1. PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS WANT TO TAKE CONTROL Sally Cartwright HELLO!

4. CIRCULATION 502,679 Source: ABC July – December 2000

5. THE COST OF POSTAGE NO TIME ADVANTAGE THE AVAILABILITY OF NEWSAGENTS HELLO! SUBSCRIPTIO NS

6. HELLO! RETURNS 18%

7. 25%

8. 34% UK INDUSTRY AVERAGE

9. THE ENVIRONMEN T AND THE MAGAZINE

11. USA/UK/GERMAN MAGAZINE MARKET COMPARISON

12. UK MAGAZINE MARKET RETAIL GROWTH Source: Wessenden Marketing, JM \ SD \ WHS wholesale data

13. UK RETAIL MARKET SHARES 1993 - 2000 New Entrants have gained Significant Share at the expense of the traditional sectors.

14. UK MARKET DYNAMICS - PUBLISHERS/DISTRIBUTORS Retail market value growth slowed to 1.5% from 10%. Number of Consumer titles grown by 45% in last decade to 3,200. Industry unsolds costs now $230m. Publisher/Distributor consolidation. Subscription sales still only 11% of market Internet “bubble-burst” means investment back into printed media.

15. UK MARKET DYNAMICS - WHOLESALE Wholesaling is a relic of the former dominance of the local newsagent. Market value growth over the past ten years has supported profitability. The wholesale sector will continue to concentrate.

16. UK MARKET DYNAMICS - RETAIL Outlets selling Magazines grown by 30% in 7 years New sectors growth Supermarket sales growth will slow Multiple retailer frustration Independents are intrinsically marginal businesses.

17. WHAT’S HAPPENED IN THE LAST 12 MONTHS? Tesco/WHS announced “National Direct” in March 2000 PPA/NPA fought back Tesco dropped ND in October 2000 - consensual industry approach WHS dropped ND in Dec 2000 Industry “8 point plan” agreed WHS announced planned sale of Wholesale arm in Feb 2001

18. RETAIL REQUIREMENTS FROM BLUEPRINT IMPROVE CONSUMER OFFER REDUCE WASTE SIMPLIFY SUPPLY CHAIN INCREASE MAGAZINE SALES

19. THE BLUEPRINT - A NATIONAL SERVICE OFFER Retail Store Regional Wholesalers Printers Retail HQ Publisher/Distributor

20. CPU ELEMENTS Allocation system, including SBR system. Information Warehouse. Central invoicing and cash collection facility. Central customer service facility. Simplified in-store handling systems

21. SUMMARY Magazines doing well Facing up to major challenges Diversifying successfully Print on paper will be major revenue stream for many years to come …and to close…just look at two new sectors

22. 2,030,498 EVERY MONTH

23. 7,900,000 EVERY MONTH Source: ABC July – December 2000