
Thereof impairment losses
Disposals
Reclassifications
Balance as of 12/31/2017
Deconsolidation
Currency effects
Additions
Thereof depreciation
Thereof impairment losses
Disposals
Reclassifications
Balance as of 12/31/2018
Carrying amounts
Balance as of 12/31/2018
Balance as of 12/31/2017
Purchased
rights and
licenses
Internally
generated
rights
Goodwill
Total
2,191.1
288.9
2,424.6
4,904.6
5.4
0.0
– 3.2
79.6
– 1.4
0.0
369.2
1.4
– 3.5
– 0.3
80.0
– 28.8
– 3.5
414.5
124.6
– 1.7
– 53.1
0.0
0.0
– 184.4
2,310.0
85.5
– 3.3
5.0
0.0
0.0
0.0
201.2
– 10.0
– 93.6
113.4
– 51.8
– 344.7
4,719.0
170.5
– 18.3
5.9
110.4
– 36.9
0.0
2,397.1
4,950.5
146.8
30.1
0.0
– 1.5
69.9
67.1
2.8
– 1.3
4.6
218.4
– 2.7
0.0
73.3
70.9
2.3
– 28.8
– 3.4
256.8
157.6
150.9
0.0
0.2
2.0
0.0
2.0
0.0
– 2.0
30.3
0.0
0.0
42.3
0.0
42.3
0.0
0.0
72.6
742.2
– 7.4
– 2.5
182.3
175.8
6.5
– 51.0
– 49.0
814.7
– 3.8
– 1.1
235.5
189.8
45.7
– 33.4
0.0
1,011.8
2,324.5
2,279.7
3,938.6
3,904.4
71.2
– 8.3
– 37.4
33.8
– 50.4
– 160.2
2,039.8
83.6
– 11.6
1.2
30.4
– 8.0
3.5
2,138.9
565.3
– 7.4
– 1.1
110.4
108.8
1.6
– 49.7
– 51.6
566.0
– 1.1
– 1.1
119.9
118.8
1.1
– 4.6
3.4
682.4
1,456.4
1,473.9
126
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
At the balance sheet date, the purchased rights and li-
censes mainly comprised title rights, trademarks, and
customer relationships. The internally generated intangi-
ble assets mainly consisted of software solutions and
websites.
In the following tables, we disclose the allocation of
goodwills and the purchased rights and licenses within
the intangible assets with indefinite useful lives for report-
ing units, as well as the discount rates and growth rates
used for impairment testing:
The reclassifications in the prior year consisted almost
exclusively of the reclassification into assets held for sale
(see note (9)).
2018
SeLoger
StepStone
Business Insider
Ringier Axel Springer Media
Awin
Immowelt
eMarketer
Yad2
@Leisure
Others
Total
thereof Classifieds Media
thereof News Media
thereof Marketing Media
€ millions
Other intangible
assets with
indefinite useful life
Goodwill
522.9
291.0
218.7
183.9
248.0
142.1
121.4
130.5
71.0
395.0
2,324.5
1,355.7
613.7
354.7
165.2
167.9
153.8
168.6
10.9
55.9
76.5
53.4
95.9
115.6
1,063.7
630.2
404.2
29.2
Total
688.1
458.9
372.6
352.5
258.9
198.0
197.9
183.9
166.9
Discount rate
(before tax)
Discount rate
(after tax)
Growth rate
9.5 %
9.0 %
8.9 %
8.0 %
9.6 %
8.4 %
9.3 %
9.9 %
8.8 %
7.2 %
7.1 %
7.6 %
7.2 %
7.9 %
6.6 %
7.6 %
8.2 %
7.2 %
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
2.5 %
510.6
6.9 % – 10.6 %
5.0 % – 8.2 %
0.0 % – 2.5 %
3,388.2
1,985.9
1,018.0
383.9
127
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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
€ millions
Other intangible
assets with
indefinite useful life
Goodwill
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
127.4
142.2
172.6
146.2
31.2
56.1
55.1
73.2
102.7
122.4
1,029.0
585.2
397.2
46.5
Total
590.8
377.9
365.1
355.2
278.6
198.1
189.9
189.1
172.5
Discount rate
(before tax)
Discount rate
(after tax)
Growth rate
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 %
3,308.7
1,861.0
1,004.3
442.8
The changes in goodwill of the major reporting units were as follows:
€ millions
01/01/2017
Currency
effects
Reclassi-
fications 12/31/2017
Initial
consoli-
dation
Initial
consoli-
dation
Initial
consoli-
dation
0.0
6.0
103.1
463.4
235.8
148.9
192.4
142.1
138.2
131.7
69.4
166.2
11.7
0.0
0.0
0.0
0.4
0.0
SeLoger
StepStone
Awin
Business
Insider
Ringier Axel
Springer
Media
Immowelt
Yad2
eMarketer
@Leisure
AuFeminin
237.1
0.0
– 28.2
0.0
– 6.1
– 4.6
9.8
0.0
– 3.5
– 15.7
0.0
0.0
0.0
0.0
0.0
– 19.4
0.0
0.0
0.0
0.0
– 3.1
– 163.1
463.4
235.7
247.4
209.0
192.5
142.1
134.8
115.9
69.8
0.0
59.5
24.5
0.0
0.0
0.0
0.0
0.0
0.0
– 1.6
– 1.6
0.0
0.0
0.0
2.9
0.0
0.0
0.0
0.0
– 1.6
0.0
– 3.3
Currency
effects
Reclassi-
fications 12/31/2018
0.0
– 1.2
0.6
0.0
31.9
0.0
522.9
291.0
248.0
9.8
0.0
218.7
– 5.4
0.0
– 4.3
5.5
0.0
0.0
5.0
0.0
0.0
0.0
0.0
0.0
0.0
183.9
142.1
130.5
121.4
71.0
0.0
31.9
1,929.5
Total
1,925.2
121.3
– 51.5
– 182.5
1,810.6
85.3
128
Annual Report 2018
Axel Springer SE
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 the SeLoger Group, fol-
lowing the acquisition of Concept Multimédia in 2018, in-
cludes the assumption of the realization of synergies
through the integrated marketing of the online market-
places. The high brand awareness of the SeLoger and
Logic-Immo brands will be supported by continuous in-
vestment in marketing and further developed, in order to
retain the high market penetration. Through user-friendly
and innovative products, differentiating features com-
pared to the competition will be created. In addition, the
strategic growth initiative “Seller Leads”, a service to
support real estate agents in attracting clients, shall de-
velop into a new, sustainable source of income in the fu-
ture. Moderate growth is assumed for growth in the
online real estate ads market in France for 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. In order to face the increas-
ingly intense competitive situation in the market and to
expand and strengthen its respective market position,
the StepStone Group is investing increasingly in market-
ing in the form of branding campaigns, especially in Ger-
many and in the UK. In addition, the marketing expenses
for purchasing traffic are also increasing, in order to se-
cure a high candidate feed rate per display as an im-
portant measure of customer satisfaction as the volume
of advertisements increases. Primarily in Germany and
the United Kingdom, but also in Ireland, more invest-
ments are also being made in the sales organization. In
the United Kingdom, the ongoing consolidation of To-
taljobs and Jobsite sales teams also has a positive im-
pact on revenue development. The margin of the
StepStone Group is falling due to the capital expendi-
tures mentioned, but remains at a high level.
In the medium-term planning, Business Insider expects
a significant increase in revenue. In addition to advertis-
ing revenues as the main source of revenue, sales reve-
nues are expected to make a significant contribution to
revenue growth. This shall be realized through the ex-
pansion of B2B and B2C subscription offerings. In terms
of advertising revenues, a large part of the growth is to
be realized by linking editorial content with commercial
offers. To increase these revenue streams, further invest-
ments are envisaged during the planning period, espe-
cially in the areas of editorial and technology. In order to
adequately take into account the build-up and expansion
of the company to a stable condition in the context of the
estimation of the future cash flows, a detailed planning
period of seven was applied, exceeding the detailed
planning period principally used.
In the mid-term planning of Ringier Axel Springer Me-
dia, we assume that our digital content offerings will in-
creasingly and sustainably participate in the structural
shift of print into digital channels and that digital business
models in the area of paid services and classified adver-
tisements will gain in importance in the long term. None-
theless, revenue streams in sales as well as in the print
advertising market will continue to decline in the coming
years. However, the decline in circulation will at least be
partly compensated by price increases. Due to strict cost
management in the print sector, profitability in this area is
to be largely maintained.
The medium-term planning of the Awin Group is essen-
tially characterized by scaling effects and synergies from
the merger of Awin and Affilinet. These include the inte-
gration of booking platforms, the centralization of opera-
tional functions, the consolidation of regional units, as
well as the further development of products and the au-
tomation of business processes. In addition to opera-
tional measures and cost savings, the Group plans mod-
erate revenue growth by opening up new regions and
markets.
The medium-term planning of the Immowelt Group is
based on the assumption of continued positive market
conditions in relation to economic growth, employment
rates and interest rate developments. As a result, for the
German real estate market, the Immowelt Group as-
129
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
sumes stable development in terms of real estate de-
mand in an environment of continuing intense competi-
tion. On the supply side, stagnation in property inventory
leads to a competitive market situation. Immowelt meets
these challenges with product innovations, data-driven
sales campaigns and the establishment of a regional
sales organization to optimize customer care. In addition,
the planning assumes price increases and the possibility
of up-selling activities. In the coming years, capital ex-
penditures to strengthen brand awareness are planned.
The returns are expected to remain at a high level.
The medium-term planning of eMarketer is based on
the assumption that revenues in the planning period can
be significantly increased through additional users and
the sale of new products. The continuous increase of the
customer base shall be supported by improved cus-
tomer loyalty and the acquisition of new customers. Ad-
ditional growth potential exists in thematic extensions of
the offerings.
The mid-term planning of Yad2 is based on the assump-
tion of moderate overall macroeconomic growth rates for
Israel. In the classifieds market, Yad2 benefits from a
high brand awareness and the associated excellent mar-
ket position. In conjunction with continuous product in-
novations, Yad2 assumes further growth in classifieds
revenues in all three core classifieds property, jobs and
cars. The banner business, on the other hand, is planned
to decline.
The medium-term planning of the @Leisure Group is
characterized by the resolute implementation of strate-
gies and measures relating to markets, organization and
technology. On the market side, @Leisure wants to posi-
tion itself even more attractively for homeowners, open
up new regions, strengthen the existing brands and thus
significantly increase the range of available holiday prop-
erties. Additional services and a targeted focus on guest
satisfaction improve the booking rate and utilization. At
the same time, the centralization and harmonization of
products and functions can keep processes lean and
thus costs stable. Finally, through cooperation with
global booking platforms, growth and market share will
be improved.
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, as in the previous year, no large
reporting unit showed that their carrying amounts of the
assets exceeded their recoverable amounts.
Goodwill allocated to the other reporting units of the
Group and intangible assets with indefinite useful lives of
€ 510.6 million (PY: € 591.5 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. Only
for one (PY: none) of the other reporting units an impair-
ment was indicated. For this other reporting unit which is
allocated to the Marketing Media segment and generates
digital advertising revenues in Germany and various other
countries, primarily via the mobile Internet, an impairment
of € 42.3 million on goodwill was recorded in the report-
ing year. The impairment was the result of adjusted earn-
ings planning in the coming years due to market-related
reduced expectations of the business development of
the core business areas in Germany as well as the higher
than previously assumed development of the permanent
costs for necessary technological developments. The re-
coverable amount of the reporting unit was determined
on the basis of the net realizable value at € 31.0 million.
The calculation was based on non-observable input fac-
tors (Level 3) using a discounted cash flow method with
a post-tax discount rate of 8.2 % and a terminal growth
rate of 2.5 %. As a result, the sensitivity analysis for this
other reporting unit showed that an adjustment of the fu-
ture cash flows in the last planning year by 10 %, an in-
crease in weighted capital costs of capital of 10 % and a
reduction of half a percentage point in the long-term
growth rate would lead to an additional impairment of
€ 3.6 million, € 5.4 million or € 2.9 million respectively.
130
Annual Report 2018
Axel Springer SE
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
Technical
equipment
and
machinery
Other
equipment,
operational
and office
equipment
Pre-
payments on
construction
in progress
Land and
buildings
Right-of-use
assets
Balance as of 01/01/2017
423.8
542.9
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Reclassifications
Balance as of 12/31/2017
Initial application of IFRS 16 as of 01/01/2018
Initial consolidation
Deconsolidation
Currency effects
Additions
Disposals
Reclassifications
Balance as of 12/31/2018
0.0
0.0
0.9
2.1
– 138.4
3.1
291.6
0.0
– 0.1
– 0.8
1.5
– 62.5
– 0.6
229.1
0.0
0.0
0.3
3.7
– 2.3
1.7
546.4
0.0
0.0
– 0.4
3.1
– 2.6
– 1.3
545.2
243.5
0.8
– 0.2
– 0.3
36.7
– 11.5
– 4.0
265.1
0.9
– 0.7
0.1
23.1
– 25.4
– 5.2
257.9
Depreciation, amortization, and impairments
Balance as of 01/01/2017
149.8
417.5
174.9
Deconsolidation
Currency effects
Additions
Thereof depreciation
Thereof impairment losses
Disposals
Reclassifications
Balance as of 12/31/2017
Deconsolidation
Currency effects
Additions
Thereof depreciation
Thereof impairment losses
Disposals
Reclassifications
Balance as of 12/31/2018
Carrying amounts
Balance as of 12/31/2018
Balance as of 12/31/2017
0.0
0.2
7.1
7.1
0.0
– 34.3
– 0.5
122.3
0.0
– 0.2
5.1
5.1
0.0
– 35.3
– 1.5
90.3
138.8
169.3
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
– 0.6
– 0.3
27.1
27.0
0.1
– 24.7
– 4.0
182.9
75.0
79.7
0.0
– 0.2
20.0
19.9
0.1
– 2.5
– 4.4
450.4
94.8
108.8
131
51.3
0.0
0.0
0.1
50.5
– 0.4
– 7.6
93.9
0.0
0.0
0.0
87.5
– 0.1
– 3.2
178.2
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
0.0
0.0
0.0
190.9
4.9
– 0.8
1.0
134.9
– 19.2
10.2
321.8
– 0.2
0.0
60.2
60.2
0.0
– 9.7
10.0
60.3
178.2
261.5
93.9
Total
1,261.5
0.8
– 0.2
1.0
93.0
– 152.5
– 6.8
1,196.9
190.9
5.8
– 1.5
– 0.2
250.1
– 109.8
0.0
1,532.2
742.2
– 0.1
0.4
53.5
52.5
1.0
– 45.9
– 4.8
745.2
– 0.8
– 0.7
112.4
112.2
0.2
– 72.2
0.0
783.9
748.3
451.7
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
As of December 31, 2018, property, plant and equip-
ment with acquisition or production costs of € 254.6 mil-
lion (PY: € 299.3 million) were in use, that had already
been fully depreciated.
At the balance sheet date, property, plant and equip-
ment amounting to € 7.7 million (PY: € 37.9 million) had
been pledged as security for own liabilities.
As of December 31, 2018, the following right-of-use as-
sets from leases were accounted for:
€ millions
Real estate
Technical equipment and machinery
Other equipment, operational and office equipment
Right-of-use assets
12/31/2018
246.2
2.4
12.9
261.5
As of December 31, 2017, the carrying amount of prop-
erty, plant and equipment recognized as part of finance
leases amounted to € 0.2 million. For the effects with re-
spect to the initial application of the new lease account-
ing standard (IFRS 16) as of January 1, 2018, see
note (3o).
Depreciations regarding right-of-use assets from leases
broke down as follows in the reporting year:
€ millions
Real estate
Technical equipment and machinery
Other equipment, operational and office equipment
Depreciation on right-of-use assets
2018
52.0
1.5
6.8
60.2
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 are reported as a so-
called sale-and-leaseback transaction. Consequently,
the remaining carrying amount of the building as of Janu-
ary 1, 2018 (€ 27.0 million) in the amount of € 19.7 mil-
lion was to be carried forward as a new leasing right-of-
use asset and derecognized in the amount of € 7.3 mil-
lion. On the basis of the future rent payments, a lease lia-
bility in the amount of € 113.8 million was recognized as
of January 1, 2018. In total, the transaction resulted in in-
come of € 34.9 million in the fiscal year 2018 which was
adjusted as a non-recurring effect (see note (31)).
At the end of 2017, the sale of the Axel-Springer-Pas-
sage in Berlin was completed with payment of the pur-
chase price of € 330.0 million (before tax payments of
€ 79.9 million) and the handover of the building. The re-
maining carrying amount was derecognized, amounted
to € 134.6 million and related with € 104.8 million to
property, plant and equipment and with € 29.8 million to
investment property. The tax expense, taking into ac-
count the reversal of deferred tax liabilities from previous
years, amounted to € 55.7 million. Since the beginning
of the reporting year, we use the substantial part of the
Axel-Springer-Passage in Berlin as a tenant until the end
of 2020 for an initial annual rent of € 10.9 million. On the
basis of future lease payments, a right-of-use asset in
the amount of € 41.5 million, a lease receivable from
subleasing rented areas totaling € 6.4 million and a lease
liability of € 49.4 million were recognized as of Janu-
ary 1, 2018. Furthermore, a provision recorded in con-
nection with the lease contract as of December 31,
2017, was offset against the right-of-use asset.
Additions during the reporting year in construction in pro-
gress amounted to € 76.0 million (PY: € 48.3 million) and
related to the new Axel Springer building in Berlin (for ad-
ditional information regarding the construction project
see note (39)).
132
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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 or the beginning of 2020
respectively. Axel Springer will rent the new building
starting in 2020 on a long-term basis.
€ millions
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
12/31/2018 12/31/2017
67.8
452.4
61.0
419.0
– 121.5
– 108.4
– 105.6
– 86.3
293.2
285.3
(6) Non-current financial assets
(a) Investments recognized using the equity
method
Since the beginning of 2016, we legally hold a 50 %
stake in Ringier Axel Springer Schweiz AG, Zurich,
Switzerland. The company gathers all Swiss-German
and West Swiss newspaper and broadsheet titles (in-
cluding their associated online portals) of Ringier and
Axel Springer.
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
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:
€ millions
Revenues
Income after taxes
Other income/loss
Comprehensive income
2018
198.8
14.5
– 3.7
10.8
2017
206.8
12.7
7.3
19.9
Of the total comprehensive income, an amount of
€ 5.8 million (PY: € 9.0 million) is attributable to our
share. Taking into account a write-up in the amount of
€ 1.2 million in the reporting year (PY: impairment of
€ 38.7 million; see note (24)), which was eliminated as a
non-recurring effect (see note (31)), we thus disclose a
carrying amount of € 107.9 million (PY: € 103.0 million)
for our investment as of December 31, 2018. The
change in the carrying amount of the investment also re-
sulted from currency translation effects recognized in ac-
cumulated other comprehensive income. The impairment
loss recorded in the News Media segment in the previ-
ous year is due to the development of the advertising
market and the digitization potential in Switzerland and
the resulting adjusted earnings expectations for future
years. The recoverable amount of € 103.0 million was
based on the fair value less costs to sell. The calculation
was based on non-observable input factors (Level 3) us-
ing a discounted cash flow method by discounting future
expected dividend payments. The used discount rate af-
ter taxes of the previous year amounted to 7.1 %.
At the end of April 2018, Axel Springer acquired 11.5 %
of the shares in Purplebricks Group plc, Solihull,
United Kingdom, through a capital increase and pur-
chase of existing shares from shareholders (see note
(2c)). Purplebricks operates a transaction-based digital
real estate platform. The company is also active in Aus-
tralia, the USA and Canada. Since December 2015, Pur-
plebricks has been listed on the London Stock Ex-
change. The purchase price for the investment
amounted to € 143.2 million which equals a price per
share of £ 3.60. In July 2018, Axel Springer has acquired
further shares for a price per share of £ 3.07 and a total
value of € 10.4 million, thereby increasing its stake to
around 12.5 %. Dr. Andreas Wiele, President Classifieds
Media of the Axel Springer SE, has assumed a seat on
133
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
the Board of Directors of the company, so that we ac-
count for the investment using the equity method taking
into account further shareholder rights.
Summarized financial information regarding all compa-
nies which are accounted for using the equity method
and are not individually material are shown below:
Purplebricks has a balance sheet date (April 30) which
differs from this Annual Report. Due to restrictions with
respect to securities laws, we do not receive any finan-
cial information as of December 31, 2018. Thus, the in-
vestment is included into the consolidated financial state-
ments with its half-yearly figures as of October 31, 2018.
Summarized financial information (pursuant to IFRS) re-
garding the investment (including PPA effects and the
goodwill (on a 100 % basis)) are shown below:
€ millions
Non-material associates
Carrying amount
Share attributable to Axel Springer SE:
Income from continued operations
Other income/loss
Comprehensive income
2018
2017
37.2
54.9
– 0.2
0.0
– 0.3
0.0
– 0.2
– 0.3
05/01 - 10/31/2018
€ millions
2018
2017
€ millions
Revenues
Income after taxes
Other income/loss
Comprehensive income
€ millions
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Of the total comprehensive income, an amount of € -4.2
million is attributable to our share in the reporting year. Tak-
ing into account an impairment of € 82.9 million (see note
(24)) in the reporting year, we thus disclose a carrying
amount of € 62.3 million for our investment as of Decem-
ber 31, 2018. The change in the carrying amount of the in-
vestment also resulted from currency translation effects
recognized in accumulated other comprehensive income.
The impairment recorded in the Classifieds Media segment
stems from the declining stock market price since acquisi-
tion and was eliminated as a non-recurring effect (see
note (31)).
74.0
– 33.9
0.0
– 33.9
10/31/2018
145.1
481.6
– 51.9
– 76.2
498.6
Non-material joint-ventures
Carrying amount
30.0
9.6
Share attributable to Axel Springer SE:
Income from continued operations
Other income/loss
Comprehensive income
7.1
0.0
7.1
1.4
0.0
1.4
In the reporting year proportionate net income to be rec-
ognized in income from investments was not recorded in
the amount of € -2.1 million (PY: € 0.0 million), since the
respective net investment had been impaired.
(b) Other non-current financial assets
Other non-current financial assets as of December 31,
2018, included investments measured at fair value
through profit or loss in the amount of € 212.4 million
and convertible loans of € 1.9 million. The miscellaneous
other non-current financial assets, mainly loans, in the
amount of € 26.4 million were accounted for at amor-
tized cost.
134
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The investments contained particularly our shares in
Group Nine Media Inc. with € 75.1 million (PY:
€ 68.5 million).
(7) Trade receivables
The trade receivables broke down as follows:
In May 2018, Axel Springer sold its remaining share of
approximately 7 % in Do⁄an TV to Do⁄an Holding for a
total purchase price of € 160.0 million through exercise
of the put options. Through the sale, no material income
effects occurred. In the previous year, the options, which
were secured by bank guarantees, were disclosed in
other non-current financial assets in the amount of
€ 155.3 million. The valuation of the put options in the
previous year was based on the discounted payment
claim deriving from the agreed option rights, minus all
costs to be incurred. The discount rates were deter-
mined according to the duration of the put options and
the default risk, taking into account the granted bank
guarantees.
€ millions
12/31/2018 12/31/2017
Trade receivables, nominal
Allowances for doubtful trade receivables
Trade receivables
797.8
– 14.9
782.9
715.5
– 21.6
693.9
The allowances for trade receivables as of December 31,
2018, were determined based on the application of the
new expected loss model (see note (3f)) in the amount of
the expected losses on receivables. This resulted in the
following provision matrix:
€ millions
Expected loss rate
Trade receivables, nominal
Allowances for doubtful trade receivables
Overdue
Non
overdue
up to 30
days
31 to 90
days
91 to 180
days
> 180 days
past due 12/31/2018
0.1 %
601.7
0.5 %
110.2
– 0.7
– 0.5
2.3 %
14.2 %
49.9 %
44.9
– 1.0
21.7
– 3.1
19.3
– 9.6
797.8
– 14.9
The changes in the allowances for doubtful trade receiv-
ables are presented below:
€ millions
Balance as of 01/01
Adjustment due to initial application of
IFRS 9 (see note (3o))
Balance as of 01/01, adjusted
Additions
Reversals
Utilization
Other changes
Balance as of 12/31
2018
21.6
– 3.4
18.1
18.8
– 6.4
– 16.0
0.3
14.9
2017
25.4
0.0
25.4
6.7
– 0.8
– 4.0
– 5.8
21.6
In the reporting year, trade receivables in the amount of
€ 16.0 million (PY: € 4.0 million) were impaired and de-
recognized (utilizations). Of the amounts derecognized in
the reporting year € 7.1 million were still subject to en-
forcement measures.
Other changes of the prior year mainly related to reclassi-
fications into assets held for sale (see note (9)).
135
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(8) Other assets
The other assets broke down as follows:
The future (undiscounted) cash inflows from finance
leases (€ 4.8 million) are due as follows:
€ millions
12/31/2018 12/31/2017
Reimbursement right for pension
obligations
Deposits
Receivables from finance leases
Other
Other financial assets
Thereof current
Thereof non-current
Advance payments
Contract assets1)
Receivables due from employees
Receivables from other taxes
Other
Other non-financial assets1)
Thereof current1)
Thereof non-current
Other assets
Thereof current1)
Thereof non-current
23.4
7.7
4.7
17.4
53.2
23.2
30.0
27.1
0.6
1.1
22.2
14.7
65.7
56.0
9.7
24.8
10.4
0.0
43.1
78.3
42.8
35.5
25.3
0.9
0.8
30.5
13.7
71.3
62.8
8.5
118.9
149.6
79.2
39.7
105.6
44.0
1) Adjustment of prior year figures as of December 31, 2017 due to the retrospective
application of IFRS 15 (by € 0.9 million); see note (3o) ("New accounting standards").
The receivables from finance leases relate almost entirely
to the sublease of the Axel-Springer-Passage in Berlin
with an amount of € 4.5 million (see note (5)). Regarding
the reimbursement right concerning pension obligations,
see note (12). The miscellaneous other financial assets
particularly included a purchase price claim for the final
instalment regarding the sale of the office building in
Hamburg executed in 2016, reimbursement claims and
debit balances in accounts payable.
€ millions
2019
2020
2021
2022
2023
2024 ff.
Contractual (undiscounted) cash inflows
Unrealized financial income
Receivables from finance leases
12/31/2018
2.0
2.1
0.1
0.1
0.1
0.3
4.8
– 0.1
4.7
(9) Assets held for sale
The assets held for sale and the related liabilities dis-
closed in the previous year in the following table were
completely derecognized in the reporting year:
€ millions
aufeminin Group
Ringier Axel Springer 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). The transaction was completed at the end of
April 2018 after approval by the relevant antitrust authori-
ties.
136
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
In November 2017, the sale of the newspaper and mag-
azine portfolio including the associated online offers of
Ringier Axel Springer Slovakia (News Media segment)
was contracted. The disposal was finalized after authori-
zation by the local authorities at the end of July 2018.
For the assets and liabilities derecognized as part of
those two transactions, see note (2c).
(10) 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
Pursuant to Section 5 (4) of the Articles of Incorporation,
the Executive Board is entitled due to resolution of the
Annual General Meeting of April 18, 2018, to increase
the share capital one time or multiple times by a maxi-
mum amount of € 10.5 million with consent of the Su-
pervisory Board until April 17, 2023, by issuance of
newly registered shares in return for cash and/or contri-
butions in kind (authorized capital). The shareholders
generally thereby must be granted a subscription right.
However, the Executive Board is entitled under specific
circumstances with the approval of the Supervisory
Board to waive the subscription right of the sharehold-
ers. The resolution of the Annual General Meeting of
April 14, 2015, to increase the share capital and to waive
the subscription right pursuant to Section 5 (4) of the
company's Articles of Incorporation was revoked with
the new authorized capital coming into effect.
As of December 31, 2018, the authorized capital was
not utilized and amounted to € 10.5 million.
(c) Additional paid-in capital
The additional paid-in capital (€ 496.0 million; PY:
€ 501.0 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 settled with equity instruments (see note (11)).
In the reporting year, the remaining value of the share-
based compensation program of the aufeminin Group in
the amount of € 5.5 million was reclassified into the ac-
cumulated retained earnings at the date of disposal (see
note (2c)).
(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 € 215.8 million
(PY: € 205.0 million) or € 2.00 (PY: € 1.90) per qualifying
share for the previous reporting year. For the reporting
year 2018, the Executive Board and the Supervisory
Board propose to distribute a dividend of € 2.10 per
share entitled to the dividend, in total representing
€ 226.6 million in expected payments. Payment of the
proposed dividend is contingent upon approval at the
Annual General Meeting on April 17, 2019.
Due to the initial application of the new accounting
standard regarding revenue recognition, IFRS 15 "Reve-
nue from Contracts with Customers" as of January 1,
2018, following the full retrospective approach, the prior-
year period was adjusted accordingly with the accumu-
lated retained earnings as of January 1, 2017, increasing
by € 0.9 million (see note (3o)).
The initial application of the new accounting standard
IFRS 9 "Financial Instruments" as of January 1, 2018, led
to a decrease of the allowances recorded on trade re-
ceivables. Taking into account deferred taxes, the accu-
mulated retained earnings increased, without effecting
profit or loss, by € 2.5 million (see note (3o) and (7)).
Moreover, as of January 1, 2018, the fair value adjust-
ments for investments classified as available-for-sale in
137
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
the amount of € 8.0 million, which were previously rec-
ognized in accumulated other comprehensive income,
were reclassified into accumulated retained earnings (see
note (3o) and note (11e)).
Furthermore, transactions with shareholders are recog-
nized within the accumulated retained earnings.
As part of the merger of the Immowelt and Immonet
group in June 2015, non-controlling shareholders were
granted put options for 35 % of non-controlling interests
at a fixed option price, exercisable at any time up until
the second quarter of 2018, which do not grant present
ownership interests. In 2015, the resulting obligation was
recognized without effects on income, solely decreasing
equity. The option rights expired in the second quarter of
2018 due to non-exercise. As a result, the recorded lia-
bility (€ 159.8 million) was completely derecognized with-
out effects on income, solely increasing equity.
In the previous year, the contribution of 20 % of the
shares of AWIN AG with respect to the acquisition of the
affilinet Group led to an increase of the accumulated re-
tained 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 € -125.3 million (PY:
€ -118.9 million).
As in the previous year, changes in foreign currency
translations are primarily due to conversions of financial
statements denominated in US-Dollar.
As of January 1, 2018, the fair value adjustments for in-
vestments classified as available-for-sale in the amount
of € 8.0 million, which were previously recognized in ac-
cumulated other comprehensive income, were reclassi-
fied into accumulated retained earnings (see note (3o)
and note (11d)).
(f) Non-controlling interests
The non-controlling interests mainly related to the follow-
ing companies:
€ millions
12/31/2018 12/31/2017
Ringier Axel Springer Media Group
249.0
261.0
Immowelt Group
AWIN Group
Other companies
Non-controlling interests
79.2
57.9
74.6
460.6
74.1
58.8
117.4
511.4
As of December 31, 2018, the non-controlling interests
in Ringier Axel Springer Media amounted to 50.0 % (PY:
50.0 %), whilst their share in the Group net income
amounted to € 8.0 million (PY: € 11.4 million). Moreover,
they received dividend distributions of € 10.0 million (PY:
€ 0.0 million) which were paid out from net profit.
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
Cash flow from investing activities
2018
278.9
14.3
– 6.0
165.2
451.7
62.1
47.7
53.7
44.3
Cash flow from financing activities
– 34.3
2017
273.0
20.0
43.9
187.7
466.8
71.1
51.6
41.2
– 14.2
– 28.6
The decrease of the non-controlling interests attributable
to other companies can mainly be ascribed to the dis-
posal of the aufeminin Group (see note (2c)).
138
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Regarding the contribution of 20 % of the shares of
AWIN AG related to the acquisition of the affilinet Group
in the previous year, see note (2c).
terms a total payment of 0.48 % of the increase in mar-
ket capitalization ("Executive LTIP").
(11) Share-based payment
In the reporting year, expenses and income for share-
based payment programs amounted to € -10.7 million
and € 11.5 million respectively (PY: € -44.9). These ef-
fects were attributable to equity-settled programs with an
amount of € -1.1 million (PY: € -1.0 million) and to cash-
settled programs with an amount of € -9.6 million and
€ 11.5 million respectively (PY: € -43.9 million). The liabil-
ity recorded for share-based payments concerns espe-
cially the following stock option plans and totaled
€ 31.3 million (PY: € 55.1 million).
As of May 1, 2016, members of the Executive Board,
which already held office in 2016, were granted a long-
term variable remuneration in the form of a long-term in-
centive plan ("LTIP") with a duration – including lock-up
periods – until 2023. In addition, selected executives
were granted this LTIP with largely equal terms in the re-
porting year. The LTIP stipulates a participation in the in-
crease in the company value, measured on the basis of
market capitalization. It will be distributed in the form of a
cash bonus and contains a subsequent obligation to pur-
chase Axel Springer shares in the corresponding amount.
The compensation entitlement requires market capitali-
zation 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. The compensation entitle-
ment will increase only up to a growth in market capitali-
zation by maximally 60 %.
In the event of targets being achieved, the eligible mem-
bers of the Executive Board were entitled to a payment
claim totaling 4.0% of the increase in market capitaliza-
tion. In the reporting year, the LTIP was adjusted by re-
ducing the payment to entitled members of the Executive
Board to 3.63 % ("Executive Board LTIP") and by grant-
ing selected executives the LTIP with substantially equal
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 perfor-
mance period multiplied by the number of outstanding
Axel Springer shares (less treasury shares) adding divi-
dend distributions 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 to-
tal amount ("payout amount II") will be paid out. In the
case of early target achievement after three years, the
payout amount I is to be paid out immediately, but only
in the case of the Executive Board LTIP, if the beneficiar-
ies exercise their respective option. Solely in the case of
premature target achievement, payout amount II will 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 payments (after taking into account
taxes and duties to be paid) must always be fully in-
vested in issued Axel Springer shares. The equity invest-
ment made in respect of the payout amount I or II must
be held for a minimum of two years or one year. The
LTIP contains common regulations for premature retire-
ment. Thus, e.g. all non-contractual claims not paid out
under the LTIP lapse if the member of the Executive
Board or the company executive leaves the Executive
Board or resigns at his own request before expiration of
the waiting period or termination of the employment rela-
tionship.
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.
139
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The value of the Executive Board LTIP at grant date was
determined at € 32.1 million, using a stochastic model
for the valuation of stock option rights. On the basis of
the valuation adjustment made retrospectively to the
grant date in the reporting year, the value amounts to
€ 29.1 million. The value of the LTIP granted retrospec-
tively to selected executives amounts to € 3.9 million. In
the reporting year, the valuation of the Executive Board
LTIP resulted in other operating income totaling
€ 9.2 million (PY: personnel expenses of € 20.2 million),
in particular due to the development of the price of the
Axel Springer share. Personnel expenses of € 1.9 million
(PY: € 0.0 million) were incurred for the Executive LTIP.
As of December 31, 2018, the liabilities (Executive Board
LTIP) and provisions (Executive LTIP) recognized
amounted to € 14.5 million (PY: € 23.7 million) and
€ 1.9 million (PY: € 0.0 million) respectively.
Members of the Executive Board and selected executives
(beneficiaries) were granted virtual stock option plans.
The Executive Board Programs 2014 I and 2014 II, as
well as the Senior Executive Program 2014 were fully ex-
ercised during the reporting year and are thus terminated.
In the reporting year, the Executive Board member not
participating in the LTIP was granted a virtual stock op-
tion plan 2018 (Executive Board Program 2018). The fun-
damental parameters of the current plans of the reporting
year and those of the prior year are shown 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
2014 I
2014 II
2018
2014
01/01/2014
09/01/2014
10/01/2018
03/01/2014
6
4
6
4
6
4
5
3
205,313
675,000
225,000
60,000
44.06
88.12
6.69
1.4
44.56
89.12
6.26
4.2
62.06
124.12
4.35
1.0
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 may become vested. If
the employment with the company ends before the end
of the vesting period, but ends 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 Programs) or up to one half (Senior Executive
Program 2014).
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
percentage increase of this average price exceeds that
of the base value of the development of the DAX over a
period of 90 calendar days (Executive Board Programs)
or three calendar months (Senior Executive Program)
within a time period of a year before the end of the wait-
ing period.
Exercising stock options is only possible if the volume-
weighted average price of the Axel Springer share of 90
calendar days (Executive Board Programs) or of three cal-
140
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
endar months (Senior Executive Program) before exercis-
ing such options is at least 30 % over the base value and
that the percentage increase exceeds that of the DAX in-
dex. 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.
01/01/2017
Exercise
Lapse
12/31/2017
Exercise
Grant
12/31/2018
Beneficiaries are obliged to hold one Axel Springer share
for every ten stock options as their own investment. Dis-
posing of these shares prior to exercising the stock op-
tions would result in the stock options being forfeited at
the same rate.
The value of the options was determined by application
of a Black-Scholes model in a Monte-Carlo simulation at
grant date. The options will be remeasured at each bal-
ance sheet date and recognized proportionally in ac-
cordance with the projected vesting. The development of
the stock options is shown below:
Virtual stock option plans
Executive Board Program
2014 I
2014 II
2018
205,313
675,000
0
0
0
0
205,313
675,000
– 205,313
– 675,000
0
0
0
0
0
0
0
0
0
225,000
225,000
Senior
Executive
Program
2014
60,000
0
0
60,000
– 60,000
0
0
The expenses and income in the reporting year, as well as the portfolio of liabilities and provisions at the balance sheet
date are shown below:
€ millions
Expenses/income 2018
Expenses/income 2017
Carrying amount as of 12/31/2018
Carrying amount as of 12/31/2017
Virtual stock option plans
Executive Board Program
2014 I
2014 II
– 1.0
– 4.2
0.0
4.9
2.2
– 10.7
0.0
13.0
2018
– 0.1
0.0
0.1
0.0
Senior
Executive
Program
2014
0.1
– 1.2
0.0
1.3
141
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The following material share-based payment 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 ten 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.
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, 2018, 11,097 option rights still ex-
isted (PY: 15,854 options) of which none are exercisable.
The exercise price of the option per share amounts to
kUSD 3.6 (k€ 3.2). The weighted average residual term
of the option was 6.8 years (PY: 7.8 years). In the previ-
ous year, it was agreed that in case that prescribed reve-
nue and performance targets in 2018 are met, 30% of
the option rights shall be acquired by Axel Springer; thus,
in the reporting year, 4,757 options were repurchased for
a payment of USD 4.6 million (€ 4.0 million). Further-
more, in the previous year, it has been agreed that in the
event of reaching revenue targets in the year 2020, an
advance payment in the amount of USD 15.0 million
(€13.1 million) will occur, which will be offset against any
future payments from the options; in the reporting year, it
has also been stipulated that regardless of reaching de-
fined targets, half of the aforementioned payment shall
be made in equal annual installments from 2018 until
2022. An additional USD 3.0 million (€ 2.6 million) shall
be disbursed in the event of earnings and revenue tar-
gets being achieved in 2021/2022. To date, such pay-
ments have not occurred. There is no repayment obliga-
tion in case of stock options being forfeited or not being
exercised. If targets are not achieved, the stock option
program will continue unchanged at the respective
dates. Due to the adjustment of the program in the re-
porting year, its fair value increased by USD 2.8 million
(€ 2.5 million); due to the adjustment of the program in
the previous year, the fair value increased by
USD 4.2 million (€ 3.5 million).
The fair value was still determined on the basis of an op-
tion pricing model using a Monte Carlo simulation. In the
reporting year, an amount of € 6.0 million in personnel
expenses was recorded (PY: 4.9 million). The value of the
liability as of December 31, 2018 arising from the option
program amounted to € 14.9 million (PY: € 12.3 million).
Other share-based payment programs were individually
and in total insignificant for the financial position, liquidity,
and financial performance of the Group.
142
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(12) 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 € 51.4 million (PY:
€ 50.0 million) and were shown as social security contri-
butions in personnel expenses.
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 fair
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 Com-
pany Pension Act. The commitments to the Executive
Board correspond in their design to the second pension
plan and are additionally dynamic in the vesting period
depending on inflation. The third pension plan is a de-
fined-contribution benefit in which a benefit is calculated
using fixed factor tables dependent on converted com-
pensation components. Ongoing benefits are adjusted
from the beginning of pension payments at 1 % p.a. The
fourth pension plan includes direct commitments based
on subsidized remuneration conversions which are con-
gruently covered by insurance and usually grant a one-
time payment upon retirement.
The measurement was based on the following parame-
ters:
Information in %
2018
2017
Discount rate
Salary trend
Pension trend
1.6
1.6
1.6
1.6
1.5
1.5
The expected life spans were determined with reference
to the mortality tables 2018 G (PY: 2005 G) by Dr. Klaus
Heubeck.
143
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The following table shows the development of the defined benefit pension liabilities as well as associated plan assets
and reimbursement right:
Defined benefit
liabilities
Plan assets
Provisions for
pensions
Reimbursement
right
Net obligation
€ millions
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Balance as of 01/01, adjusted
538.4
534.4
– 174.9
– 162.9
363.5
371.5
– 24.8
– 26.6
338.7
344.9
Current service costs
Plan curtailments
Net interest expense
Pension expenses
Actuarial gains/losses from plan
assets
Changes in demographic
assumptions
Changes in financial assumptions
Experience-related adjustments
Actuarial gains/losses
Employer contribution
7.9
8.5
8.4
0.1
8.8
– 5.0
16.4
17.3
– 5.0
– 3.2
– 3.2
7.9
0.0
3.5
8.4
0.1
5.6
– 0.4
11.4
14.1
– 0.4
0.2
– 0.3
0.2
– 0.3
4.1
4.7
1.0
9.8
0.0
7.4
– 2.1
4.1
4.7
1.0
0.0
7.4
– 2.1
– 0.2
– 0.2
0.1
5.3
0.2
– 0.3
10.0
5.0
– 0.3
– 141.6
– 26.5
– 141.6
– 26.5
– 0.4
– 0.4
0.0
– 0.2
0.3
0.1
7.9
0.0
3.1
8.4
0.1
5.2
11.0
13.7
0.2
– 0.3
3.9
4.5
1.1
9.7
0.0
7.2
– 1.8
5.1
– 141.6
– 26.5
2.7
2.8
Employee contribution
3.0
3.0
– 0.3
Key performance indicator
– 21.3
– 21.4
Change in consolidated companies
Other
4.9
0.1
– 0.2
– 0.2
18.1
0.1
2.7
– 21.3
4.9
0.1
2.8
– 3.3
0.0
– 0.1
2.1
2.1
– 19.2
– 1.2
4.9
0.1
0.0
– 0.1
Other changes
– 13.3
– 18.6
– 141.9
– 8.5
– 155.2
– 27.1
2.1
2.1
– 153.1
– 25.0
Balance as of 12/31
551.3
538.4
– 321.6
– 174.9
229.7
363.5
– 23.4
– 24.8
206.3
338.7
Service costs and expenses from plan curtailments are
represented in personnel expenses (see note (21)). Net
interest expenses are represented in financial result (see
note (25)). Actuarial gains and losses are represented in
other income or loss in the consolidated statement of
comprehensive income (see note (28)).
As of December 31, 2018, the weighted average dura-
tion of the defined benefit obligation was 14 years (PY:
14 years).
144
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Plan assets broke down as follows:
€ millions
Shares
Bonds
Cash and cash equivalents
Real estate funds
Others
Plan assets with market price
quotations
Real Estate
Others
Plan assets without market price
quotations
Total
12/31/2018 12/31/2017
32.8
62.4
22.0
18.3
24.2
159.7
161.3
0.5
161.8
321.6
53.7
72.5
21.8
18.3
7.8
174.1
0.5
0.3
0.8
174.9
Employer contributions to the plan assets included
mainly the fiduciary transfer of the Axel Springer high-rise
(main building) in Berlin to Axel Springer Pensionstreu-
hand e.V. in the reporting year (see note (5)). In 2019 we
do not expect any significant employer contributions to
plan assets.
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 (see
note 8), whereas in the income statement, the income
from the reimbursement was netted with the corre-
sponding pension expenses. Based on the existing con-
tractual regulations, we do not assume a short-term set-
tlement of the reimbursement claim and the
corresponding pension obligations any more, and there-
fore in the reporting period, we classified the asset as
well as the related pension liability in an amount of
€ 21.4 million (PY: € 22.7 million) as non-current. The
remaining amount of € 2.0 million (PY: € 2.1 million) was
classified as current.
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:
Increase by
25 basis points
Decrease by
25 basis points
Information in %
2018
2017
2018
2017
Discount rate
Salary trend
Pension trend
– 3.3
– 3.4
0.1
2.3
0.1
2.4
3.5
– 0.1
– 2.2
3.6
– 0.1
– 2.3
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, 2018, pension obliga-
tions in Germany would have risen by 4.3 % (PY: 3.2 %).
145
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(13) Other provisions
Other provisions broke down as follows:
€ millions
01/01/2018 Utilization Reversals Additions
Balance as of
Other
changes
Balance as of
12/31/2018
Thereof
current
Thereof
non-current
Other obligations
towards employees
Partial early retirement
program (Altersteilzeit)
Structural measures
Discounts and rebates
Returns
Litigation expenses
Other taxes
Dismantling obligations
91.6
– 68.9
– 3.6
44.9
43.1
15.6
12.0
11.6
8.5
7.7
– 11.1
– 27.9
– 13.9
– 8.4
– 3.7
0.0
– 0.5
0.0
– 1.5
– 1.5
– 0.8
– 2.9
0.0
– 2.1
– 1.7
84.8
11.6
23.4
13.4
8.1
2.4
1.9
0.3
6.4
2.1
0.0
0.0
0.1
0.0
0.2
0.0
0.1
0.2
106.0
45.3
37.1
13.8
10.9
7.5
10.5
5.5
20.3
72.2
11.5
29.9
13.8
10.9
5.3
10.5
0.5
16.3
33.8
33.8
7.2
0.0
0.0
2.2
0.0
5.0
4.1
Other
30.8
– 15.4
Other provisions
265.8
– 149.9
– 14.2
152.4
2.7
256.8
170.8
86.0
Other obligations towards employees primarily in-
cluded variable compensation tied to performance
measures. Structural measures were mainly allocated
to the newspaper and magazine units as well as distri-
bution and sales divisions, and printing plants. Other
provisions mainly involved rebuilding measures still to
be carried out in connection with the sale of the office
building complex in Hamburg in 2016 and the sale of
the Axel-Springer-Passage in Berlin (see note (5)).
The other changes resulted from the initial consolida-
tion of acquired companies (see note (2c)), currency
translation differences and compounding.
(14) Financial liabilities
The financial liabilities comprised liabilities from promis-
sory notes in the amount of € 698.8 million (PY: € 817.7
million), other liabilities due to banks amounting to
€ 452.3 million (PY: € 365.1 million), as well as from
leases of € 379.6 million (PY: € 0.3 million).
The increase of the financial liabilities from leases was a
result of the initial application of IFRS 16 as of Janu-
ary 1, 2018, (see note (3o)) and the recognition of new
lease liabilities of the fiscal year 2018, particularly with re-
spect to the contracts concluded to rent the Axel-
Springer-Passage and the Axel Springer high-rise (main
building), see note (5).
146
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
19.8
16.0
0.3
22.8
162.2
119.6
42.6
262.0
79.8
48.5
22.3
10.5
5.8
3.8
10.0
442.6
436.8
5.7
604.8
556.4
48.3
19.6
12.6
0.4
32.3
362.8
233.3
129.5
215.8
55.7
45.4
20.3
8.5
5.1
4.3
21.8
376.9
348.3
28.6
739.7
581.6
158.1
The promissory notes (nominal amounts) were character-
ized by the following utilizations, interest rates, and ma-
turities at the reporting date:
(15) Other liabilities
The other liabilities broke down as follows:
€ millions
12/31/2018 12/31/2017
Interest rate in %
Maturity
1.14 05/30/2024
Contingent consideration and other put
options for purchase of non-controlling
interests
103.4
297.9
2018
€ million
2017
€ million
327.5
146.0
72.0
69.0
327.5
146.0
72.0
69.0
66.5
12.0
11.5
0.0
0.0
0.73 05/30/2022
Liabilities from loans
0.91 05/30/2023
Debit balances in accounts receivable
1.47 10/12/2020
Liabilities from derivatives
66.5
6-month EURIBOR + 0.70 05/30/2024
Other
12.0
6-month EURIBOR + 0.55 05/30/2022
Other financial liabilities
11.5
104.0
70.5
0.51 05/30/2021
1.03 10/11/2018
Thereof current
Thereof non-current
3.06 04/11/2018
Contract liabilities1)
The other liabilities due to banks (nominal amounts) re-
lated almost exclusively to utilization of credit lines by
Axel Springer SE, characterized by utilizations, interest
rates, and maturities set forth in the table below:
Liabilities from other taxes
Liabilities due to employees
Accrued liabilities
Liabilities due to social insurance carriers
Liabilities for duties and contributions
Capital investment subsidies
Other
2018
€ million
2017
€ million
Interest rate in %
Maturity
Other non-financial liabilities
175.0
115.0
100.0
63.0
1.9
0.0
60.0
135.0
0.0
0.0
2.4
Eonia + 0.30
07/03/2023
Eonia + 0.25
07/03/2023
Eonia + 0.25
07/03/2023
1-month EURIBOR +0.25
07/03/2023
3-month EURIBOR + 0.30
10/15/2022
170.0
1-month EURIBOR +0.43
07/03/2020
Thereof current
Thereof non-current
Other liabilities
Thereof current
Thereof non-current
Furthermore, on the reporting date additional unused
long-term credit facilities amounted to € 1,047.0 million
(PY: € 835.0 million).
The commercial paper program available since the re-
porting year (see note (32)) was not used significantly
during the reporting year and was not utilized as of the
reporting date.
1) Adjustment of prior-year figures due to the retrospective application of IFRS 15
contract liabilities recognized under advance payments from customers
(€ 204.9 million) and advance payments (€ 10.9 million) were reclassified (see
note (3o)).
Other financial liabilities mainly related to profit distribu-
tions to minority shareholders. Contingent consideration
and other put options for the purchase of non-controlling
interests primarily decreased due to non-exercised put
options for the acquisition of 35% of the non-controlling
interests of the Immowelt Group (see note (10d)) and due
to payouts (see note (33)). Contract liabilities mainly con-
sisted of advance payments from customers. Liabilities
due to employees related to outstanding wage and sal-
ary payments, management bonuses, and severance
147
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
compensation claims. Accrued liabilities contained liabili-
ties resulting from over-time and unused vacation.
(16) Maturity analysis of financial liabilities
The contractually agreed (undiscounted) payments related to financial liabilities are presented in the following table:
€ millions
Financial liabilities
thereof lease liabilities1)
Contingent consideration and other put options for purchase of
non-controlling interests
Other non-derivative financial liabilities
Derivative financial liabilities
€ millions
Financial liabilities
thereof lease liabilities
Contingent consideration and other put options for purchase of
non-controlling interests
Other non-derivative financial liabilities
Derivative financial liabilities
1) See note (3o) for initial application of IFRS 16.
Carrying
amount as of
12/31/2018
1,530.8
379.6
103.4
591.3
0.3
Carrying
amount as of
12/31/2017
1,237.0
0.3
297.8
547.5
0.4
Undiscounted cash outflows
2019
2020-2023
2024 ff.
82.7
73.9
87.8
563.2
0.3
964.8
176.1
15.7
11.9
0.1
596.4
206.3
0.0
16.2
0.0
Undiscounted cash outflows
2018
2019-2022
2023 ff.
185.4
0.3
199.5
516.5
0.2
633.3
0.0
88.9
15.0
0.2
472.2
0.0
10.9
16.0
0.0
148
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated income statement
(17) Revenues
Revenues in the reporting year and the prior year were almost exclusively generated from contracts with customers and
broke down as follows:
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
Classifieds
Media
2018
News
Media
Marketing
Media
Services/
Holding
2017
313.4
0.0
2,159.4
990.4
666.1
357.5
0.0 2,014.0
€ millions
Advertising
revenues1)
Circulation
revenues
Other revenues
1,167.4
678.5
0.0
45.1
592.0
225.7
Revenues
1,212.5
1,496.2
0.0
0.0
592.0
0.0
633.1
0.0
0.0
633.1
104.8
418.3
53.7
429.3
17.3
210.6
53.7
3,180.7
1,007.7
1,509.8
119.8
477.3
60.7
408.4
60.7
3,055.5
1) Adjustment of prior-year figures due to the retrospective application of IFRS 15 in the Marketing Media segment (by € 507.2 million); see note (3o).
Revenues in the Classifieds Media segment resulted al-
most exclusively from advertising revenues from online
classifieds ads and broke down as follows:
Revenues in the Marketing Media segment were pre-
dominantly generated by advertising customers in reach-
based and performance-based marketing and broke
down as follows:
€ millions
Jobs
Real Estate
General/Other
Revenues
2018
602.6
375.3
234.6
2017
495.9
290.1
221.7
€ millions
Reach-based marketing
Performance-based marketing
1,212.5
1,007.7
Revenues1)
2018
235.2
183.1
418.3
2017
317.7
159.6
477.3
Revenues in the News Media segment were predomi-
nantly generated by national and international advertising
and circulation revenues and broke down as follows:
€ millions
Advertising revenues national
Circulation revenues national
Other revenues national
2018
432.4
474.6
163.4
2017
448.3
504.7
156.2
Revenues national
1,070.4
1,109.2
Advertising revenues international
Circulation revenues international
Other revenues international
Revenues international
246.1
117.4
62.3
425.7
217.8
128.4
54.4
400.7
Revenues
1,496.2
1,509.8
1) Adjustment of prior-year figures due to the retrospective application of IFRS 15 in the Mar-
keting Media segment (by € 507.2 million); see note (3o).
Furthermore, revenues for group services and holding
functions of € 53.7 million (PY: € 60.7 million) were gen-
erated.
Contract liabilities recognized as of December 31, 2017,
of € 215.8 million almost completely led to revenue in the
reporting year.
Other revenues included revenues from operating leasing
of € 2.4 million. Thereof € 2.0 million were attributable to
income from subleasing in the reporting year.
149
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Future (undiscounted) cash inflows from operating leas-
ing are due as follows:
€ millions
2019
2020
2021
2022
2023
2024 ff.
Contractual (undiscounted) cash inflows
12/31/2018
1.9
1.3
0.2
0.2
0.2
0.6
4.5
(18) Other operating income
The other operating income broke down as follows:
in the previous year the income included € 200.5 million
from the sale of the Axel-Springer-Passage in Berlin (see
note (5)). Gains from the subsequent valuation of contin-
gent purchase price liabilities in the previous year in the
amount of € 50.0 million were attributable to options to
acquire non-controlling interests in Bonial Holding. The
gain on disposal of consolidated subsidiaries in the re-
porting year resulted mainly from the sale of the aufemi-
nin Group (see note (2c)). Miscellaneous operating in-
come contained a large number of non-material items.
(19) Change in inventories and internal costs
capitalized
Change in inventories and internal costs capitalized in-
creased to € 93.5 million (PY: € 87.7 million) in the re-
porting year and mainly related to IT development pro-
jects to develop and expand our digital business models.
€ millions
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
2018
2017
(20) Purchased goods and services
35.7
204.7
The purchased goods and services broke down as fol-
lows:
5.7
14.2
3.1
45.1
65.8
54.9
8.5
4.6
4.2
40.5
€ millions
2018
2017
Raw materials and supplies and
purchased merchandise
Purchased services1)
Purchased goods and services
114.6
435.1
549.7
114.5
429.6
544.2
1) Adjustment of previous-year figures by € 507.2 million due to retrospective appli-
cation of IFRS 15 (see note (3o)).
Other operating income
169.5
317.3
Income from the disposal of intangible assets and prop-
erty, plant and equipment and investment property in the
reporting year resulted mainly from the transfer of the
Axel Springer high-rise (main building) to Axel Springer
Pensionstreuhand e.V. and amounted to € 34.9 million;
Raw materials and supplies and purchased merchandise
comprised paper costs amounted to € 56.2 million (PY:
€ 53.3 million).
The cost of purchased services was predominantly com-
posed of purchased third-party printing services (includ-
ing paper costs), professional fees and other purchased
services.
150
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(21) Personnel expenses
(22) Depreciation, amortization, and impairments
The personnel expenses broke down as follows:
The depreciation, amortization, and impairments broke
down as follows:
€ millions
Wages and salaries
Social security
Share-based payments
Expenses of defined benefit plans
Other personnel expenses
2018
2017
1,042.6
156.2
10.7
7.9
7.1
995.4
146.3
44.9
8.5
7.0
Personnel expenses
1,224.4
1,202.1
The average number of employees in the Group is
shown below:
Salaried employees
Editors
Wage-earning employees
Total employees
2018
2017
13,093
12,397
2,773
2,867
484
572
16,350
15,836
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.
€ millions
Impairment losses in goodwill
2018
42.3
2017
2.0
Amortization of other intangible assets
189.8
175.8
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
3.4
4.5
112.2
52.5
0.2
0.0
1.0
0.3
347.9
236.1
Depreciation of property, plant and equipment of the report-
ing year included depreciation of right-of-use lease assets of
€ 60.2 million (see note (5)).
For impairment losses in goodwill see note (4).
Impairment losses in investments are included in the income
from investments.
151
Annual Report 2018
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 external personnel
Mailing and postage expenses
Consulting, audit and legal fees
Commissions and gratuities
Maintenance and repairs
Travel expenses
Allowances for doubtful receivables
Training of employees
Lease expenses
Services provided by related parties
Subsequent valuation of contingent
purchase price liabilities and other option
liabilities for the acquisition of non-
controlling interests
Other taxes
Foreign exchange losses
Miscellaneous operating expenses
2018
290.1
183.2
2017
266.8
181.7
91.3
55.4
40.6
39.1
28.6
19.2
15.9
12.5
9.1
8.7
6.8
3.7
77.7
94.5
53.3
38.9
30.7
26.7
7.4
16.3
59.4
16.6
21.4
8.4
2.9
87.4
Other operating expenses
882.0
912.4
The miscellaneous operating expenses included addi-
tions to provisions relating to legal and other risks, addi-
tional rental costs, expenses from bank charges and
other operating expenses. Lease expenses of the report-
ing year included expenses for short-term leases (€ 11.2
million), low-value assets (€ 0.5 million) as well as ex-
penses for variable lease payments (€ 0.8 million).
The following professional fees for the services rendered
by the auditor Ernst & Young GmbH were recognized:
€ millions
2018
2017
Audits of the annual financial statements
Tax advisory services
Other services
Total professional fees
1.4
0.2
0.1
1.6
1.4
0.3
0.2
1.9
The professional fees for the audit of financial statements
included mainly statutory and voluntary audits of the sep-
arate financial statements of Axel Springer SE and other
German subsidiaries, the consolidated financial state-
ments, the auditor's review of the half-year financial re-
port, the audit of financial statements according to IDW
PS 480, which prescribes the audit of financial state-
ments com-piled for a special purpose, the audit of inter-
nal control systems in service companies according to
IDW PS 951, as well as the audit of the system imple-
mented 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 acquisi-
tions within the fiscal year.
(24) Income from investments
The income from companies accounted for using the eq-
uity method amounted to € -86.9 million (PY: € -43.9
million). Besides our share in the investee’s net income, it
consisted of write-ups of € 1.2 million (PY: € 0.0 million)
and impairment losses of € 92.7 million (PY: € 51.1 mil-
lion). Impairment losses were mainly attributable to our
investment in Purplebricks Group plc (PY: mainly in
Ringier Axel Springer Schweiz AG), see note (6a).
152
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The other investment income of € 24.7 million (PY:
€ 4.9 million) included dividends received from other in-
vestments as well as gains from the measurement of
other investments at fair value in the amount of
€ 14.5 million. In the previous year, the other operating
expenses included impairment losses from other invest-
ments in the amount of € 4.4 million.
(25) Financial result
The financial income broke down as follows:
€ millions
2018
2017
Interest income from bank accounts
Interest income from loans and securities
Interest income from taxes
Other interest income
Interest income
Other financial income
Financial income
0.6
0.8
0.1
4.6
6.1
4.4
0.7
0.9
0.4
7.2
9.2
5.9
10.5
15.1
The financial expenses broke down as follows:
€ millions
2018
2017
Interest expenses on liabilities due to banks
and on promissory note
12.7
18.0
Net interest expense due from pension
accounting
Interest expense from compounding
Interest expenses from leases
Miscellaneous interest expenses
Interest and similar expenses
Other financial expenses
Financial expense
3.1
1.3
7.3
2.6
27.0
4.7
31.6
5.2
3.6
0.0
3.2
30.0
3.5
33.5
With respect to financial assets and liabilities not carried
at fair value through profit or loss, interest income and
expenses amounting to € 2.3 million (PY: € 2.3 million)
and € -22.0 million (PY: € -19.3 million) were recognized
respectively.
Other financial income as well as other financial ex-
penses include gains and losses from currency transla-
tion of € 3.5 million (PY: € 3.0 million) and € -4.1 million
(PY: € -2.1 million).
The increase in interest expenses from leases resulted
from the initial application of IFRS 16 as of Janu-
ary 1, 2018 (see note (3o)).
(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
Income taxes from continued
operations
Income taxes from discontinued
operations
Income taxes
2018
170.1
2017
274.6
– 22.1
– 144.4
147.9
130.2
0.0
0.6
147.9
130.8
Changes in current and deferred taxes are mainly related
to the sale of the Axel-Springer-Passage in Berlin in the
previous year (see note (5)). The decrease in deferred tax
income resulted from tax rate changes in particular in the
USA in the previous year.
153
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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:
€ millions
Income before income taxes
2018
356.4
2017
508.3
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
110.5
– 10.0
– 5.5
46.5
2.6
11.4
– 3.1
14.8
– 23.5
0.9
3.2
157.6
– 3.8
– 55.0
2.8
6.3
27.8
– 19.1
12.5
– 1.2
2.4
– 0.1
147.9
130.2
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 differing 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 previous year, effects from tax
rate changes mainly resulted from reduced tax rates in
the USA. The permanent differences resulted mainly
from impairment losses in goodwill (see note (4)), impair-
ment losses in companies accounted for using the equity
method (see note (6a)) and other consolidation effects
that are not taken into account for tax purposes. The ad-
justments made to the carrying amounts of deferred
taxes included € 9.8 million (PY: € 21.4 million) for the
non-recognition of deferred taxes on tax loss carry-for-
wards. In addition, effects from the initial recognition of
deferred tax assets are included. In the reporting year,
tax-exempt income was mainly attributable to the dis-
posal of the aufeminin Group (see note (2c)).
Deferred tax assets and liabilities were recognized to ac-
count for temporary differences and tax loss carry-for-
wards, as follows:
12/31/2018
12/31/2017
Deferred
tax
assets
Deferred
tax
liabilities
Deferred
tax
assets
Deferred
tax
liabilities
€ millions
Intangible assets
16.8
382.0
11.8
374.2
Property, plant and
equipment
Non-current financial
assets
Inventories
Receivables and other
assets
Pension provisions
Other provisions
Liabilities
6.0
104.1
2.2
51.0
0.7
0.5
56.6
11.3
12.4
117.7
3.1
0.0
4.6
35.9
4.8
0.9
1.0
0.6
54.9
19.1
11.1
22.9
0.3
0.0
6.5
0.0
5.9
3.9
Temporary differences
222.1
535.4
123.6
441.8
Tax loss carry-forwards
6.1
0.0
3.5
0.0
Total
Offsetting
228.2
535.4
127.1
441.8
– 171.5
– 171.5
– 72.5
– 72.5
Amounts as per balance
sheet
56.7
363.9
54.6
369.3
The increase in deferred tax liabilities related to property,
plant and equipment as well as the increase of deferred
tax assets related to liabilities is related to the initial appli-
cation of IFRS 16 and the resulting accounting of right-
of-use assets and corresponding lease liabilities (see
note (3o)).
154
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The transfer of the Axel Springer high-rise (main building)
for the formation of plan assets to Axel Springer Pen-
sionstreuhand e.V. leads to an increase in deferred tax li-
abilities for pension provisions (see note (5)); taking into
account the changes in property, plant and equipment
and lease liabilities, the transfer resulted in the recogni-
tion of deferred tax expenses in the total amount of
€ 10.8 million.
The net balance of deferred tax items from January 1 to
December 31, 2018 was derived as follows:
€ millions
Deferred tax assets as of January 1
2018
54.6
2017
55.0
Deferred tax liabilities as of January 1
– 369.3
– 530.5
Net tax position as of January 1
– 314.8
– 475.5
Deferred tax of current year
22.1
144.4
Changes in deferred taxes recognized in
other comprehensive income
Changes due to currency translations
3.1
– 1.7
1.6
14.9
Changes in consolidated companies
– 15.9
– 23.0
Reclassification into assets and liabilities
held for sale
0.0
22.8
Net tax position as of December 31
– 307.2
– 314.8
Deferred tax assets as of December 31
56.7
54.6
Deferred tax liabilities as of December 31
– 363.9
– 369.3
Of the deferred tax assets, an amount of € 12.7 million
(PY: € 22.4 million), and of the deferred tax liabilities, an
amount of € 2.4 million (PY: € 5.2 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 € 4.5 million (PY:
€ 3.8 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 € 55.3 million (PY:
€ 52.2 million) were recognized directly in equity, as
they related to matters that were likewise recognized di-
rectly in equity.
In the fiscal year, no deferred tax assets were recog-
nized with respect to corporate income tax loss carry-
forwards amounting to € 168.1 million (PY: € 233.6 mil-
lion), and with respect to trade tax loss carry-forwards
amounting to € 104.3 million (PY: € 87.7 million), be-
cause it did not appear probable that sufficient taxable
income could be generated for these amounts in the
near future. In addition, there are interest carry-forwards
amounting to € 1.5 million (PY: € 1.9 million) for which
no deferred tax assets were recognized. Of these tax
loss carry-forwards, an amount of € 9.7 million (PY:
€ 6.1 million) can be carried forward for up to five years
and an amount of € 0.0 million (PY: € 0.0 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 € 2.3 mil-
lion (PY: € 1.9 million). In the previous year, there were
corrections of recognized tax loss carry-forwards due to
tax audits or differing tax assessments in the amount of
€ 2.4 million (PY: € -0.7 million).
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 consolidated bal-
ance 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 € 11.3 million (PY: € 6.0
million) because a realization is not planned at the pre-
sent 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.
155
Annual Report 2018
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
€ millions
181.0
344.1
Result of discontinued operations attributable to shareholders of Axel Springer SE
€ millions
0.0
1.3
2018
2017
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)
€ millions
181.0
345.5
000s
107,895
107,895
€
€
€
1.68
0.00
1.68
3.19
0.01
3.20
Notes to the consolidated statement of comprehensive income
(28) Other income/loss
The other income/loss broke down as follows:
€ millions
Before tax
Tax effect
Net
Before tax
Tax effect
Net
2018
2017
Actuarial gains/losses from defined benefit pension
obligations
Currency translation differences
Changes in fair value of available-for-sale financial
assets1)
Changes in fair value of derivatives in cash flow
hedges
Other income/loss from investments accounted for
using the equity method
Other income/loss
– 9.7
9.0
–
0.2
– 2.6
– 3.2
3.2
0.0
–
0.0
0.0
3.1
– 6.5
9.0
–
0.1
– 2.6
– 0.1
– 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
1) Elimination of the category due to the initial application of IFRS 9 (see Note (3o)).
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.
156
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated statement
of cash flows
(29) Other disclosures
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):
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 € 5.0 million (PY: € 6.6 million) had not
been paid yet.
In the reporting period, the total cash outflow for leases
amounted to € 80.0 million.
In the reporting period, the income taxes paid in the cash
flow from operating activities disclosed below the cash
flow statement amounted to € 184.9 million (PY: € 161.8
million).
In the prior year, the cash flow from investing activities
contains income taxes paid of € 113.0 million, which re-
sulted from real estate sales. Together with the income
taxes paid in the cash flow from operating activities dis-
closed below the cash flow statement, the income taxes
paid amounted in total to € 274.7 million in the previous
year.
€ millions
Intangible assets
Property, plant and equipment
Inventories
Trade receivables
Other assets
Cash and cash equivalents
2018
85.1
5.7
0.1
15.1
5.4
7.2
Assets related to investments held for sale
23.6
2017
75.9
0.9
0.0
31.0
3.9
21.1
0.0
Provisions and other liabilities
– 27.9
– 49.8
Trade payables
Financial liabilities
– 7.9
– 4.8
0.0
0.0
Deferred tax liabilities
– 20.1
– 22.7
Liabilities related to investments held for
sale
Net assets
Acquisition cost
Thereof paid
– 5.3
76.2
163.0
141.2
0.0
60.2
181.9
86.2
The amounts from the purchases of shares in consoli-
dated subsidiaries and business units less cash and
cash equivalents acquired which are reported in the cash
flow statement mainly related to the acquisitions of Con-
cept Multimédia and Universum (see note (2c)) and, in
addition to the cash payments and acquired funds listed
in the table, also include payments for acquisitions of the
previous years (in particular payments from contingent
considerations totaling € 20.7 million (PY: € 120.0 mil-
lion); see note (33)).
157
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The purchases of investments in non-current financial
assets mainly related to purchase prices paid in connec-
tion with the acquisition of our stake in Purplebricks
Group plc in the amount of € 153.7 million in the report-
ing period (see note (2c) and (6a)).
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
Assets related to investments held for sale
Provisions and other liabilities
Deferred tax liabilities
Liabilities related to investments held for
sale
Disposal net assets
Selling prices
Thereof paid-up
2018
185.6
125.5
11.0
32.7
23.2
74.2
23.6
– 76.2
– 29.8
– 5.3
364.5
360.8
358.2
2017
1.7
0.8
0.1
3.6
0.7
0.4
0.0
– 5.1
– 0.3
0.0
1.9
6.4
5.6
In the reporting period, the proceeds from disposals (af-
ter taxes) comprised in particular the purchase prices
paid for the sale of the aufeminin Group in the amount of
€ 291.5 million, as well as for the sale of our newspaper
and magazine portfolio including the associated online
offers in Slovakia in the amount of € 57.9 million (see
note (2c)). The disclosure of cash inflows from divesti-
tures in the cash flow statement is made under proceeds
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
previous year of € 247.6 million related to the sale of the
Axel-Springer-Passage in Berlin (see note (5)). For the
purchases of intangible assets and property, plant and
equipment in connection with the new Axel Springer
building in Berlin see note (5) and note (39).
The proceeds from the disposal of non-current financial
assets mainly related to the purchase price paid in con-
nection with the sale of our investment in Do⁄an TV in
the amount of € 160.0 million (see note (6b)).
In the prior year, in the line purchase of non-controlling
interests primarily the payment for the exercise of the op-
tion to acquire the non-controlling interests of the Awin
Group has been recorded, see note (2c) and note (33).
The change in the statement of financial positions of cur-
rent and non-current financial liabilities related almost ex-
clusively from cash proceeds and cash repayments dis-
closed in the cash flow from financing activities. As a
result of the application of IFRS 16, beginning at the start
of the current financial year, the cash-effective repay-
ment portion for the settlement of lease liabilities is in-
cluded in the cash flow from financing activities and
therefore changes the current and non-current financial
liabilities (see note (3o)).
In the reporting period the cash outflows from other finan-
cial transactions (PY: cash inflows) resulted primarily from
other non-current loans and correspond to the change in
the statement of financial positions within other non-current
financial liabilities.
Regarding cash outflows with respect to discontinued op-
erations in the previous year, see note (2d).
158
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the consolidated segment report
(30) Basic principles of segment reporting
The segment reporting reflects the internal management
and reporting structures. The reporting format is broken
down into the three operating segments, those being
News Media, Marketing Media, and Classifieds Media. 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 (incl. the portal Logic-Immo ac-
quired in 2018), Immoweb, Immowelt/Immonet, the job
portals of the StepStone Group (including the portals of
Totaljobs, Jobsite and Saongroup, the regional portal
meinestadt.de, and since 2018 the employer-branding
specialist Universum), the portals of @Leisure for holiday
properties (incl. the portals Traum-Ferienwohnungen and
DanCenter), as well as the car and generalist 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.
Furthermore the TV-news channel WELT (previously
N24) is part of WELT Group.
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. Beyond
that, the segment includes the news aggregator upday
and the European joint venture together with Politico.
The Marketing Media segment comprises all domestic
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
(incl. ShareASale.com), as well as the reach-based mar-
keting offers of Idealo, finanzen.net and Bonial. The
aufeminin Group was part of the Marketing Media seg-
ment until April 30, 2018, as well, before being sold at
the end of April 2018 (see note (2c)).
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.
159
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(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 share-based incentive plan (LTIP).
Purchase price allocation effects include the expenses of
amortization, depreciation, and impairments of intangible
assets, and property, plant and equipment from the ac-
quisition of companies and business divisions.
The breakdown of the eliminated non-recurring effects
from the adjusted EBITDA and adjusted EBIT into the
segments is shown below:
€ 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
Impairments and write-ups on investments
Long-term share-based incentive plan (LTIP)
2018
2017
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
Classifieds
Media
News
Media
Marketing
Media
Services/
Holding
– 2.7
– 7.2
0.0
0.0
– 2.4
– 10.9
– 1.3
0.0
– 5.0
– 0.6
– 1.8
0.0
– 15.1
– 2.6
52.7
0.0
– 4.1
– 83.7
0.0
– 0.7
– 4.1
0.0
47.0
12.2
0.0
32.2
– 1.3
7.2
0.4
0.0
0.0
– 12.4
– 40.3
0.0
0.7
183.7
– 15.3
0.0
0.0
36.8
– 20.2
163.5
Non-recurring effects
– 95.4
– 12.6
57.3
38.2
– 17.2
– 66.2
160
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The effects from acquisitions of subsidiaries and invest-
ments are primarily attributable to the News Media seg-
ment, mainly resulting as in the previous year from ef-
fects of purchase price allocations in connection with the
establishment of Ringier Axel Springer Schweiz AG.
In the previous year, the effects of the subsequent valua-
tion of contingent consideration and other option liabili-
ties for the acquisition of non-controlling interests related
primarily to Bonial Holding (Marketing Media) and Im-
mowelt (Classifieds Media).
The effects from initiated and finalized disposals of sub-
sidiaries, investments and real estate are mainly attribut-
able to the disposal of our shares in the aufeminin Group
(Marketing Media; see note (2c)) as well as the transfer of
the Axel Springer high-rise (main building) in Berlin to the
Axel Springer Pensionstreuhand e.V. (Services/Holding;
see note (5)). In the previous year, the effects related pri-
marily to the sale of the Axel-Springer-Passage in Berlin
(Services/Holding, see note (5)).
In the reporting period the impairment and write-ups of
investments related primarily to Purplebricks Group plc
(Classifieds Media). In the previous year the effects
mainly related to Ringier Axel Springer Schweiz AG
(News Media); for both effects see note (6a).
For the long-term share-based incentive plan (LTIP) see
further explanations in note (11).
The reconciliation of the income from investments dis-
closed in the income statement as well as the impair-
ments are shown below:
€ millions
2018
2017
Income from investments included in
adjusted EBITDA
15.5
16.0
Non-recurring effects included in result
from investments accounted for using the
equity method
Non-recurring effects included in other
investment income
– 97.4
– 51.1
19.7
– 4.0
Income from investments
– 62.2
– 39.0
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
– 210.1
– 141.9
– 137.8
– 94.2
– 347.9
– 236.1
For the impairment losses in goodwill in the amortization
and impairments from purchase price allocations in the
reporting period see note (4).
The non-current segment assets include goodwill, intan-
gible assets, property, plant and equipment. The largest
share of non-current segment assets of the other coun-
tries is attributable to France in the amount of € 965.9
million (PY: € 838.6 million) and the USA in the amount of
€ 726.6 million (PY: € 668.0 million).
The largest share of revenues of the other countries is at-
tributable to France in the amount of € 324.7 million (PY:
€ 282.4 million).
161
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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
goals, methods, and processes of our capital manage-
ment are subordinate to the earnings-driven financial key
figures.
We can utilize the funds derived from the promissory
notes (€ 704.5 million) and also avail ourselves of our
long-term credit lines (€ 1,500.0 million), both for general
business purposes as well as to finance acquisitions.
In May 2018, we adjusted the financing conditions for
our credit lines and, in this context, reduced the average
interest rate, extended the term and increased the fi-
nancing volume. Thus, we were able to avail ourselves of
long-term credit lines in the amount of € 1,500.0 million
(previously € 1,200.0 million), of which its utilizations will
be due for repayment in July 2023 (previously 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.
In addition, there existed promissory notes totaling
€ 704.5 million as of December 31, 2018, whose financ-
ing conditions were optimized in the prior year by partial
termination, conversion and re-issuance. The promissory
note run until October 2020 (€ 69.0 million), May 2021
(€ 11.5 million), May 2022 (€ 158.0 million), May 2023
(€ 72.0 million), and May 2024 (€ 394.0 million).
Furthermore, for interest-optimizing satisfaction of short-
term capital requirements, we are able – starting in the
reporting year – to issue certain forms of short-term
bearer bonds (commercial paper program) with a maxi-
mum volume of € 750.0 million. As of the reporting date,
no commercial paper had been issued.
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 18, 2018. Treasury shares can be used for acquisi-
tion financing or they can be retired. At the reporting
date and the prior-year's reporting date, we held no
treasury shares.
162
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(33) Financial assets and liabilities
The carrying amounts of the items in the statement of financial positions as of December 31, 2018, comprising financial
assets and liabilities can be attributed to the measurement categories according to IFRS 9 as follows (see note (3o)):
€ millions
ASSETS
Investments
Loans
Other non-current financial assets
Trade receivables
Receivables due from related parties
Other assets
Cash and cash equivalents
EQUITY AND LIABILITIES
Financial liabilities
Trade payables
Liabilities due to related parties
Contingent consideration
Remaining other non-financial assets
Other liabilities
Valuation categories according to
IFRS 9
Carrying amount
as of 12/31/2018
At fair value
through profit or
loss
At amortized
cost
No valuation
categories
according to
IFRS 9 and non-
financial assets
and liabilities
212.4
28.2
240.6
782.9
22.9
118.9
281.5
1,530.8
511.8
35.5
51.3
553.5
604.8
212.4
1.9
214.3
51.3
0.3
51.5
26.4
26.4
782.9
22.9
53.2
281.5
1,151.1
511.8
35.5
58.5
58.5
65.7
379.6
494.7
494.7
A designation of financial assets and financial liabilities as measured at fair value through profit or loss was not made.
163
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The carrying amounts of the items in the statement of financial positions as of December 31, 2017, comprising financial
assets and liabilities can be attributed to the measurement categories according 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 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
Carrying
amount as of
12/31/2017
Loans and
receivables
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
216.8
163.9
40.1
155.3
359.3
693.9
29.3
148.7
216.8
1,237.0
462.1
64.5
0.4
80.6
658.7
739.7
1,236.8
462.1
22.9
281.8
281.8
163.9
163.9
155.3
155.3
95.2
0.3
41.6
80.6
376.9
457.4
0.4
0.4
The following table presents the applied valuation hierarchy for financial assets and liabilities, which are not measure at
amortized cost (see note (3f)):
€ millions
Investments (PY: Other non-current investments and
securities)
Loans
Derivatives not designated as a hedging instrument
(positive fair value) (see note (35))
Derivatives designated as a hedging instrument
(negative fair value) as part of other liabilities
Contingent consideration
12/31/2018
12/31/2017
Fair value
based on
market price
(level 1)
Fair value
based on
observable
market data
(level 2)
Fair value not
based on
observable
market data
(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)
212.4
1.9
0.0
51.3
0.3
103.7
0.0
155.3
80.6
0.4
The development of investments (PY: other non-current
investments and securities) related to the reclassification
in connection with the initial application of IFRS 9 as of
January 1, 2018, of € 60.2 million (see note (3o)), addi-
tions of € 34.6 million (PY: € 21.1 million) and disposals
of € 0.6 million (PY: € 5.6 million) as well as fair value
changes from the valuation affecting profit or loss recog-
nized in other investment income of € 14.5 million (PY:
€ -0.6 million). In the prior year, fair value changes recog-
nized directly in equity amounted to € -17.8 million.
164
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Loans receivables mainly related to a loan granted in the
reporting period with a conversion right into shares in
the company.
In the reporting year, the fair values of liabilities for con-
tingent considerations from business combinations de-
veloped as follows:
€ millions
January 1
Acquisitions or granting of option rights
2018
80.6
0.9
2017
309.3
13.2
Thereof
Immoweb
Thereof
Bonial
Holding
Thereof
Awin
Thereof
Onet
67.4
54.2
63.1
41.9
Payment
– 28.9
– 187.0
– 52.8
– 62.4
– 43.8
Subsequent valuation affecting net income
Thereof other operating income
Thereof other operating expenses
Compound
Other
December 31
– 1.7
– 5.7
4.0
0.6
– 0.3
51.3
– 43.9
– 56.6
12.6
2.0
– 13.0
80.6
3.4
3.4
0.2
– 50.0
– 50.0
– 1.1
– 1.1
0.1
0.4
2.0
2.0
18.2
4.3
0.0
0.0
Contingent considerations as of December 31, 2018,
mainly related to the option liability for the acquisition of
non-controlling interests in Immoweb. The payments in-
clude an amount of € 8.2 million, which had been paid to
a notary trust account in the prior year. In addition, in the
reporting period, other operating expenses of € 4.0 mil-
lion from the subsequent valuation from contingent con-
siderations in connection with assets held for sale and
related liabilities have been recognized (see note (9)).
In the prior year, other effects mainly related to the re-
classification of contingent considerations into liabilities
related to assets held for sale (see note (9)). The subse-
quent valuation of the contingent consideration for the
acquisition of non-controlling interests of the Bonial
Holding in the prior year is connected to the closing of
the business in the USA and the associated adjustment
of the medium-term planning of the entity.
The fair value measurement of contingent considerations
essentially depends on the estimated results of the ac-
quired companies in the years before the possible exer-
cise periods of the option rights or the payment dates of
the earn-outs. The earnings used as a basis for meas-
urement are generally EBITDA figures adjusted for mate-
rial non-recurring effects. In case of an increase of the
relevant estimated earnings measures by 10 %, the value
of the contingent consideration would increase by ap-
proximately 18 %. A decrease of the relevant earnings
measures by 10 % would result in a reduction of approxi-
mately 6 %.
165
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
With the exception of the financial liabilities presented
below, the carrying amounts of the financial assets and
liabilities were identical to their fair values.
In the prior year, net gains and losses of financial instru-
ments (excluding interest, income from investments and
results from the currency translation) were the following:
12/31/2018
12/31/2017
€ millions
€ millions
Carrying
amount Fair value
Carrying
amount Fair value
Financial liabilities
620.4
627.4
793.3
804.1
Thereof
promissory note
620.4
627.4
793.3
804.1
Loans and receivables, financial liabilities
Available-for-sale financial assets
Financial assets and liabilities held for trading
2017
– 6.4
– 4.5
4.7
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 (3f)).
The net gains and losses in the categories of "loans and re-
ceivables" and "financial liabilities" consisted mainly of valu-
ation allowances.
The net gains or losses of "available-for-sale financial as-
sets" consisted mainly of impairment losses of other invest-
ments.
The net gains and losses of financial instruments (exclud-
ing interest, income from investments and results from
the currency translation) recognized in profit or loss are
presented in the following table:
The net gains or losses in the category of "financial assets
and liabilities held for trading" mostly resulted from changes
in fair value of foreign currency derivatives and gains from
other financial derivatives.
€ millions
Financial assets and liabilities at fair value through
profit or loss
Financial assets at amortized cost
Financial liabilities at amortized cost
2018
16.5
– 14.4
– 1.9
The net gains and losses in the category of "financial assets
and liabilities measured at fair value through profit or loss"
resulted mainly from the revaluation of other investments
and gains from the disposal of other investments.
The net gains and losses in the category of "financial assets
at amortized cost" are mainly valuation effects for trade re-
ceivables and other assets resulting from the new impair-
ment model according to IFRS 9 (see note (3o)).
The net gains and losses in the category of "financial liabili-
ties at amortized cost" related to effects of the subsequent
valuation of contingent considerations.
In the fiscal year 2017, fair value changes of € -17.8 million
were recognized directly in equity.
(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
166
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
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
59.9 % (PY: 49.0 %).
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 € 1.0 mil-
lion (PY: € 0.9 million). Assuming a parallel shift of the in-
terest curve by -50 basis points, the financial result
would increase by € 0.4 million (PY: € 0.4 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 countries in which
we sell our products and services. Remaining currency
risks from operations are insignificant to the Group since
the majority of adjusted EBITDA is earned in the euro cur-
rency zone. In the reporting period, the share of adjusted
EBITDA not earned in Euros was 22 % (PY: 22 %).
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 distributed in the
form of dividends. Therefore, the foreign exchange 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
and financial flexibility of the Axel Springer Group is en-
sured by fixed credit lines in the amount of € 1,500.0
million (until 2023) as well as by the promissory notes
(€ 704.5 million). Note (16) 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. Significant risk items
are contained in non-current financial assets (loan receiv-
ables) as well as in trade receivables, receivables due
from related parties, and other assets. The maximum ex-
posure to risk from financial assets, which are fundamen-
tally subject to credit risk, correspond to their carrying
amounts. Collateral for related receivables and repay-
ment claims usually does not exist.
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.
167
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Credit risks are taken into account in the statement of fi-
nancial positions through appropriate allowances (see
note (3f)).
of the fair value of the put options by approximately
€ 1.1 million.
Investments in securities are mainly made only in instru-
ments with first-class ratings according to our finance
regulations. Investment in time deposits occurs exclu-
sively 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 not designated as
hedging instruments
In May 2018, we sold our remaining share of approxi-
mately 7 % in Do⁄an TV to Do⁄an Holding for a total
purchase price of € 160 million through exercise of the
put options. With regard to the accounting of this hedg-
ing agreement, see note (6b). From the valuation of
these put options we recognized gains of € 3.7 million
(PY: € 6.4 million) in the financial result in the reporting
period until the date of disposal. Besides the agreed
fixed price secured by bank guarantees, the valuation
of the derivatives depended in particular on the dis-
counting of the future payment entitlements. A sup-
posed variation of the interest rate by 25 basis points
would have led in the prior year to an opposite change
(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. Since the end of No-
vember 2018, the group is directly controlled by Dr. h. c.
Friede Springer. Previously the group was controlled by
Axel Springer Gesellschaft für Publizistik GmbH & Co or
its parent company, Friede Springer GmbH & Co. KG, of
which a majority was attributable to Dr. h. c. Friede
Springer. Accordingly, Dr. h. c. Friede Springer and her
immediate family, the companies controlled, jointly man-
aged, or that are 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. Furthermore, the subsidiar-
ies, joint ventures, and associated companies of the Axel
Springer Group are defined as related parties. In addition
to the active members of the Executive Board and Su-
pervisory Board of Axel Springer SE (including their family
members) and their controlled or jointly managed invest-
ments, the Axel Springer Pensionstreuhand e.V., which
manages the plan assets of the Axel Springer Group, are
also considered related parties.
168
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Besides the business relationships with consolidated subsidiaries, the following business relationships with related par-
ties existed:
€ 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
12/31/2018
12/31/2017
2.0
22.9
2.5
0.6
20.0
35.5
2.8
2018
5.9
26.4
0.1
0.2
20.4
1.3
0.0
0.0
13.0
1.2
4.5
1.5
0.0
1.8
2.5
1.2
0.6
20.0
22.5
1.6
1.4
24.9
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
0.6
2.2
0.9
1.2
17.5
52.2
2.8
2.5
75.9
0.1
The changes in the allowances for receivables due from
related parties are presented in the table below:
€ millions
Balance as of January 1
Additions
Utilization
Reversals
Other changes
Balance as of December 31
2018
1.2
– 0.9
– 0.5
0.2
0.6
0.6
2017
18.3
0.2
– 17.0
– 0.4
0.0
1.2
Receivables due from related parties in the amount of
€ 0.5 million (PY: € 17.0 million) have been written off and
derecognized (utilizations).
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 foundation of the company in 2016.
The provisions refer to pension obligations owed to
members of the Executive Board. The liabilities due from
related parties include obligations from the share-based
compensation pro-grams granted to the Executive Board
of Axel Springer SE in the amount of € 14.6 million (PY:
€ 41.6 million).
Goods and services provided to related parties were
mostly related to other services, and in the previous year
also concerned the distribution of newspapers and mag-
azines. The services received from related parties mainly
included Executive Board or Supervisory Board services
and other services.
In the financial year 2018, the fixed compensation of the
members of the Executive Board of Axel Springer SE
amounted to € 10.1 million (PY: € 9.5 million). The varia-
ble compensation amounted to € 11.3 million (PY:
€ 10.2 million). The measurement of the share-based
compensation granted to the Executive Board of Axel
Springer SE resulted in personnel expenses of € 1.1 mil-
lion and other operating income of € 11.4 million (PY:
169
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
personnel expenses of € 35.1 million; see note (11)). In
the previous year, the Supervisory Board has granted the
Executive Board members a bonus totaling € 12.0 mil-
lion, which was part of a voluntary one-off payment of
the global growth investor 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 con-
solidated income statement (see further explanation in
the combined management report, page 86). Guaran-
teed pension payments to members of the Executive
Board resulted in a personnel expense of € 1.4 million
(PY: € 1.6 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 approximately 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 has re-
ceived a compensation of USD 0.4 million (€ 0.3 million)
in the reporting period (PY: USD 0.1 million (€ 0.1 mil-
lion)). In addition, we have granted the related party of a
Supervisory Board member a loan of € 1.5 million in the
reporting period. The granting of the loan includes a con-
version right into shares in the company. The company
develops future mobility concepts.
The compensation of the members of the Executive and
Supervisory Board of the Axel Springer SE is described
in detail in the compensation report, which is part of the
notes to the consolidated financial statements. The com-
pensation report is included in the section “Corporate
Governance Report”.
An amount of € 2.5 million (PY: € 2.5 million) was paid to
former Executive Board members and former managing
directors and their survivors. A total amount of € 31.0
million (PY: € 31.4 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 (5) and note (12).
(37) Contingent liabilities
As of December 31, 2018, contingent liabilities from
guarantees existed in the amount of € 1.8 million
(PY: € 4.3 million).
(38) Contigent assets
No contingent assets existed as of December 31, 2018.
In the previous year, contingent assets were due from
KirchMedia GmbH & Co KGaA i. L. in the amount of
€ 211.3 million. The receivables accepted in the table of
claims by the insolvency administrator originally totaled
€ 325.0 million. The insolvency proceedings against
KirchMedia GmbH & Co. KGaA i. L. have been com-
pleted in the reporting period. A total of € 20.4 million
(PY: € 8.1 million) was terminally paid out.
(39) Other financial commitments
The other financial commitments broke down as follows:
€ millions
12/31/2018 12/31/2017
Purchase commitments for
- intangible assets
- property, plant and equipment
- inventories
1.1
129.5
55.2
1.9
193.7
48.9
Future payments from unrecorded leases
according to IFRS 16
241.7
-
Future payments from unrecorded leases
according to IAS 17
Future payments from unrecorded leases
under finance lease according to IAS 17
-
-
Long-term purchase obligations
40.5
479.3
0.3
38.4
Other financial obligations
468.1
762.5
In Berlin, the construction of the new Axel Springer build-
ing in the immediate vicinity of the current publishing
building is currently taking place. Up to 3,500 employees
will be working on approximately 52,000 m2 from 2020
170
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
onwards. The total construction budget will be approxi-
mately € 310 million. As of the balance sheet date, in-
vestments amounted to around € 166 million (PY: about
€ 90 million). The purchase commitments for property,
plant and equipment almost exclusively result from this
new construction project.
Future lease payments include obligations under short-
term leases (€ 0.9 million), leases for low-value assets
(€ 1.1 million) and contracts that have already been con-
cluded, but start after the reporting date (€ 239.7 mil-
lion). This includes the future financial obligation of
€ 223.4 million for the leaseback of the new building af-
ter completion (see note (5)). All other leases are ac-
counted for as liabilities in accordance with IFRS 16, see
note (16). In the previous year, there were almost exclu-
sively obligations from operating leases, and the future
minimum lease payments broke down as follows:
€ 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
Due to extension options not included in the valuation of
lease liabilities, potential future cash outflows of
€ 40.8 million arise. This essentially relates to extension
options of up to ten years for the partial lease of the
Axel-Springer-Passage in Berlin. It is currently not rea-
sonably certain that these options will be exercised.
Therefore, the options are not included in the valuation of
the lease liability. Exercising all options in connection with
the Axel-Springer-Passage would result in a cash outflow
of approximately € 20 million.
Long-term purchase obligations resulted primarily from
contracts for TV productions.
(40) 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 Executive Board and Supervisory Board in accord-
ance with Section 161 of the German Stock Corpora-
tions 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.
171
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(41) Companies included in the consolidated financial statements and share property
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
54
Fully consolidated subsidiaries
Germany
affilinet GmbH, Munich
AS Osteuropa GmbH, Berlin
AS TV-Produktions- und Vertriebsges. mbH, Hamburg
AWIN AG, Berlin
Axel Springer All Media GmbH (previously Axel Springer All Media GmbH & Co. KG), Berlin
Axel Springer Asia GmbH, Hamburg
Axel Springer Audio GmbH, Berlin
Axel Springer Auto-Verlag GmbH, Hamburg
Axel Springer Corporate Solutions GmbH & Co. KG, Berlin
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, Berlin
Axel Springer Druckhaus Spandau GmbH & Co. KG, Berlin
Axel Springer hy 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 Media for Equity GmbH (previously Einhundertzweite "Media" Vermögensverwaltungsgesellschaft mbH), 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, 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 (previously 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
172
12/31/2018
12/31/2017
Share-
holding
in %
-
-
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
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
80.5
51.0
-
100.0
100.0
100.0
75.1
100.0
100.0
100.0
Share-
holding
via No.
in % via No.
-
-
-
-
100.0
23
1
13
1
23
1
1
1
13
11
1
13
14
14
1
14
38
38
14
162
1
22
1
19
14
1
1
1
1
-
1
34
1
38
6
1
1
38
38
1
13
42
42
1
1
-
23
59
1
6
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
100.0
62.12
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
100.0
72.5
100.0
100.0
77.1
51.0
100.0
100.0
100.0
100.0
75.1
5
23
1
13
1
23
1
1
-
13
11
1
13
14
14
1
14
38
38
14
162
1
22
1
19
1
1
1
1
1
1
1
34
1
38
6
1
1
38
38
1
13
42
42
1
1
95
23
59
1
6
92
100.0
146
100.0
5
100.0
92
146
5
5)
5)
5)
6)
5)
5)
5)
5)
6)
5)
5)
5)
5)
5)
5)
5)
5)
5)
6)
6)
5)
5)
5)
5)
5)
5)
5)
5)
9)
6)
5)
5)
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No.
Company
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
113
finanzen.net GmbH, Karlsruhe
Fünfundachtzigste "Media" Vermögensverwaltungsges. mbH, Berlin
Gofeminin.de GmbH, Cologne
Idealo International GmbH, Berlin
Idealo Internet GmbH, Berlin
ImmoSolve GmbH, Bad Bramstedt
Immowelt AG, Nuremberg
Immowelt Hamburg 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 (previously Sales Impact GmbH & Co. KG), Berlin
SPRING Axel Springer Digital News Media GmbH & Co. KG, Berlin
StepStone Continental Europe GmbH, Berlin
StepStone Deutschland GmbH, Düsseldorf
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, Berlin
WeltN24 GmbH, Berlin
YOURCAREERGROUP GmbH, Düsseldorf
Other countries
@Leisure Holding B.V., Rotterdam, Netherlands
AanZee VillaXL B.V., Bergen, Netherlands
Administrationsselskabet af 1.10.2015 ApS, Copenhagen, Denmark
Admiral Strand Feriehuse ApS, Nørre Nebel, 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., Belgrade, 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, Stockholm, Sweden
AWIN B.V., Amsterdam, Netherlands
AWIN Global Affiliate Network S.L., Madrid, Spain
AWIN Inc., Wilmington, USA
173
12/31/2018
12/31/2017
Share-
holding
in %
75.0
100.0
Share-
holding
via No.
in % via No.
14
12
75.0
100.0
10)
14
1
-
-
100.0
107
9)
5)
6)
5)
5)
5)
5)
5)
6)
5)
5)
5)
6)
5)
6)
6)
9)
6)
5)
5)
15)
100.0
74.9
100.0
100.0
100.0
55.0
80.3
100.0
74.9
100.0
59
13
62
63
63
12
9
92
6
76
100.0
74.9
100.0
100.0
100.0
55.0
60.4
100.0
74.9
100.0
-
-
100.0
100.0
67
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
96.0
100.0
100.0
100.0
51.0
100.0
-
1
1
100.0
100.0
100.0
59
100.0
1
1
78
76
12
83
94
55
41
131
38
62
1
86
92
6
59
92
1
76
12
94
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
51.0
100.0
59
13
62
63
63
12
9
92
6
68
12
67
43
1
1
59
1
1
78
76
12
83
47
55
41
131
38
62
1
86
92
6
59
92
1
76
12
94
-
-
100.0
146
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
146
-
5
5
5
5
5
5
-
197
199
-
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
78.3
100.0
227
100.0
5
5
5
100.0
100.0
100.0
-
2
2
2
2
2
2
107
197
199
23
107
227
5
5
5
114
100.0
114
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No.
114
115
116
117
Company
AWIN Ltd., London, United Kingdom
AWIN SAS, Paris, France
AWIN Sp. z o.o., Warsaw, Poland
AWIN SRL, Milan, Italy
118
AWIN VEICULAÇÃO DE PUBLICIDADE NA INTERNET LTDA., São Paulo, Brazil
119
120
121
122
123
124
125
126
127
128
129
130
131
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 Schweiz AG, Zurich, Switzerland
Axel Springer Services Inc., Wilmington, USA
Belles Demeures S.A.S., Paris, France
Belvilla AG, Zurich, Switzerland
Belvilla Ferienwohnungen GmbH, Kitzbühel, Austria
Belvilla Nederland B.V. (previously Topic Travel B.V.), The Hague, Netherlands
Belvilla Services B.V. (previously @Leisure BR B.V.), Eindhoven, Netherlands
132
BEMFEMININO.COM.BR, São Paulo, Brazil
133
134
135
136
137
138
Blikk Kft., Budapest, Hungary
Bonial Enterprises North America Inc., New York, USA
Bonial SAS, Paris, France
Business Insider Europe Limited, London, United Kingdom
Candidate Manager Ltd, Dublin, Ireland
Candidate Manager (US) Inc, Boston, USA
139
Car&Boat Media SAS, Paris, France
140
141
142
143
144
CaribbeanJobs Ltd, George Town, Cayman Islands
City-Nav Sp. z o.o., Poznan, Poland
Concept Multimédia SAS, Aix-en-Provence, France
Coral-Tell Ltd., Tel Aviv, Israel
CV Keskus OÜ, Tallinn, Estonia
145
Cybersearch S.A., Guatemala City, Guatemala
146
147
148
149
150
151
152
153
154
155
156
157
158
159
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
160
ictjob SPRL, Waterloo, Belgium
161
162
163
164
165
166
167
168
Immoweb SA, Brussels, Belgium
Insider Inc. (previously Business Insider Inc.), New York, USA
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
174
12/31/2018
12/31/2017
Share-
holding
in %
Share-
holding
via No.
in % via No.
100.0
100.0
100.0
100.0
100.0
0.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
100.0
100.0
-
-
7)
5
5
5
5
5
100.0
100.0
100.0
100.0
100.0
54
0.0
125
100.0
12
100.0
1
1
100.0
100.0
5
5
5
5
5
54
125
12
1
1
124
100.0
124
23
100.0
124
100.0
14
100.0
23
1
14
192
100.0
192
-
-
50.0
131
11)
94
131
94
94
-
-
100.0
100.0
99.9
0.1
94
94
107
108
200
42
43
162
207
137
12
120
207
202
-
12
200
220
207
94
146
188
150
14
107
220
107
177
139
161
188
78
213
76
214
120
14
190
78
207
207
218
107
7)
9)
9)
100.0
200
100.0
-
-
100.0
98.0
100.0
100.0
100.0
61.0
39.0
100.0
69.3
100.0
100.0
100.0
100.0
0.0
100.0
100.0
43
162
207
137
12
120
207
202
120
98.0
100.0
100.0
100.0
61.0
39.0
100.0
69.3
-
12
100.0
200
220
207
100.0
100.0
0.0
94
100.0
146
100.0
-
-
100.0
100.0
95.1
150
100.0
14
93.9
-
-
100.0
100.0
220
100.0
-
-
100.0
100.0
-
-
139
161
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
78
100.0
213
100.0
76
214
120
99.0
1.0
94.5
14
100.0
190
100.0
78
100.0
207
207
218
100.0
100.0
100.0
-
-
100.0
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No.
169
Company
Livingly Media, Inc., San Carlos, USA
170 Maritimo 101 SL, Malaga, Spain
171 Marmiton SAS, Paris, France
172 Media Impact Polska Sp. z o.o., Warsaw, Poland
173 Merci Alfred S.A.S., Paris, France
174 Milkround Online Ltd., London, United Kingdom
175 My Little Box KK, Tokyo, Japan
176 My Little Campus SAS, Paris, France
177 My Little Paris S.A.S., Paris, France
178 My Web Ltd, Ebene, Mauritius
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
NARKS INFOSERVIS, a.s., Bratislava, Slovakia
Netmums Limited, London, United Kingdom
New Digital d.o.o. Belgrade, Belgrade, Serbia
NIJobs.com Ltd, Belfast, United Kingdom
NIN d.o.o., Belgrade, Serbia
Ofertia Colombia Retail Services SAS, Bogotá, Columbia
OfertiaCL Retail Services SpA, Santiago de Chile, Chile
OFERTIAMX RETAIL SERVICES, S. de R.L. de C.V., Mexico City, Mexico
OnetMarketing Sp. z o.o., Krakow, Poland
Onet.S.A., Krakow, Poland
Opineo Sp. z o.o., Wroclaw, Poland
Pnet (Pty) Ltd, Johannesburg, South Africa
Praxis SARL, Chambéry, France
PressImmo On Line S.A.S., Paris, France
profession.hu Kft, Budapest, Hungary
194
RealSoft s.r.o., Nové Mesto nad Váhom, Slovakia
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
Residence de Monbrison A/S, Copenhagen, Denmark
SeLoger.com SAS, Paris, France
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 Polska Sp. z.o.o. (previously ONET Holding Sp. z.o.o.), Warsaw, Poland
Ringier Axel Springer SK, a.s., Bratislava, Slovakia
Ringier Axel Springer Slovakia a.s., Bratislava, Slovakia
Rodacom SARL, Grenoble, France
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
214
StepStone NV, Brussels, Belgium
215
216
217
218
StepStone Österreich GmbH, Vienna, Austria
StepStone.pl Sp. z o.o., Warsaw, Poland
StepStone Services Sp. z o.o., Warsaw, Poland
StepStone UK Holding Limited, London, United Kingdom
219
Tecoloco El Salvador S.A. de C.V., San Salvador, El Salvador
220
Tecoloco International Inc, Panama City, Panama
221
Tecoloco S.A. de C.V. Honduras, Tegucigalpa, Honduras
222
Tecoloco.com S.A. de C.V. Nicaragua, Managua, Nicaragua
175
12/31/2018
12/31/2017
Share-
holding
in %
Share-
holding
via No.
in % via No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100.0
100.0
190
227
100.0
100.0
100.0
50.0
50.0
100.0
100.0
100.0
100.0
91.7
100.0
100.0
-
-
100.0
107
146
107
188
201
107
224
177
177
107
190
227
107
197
207
197
211
211
211
188
202
202
207
192
196
200
227
223
146
120
200
201
200
124
200
200
-
9)
3)
9)
12)
9)
197
207
197
211
211
211
-
-
-
207
192
196
200
227
223
146
120
200
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
50.0
50.0
73.2
100.0
100.0
-
99.0
200
124
100.0
50.0
-
100.0
200
200
100.0
-
100.0
100.0
99.7
100.0
100.0
100.0
-
-
-
100.0
100.0
100.0
100.0
50.0
50.0
73.2
100.0
100.0
-
100.0
50.0
-
100.0
87.5
-
100.0
100.0
100.0
100.0
-
-
70.0
66.7
100.0
100.0
-
89.0
200
142
143
218
113
-
-
43
203
76
76
-
70.0
100.0
100.0
100.0
100.0
70.0
66.7
100.0
100.0
-
143
218
113
202
107
43
204
76
76
0.0
215
0.0
215
7)
100.0
100.0
100.0
100.0
100.0
0.0
100.0
99.6
0.4
95.0
3.0
2.0
77
100.0
200
76
78
220
207
207
220
207
220
219
145
-
100.0
100.0
100.0
0.0
100.0
99.6
0.4
95.0
3.0
2.0
77
-
76
78
220
207
207
220
207
220
219
145
7)
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
12/31/2018
12/31/2017
No.
223
224
Company
Topreality.sk s.r.o., Nové Mesto nad Váhom, Slovakia
Totaljobs Group Limited, London, United Kingdom
225
Turijobs México S DE RL DE CV, Mexico City, Mexico
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
Turijobs Tourism Services S.L., Barcelona, Spain
United Classifieds s.r.o., Bratislava, Slovakia
Universum Business Consulting Shanghai Co. Ltd, Shanghai, China
Universum Communications Holding Inc., New York, USA
Universum Communications Inc., New York, USA
Universum Communications Ltd, London, United Kingdom
Universum Communications Norway AS, Oslo, Norway
Universum Communications Pte Ltd, Singapore, Singapore
Universum Communications SA (PTY) Ltd, Johannesburg, South Africa
Universum Communications SARL, Paris, France
Universum Communications Sweden AB, Stockholm, Sweden
Universum Communications Switzerland AG, Basel, Switzerland
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
244 WEBIMM SAS, Paris, France
245
246
247
wewomen.com Inc., Wilmington, USA
YOURCAREERGROUP Austria GmbH, Vienna, Austria
YOURCAREERGROUP Schweiz GmbH, Kloten, Switzerland
Share-
holding
in %
100.0
100.0
100.0
0.0
100.0
60.0
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
65.0
Share-
holding
via No.
in % via No.
227
218
220
207
100.0
100.0
85.0
15.0
76
100.0
227
218
226
76
76
7)
60.0
204
203
236
236
229
236
236
236
236
236
78
236
87
87
87
87
87
87
-
-
-
-
-
-
-
-
-
-
100.0
100.0
100.0
100.0
100.0
100.0
-
-
-
-
-
-
-
-
-
-
87
87
87
87
87
87
196
107
76
76
196
65.0
-
-
100.0
100.0
100.0
76
76
100.0
100.0
12/31/2018
Share-
holding
in % via No.
No. Company
No. Company
Other subsidiaries1)
Germany
248
Achtundachtzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
249
Achtundsiebzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
100.0
100.0
1
1
250 AS Buchversand GmbH, Munich
100.0
38
261
Einhunderterste "Media" Vermögensverwaltungsges. mbH,
Berlin
262
Einhundertfünfte "Media" Vermögensverwaltungsgesellschaft
mbH, Berlin
263
Einhundertsechste "Media" Vermögensverwaltungsgesell-
schaft mbH, Berlin
264
Einhundertste "Media" Vermögensverwaltungsges. mbH, Ber-
lin
251
Axel Springer Corporate Solutions Verwaltungs-GmbH (previ-
ously Einhundertdritte "Media" Vermögensverwaltungsges.,
mbH), Berlin
100.0
1
265
Einhundertvierte "Media" Vermögensverwaltungsgesellschaft
mbH, Berlin
12/31/2018
Share-
holding
in % via No.
100.0
100.0
100.0
100.0
100.0
100.0
1
1
1
1
1
1
252 Axel Springer Financial Media GmbH, Munich
100.0
1
253
Axel Springer Porsche Management GmbH (previously Neu-
nundneunzigste "Media" Vermögensverwaltungsges.mbH),
Berlin
254 Axel Springer Print Management GmbH, Ahrensburg
255 Axel Springer Security GmbH, Berlin
256 Bonial Ventures GmbH, Berlin
50.0
14
100.0
100.0
74.9
1
1
1
257 CEO Event GmbH, Berlin
100.0
88
258
Dreiundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
259
Dreizehnte "Media" Vermögensverwaltungsges. mbH, Ham-
burg
260
Einhundertachte "Media" Vermögensverwaltungsgesellschaft
mbH, Berlin
100.0
100.0
100.0
1
1
1
266
Einundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
267 Finanzen Corporate Publishing GmbH, Berlin
100.0
1
268
Fünfundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
269
Fünfundsiebzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
270
Hammerich & Lesser Zeitschriften- und Buchverlag GmbH,
Hamburg
271 Hauptstadtsee 809. VV GmbH, Berlin
272
Informationsmedien Handels GmbH, Hamburg
273 kinkaa GbR, Berlin
274 Media Impact Management GmbH, Berlin
100.0
100.0
100.0
100.0
100.0
50.0
50.0
74.9
1
38
1
1
1
59
73
6
176
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No. Company
in % via No.
No. Company
12/31/2018
Share-
holding
12/31/2018
Share-
holding
in % via No.
275
meinestadt.de Vermögensverwaltungsgesellschaft mbH, Co-
logne
100.0
67
276 myPass GmbH, Berlin
277 Room 49 GmbH, Berlin
278 Scubia GbR, Berlin
279 Shop Now GmbH i.L., Berlin
280
Siebenundachtzigste "Media" Vermögensverwaltungsges.
mbH, Berlin
281
SPRING Axel Springer Digital News Media Management
GmbH, Berlin
282 Tarif24 GmbH, Berlin
283 TOPS Online Publications GbR, Lüneburg
284 Transfermarkt Verwaltungs GmbH, Hamburg
285 Umzugsauktion Verwaltungs GmbH, Schallstadt
286 upday Management GmbH, Berlin
287 Varsavsky Axel Springer Management GmbH, Berlin
288
Vierundneunzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
289 Visoon Video Impact Management GmbH, Berlin
290 Zuio GmbH, Berlin
100.0
100.0
50.0
50.0
90.0
100.0
100.0
100.0
90.0
10.0
51.0
100.0
100.0
100.0
1
20
59
73
20
1
1
59
49
59
41
62
1
14
291
Zweiundsechzigste "Media" Vermögensverwaltungsges. mbH,
Berlin
100.0
1
Other countries
292 Alpha Real spol. s.r.o., Zilina, Slovakia
293 AUTOVIA, s.r.o., Bratislava, Slovakia
100.0
203
100.0
227
294 Axel Springer Hírszolgálat Kft, Tatabánya, Hungary
100.0
199
295
Axel Springer International Group Limited, London, United
Kingdom
100.0
1
296
Axel Springer Media France S.A.R.L., Neuilly-sur-Seine,
France
297 Axel Springer Media Italia s.r.l., Milan, Italy
298 Axel Springer Norway AS, Oslo, Norway
100.0
66
100.0
66
100.0
124
299
Axel Springer Publishing International Limited, London, United
Kingdom
100.0
294
300
Axel Springer TV International Limited, London, United King-
dom
100.0
294
301 Azet.sk – katalóg s.r.o., Zilina, Slovakia
302 BILD Inc., City of Wilmington, USA
303 Car Price List Yad2 Ltd., Tel Aviv, Israel
304 CompuTel Telefonservice AG, Chur, Switzerland
305 Cpress Media s.r.o., Zilina, Slovakia
306 Digitalni klik d.o.o., Zagreb, Croatia
307 ETSBA Ltd., Tel Aviv, Israel
100.0
203
100.0
41
100.0
143
100.0
125
100.0
203
60.0
61
100.0
143
308 Euro Blic Press d.o.o., Banja Luka, Bosnia and Herzegovina
100.0
197
309 eurobridge Inc., New York, USA
310 Flyers 24hs S.A., São Paulo, Brazil
311
Immostreet ES, Barcelona, Spain
312 Jean Frey AG, Zurich, Switzerland
313 Jobcity Ltd., Tel Aviv, Israel
314 Media Impact Inc., New York, USA
315 Realty Media House s.r.o., Bratislava, Slovakia
100.0
1
58.3
256
100.0
192
100.0
125
100.0
143
100.0
66
100.0
179
316 Saongroup Caribbean (Jamaica) Ltd, Kingston, Jamaica
100.0
140
317
Saongroup Caribbean (Trinidad) Ltd, Port of Spain, Trinidad
and Tobago
100.0
140
318 Saongroup.com India Pvt Ltd, Pune, India
100.0
207
319 Tecoloco.com S.A. de C.V. Panama, Panama City, Panama
100.0
220
320 upday Polska Sp. z o.o., Warsaw, Poland
321 Yad2 Internet Ads Ltd., Haifa, Israel
322 Yad2Pay Ltd., Tel Aviv, Israel
323 zanox Schweiz AG i.L., Zurich, Swirtzerland
100.0
87
100.0
143
100.0
143
100.0
5
Associated companies and joint ventures accounted for
using the equity method
Germany
324 AS TYFP Media GmbH & Co. KG, Berlin
325 Axel Springer Plug and Play Accelerator GmbH, Berlin
326 Axel Springer Porsche GmbH & Co. KG, Berlin
327
Einhundertsiebte "Media" Vermögensverwaltungsgesellschaft
mbH, Berlin
100.0
1
328 Project A Ventures GmbH & Co. KG, Berlin
51.0
100.0
6
38
329 Radio Hamburg GmbH & Co. KG, Hamburg
330 Varsavsky Axel Springer GmbH & Co. KG, Berlin
Other countries
331 AC3 SAS, Guipavas, France
332 Custeed SAS, Arcueil, France
333
Editions Mondadori Axel Springer (EMAS) S.E.N.C.,
Montrouge Cedex, France
334 Ozy Media, Inc., Mountain View, USA
335 Purplebricks Group plc, Solihull, United Kingdom
336 QWANT SAS, Paris, France
337 Ringier Axel Springer Schweiz AG, Zurich, Switzerland
Other associated companies and joint ventures2)
Germany
50.0
50.0
50.0
50.0
50.0
26.3
35.0
93.3
40.0
16.2
1
14
14
335
56
13
8
14 4)
120
139 8)
50.0
122
16.8
12.5
18.1
50.0
14 8)
56 8)
14 8)
119
338 Berliner Pool TV Produktion Gesellschaft mbH, Berlin
50.0
92
339
Blitz-Tip Radio Hessen Beteiligungsges. mbH & Co. KG, Bad
Soden am Taunus
340 Dalim Software GmbH, Kehl
341 Filmgarten GmbH, Berlin
342
Ges. für integr. Kommunikationsforschung mbH & Co. KG,
Munich
343
Ges. für integr. Kommunikationsforschung Verwaltungs
GmbH, Munich
344
Intermedia Standard Presse-Code GmbH, Hamburg
345
InterRed GmbH, Haiger
346
ISPC Intermedia Standard Presse-Code GmbH & Co.KG,
Hamburg
347 LAUT AG, Constance
348 Marina Wendtorf Invest II GmbH & Co. KG, Kiel
349 Mont Ventoux Media GmbH, Berlin
350 Project A Management GmbH, Berlin
351 Project A Services GmbH & Co. KG, Berlin
352 Qivive GmbH i. L., Bad Homburg
353 Sparheld International GmbH, Berlin
33.3
21.9
42.0
20.0
20.0
32.0
24.0
32.0
25.0
49.0
50.0
26.3
37.5
33.3
30.0
8
1
59
1
1
1
1
1
1
146
37
13
13
1
59
177
Annual Report 2018
Axel Springer SE
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
No. Company
Other countries
354 1plusX AG, Pfäffikon, Switzerland
355 Asocijacija Privatnih Media, Belgrade, Serbia
356 BULGARPRESS OOD, Veliko Tarnovo, Bulgaria
357 EMAS Digital SAS, Montrouge Cedex, France
358
Inoveo Holding SA, Sugiez, Switzerland
12/31/2018
Share-
holding
in % via No.
No. Company
10.0
20.0
25.5
50.0
20.0
6
197
1
122
196
359 No Fluff Jobs Sp. z o.o., Gdansk, Poland
360 Polskie Badania Internetu sp. z o.o., Warsaw, Poland
361 Real Estate Media S.A., Esch-sur-Alzette, Luxembourg
362 SereniPay SAS, Paris, France
363 Vooop GmbH, Vienna, Austria
364 WeCheck Ltd., Ramat Hasharon, Israel
12/31/2018
Share-
holding
in % via No.
44.0
21.3
35.0
19.4
30.0
25.0
200
202
161
139
65
143
No. Other significant investments
Germany
365 ANTENNE BAYERN GmbH & Co. KG, Ismaning
366 Funk & Fernsehen Nordwestdeutschland GmbH & Co. KG, Hannover
367 RADIO/TELE FFH GmbH & Co. Betriebs-KG, Bad Vilbel
368 Verimi GmbH, Berlin
Other countries
369 Airbnb, Inc., San Francisco, USA
370 Group Nine Media, Inc., New York, USA
371 Lakestar II LP, Guernsey, Guernsey
372 Lamudi Global S.à.r.l., Senningerberg, Luxembourg
373 Lerer Hippeau Ventures IV, LP, New York, USA
374 Lerer Hippeau Ventures V, LP, New York, USA
375 NeoLotto Limited, Ta' Xbiex, Malta
12/31/2018
Shareholding
in %
via No.
Equity
€ million 13)
Net Income
€ million 13)
16.0
7.6
15.0
6.5
0.1
13.0
5.7
10.0
1.6
1.8
13.0
1
8
1
1
1
14
14
56
14
14
1
-
0.2
-
14)
-
0.5
14)
-
35.7
– 4.5
-
67.9
170.2
47.8
101.7
87.8
– 4.3
14)
-
– 21.2
– 14.3
0.3
– 1.1
– 2.3
– 7.1
1) No full consolidation due to immaterial impact (relation of net income and balance
sheet total for the company to net income and balance sheet total of the Group).
2) No at-equity consolidation due to immaterial impact (relation of net income of the
9) Due to option rights in the reporting year and/or in the prior year a share
of 100 % consolidated.
10) Due to option rights in the reporting year and in the prior year a share
company to 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 con-
tractual agreements, which exclude the power of control and the possibility to influ-
ence the variable outflows.
5) The company has exercised the exemption rights of Section 264 (3) of the German
Commercial Code (Handelsgesetzbuch - HGB).
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 2017. Values translated into foreign
currency using the closing rate as at December 31, 2018.
14) No statement of equity and profit for the year as the annual financial statements
6) The company has exercised the exemption rights of Section 264b of the German
are not published.
Commercial Code (Handelsgesetzbuch – HGB).
7) Shares less than 0.1 % in the reporting year and/or in the previous year.
8) Significant influence on the basis of contractual agreements.
15) Application of the exemption pursuant to Section 479(A) of the UK Companies
Act 2006.
178
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 21, 2019
Axel Springer SE
Dr. Mathias Döpfner
Jan Bayer
Dr. Stephanie Caspar
Dr. Julian Deutz
Dr. Andreas Wiele
179
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, 2018, 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, 2018, 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, 2018. 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,
2018, and of its financial performance for the fiscal
year from January 1 to December 31, 2018, 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.
180
Annual Report 2018
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, 2018. 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 € 2.325 million, which repre-
sented approximately 36 % of the balance sheet total,
and approximately 81 % 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.
181
Annual Report 2018
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 (e). 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 2018, the Axel Springer Group recog-
nized total revenues of € 3,181 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,
€ 1,407 million originate from revenues generated out-
side of Germany, which represents a share of 44 %.
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 new accounting standard
IFRS 15 which defines a five-step process concerning
revenue recognition. In this context, we have especially
given attention to contracts for which we expected, due
to the business model of the company, impacts caused
by the new standard. Additionally, we have verified the
processes implemented by the executive directors of
Axel Springer SE in relation to revenue recognition, par-
ticularly by ensuring that returns and further sales dis-
counts have been taken into account correctly; we have
also reviewed the controls implemented as part of these
processes.
In addition, we have analyzed the key revenues for the
fiscal year 2018 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
IFRS 15. We have audited the revenues for the fiscal
year 2018 on a random basis with regard to accrual ac-
counting by performing case-by-case assessments of
revenue transactions shortly before and after the report-
ing date. In addition, we obtained balance confirmations
from customers on a random basis.
The executive directors of Axel Springer SE issued de-
tailed accounting guidelines for the recognition of reve-
nues and implemented corresponding processes.
Based on our audit procedures, no reservations apply in
relation to revenue recognition from the sale of circulation
and advertising services.
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.
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 ef-
fects resulting from the initial application of IFRS 15
“Revenues from Contracts with Customers” see section
182
Annual Report 2018
Axel Springer SE
Independent Auditor’s Report
(3) chapter (o) “New accounting standards”. The expla-
nations concerning the composition of revenues can be
found in the notes in section (17) “Revenues”.
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. The other
remaining information comprise the components of the
Management Report which are disclosed in the attach-
ment to the Auditor’s Report, further the remaining com-
ponents of the Annual Report, with exemption of the au-
dited Financial Statements and the Management Report,
as well as our Auditor’s Report, especially the Responsi-
bility Statement of the executive directors pursuant to
Section 297 (2), Sentence 4 HGB, the report of the Su-
pervisory Report pursuant to Section 171 (2) AktG, as
well as the paragraphs “Group Key Figures”, “Foreword”,
“Executive Board” and “The Axel Springer Share”. Of this
other information, we have received a version prior to the
issuing of this Auditor's Report.
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.
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
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 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.
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.
183
Annual Report 2018
Axel Springer SE
Independent Auditor’s 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.
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
184
Annual Report 2018
Axel Springer SE
Independent Auditor’s Report
management report. We are responsible for the direc-
tion, supervision and performance of the group audit.
We remain solely responsible for our audit opinions.
Other legal and regulatory requirements
Further information pursuant to Art. 10 of the EU
Audit Regulation
We were elected as group auditor by the Annual General
Meeting on April 18, 2018. We were engaged by the Su-
pervisory Board on April 18, 2018. 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.
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.
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.
185
Annual Report 2018
Axel Springer SE
Independent Auditor’s Report
German Public Auditor responsible for the engagement
The German Public Auditor responsible for the engage-
ment is Nathalie Mielke.
Attachments to the Auditor’s Report:
Components of the Group Management Report which
we have not audited with respect to their contents:
information contained in the “Corporate Governance
Report” of the Group Management Report, except for
the Compensation Report
Berlin, February 22, 2019
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Ludwig
Wirtschaftsprüfer
Mielke
Wirtschaftsprüferin
186
Boards
Supervisory Board
The Supervisory Board is composed of the following persons:
Seats on other mandatory
supervisory boards in Germany
Seats on comparable boards
in Germany and abroad
Name, occupation
Dr. Giuseppe Vita
Dr. h. c. Friede Springer
William E. Ford (until April 2018)
Oliver Heine
Dr. Alexander Karp (since April 2018)
Rudolf Knepper (until April 2018)
Iris Knobloch (since April 2018)
Lothar Lanz
Dr. Nicola Leibinger-Kammüller
Prof. Dr.-Ing. Wolfgang Reitzle
Martin Varsavsky
Entrepreneur
187
Annual report 2018
Axel Springer SE
Executive Board
The Executive Board is composed of the following persons:
Boards
Name, occupation
Dr. Mathias Döpfner
Jan Bayer
Dr. Stephanie Caspar
Dr. Julian Deutz
Dr. Andreas Wiele
Seats on other mandatory
supervisory boards in Germany
Seats on comparable boards
in Germany and abroad
∕
188
Financial Calender
March 7, 2019
Annual Report 2018
Annual results press conference, telephone conference
for investors and analysts, audio webcast
April 17, 2019
Annual General Meeting
Video webcast of the speech of the CEO
May 7, 2019
Quarterly Statement as of March 31, 2019
Telephone conference, audio webcast
August 14, 2019
Interim Financial Report as of June 30, 2019
Telephone conference, audio webcast
November 6, 2019
Quarterly Statement as of September 30, 2019
Telephone conference, audio 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
Max Threlfall / Sergio Rinaldi
The annual report as well as up-to-date information
about Axel Springer are available on the Internet at:
www.axelspringer.com
The English translation of the Annual Report is provided
for convenience only. The German original is legally
binding.