NEWSPAPER MARKET / GAZETA WYBORCZA

Gazeta Wyborcza maintained its leadership position among quality newspapers. It sold 418 thou. copies on average (down 5.2%) and decreased copy sales revenues by 15,7%. Copy sales of Dziennik declined by 13% to 154 thou. copies, Rzeczpospolita sold 153 thou. copies (down 11%) and Fakt sold 479 thou. copies (down 7%). Super Express grew paid circulation by 0.7% to 200 thou. copies.

Polskapresse's local dailies published under a common title Polska recorded in total the following copy sales figures for "old titles": Polska Dziennik Bałtycki (50 thou.), Polska Dziennik Lodzki (45 thou.), Polska Dziennik Zachodni (82 thou.), Polska Gazeta Krakowska (30 thou.), Polska Głos Wielkopolski (52 thou.), Polska Gazeta Wrocławska (34 thou.), Polska Kurier Lubelski (9.8 thou.) and for "new titles" (published since 15 of October 2007): Polska Białystok (0.7 thou.), Polska Gazeta Opolska (1.6 thou.), Polska Kielce (0.8 thou.), Polska Koszalin (0.5 thou.), Polska Kujawy (1.1 thou.), Polska Lubuskie (1.2 thou.), Polska Mazowsze (2.5 thou.), Polska Metropolia Warszawska (15.9 thou.), Polska Olsztyn (0.6 thou.), Polska Rzeszów (1.1 thou.), Polska Szczecin (0.9 thou.). The total number of copies sold for the 11 "new titles" of Polskapresse constituted 9% of the total copy sales of all dailies published under common title Polska.

Most publishers decided to increase copy prices of their newspapers. Dziennik currently sells for PLN 2 on weekdays and for PLN 2.5 on Saturdays and Fridays. The titles published under Polska brand cost from PLN 1.4 to PLN 1.5 on weekdays, while Rzeczpospolita sells for PLN 3.4. Since January 1, 2009, Gazeta is available at PLN 1.8 every day.

The attempts to arrest paid circulation and readership decline through so-called "other paid forms of distribution" became market standard for Gazeta's competition. In practice, in 4q2008 ca 49.5% of Dziennik's paid circulation and 13.2% of Rzeczpospolita's was sold through barter arrangements or the like methods. 'Other paid forms of distribution' constituted 8.6% of Gazeta's total copy sales.

In 4q2008 Gazeta Wyborcza was the most read quality daily during the week. It reached almost 4.5 million readers (15% reach, CCS - weekly readership index), which is almost 1.5 times more that the number of readers of 18 local dailies under the nationwide title Polska and 3 times more that the number of the readers of Rzeczpospolita or Dziennik.

Gazeta's net advertising revenues amounted to PLN 115.6 million (2) (down 13.7%) while its share in display advertising in dailies reached ca. 38% (down 1.3 pp). The share of Fakt in total newspaper advertising spending reached 6.5% while that of Dziennik stood at 7.5%.

INTERNET

Internet ad revenues (3) of Agora grew by 36.9% to PLN 15.2 million, including PLN 2.8 million from Internet ad sales of Trader.com (Polska). Listing sales in classified vortals increased by 34% to PLN 4.7 million 4. In November the reach of Agora's Internet brands among Polish users reached 45.5%, while the number of users amounted to 7.19 million (up 16.7%). At the end of December, Agora's Internet offering consisted of 89 online brands and was expanded in 4q by 14 new services, i.a: educational services, previously part of Grupa Pracuj, i.a. Edulandia.pl and Studies.pl and three new services in Ukraine: the recruitment StartJob.com.ua vortal, the ChikiDriki.com.ua online gaming service and the gossip Plitkar.com.ua service. Agora launched first Internet ad network for women Glossy Media and started cooperation with Dailymotion, an independent video hosting service.

METRO

Metro reported a positive operating EBITDA of PLN 0.5 million (up PLN 0.5 million)1.The title's total advertising revenues grew by 7.8%, while that of display ads increased by almost 4%. Agora's free daily increased its share in total newspaper display ad spend to nearly 3.5% and posted good readership results. With weekly readership reach of 7.6% Metro was the third most read newspaper in Poland (together with Super Express). Agora's free daily is targeted at young urban readers. Its readership profile is composed of more young people (up to 24 years of age) than that of most Polish dailies, while 60% of their audiences live in cities with population of over 200 thousand. Due to this attractive readership structure Metro appeals to more and more advertisers. According to our plan, in 2008 Metro posted a positive operating EBITDA of PLN 1 million (1).

COLLECTIONS

Sales of collections brought PLN 23.2 million. Agora ran 5 collections and 25 one-off projects. The Company sold 1 million books and books with DVDs and CDs, i.a. books from 16-volume book series Dzieła Stanisława Lema (Stanisław Lem's Masterpieces), books with CDs from 24-volume music collection of Queen, books with DVD with documentary Poste restante by Marcel Lozinski, booklets with music CDs: 2-CD album The Best of Smooth Jazz Cafe recommended by Marek Niedzwiecki or books, i.a. a handbook by prof. Witold Orlowski Swiat, który oszalał, czyli poradnik na ciekawe czasy (The World's gone mad - a guide for interesting times). The most prestigious project was the movie Swiadectwo (Testimony). The world premiere of Agora's co-production took place in Vatican and in December the movie was published on DVD with accompanying book. Agora together with STX Jamboree Agency co-organized the first ever concert in Poland of Woody Allen's Jazz Band.

OUTDOOR

AMS grew revenues by 15.3% (to PLN 55 million) while total spending on outdoor advertising decreased by 2% yoy. The company's ad sales grew by 13.3%. This high increase stems from effective sales of campaigns on additional Premium and Superpremium panels, which AMS continued to add to its portfolio during last few quarters. The increase of operating cost by 30.2% mainly reflects higher system maintenance cost related to expanded offer and the investment in a new advertising channel in the Warsaw metro system, CityINFOtv. Estimated share of AMS in out-of-home ad spend grew to 26.9% (up by 4.9pp) (excluding transit advertising and cost of cross-promotion of Agora's other media on AMS panels if such promotion was executed without prior reservation).

MAGAZINES (5)

EBITDA of magazines (1) reached PLN 0.6 million, while segment's revenues grew to PLN 25.9 million (down 7.2%). The decline of revenues from ad sales (by 6.4% to PLN 14.6) and copy sales (by 8.2% to PLN 11.2 million) reflects general economic slowdown. Paid circulation of magazines remained flat yoy. In Q42008 Agora's magazines occupied 6.9% share of total magazine advertising spending.

RADIO

Local radio stations reported PLN 2.3 million operating EBITDA and increased ad revenues to PLN 25.4 million (up 16.5%) while total spending for radio advertising decreased by 3% yoy. Agora's local radio stations audience share reached 7.26%. The audience share of TOK FM reached 4.41% in all cities where broadcasted and 7.25% in Warsaw. The station grew its sales revenues by over 6%. In 2008 TOK FM grew revenues by 34% yoy and improved its results significantly. The station was named The Station of the Year 2007 by weekly Media&Marketing Polska.

PROSPECTS