Affichage Annual Report 2011

Affichage Holding SA

1

2 011

2 011 / 2 010 Change

2 010

2009

CHF m

311.8

2.5%

304.3

340.0

42.3%

Affichage Group Sales revenue EBITDA

CHF m

73.0

Operating income (EBIT)

CHF m

56.1

Net income

CHF m

41.8

Free cash flow

CHF m

67.4

Net debt

CHF m

– 62.5

Equity ratio

106.5%

39.7%

Employees

661

– 6.3%

51.3

45.6

– 39.1

– 65.2

– 52.3

– 59.1

32.6

18.4

4.1

34.5

36.3%

41.8%

705

782

Data per share Net income

CHF

14.23

– 17.82

– 19.84

Cash flow

CHF

21.78

15.29

12.03

Shareholders’ equity

CHF

42.11

33.99

55.45

Payout 1

CHF

7.00

0.00

0.00

5.1%

0.0%

0.0%

Payout yield 1

1 4 6 7 8 30 34 40 54 60

Proposal to the General Meeting

Contents Preface Consolidated net income Development of key figures Information on Affichage shares Affichage Switzerland Affichage International Human Resources Corporate Governance Extract of the Financial Report Contact

13 th Report of the Board of Directors to the Annual General Meeting of May 23, 2 012

Turnaround achieved.

Reassuring annual result.

Strategy implemented swiftly and systematically.

Dividend payments resumed.

Dear Shareholder: Business development: In both strategic and operational terms, our company made considerable progress in 2011. We thus take an optimistic stance on the future. After a difficult phase of unsuccessful expansion into foreign markets and the associated negative financial results, the Board of Directors with its new Chairman and new Executive Board achieved a genuine turnaround within a very short time last year. Numerous problem areas abroad were resolved, all companies in Switzerland generated encouraging results, and important contracts were renewed. The annual result ranks among the best in the company’s history.

Two priority objectives dominated the year under review. The first was to execute the redefined corporate strategy with its focus on the Swiss home market while significantly reducing the international portfolio. The other was to adjust the structures and processes of the companies in Switzerland with a view to creating an integrated, contemporary Out of Home media company. In this context, numerous projects were initiated to strengthen the company’s competitiveness in an ever more complex and increasingly digitized market environment.

Consolidated sales rose by 2.5% to CHF 311.8 million. Organic growth in local currencies amounted to 3.7%; currency effects came to a net –1.2%. Disciplined cost management, the elimination of unprofitable business activities abroad, and the positive trend in Switzerland pushed EBITDA up by 42.3% to CHF 73.0 million (PY CHF 51.3 million), which is equivalent to a groupwide EBITDA margin of 23.4% (PY 16.9%).

Rigorous implementation of the new corporate strategy, strong growth in Switzerland, disciplined cost management, non-recurring proceeds, and the elimination of impairments on intangible assets brought about a sizeable improvement in the result. After two years of losses (2010: CHF – 52.3 million, 2009: CHF – 59.3 million), net income for 2011 amounted to CHF 41.8 million.

Swiss market: The development of our activities in the Swiss market was consistently positive, and supplementary revenues accruing from the national elections added further momentum. All business activities and companies in Switzerland posted higher earnings and generated encouraging results. Sales revenue in financial year 2011 advanced by 8.3% to CHF 280.6 million (PY CHF 259.0 million). EBITDA improved by 5.6% to CHF 71.8 million, which corresponds to an EBITDA margin of 25.6% (PY 26.3%).

Financially attractive offers for franchise partners coupled with dependable, high-quality services and an exemplary commitment to environmental protection and sustainability again enabled the company to outplay rivals and land contracts awarded under public tenders and RFQs in a fair competitive spirit. Key partners (including municipalities, mass transit operators, tourist resorts and shopping centers) continue to place their trust in our companies, which for decades have proven their capabilities and reliability in the marketplace. The list of achievements includes contract renewals

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with the cities of Geneva and Schaffhausen, the intensification of the marketing partnership with the public transportation authorities in Lausanne, and many others. The highly successful introduction of digital ePanels at the RailCity stations in Basel, Bern, Geneva, Lausanne, Lucerne and Zürich was another important milestone.

Our conceptual work last year was shaped by the progressive digitization of our everyday life and the opportunities it opens up for the advertising industry, as well as by our plans for an integrated sales organization with the involvement of all segment companies. Interdisciplinary project groups laid the foundations for a forward-looking and more flexible sales organization. This also included the creation of a Digital Competence Center and of a Digital Sales Unit within the Swiss market organization.

Within the scope of a brand strategy review and optimization program, it was decided that the traditional core brands APG (Eastern Switzerland) and SGA (Western Switzerland and Ticino) should be merged and strengthened. At the same time, all segment companies – some of which have operated under proprietary names – are being integrated in the new brand management concept. Since January 2012, our company has been operating under the unified APG|SGA umbrella brand, thus reflecting the new integrated product portfolio and sales structure.

Foreign strategy: Announced in the spring of 2011, the strategic realignment focused on the Swiss home market – which also entailed a massive reduction in exposure to foreign markets – was implemented swiftly and systematically. The activities in Greece were sold in April, and our heavily loss-generating sales organization in that country was wound down. In the months that followed, negotiations held concurrently in various other countries were successfully completed despite the adverse economic conditions. All our interests in Hungary, Bulgaria, Bosnia, and Italy have now been sold, and we are withdrawing from these markets. In Romania, a settlement ended the protracted legal dispute with the minority shareholder and general manager: all his shares were acquired, ending a stalemate situation which until then had been a significant burden for the company. An exit from the Romanian market at some point in the future is still the objective. We granted the former minority shareholder a call option on all shares, scheduled to expire on March 31, 2012.

Despite the challenging economic scenario and delays in conjunction with the modernization and upgrading of advertising plant in the first quarter, the company in Serbia performed in line with our expectations and generated a respectable result. Its strong market leadership position, combined with an inventory of high-quality outdoor advertising products, constitutes a solid foundation for future activities in the Serbian market.

Organization: CFO Dr. Ulrich von Bassewitz announced his resignation from the Group effective March 31, 2012. After a one-month familiarization period, his designated successor Beat Hermann will assume this function as of April 1, 2012.

Christian Gotter joined our company on January 1, 2012. He has been appointed Head of Logistics effective February 15, 2012, replacing Walter Oeschger, who is retiring. The Board of Directors and the Executive Board wish to thank both former members of the Management Board for their long years of service to APG and Affichage Holding.

Proposals to the General Meeting: The Board of Directors proposes to the General Meeting the payment of an ordinary dividend of CHF 5 per share for financial 2011. At the same time, in view of the attainment of interim strategic and operational benchmarks and the positive annual result achieved, the Board also proposes the payment of a special dividend of CHF 2 per share. This proposal addresses both the need for a further consolidation of shareholders’ equity and the resumption of dividend payments, thus rewarding the shareholders who continued to place their trust in the company despite the difficult years 2009 and 2010.

As briefly outlined on the occasion of last year’s General Meeting, the Board of Directors is of the opinion that our company, organized and operated according to modern corporate governance guidelines, should abandon the traditional transferability restrictions applied to registered shares. Limiting registration and voting rights to shareholders with a maximum of five percent of the share capital, as stipulated by this transferability provision, is anachronistic. In the interest of all shareholders, the Board of Directors thus proposes to the General Meeting to delete the transferability restriction from the Articles of Incorporation. The introduction of the so-called “one share, one vote” principle reconciles par value with voting rights conferred to each share.

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Within the framework of the realignment of the company and the related shift in focus onto the core domestic market, a complementary objective is to adjust the brand asset management approach at the holding company level as well. Associated primarily with expansion into foreign markets, the Affichage Holding SA brand has become obsolete. The General Meeting is requested to approve APG|SGA AG as the new name effective July 1, 2012.

Outlook: The diffuse macroeconomic environment and its likely impact on the advertising industry make it virtually impossible to forecast business developments in fiscal 2012 with any degree of certainty. Even though the year began with a positive trend in new orders, we expect booking behavior to be short-term and volatile as 2012 unfolds, with much depending on how the economic scenario develops. At the same time, we see the various measures put in place to strengthen our competitiveness as justifying an optimistic outlook for the near future.

We wish to thank all of our employees for their strong commitment. They handle their daily assignments competently, enthusiastically, and in close collaboration with market partners.

And finally we would like to express our gratitude to you, our shareholders, for your loyalty and support.

Jean-Franรงois Decaux Chairman of the Board of Directors

Dr. Daniel Hofer Chief Executive Officer

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Consolidated net income

General: While sales growth was reassuring in Switzerland, the Group remains confronted with adverse baseline conditions in its foreign markets. The reduction of foreign interests, resolved and systematically implemented as part of the strategy reorientation, as well as an upswing in the Swiss domestic market had a positive influence on income, the balance statement, and free cash flow.

Affichage Group: Consolidated sales revenue rose by 2.5% to CHF 311.8 million (PY CHF 304.3 million). Organic growth in local currencies amounted to 3.7%; currency effects accounted for –1.2%. Real estate revenue rose by 6.7% to CHF 2.5 million. Five effects had a positive impact on the operating result: the redimensioned and largely rehabilitated foreign activities, non-recurring proceeds amounting to CHF 6.4 million (item Other income: collection of bank guarantees, sale of activities abroad, recovered write-downs), sales growth in Switzerland achieved without infrastructure expansions, and proportionally slightly lower concession fees (44.6% of sales revenue). EBITDA advanced by 42.3% to CHF 73.0 million (PY CHF 51.3 million), which is equivalent to a groupwide EBITDA margin of 23.4% (PY 16.9%).

Net income closed at CHF 41.8 million (PY CHF – 52.3 million); apart from the operational recovery, this result also reflects the elimination of impairments on intangible assets. Net income for the period from January to September 2011 closed at CHF 27.7 million. Total income attributable to shareholders of Affichage Holding SA (comprehensive income) amounted to CHF 23.5 million (PY CHF – 65.6 million).

Switzerland: In the Swiss home market, sales revenue rose by 8.3% to CHF 280.6 million (PY CHF 259.0 million). All activities contributed to this vigorous growth. The gain in the first half of the year was 7.5%, accelerating to 8.8% in the second half, buoyed by the national parliamentary elections and new electronic products (ePanels in railway stations). EBITDA increased by 5.6% to CHF 71.8 million (PY CHF 68.1 million), resulting in an EBITDA margin of 25.6% (PY 26.3%). Overall, the company generated CHF 47.9 million in net income (PY CHF 42.0 million).

International – Greece and other foreign countries: In compliance with reporting standard IFRS 8 (segment reporting), the International Division is subdivided into two segments: Greece and Other foreign countries. The total foreign contribution to consolidated sales revenue declined from 14.8% to 10%, closing at CHF 31.2 million (PY CHF 45.2 million). This represents a decrease of 30.9%, of which 8.4% is attributable to negative foreign-exchange effects. Overall, the International Division generated EBITDA of CHF 8.8 million (PY CHF –12.5 million).

Sales revenue in Greece fell by 81.8% to CHF 1.9 million (PY CHF 10.7 million), of which – 2.2% was due to currency translation. To a large extent, EBITDA of CHF 4.2 million (PY CHF –16 million) reflects costs for the controlled exit, income from the sale of individual activities to a local partner, and an amount collected from a bank guarantee representing a receivable from the seller of the operations in Greece. Net income closed at CHF 4.2 million (PY CHF – 21.9 million).

Sales revenue in Other foreign countries declined by 15.0% to CHF 29.3 million (PY CHF 34.4 million); currency effects account for –10.3%. Expressed in local currencies, sales revenue in the Serbian market stagnated, and a further decline of 13.5% was posted in the Romanian market. EBITDA closed at CHF 4.7 million (PY CHF 3.4 million), resulting in an EBITDA margin of 15.9% (PY 10.0%). Net income improved to CHF – 4.8 million (PY CHF –79.4 million), which is attributable to the elimination of prior-year impairments. In compliance with IFRS 5, no separate report was compiled for the sale of activities in Bosnia, Bulgaria, South Tyrol, and Hungary: they were classified as non-essential. The segment report for Other foreign countries lists the sold activities with a revenue contribution of CHF 7.5 million, an EBITDA contribution of CHF 1.3 million, and net income amounting to CHF 0.6 million.

In late 2011, the Affichage Group acquired the 30% share minority in Affichage Romania Srl and granted the former minority shareholder a call option for the 100% acquisition of the Romanian group; the option expires at the end of March 2012.

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Cash flow: Cash flow closed at CHF 63.9 million (PY CHF 44.9 million). Cash flow from operations, i.e. cash-relevant income under consideration of changes in net current assets, closed at CHF 72.7 million (PY CHF 55.7 million). After investments in property, plant, and equipment, financial assets, and intangible assets amounting to CHF 10.8 million (PY CHF 23.1 million) as well as proceeds from the sale of property, plant, and equipment, and participating interests totaling CHF 5.5 million, free cash flow closed at CHF 67.4 million (PY CHF 32.6 million).

Balance sheet: Total assets increased by 31.1% to CHF 311.2 million, mainly because of increased liquidity. Intangible assets amount to 22.2% of total assets (PY 27.4%) or 55.9% of shareholders’ equity (PY 75.4%). Net current assets amount to 6.7% of sales revenue (PY 9.7%). The receivables portfolio decreased to CHF 39.8 million (PY CHF 44.4 million). The CHF 4.1 million net debt position from the prior year was transformed into a net cash position of CHF 62.5 million. Shareholders’ equity amounts to CHF 123.7 million (PY CHF 99.8 million), which is equivalent to an equity ratio of 39.7% (PY 36.3%). Shareholders’ equity was burdened by an IFRS-related actuarial loss from defined-benefit plans in the amount of CHF 21.2 million (PY CHF 6.6 million). This reflects slight losses on pension fund assets as well as historically low interest rates that resulted in a further reduction of the discount rate, which in turn increases expected future benefit obligations.

– 55.4

– 36.3

– 55.8

– 17.9

303.1

38.5

105.1 13.4

86.3

16.9

19.5

Sales revenue CHF m

EBITDA CHF m

EBITDA margin In percent of sales revenue

2011 10.8

2010

2009

2008

2007

2011

2010

2009

2008

2007

2011

2010

2009

2008

2007

2011

2010

2009

2008

2007

24.3

38.1

51.3

45.6

73.0

83.5

80.9

20.9

23.4

26.1

– 31.3

9.4

– 6.7

42.3

12.5

3.2

– 45.4

2.5 311.8

32.2

– 10.5 304.3

10.9

– 20.7

428.7 340.0

386.4

20.4

Change vs. PY in percent

Investments CHF m

5

Development of key figures

5-year financial highlights of the Affichage Group

2011

2010

2009

2008

2007

69.8

Balance sheet Buildings and land

CHF m

52.7

57.3

60.1

62.7

Advertising plant

CHF m

20.3

24.1

38.6

59.7

61.6

Current assets

CHF m

142.8

94.4

125.9

194.3

212.9

Net current assets

CHF m

21.0

29.5

30.9

56.6

70.6

Net debt (+) / Net liquidity (–)

CHF m

– 62.5

4.1

34.5

35.5

– 2.7

Net debt /EBITDA Gearing

0.08

0.76

0.43

4.0%

20.7%

15.2%

Equity

CHF m

126.5

100.9

167.2

233.3

Total assets

CHF m

311.2

275.1

395.1

567.2

577.1

13.1%

– 30.4%

– 30.3%

– 1.7%

34.3%

– Change versus PY

326.0

Income statement Sales revenue (SR)

CHF m

311.8

304.3

340.0

428.7

386.4

– Switzerland

CHF m

280.6

259.0

250.1

305.9

297.3

– International

CHF m

31.2

45.2

89.9

122.4

89.1

Fees and commissions

CHF m

139.1

141.4

164.1

194.7

176.2

in% SR

44.6%

46.5%

48.3%

45.4%

45.6%

Personnel expenses

CHF m

66.0

68.3

68.0

77.8

74.3

in% SR

21.2%

22.5%

20.0%

18.1%

19.2%

Depreciation of property, plant, and equipment Amortization of intangible assets

CHF m

11.3

14.3

20.6

23.1

21.0

in% SR

3.6%

4.7%

6.1%

5.4%

5.4%

CHF m

4.8

5.4

7.6

7.7

5.0

in% SR

1.5%

1.8%

2.2%

1.8%

1.3%

EBITDA

CHF m

73.0

51.3

45.6

83.5

80.9

Operating income (EBIT)

CHF m

56.1

– 39.1

– 65.2

52.7

54.9

Income from continuing operations

CHF m

43.0

– 52.7

– 41.4

32.9

41.6

Net income

CHF m

41.8

– 52.3

– 59.1

29.7

65.4

Cash flow

CHF m

63.9

44.9

35.9

56.9

78.0

Free cash flow

CHF m

67.4

32.6

18.4

– 13.7

– 50.2

20.9%

Statement of cash flows

Financial indicators EBITDA margin

in % SR

23.4%

16.9%

13.4%

19.5%

Operating income (EBIT margin)

in % SR

18.0%

– 12.8%

– 19.2%

12.3%

14.2%

Income from ongoing business activities

in % SR

13.8%

– 17.3%

– 12.2%

7.7%

10.8%

Net income

in % SR

13.4%

– 17.2%

– 17.4%

6.9%

16.9%

Cash flow

in % SR

20.5%

14.7%

10.5%

13.3%

20.2%

ROIC

66.4%

– 25.5%

– 27.7%

17.8%

23.2%

ROE

37.4%

– 39.5%

– 30.7%

11.2%

24.1%

27.9

Investments Advertising plant

CHF m

6.4

2.8

10.8

21.9

Other investments in property, plant, and equipment

CHF m

2.8

2.5

2.5

6.4

7.9

Intangible and financial assets

CHF m

1.7

18.9

24.8

58.1

69.3

661

705

782

825

819

Employees Explanation of financial terms see page 55

6

Information on Affichage shares

2011

2010

2009

2008

2007

Data per share Operating income (EBIT)

CHF

19.11

– 13.32

– 21.87

17.96

18.80

Cash flow

CHF

21.78

15.29

12.03

19.37

26.69

Income from continuing operations

CHF

14.23

– 17.96

– 12.78

10.10

13.01

Net income

CHF

14.23

– 17.82

– 19.84

10.11

22.40

Equity held by Affichage Holding SA shareholders

CHF

42.11

33.99

55.45

75.16

105.85

Payout

CHF

7.00 1

Payout ratio

49.2%

0.00

0.00

4.40

8.80

0.0%

0.0%

44.5%

40.3%

Share price data Market price high / low 2

CHF

Year-end market price

CHF

151/ 93.8

149/96.5

257/127.5

279.5/200

136.0

140.0

108.7

140.0

252.0

5.1%

0.0%

0.0%

3.1%

3.5%

408.0

420.0

326.1

420.0

756.0

– versus shareholders’ equity

3.2

4.2

2.0

1.9

2.4

– versus sales revenue P / E ratio 3, 4

1.3 9.6

1.4 –

1.0 –

0.9 13.8

2.0 11.6

Payout yield 3 Market capitalization 3

CHF m

Proposal to the General Meeting Source: Lombard Odier Darier Hentsch & Cie 3 Based on market price as at December 31 4 Including payout on treasury stock 1

2

Price trend since December 31, 2006 160 Index 140 120 100 80

Affichage registered share SPI

60 40 20 31.12.2011

31.12.2010

31.12.2009

31.12.2008

31.12.2007

31.12.2006

0

Source: Datastream, Lombard Odier Darier Hentsch & Cie

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Affichage Switzerland

APG AG Fortified product portfolio, innovative products, digitization

Beat Holenstein Head of Partner & Product Management

Partner Management In 2011, APG further strengthened its position as the leader in the Swiss Out of Home market. For over 100 years, with innovative deliverables, it has been offering its contractual partners genuine added value and is thus the undisputed No. 1 in billposting, be it on streets, in railway stations (via Impacta / Ecofer) or at top-echelon shopping centers. In the year under review, APG was chosen in a multi-stage selection process to manage all 1,600 panels in the public spaces of the city of Geneva. The contract was awarded because of the attractive and cost-effective bid, convincing services, and proof of the strong and sustainable commitment to the needs of this long-standing contractual partner. Within the scope of a public tender, transports publics de la région lausannoise (tl) decided in favor of an all-in-one media partner to market the advertising assets in the Métro Lausanne (m1 and m2) as well as of the entire tl fleet. Valid for 5 years and covering the external and internal panels of the vehicles, the contract was awarded to transit advertising specialist APGTraffic 1, while APG was awarded the contract for poster and digital outdoor formats; this means that effective January 1, 2012, the portfolio of attractive backlit posters and screens can be broadened to address customer needs. APG is also partnering with the city of Schaffhausen for another 10 years.

The point-of-sale segment was expanded by the City West shopping center inaugurated on November 11, 2011, in Chur, as well as the Gäupark and Planète Charmilles shopping centers in Egerkingen and Geneva, respectively.

Additional malls that picked APG as their partner in 2011 include the Zentrum Rosenberg in Winterthur, the Säntispark in Abtwil, and the Lyssbachpark in Lyss.

Product Management The Premium Citystar200L ® Big5 networks that the Swiss market leader has been offering in the five largest Swiss cities since 2011 represent a top-class revenue-boosting product in the immediate vicinity of the points of sale.

1

Also see: APGTraffic, page 20

The panels, located in the centers of Zürich, Bern, Basel, Geneva, and Lausanne, guarantee premium exposure with over 150,000 weighted SPR+ contacts per site and week.

The premium branding segment also includes further exclusive assets at highly frequented “hotspots”, among them Zürich’s Bahnhofplatz, Luzern’s bay area, Bern’s Bahnhofplatz, and Basel’s Centralbahnplatz. The APG Profitline introduced in 2009 was also expanded and refined as an alternative and complementary offer. The popular and successful budget-friendly product line allows customers to benefit from APG’s billposting quality at rock-bottom prices.

In addition to the differentiated network products, the share of individually bookable panels was further increased and now amounts to about 70 percent.

Digital Competence Center In response to the escalating digitization trend and the new options it entails for Out of Home communication, APG during the year under review decided to establish a Digital Competence Center. It is responsible for the development of a unified Group strategy for digital products; it evaluates new technologies and products within the scope of pilot projects and supports customers in conceptual issues related to digital Out of Home campaigns. New opportunities are also arising at the interface between mobile communication and outdoor advertising. As an example, the APG PosterPlus ® app allows consumers with smartphones – iPhones and now also Android models – to access supplementary information about ongoing poster campaigns by using the photo function: product and pricing data, the nearest outlet, short-term clearance sales, time-limited discounts, as well as many other offer and retailer details. Out of Home advertising and smartphones can easily be combined in this manner. Added-value functions of this kind are continuously being refined, allowing merchants to reach their customers in efficient and innovative ways.

9

With its Premium Citystar200L ® networks, APG offers customers exclusive sites in Switzerland‘s five largest cities – ideal boosters for fire sales in the immediate vicinity of the point of sale.

Zürich, Paradeplatz Geneva, Boulevard Georges-Favon

High media share and greater diversity of Swiss outdoor advertising

Daniel Strobel Head of Advertising Market & Subsidiaries Switzerland

The Swiss advertising market In Switzerland, Out of Home advertising has traditionally enjoyed an exceptionally strong market position. Whether in image or product campaigns, Out of Home media constitute a mainstay of every successful media strategy. This tradition is a commitment shared by the more than one hundred staff members of our sales departments: on a daily basis, they liaise with creative and media agencies as well as their clients to familiarize them with the fascinating possibilities of our medium and to ignite their passion for customized Out of Home communication solutions.

Subsidiaries Seasoned specialists in our subsidiaries rely on their skills to produce a digital brand experience with multimedia excitement. They create amazing 3D executions, converting the environment of specific points of sale – various points of interest: railway stations, tourism lifts, airports, etc. – into unique branding places and transform public transportation vehicles into mobile communication delivery systems.

With a nationwide presence, they can thus enrich outdoor advertising – be it directly or in combination with traditional street billposting – in a decisive and sustainable manner.

One-stop shop The decision in favor of a medium is crucial for the success of measures designed to woo consumers. The continually intensifying intermedia competition in an ever more fragmented media landscape calls for more comprehensive and more individualized counsel. Organizational adjustments initiated this year will allow APG and its segment companies to better consolidate their cross-segmental consulting activities, deliverables, and services to achieve single-source convenience. The medium-term intention of these efforts is to allow customers to invest their advertising spend in our medium in a more targeted and efficient way.

Out of Home: large media share in percent, not including direct advertising

4.2

3.5

7.1

15.8

17.4

Out of Home TV Print Internet Radio Other

52.0 Source: Foundation for Advertising Statistics, publ. May 18, 2011

11

Intensive research, simplified pricing, extensive services

Markus Ehrle Head of Marketing & Business Development

Market and media research In the classic media mix, posters deliver the verifiably highest return on advertising investments as corroborated in a study commissioned by APG in 2010 together with FAW, Fachverband Aussenwerbung e.V., Frankfurt/Main (Germany) 1.

In Switzerland last year, a billposting campaign 2 confirmed this insight with concrete figures, convincingly documenting the clearance sale effect of poster campaigns in our customer community. Within the framework of the APG Poster Performance Index PPI ®, which since 1997 has been regularly surveying the recall, brand recognition, and appeal scores of poster campaigns, we have a comprehensive database of over 850 tested campaigns that serves our customers as a coveted controlling and benchmarking tool. The PPI ® is the link between the objective media performance (reach, contacts, etc.) measured by SPR+ and the actual communication success of a campaign as a result of the work performed by creative departments.

In close collaboration with SPR+, the leading independent Swiss institute in the domain of Out of Home media research, methodical and organizational fundamentals were put in place to further optimize the broadly accepted research work in the years ahead.

Category marketing, communication, and branding The annual presentation of the Swiss Poster Award on the occasion of the APG Poster Night has evolved to become a highlight on the creative media agenda since it was relaunched in 2004. The involvement of the contestants, the respected jury of professionals, and the glamour of the widely publicized event showcase the appeal of well-designed posters in the community of creatives, media agencies, and their clients. We are pursuing the same objective with the online Poster of the Month competition that was relaunched in December with a significant increase of public participation. The APG category campaign developed ahead of the Swiss parliamentary elections turned out to be a special highlight. Once again, the poster demonstrated its impact as a medium, multiplied by extensive media coverage; it triggered an overwhelmingly positive response and, by Swiss standards, an above-average turnout of voters in the autumn when the elections were held. The focus of APG communication in 2011 was on the conceptual and preparatory work for the rebranding project and the introduction of the new APG|SGA brand in January 2012.

Webtools and e-communication Today, various web applications and service tools simplify the planning of customized campaigns that are precisely aligned with specific communication goals. The focus in activities during 2011 was on inventorying existing instruments with the aim of creating the conceptual fundamentals for the next development steps. The goal is to make it even easier for our customers to plan and book poster campaigns.

Pricing A decision was made in the year under review to revise APG’s pricing and terms of business to make them more transparent and attractive. As a first step in the fall, we introduced unified rates with new products and services for 2012 site bookings, making the pricing system considerably simpler for all parties involved.

Study of the effect of advertising on sales: Posters generate the highest ROI, BrandScience, Hamburg (D), www.apg.ch / roi 2 Case study “Uncle Ben‘s Heiss auf Reis”: How posters boost sales, APG 2011 1

Webtools – APG PosterDirect: Online poster planning and booking with a 5% online booking discount www.PosterDirect.ch − APG PosterPlus: Dialog smartphone / poster – the direct channel to the consumer www.apg.ch / posterplus − Affichage InterMediaMap: Visualization of billposting campaigns on the Internet, based on Google Maps www.InterMediaMap.com

As a media company, we sincerely care about the image of Out of Home publicity.

Within the scope of various competitions, APG promotes effective and aesthetically appealing posters of high graphic quality.

Photo: “Cemented relationship” FLEUROP, winner of the Swiss Poster Award 2011 Client: Fleurop-Interflora (Schweiz) AG

Against creeping indifference: Under the motto “Decide on the face of Switzerland” and in collaboration with the online voter forum smartvote.ch, APG encouraged Swiss citizens to cast their votes in 2011, using the category campaign in the election year to demonstrate the strengths of Out of Home advertising with a bit of tongue-in-cheek humor.

13

High billposting quality,

Further ecobalance improvements

excellent customer satisfaction

Walter Robert Oeschger Head of Logistics

Quantity . . .

APG handles its own logistics, organized as service partner units for poster sales / acquisition and the segment companies in Switzerland. A total of 274 employees make sure all posters are mounted at their sites every week. During peak periods, regardless of the weather, a billposter puts up as many as 180 posters per day – converted into world format (1 square meter) equivalents. In 2011, this added up to 2,550,000 posters, of which approx. 20% in the cultural sector. Additionally, some 3,000 panels were installed, dismantled, relocated, or overhauled. Of this work, APG’s Logistics handled 90%, and 10% was outsourced.

Complementary activities include regular maintenance at all sites, cleaning of shelters, fulfillment of special customer requests (3D posting, dispenser campaigns, etc.), and the execution of third-party service orders. . . . and quality Logistics makes a significant contribution to the public perception of Swiss market leader APG, because the results of the team’s work are directly visible for customers and partners in the public domain. Swift and flawless billposting in any weather and the circumspect maintenance of poster sites are central elements of our commitment to service.

Thanks to well-trained, highly motivated Logistics employees, the customer complaint quota averaged across the year under review was remarkably low – a benchmark we are determined to uphold. The objective is to achieve even faster turnaround times in the value chain to safeguard a competitive advantage in our market.

APG has succeeded in further reducing its environmental footprint in comparison with prior years. Energy efficiency has been constantly on the rise and the ecobalance has improved year after year. Better metrics in electricity consumption and traffic contributed most to the good result.

The eco-burden from power usage has declined by 50% since 2006, and the environmental footprint from traffic by 20%. Thanks to our consistent procurement and usage of natural gas and hybrid cars, APG now has one of Switzerland's largest ecologically sound fleets, with 171 vehicles of this kind. We are also proud of the fact that we finished first among all media companies surveyed in the eco-rating 09 /2010 of BILANZ, a prominent business weekly. By relying on efficient technologies and ecologically aware procurement, we intend to further reduce the environmental burden in all processes in the service of the cities and communities for which our work as a partner makes a sustainable contribution to achieving ecological goals.

René Fanchini Head of Infrastructure and Environment

14

Bern, Bahnhofplatz Z端rich, Bahnhofplatz

Impacta AG Successful year for the rail poster pros

Markus Scheidegger Managing Director, Impacta AG

Impacta AG, which holds concessions from the SBB, the BLS, operators of other important Swiss private rail networks, tourism resorts, resort lifts, and parking facilities, achieved another promising milestone in railway station advertising during the year 2011. Planned, designed, and launched in close cooperation with APG’s profit center eAd 1, the new ePanel digital format was inaugurated in the six largest SBB railway stations on June 20. Very well received by the market, the premium product is characterized by sites of excellent quality with a strong advertising impact. The animated images and video clips are vibrant elements that seamlessly interface with the busy ambiance of the stations and RailCity shopping malls, offering an ideal contrast to the classic poster formats. During the report year, these formats were again successfully marketed in collaboration with APG. On the basis of a long-standing partnership and ongoing innovation, the SBB succeeded with Impacta in positioning railway stations as an autonomous medium in the advertising market. In Switzerland, commuters, rail tourists, and passers-by as a clearly defined target audience can be effectively addressed with a holistic lineup of products in all centers and along major rail lines.

Continuously rising rail passenger frequencies Passengers of the SBB and public transport entities, per year in millions 2010

446 431

2009

425

2008 403

2007

379

2006

364

2005 303

2000

279

1995

Source: Swiss Federal Statistical Office www.bfs.admin.ch (December 2 011)

1

See page 26

16

Latest railway station debut: ePanels with the standard 9 :16 portrait format deliver brilliant images in full-HD resolution, empowering Out of Home advertising of unprecedented quality.

RailCity Z端rich

Ecofer AG Investment advertising in railway stations – attractive and coveted

Hans-Peter Scholl General Manager, Ecofer AG

Specialized in non-poster railway station advertising, Bern-based Ecofer AG was able to broaden its product line in 2011 and generated considerable sales growth. The strengths and advantages of investment advertising – illuminated signage, large-format vinyls, long-term billboards, etc. – are being tapped by more and more media budgets, which has further expanded the Ecofer customer portfolio with the addition of prestigious national and international accounts. The rail station / rail communication channel has a long-lasting effect. This is impressively confirmed by the demand for Ecofer products. The market for large-area illuminated signage on station premises or buildings in urban centers posted particularly reassuring gains. A number of contracts were renewed prior to expiry.

Daily railway station frequencies

Rail passengers 1

Zürich HB 2

382,760

Bern 2

191,360

Basel SBB 2

108,600

Winterthur 2

95,230

Lausanne 2

89,010

Luzern 2

81,160

Zürich Oerlikon

76,470

Zürich Stadelhofen

72,580

Olten

71,400

Genève 2

62,200

Biel / Bienne

46,530

Zürich Hardbrücke

43,600

St. Gallen 2

42,170

Zürich Flughafen

41,900

Aarau

38,300

Zug 2

37,920

Zürich Altstetten

36,090

Baden

35,990

Thun

32,570

Wetzikon

25,480

In close cooperation with its concession partners – the Swiss Federal Railways (SBB), BLS AG, Appenzeller Bahnen, etc. – Ecofer designs platforms for holistic brand and product communication. The individual formats are marketed as single assets and integrated packages on a short-, medium-, and long-term basis. The trend has been moving toward combinations of the segments such as the new Stair Branding product, Big Posters, illuminated signage (neon / LED), large vinyls, and 3D designs. Paired with Impacta /APG railway station posters, they are convincing customers as tools for brand domination at the gateways of urban mobility, an ideal environment for Out of Home communication and sales promotion.

Embarking and disembarking 2 RailCity 1

Source: SBB, November 2011

18

Railway stations as brand experience hubs: here, BigPosters, backlit posters, Rail Rollingstar200LR products, Stair Branding, BigScreens, and other electronic media showcase brands in a spectacular and unforgettable way.

APG-SGA Traffic AG Firmed leadership in Swiss transit advertising

Daniel Flück General Manager, APG-SGA Traffic AG

In 2011, APG-SGA Traffic AG reported an encouraging revenue trend and further consolidated its position as the undisputed leader in the Swiss mass transit advertising market. The joint bid submitted by APG and eAd for the tender involving the advertising assets of transports publics de la région lausannoise (tl) extended the partnership with the Lausanne bus services for another 5 years, successfully strengthening the company’s market leadership in Western Switzerland as well. In addition to the exterior and interior assets, digital advertising resources are now being planned for tl buses as well, ideally complementing the broad mass transit advertising portfolio in Lausanne, as was the case in Luzern’s vbl network.

As a partner to over 90% of all city and regional mass transit system operators, the PostBus network, and BLS (S-Bahn Bern), APGTraffic markets more than 4,200 public transportation vehicles. The company interfaces many mass transit system operators with local, regional, and national advertising clients, advertising agencies, signmakers, and printers. The customers benefit from the general contractor principle, a comprehensive range of services, and holistic, single-source solutions. And the transport authorities as well as their passengers benefit from the extra income generated by advertising mandates.

Passengers transported by road Tram, trolley, and bus, per year in millions

Nationwide, transit advertising reaches some 2.7 million passengers – every day. Companies of all sizes will find appealing APGTraffic products to suit their individual needs: from classic and digital formats, standardized, nationally available hanging displays and longitudinal roof formats to 5-square-meter Traffic Boards and partial back vinyls to full-coverage vehicle wraps. Transit advertising taps into rising passenger frequencies and the positive image transfer of public transportation. In Switzerland, public transportation networks are uniquely dense, not only in the urban centers but – thanks to railway and Postbus services – also as feeders for more remote regions.

APGTraffic media research Scientific surveys repeatedly confirm the high impact of transit advertising: Weekly reach ratings of over 50% in the overall population for interior formats, over 80% for external formats, advertising impact in excess of 50%, and recall of individual visuals of up to 73%.

Sources: − APGTraffic, Case study Lausanne mass transit system, 2007 − APGTraffic, Case study Basel BLT hanging displays, 2006 − VBZ TrafficMedia, in cooperation with APGTraffic, Case study Zürich mass transit system, 2003 − APGTraffic, Case study Luzern mass transit system, 2002 Free research reports: www.apgtraffic.ch

1,385

2010

1,360

2009

1,317

2008

1,251

2007

1,205

2006

1,175

2005

1,112

2000 Source: BFS, Swiss Federal Statistical Office www.bfs.admin.ch (December 2011)

20

APGTraffic customers benefit from the superb exposure and popularity of transit advertising and from the attractive price / performance ratio.

The many city and regional transit authorities profit as well, in the form of the concession fees they receive.

21

Pioneering “Mount Toblerone” pilot project, Arosa: The midway station of the Carmenna lift was wrapped into huge printed polymer tarpaulins, transforming it into a conspicuous 3D Toblerone bar. For the chocolate image campaign, the company also deployed ski racks, clock and panorama boards, special skis, etc.

A precision job by APGMontagne: In the Crédit Agricole campaign, the slogan “Wealth management needs accuracy” was credibly transported after the elevations of all poster sites in Zermatt, Gstaad, and St. Moritz had been measured to centimeter accuracy with GPS technology.

22

APGMontagne Success through innovation and sustainability

Markus Bien General Manager, APGMontagne

APGMontagne looks back on a reassuring year. Its investments in new products initiated many innovative advertising campaigns in the mountains, generating added revenue.

Also in 2011, important concession agreements were extended by another 5 years with Lenzerheide Bergbahnen AG as well as Bergbahnen Meiringen-Hasliberg. With their signatures, both rail system operators reaffirmed their confidence in the long-standing partnership that sustainably brings their interests in line with those of businesses that advertise. This form of collaboration is symbiotic because both partners derive benefits from the large numbers of satisfied, well-served visitors. The lifts and their users enjoy the usefulness of information and guidance systems while customers can capitalize on attractive, highimpact advertising formats.

APGMontagne expects to further intensify its collaboration with partners and agency clients with the objective of continuously introducing new products and services that generate added value for all parties involved. Special emphasis is placed on digital formats as well as on service tools (snow report MD, snow and hike maps, etc.) that are optimized for web and smartphone access. The content is kept updated in the GISAB guest information system for mountain resorts. GISAB maps the complete portfolio of deliverables in many Alpine and Nordic winter destinations and supports the dialog between the individual tourism locations and their visitors.

APGMontagne links all of Switzerland’s winter and summer tourism regions and, together with international partners, provides destination marketing around the globe. In Switzerland, this APG profit center is the concession partner to 105 lifts. This represents over 90% of all operators, with more than 4,000 panels in 139 destinations nationwide – from A as in Arosa to Z as in Zermatt. Advertising on the slopes creates direct access to young and affluent target groups that have money to spend, with virtually no scatter losses. The messages reach their audience – vacationers, day trippers, and weekend tourists – in a relaxed, laid-back mood.

APGMontagne formats − F24 posters − F12 posters − Big Posters − Panorama boards − Clocks / information boards − Ski / snowboard racks − Ambient media: 3D, gondolas, chairlifts, stairs, buildings, and others

23

Bercher SA Publicité Générale Successful year for Swiss airport advertising

Pierre-Alain Mettraux General Manager, Bercher SA

The airport of Geneva is a long-standing partner and the biggest one in terms of revenue. Based on the concession agreement that was renewed in 2009 within the scope of a tender, Bercher further refined and expanded its portfolio in the report year. Standard advertising formats are being more frequently supplemented with panels individually customized to their surroundings; in 2011, this included a full wrap in the passenger zone and a special panel of about 12 square meters in the visitor-accessible arrivals area. Airport advertising is thus following the trend toward larger formats associated with a reduction of the number of sites. Advertising plant that blends in with the building architecture fulfills the growing aesthetics expectations of our partners and at the same time delivers the exclusivity that the market wants. The result: satisfied partners and customers and commercially optimized value

creation. The market demand for backlit displays is brisk, and those with integrated LED technology consume less power and are thus also convincing from an ecological standpoint.

As gateways to the world, airports reach international business and leisure travelers with their advertising messages. Communication in the point-of-sale environment at an airport is highly effective, as a brand reminder or in the sales promotion context. The functional ambiance of an airport allows clients to present brands to a discerning audience in an effective and persuasive manner.

11,324 2009

10,905

11,524

9,411

2008

7,620 2002

8,088

7,546

8,000

2001

10,000

8,593

12,000

9,963

14,000

11,865

Genève Aéroport Passengers per year, in 1,000

13,112

For Geneva-based Swiss airport specialist Bercher SA Publicité Générale, 2011 was a successful year. In addition to the watch and financial services industries, it added insurance and real estate as important new advertising segments. The year’s targets were attained with respect to sales revenue and net income. The share of short-term advertising campaigns has grown, contributing significantly to the positive overall development of the company.

Source: Genève Aéroport, www.gva.ch

2011

2010

2007

2006

2005

2004

2003

6,000

24

Prestige advertising at the airport: Large-area, high-quality formats integrated in a building’s architecture boost the exclusivity of the advertising plant and thus of the added value it generates.

25

eAd Digital Out of Home makes headway

Ulrich Ritschard General Manager, eAd

For the digital Out of Home market leader eAd, 2011 was a fine year with regard to both sales and earnings.

Specialized in operating and marketing digital advertising assets, this APG profit center expanded its site network and achieved another milestone with its ePanel product.

In late June, 41 units of the new format went online right on schedule at the SBB railway stations Zürich HB, Bern, Basel, Geneva, Lausanne, and Luzern. The complex project was handled jointly with Impacta AG, which together with the SBB is responsible for site selection, design, and installation.

As a refinement of the eBoard with its individual, sitespecific dimensions, the ePanel has a standard 2-squaremeter poster format, delivering full-HD quality moving images on its 82-inch LCD screen. In contrast to the infotainment program of eBoards, ePanel content is composed exclusively of advertising that can be booked by the day, combined with the option of broadcasting spots synchronously with eBoard displays. This dynamic, unprecedented in Swiss outdoor advertising, constitutes a pivotal success factor of the product that is highly attractive as a premium brand to luxury segment customers for promoting cosmetics, perfumes, watches, and jewelry. Revenue projections were by far exceeded in the first six months.

As at December 31, 2011, the eBoard portfolio encompassed a total of 68 screens at the 12 railway stations in Zürich (HB, Stadelhofen, and Enge), Bern, Basel, Luzern, Winterthur, Geneva, Lausanne (SBB and m2), Zug, and St. Gallen. In view of the replacement of the 10-year-old, 60-square-meter screen in Zürich’s main station scheduled for 2012, the relevant concession agreement with SBB AG was extended, and the screen at the Genève Cornavin station was relocated to a new and better site in conjunction with structural renovations there.

26

Digital Out of Home that scores: First-class eBoard site after railway station renovations in Geneva and launch of the new ePanels.

Paron AG More diversity in large-screen communication

Ernst Fuhrer General Manager, Paron AG

Zürich-based Paron AG, the nation’s leading Out of Home media company in the domain of large-screen communication, significantly increased sales versus the prior year and generated a reassuring result. Located exclusively at premium sites in the centers of Switzerland’s largest cities, the portfolio averages about 135 panels. The sizes of the formats range between 25 and 1,000 square meters.

As partially permanent and partially temporary installations, they are custom-integrated into their surroundings: classic, animated, 2D, 3D, and lenticular Big Posters, wraps, wideboards, and others.

With its large-area assets, Paron accommodates innovative ideas and with a network of specialists can also implement exceptional creative solutions. For the first time in Switzerland last year, Big Posters were partially or fully fabricated with lenticular panels to achieve animation effects. On a construction site shroud at Bellevue square in Zürich, this technique allowed customer Nestlé to make its Nespresso visual alternately appear and disappear from the perspective of passers-by and thus generate extra awareness.

Paron sites − Cities throughout Switzerland − SBB railway stations − Geneva Palexpo, exhibition center − Access to tourism regions, EuroAirport Basel-Mulhouse-Freiburg and others

Because of their unusual dimensions, Big Posters appeal very directly and personally to people, which is one of the reasons they are so well liked. They energize outdoor communication mainly in big cities and belong to the modern urban landscape. The high-impact medium has long become a key item in national and international media plans.

Paron offers its customers all-in-one service. Its work begins with a dialog and counsel regarding site selection, includes design suggestions, continues with the permitting procedure, production, assembly, illumination, maintenance, and disassembly, and finally ends with the environmentally sound disposal of the materials.

28

Paron provides effective and sustainable exposure for advertising – fresh and different every time.

29

Affichage International

Thomas Rainer Head of International Markets

Realignment of foreign strategy The corporate strategy review performed in late 2010 by the Board of Directors together with the new management resulted in the decision that the foreign participations portfolio needed to be consolidated under all circumstances.

The resolution stipulated a discontinuation of all foreign commitments that in the given scenarios were not likely to make any sustainably positive and relevant medium-term contributions to the Group’s earnings.

This decision was implemented rapidly and systematically in the course of the year under review. It involved a controlled withdrawal and the sale of our companies in Greece, Bosnia and Herzegovina, Bulgaria, Hungary, and Italy (South Tyrol). In Romania, it proved possible to acquire full control over the local businesses. However, a short- to medium-term withdrawal from this market is still the objective. In the future, the Group aims to limit its foreign exposure to Serbia and Montenegro.

Greece After an in-depth analysis of various options, the decision was taken to terminate the heavily loss-generating business activities in Greece. In April, the activities of the Group’s companies there were sold to a local Out of Home provider.

Today, the Group only holds shell companies in Greece whose assets have been transferred to the buyers. The legal proceedings we instituted against the former seller of our Greek companies and further individuals affiliated with this entity are still ongoing. In mid-year, a court in Cyprus ordered the defendant to pay a bank guarantee of EUR 2.5 million.

Bosnia and Herzegovina As regards Bosnia and Herzegovina, it was also resolved to withdraw from this market, which is seriously handicapped by the prevailing economic and political baseline conditions. In late 2011, the 70% majority interest in the Bosnian participations were subsequently sold within the scope of a management buyout to the local management that had previously held the remainder of the shares. The terms of this transaction provide for several installment payments of the purchase price.

Hungary The Group’s classic outdoor advertising activities in Hungary were sold in prior years, leaving only the Neonlight Kft. companies and the participating interest in VBM Kft. in Affichage’s Hungarian portfolio. A buyer was found for both business interests in the course of the year. Neonlight Kft., which is active exclusively in the rooftop neon advertising niche, was sold to the long-standing local general manager of the company and his Hungarian partner. The 50% interest in VBM Kft. owned by Affichage was sold to former partner Wall AG in February last year.

Italy (South Tyrol) A decision was also made to sell the company in South Tyrol, continuing the gradual withdrawal from the Italian market initiated in previous years. Several prospective buyers were found for the company. In the end, the former co-owner exercised his right of first refusal and acquired the remaining 85% of the shares in First Avenue GmbH at a price that exceeded the initial offer.

31

Bucharest, Calea Dorobantilor 99 A (Romania) Belgrade, Zeleni Venac (Serbia)

Romania In Romania, the minority shareholder and general manager exercised his put option in early 2010, but no consensus was found as regards price and terms, so a conflict ensued between the shareholders. As a result, financial 2010 was a weak year. The dispute also had an impact on 2011.

The minority shareholder lodged an appeal with the court of arbitration in Geneva. An agreement was found late in the year before the proceedings began. In this context, Affichage acquired the 30% of the shares previously held by the plaintiff and thus gained full control of the companies in Romania. At the same time, the previous minority shareowner was granted an option to purchase 100% of the shares of all Romanian companies in the period between January 1 and March 31, 2012. The transaction also stipulates the definitive termination of all pending charges and proceedings. Affichage remains determined to withdraw from Romania. It is number 2 there in the outdoor advertising market and manages some 4,200 panels throughout the country.

Montenegro Montenegro, a republic in southeastern Europe with merely 625,000 inhabitants, is the market served by Montepano d.o.o., our local company there. It manages about 350 panels and ranks number 2 in the Montenegrin Out of Home market. In 2011, it succeeded in extending the expiring contract with the capital city of Podgorica by another five years. It is the company’s most important contract and envisages an expansion of the street furniture inventory.

Due to the historic proximity to Serbia and the fact that the local company is successfully managed by Serbian executives, this business will remain in the Affichage portfolio for the time being.

Serbia The diversified product line of Alma Quattro, Affichage’s Serbian company, consists of over 5,600 panels, of which more than half are located in the capital city of Belgrade.

The main focus in 2011 was on implementing the 10-year contract awarded by Belgrade in 2010, involving large-format and Citylight assets. Formats were standardized and networks optimized. Given the solid market position, the long-term contracts, and profitable business lines, it was decided that this market would remain in the Affichage portfolio. The management, which has been successfully serving the Out of Home market for 17 years, accepted an incentive plan and made a long-term commitment to the company.

33

Human Resources

Marcel Seiler Head of Human Resources

Stocktaking and realignment In the year 2011, we prioritized a new blueprint and a fresh start for our human resources model. The focus was on defining, mapping, and bundling unified assignment catalogs and creating adequate processes in recruitment, career development, remuneration, and encouragement. The goals are to provide optimized support for line functions, to strengthen the on-site backing available to management and personnel, and to systematically align their needs with those of the company. In this manner, we will be able to boost the efficiency and professionalism of our HR processes and thus further enhance the satisfaction of our employees.

Training and career development For us, the know-how and leadership skills of our employees are crucial competitive factors. With comprehensive introductory programs, we want to make sure that new hires become thoroughly familiarized with their assignments and our corporate culture. We endorse the continuing education goals of our employees and generously support them financially and with on-the-job measures. Also, we train 13 apprentices in 3 occupations and continue to employ those persons with good performance assessments after completion of their apprenticeships.

Introduction of a personnel information system (PIS) and insourcing of payroll services All payroll services will be repatriated from the former external partner and handled in-house again. Among other results, this will help optimize costs and increase quality.

The project is associated with initial costs related to consolidating, migrating, and testing personnel data. Furthermore, the emphasis is on organizational and structural preparations for the establishment of a high-performance personnel information system (PIS) with automated processes. The components of this system, with a gradual rollout scheduled to end in mid-2012, include an Employee and Management Self Service (EES / MSS) module, an adjusted Performance Management module that integrates a new performance and conduct assessment system for all levels, and a professional eRecruiting process.

35

Overview Affichage Group Status December 31

Total workforce 1

2011

2010

661

705

By country Switzerland

543

522

Serbia

59

54

Romania

52

57

Greece

3

31

Other

4

41

Share of men, in %

73

72

Share of women, in %

27

28

Number of full-time jobs (90 –100%), in %

83

85

Number of part-time jobs (< 90%), in %

17

15

Apprentices 2

13

16

By demographics

Basis full-time job equivalents 100%, percentages rounded, without apprentices 2 Switzerland, APG: commercial 10, logistics 2, IT 1 1

Employees by country in percent 8

Employees in Switzerland, by division in percent

1

8

4

3

9 5

45 11

82

10 14

Switzerland Serbia Romania Other

APG Logistics APG Sales APG Marketing and acquisition APG Central services APGMontagne eAd Subsidiaries, without Impacta / Ecofer Holding

37

Luminous spots of color in the cityscape, superb exposure at the pulse of mobility.

As market leaders, the Affichage Groupâ&#x20AC;&#x2122;s companies share much of the responsibility for planning and designing the look and feel of public spaces. Our customers and concession partners alike benefit from attractive Out of Home environments.

ZĂźrich, Bahnhofplatz

38

39

Corporate Governance

Group structure and shareholders Introduction The principles and rules that govern the management and supervision of the Affichage Group are set forth in the articles of incorporation, the organization regulations of the Board of Directors, and the regulations of the Executive Committees. The Board of Directors regularly reviews these documents and updates them in case of new developments.

The articles of incorporation of Affichage Holding SA can be viewed at www.affichage.com/articlesofincorporation.

The information published here corresponds to the requirements of the Directive on Information Relating to Corporate Governance by SIX Swiss Exchange.

Participating interests The list of participating interests is provided in the Financial Report on page 36.

Cross-shareholdings No capital or voting cross-shareholdings exist between the Affichage Group and other companies.

Listed company Company name, headquarters: Affichage Holding SA, Geneva Market capitalization as at December 31, 2011: CHF 407 million Place listed: SIX Swiss Exchange Security No.: 1 910 702 ISIN: CH0019107025 Ticker: AFFN

Operational structure of the Affichage Group Status January 1, 2012

Board of Directors

Chief Executive Officer Dr. Daniel Hofer

Human Resources Marcel Seiler 3

Chief Financial Officer Dr. Ulrich von Bassewitz 1 Beat Hermann 2

International Markets Thomas Rainer

Logistics Walter Oeschger 4 Christian Gotter 5

Partner & Product Management Beat Holenstein

Advertising Market & Subsidiaries Switzerland Daniel Strobel 6

Marketing & Business Development Markus Ehrle 7

Left as at March 31, 2012 Entry as at March 01, 2012 Entry as at July 1, 2011 4 Left as at February 29, 2012 5 Entry as at January 1, 2012 6 Entry as at March 1, 2011 7 Entry as at April 1, 2011 1

2

3

41

Significant shareholders 1

Shares as reported as at December 31, 2010

in %

in %

Decaux family, JCDecaux SA, Neuilly-sur-Seine (F) 2

900 000

30.00 3,4

900 000

30.00 3,4

Albert Frère, Gerpinnes (B), Compagnie Nationale à Portefeuille, Loverval (B)

758 888

25.30 3,5

758 888

25.30 3

Béatrice and Paul-Henry Binz, Grisobi Holding SA, Bulle (CH)

200 956

6.70 3,6

180 956

6.03 3,6

Shareholder group Max Müller, Magglingen (CH)

116 078

3.87 6,7

156 808

5.23 8

International Value Advisers LLC, New York (USA)

104 500

3.48

9,10

104 500

3.48 9,10

Pictet Funds SA, Geneva (CH)

91 715

3.06

6,11

–

Affichage Holding SA, Geneva (CH) (shares)

62 561

2.09 6,12

64 816

2.16 6,12

147 000

4.90 4,12

147 000

4.90 4,12

Affichage Holding SA, Geneva (CH) (conditional purchase option)

3% or more shares, in the form of stocks or rights to purchase or sell stocks. The information is derived from announcements made by shareholders pursuant to Art. 20 BEHG as at December 31, 2011, subject to the availability of other information.

2 JCDecaux SA, rue Soyer 17, 92200 Neuilly-sur-Seine (F), is controlled

by JCDecaux Holding SA, rue Soyer 17, 92200 Neuilly-sur-Seine (F), whose shareholders are − Members of the Decaux family: Jean-Claude Decaux (Neuilly-sur-Seine / F), Jean-François Decaux (London / GB), Jean-Charles Decaux (Neuilly-surSeine / F), Jean-Sébastien Decaux (Bruxelles / B), Jean-Pierre Decaux (Paris / F), and Danielle Decaux (Neuilly-sur-Seine / F) − JFD Investissements (Luxembourg / L), and JFD Participations (Luxembourg / L), companies under direct control by Jean-François Decaux − Open 3 Investimenti (Uccle / B), a company under direct control

by Jean-Sébastien Decaux 3 Of which 5% registered with voting rights 4 On February 29, 2008, JCDecaux announced that it had granted a stock purchasing option to Affichage Holding SA. The option is an entitlement to purchase up to 147,000 Affichage Holding SA shares which represent up to 4.9% of the voting rights of the company (see Annual Report, Corporate Governance: Clauses on changes of control, page 52).

5 For detailed information on the relationship between Albert Frère, Compagnie Nationale à Portefeuille, and Pargesa Asset Management (Netherlands) N.V., see: www.affichage.com / media / filer_public / 2011/10 /24 / pargesa_asset_management.pdf 6 Number of shares according to stock register as at December 31, 2011 and 2010 7 On July 11, 2011, the shareholder group Max Müller, consisting of: − Starlet Investment AG, Nidau (CH), directly controlled by Ludmilla Müller, Magglingen (CH), Max Müller, Magglingen (CH), Max Igor Müller, Studen (CH), and Sandra Nadine Müller, Emmenbrücke (CH), each with 25% − Bruellan Corporate Governance Action Fund, Grand Cayman (CAI), managed by Bruellan SA, Geneva (CH) − Bruellan SA, Geneva (CH), directly held by Bruellan Holding SA, Crans-Montana (CH) − Margarete Rilliet, Geneva (CH) − William Rilliet, Chambésy (CH) − Comco Fashion AG, Nidau (CH), directly held by Comco Holding AG, Nidau (CH), which is under majority control by Max Müller, Magglingen (CH) − Claude Miffon, Thônex (CH) − Claude Piccot, Erlenbach (CH) − Peter Dreher, Pfäffikon (CH) − Paula Wegmann, Adliswil (CH) − Karl-Heinz Fischer, Schönenberg (CH) − Antoinette Hauser, Wetzikon (CH) − Janine Genoud, Adliswil (CH) − Christa Gantenbein, Geneva (CH) − Friederike Gribkowsky-Mattei, Bucharest (RO) reported that the 5% threshold had been underrun.

1

Shares as reported as at December 31, 2011

–

On October 14, 2011, the shareholder group Max Müller reported a change in the composition of the group, which consists newly of the following members: − Starlet Investment AG, Nidau (CH), directly controlled by Ludmilla Müller, Magglingen (CH), Max Müller, Magglingen (CH), Max Igor Müller, Studen (CH), and Sandra Nadine Müller, Emmenbrücke (CH), each with 25% − Bruellan Corporate Governance Action Fund, Grand Cayman (CAI), managed by Bruellan SA, Geneva (CH) − Antoine and Christina Spillmann, Cheserex (CH) − Comco Fashion AG, Nidau (CH), directly held by Comco Holding AG, Nidau (CH), which is under majority control by Max Müller, Magglingen (CH) − Claude Piccot, Erlenbach (CH) − Peter Dreher, Pfäffikon (CH) 8 Of which 1.2% registered with voting rights 9 Pursuant to the report of the falling below of the 5% threshold submitted on November 5, 2010, management mandates authorize International Value Advisers LLC to exercise the voting rights of 13 different investors and 5 funds that hold Affichage Holding SA shares. These 5 funds are: IVA Global Master Fund, L.P., Grand Cayman (CAI), IVA Overseas Master Fund, L.P., Grand Cayman (CAI), IVA International Fund, New York (USA), IVA Worldwide Fund, New York (USA), and IVA Global SICAV, Mamer (LUX).

10 Of which 3% registered with voting rights 11 On December 1, 2011, Pictet Funds SA, Geneva (CH), reported that the 3% threshold had been exceeded. The participation of Pictet Funds SA is composed as follows: − RP FI Actions CH-A (0.92%) − Pictet (CH) Swiss Mid Small Cap (0.86%) − Pictet (CH) Enhanced Swiss Equities 130/30 (0.55%) − Pictet (CH) Swiss Equities (0.52%) − Ethos (0.06%) − Pictet Institutional Swiss Equities Tracker (0.05%) − Pictet Swiss Market Tracker (0.05%) − Pictet (CH) Swiss Equities Pool (0.01%) − Raiffeisen Index Fonds SPI (0.01%) 12 Registered without voting rights

42

Capital structure Ordinary, authorized, and conditional capital As at December 31, 2011, the share capital of Affichage Holding SA amounted to CHF 7,800,000, fully paid up and subdivided into 3,000,000 registered shares with a par value of CHF 2.60 per share. As at December 31, 2011, Affichage Holding SA had neither authorized nor conditional capital.

Legal entities and partnerships linked with one another by means of capital or votes, by combined management, or by similar means shall be considered as single shareholders.

As at December 31, 2011, shareholders’ equity before minority interests amounted to CHF 123.7 million (PY CHF 99.8 million). Details on the changes in shareholders’ equity are provided in the respective annual reports: for the years 2011/2010 on page 58 of the present report, for the years 2010 /2009 on page 60 of the 2010 report.

Convertible bonds and options No convertible bonds have been issued. Option plans for employees or members of the Board do not exist.

Nominee registrations are permissible only without voting rights.

Shares, participation, and bonus certificates Affichage Holding SA shares are registered shares with a par value of CHF 2.60 per share. Each individual share entitles to one vote. At the General Meeting of Shareholders, no single shareholder may execute voting rights for more than 5% of all share votes. There exist no differential dividend entitlements except that no dividend is paid on treasury shares. There are no preferential rights for individual shareholders.

Affichage Holding SA has issued neither participation nor bonus certificates.

Limitations on transferability and nominee registrations Registration with voting rights may be denied for the following reasons: − If the purchaser, after registration as a shareholder with full rights, would directly or indirectly own a total of more than 5% of the share capital. − If the purchaser, upon request by the company, fails to explicitly confirm that he/she has purchased or is holding such registered shares in his/her own name and for his / her own account. − If the registration of the purchaser could prevent the company from being able to produce the evidence required by the Swiss legal provisions regarding the acquisition of real estate by persons residing abroad.

43

Board of Directors Members, activities, and interests The Board of Directors of Affichage Holding SA comprises five members.

Jean-François Decaux

Name

Paul-Henry Binz

Member since

End of term

Jean-François Decaux, Chairman 1

2002

2014

Paul-Henry Binz, Vice-Chairman

1993

2013

Gilles Samyn

2008

2014

Markus Scheidegger

2000

2012

Robert Schmidli 2

2011

2014

2002

2011

Left as at May 26, 2011 Klaus Hug 3 General Secretariat Mélanie Giger Gilles Samyn

Since May 26, 2010 Entry as at May 26, 2011 3 Chairman until May 26, 2010 1 2

Markus Scheidegger

The Board members execute additional functions outside their responsibility for Affichage Holding SA and / or other companies of the Group and have informed Affichage Holding SA about these functions. These functions comprise activities within the framework of important associations, foundations, or institutions in Switzerland and abroad, as well as official positions and political mandates.

Robert Schmidli

44

Jean-François Decaux (1959) Chairman, non-executive member.

French citizen, graduate of the Institut Supérieur de Gestion, Paris (France). Chairman and co-CEO of JCDecaux SA, member or chairman of the boards of various associated companies of the JCDecaux Group, Paris (France) at home and abroad. Member of the European Advisory Board of Harvard Business School and of the International Advisory Board of UC Rusal PLC. Paul-Henry Binz (1941) Vice-Chairman, non-executive member.

Swiss citizen, lic. oec. of the University of Lausanne (Hautes Etudes Commerciales HEC), joined the family enterprise Grisoni-Zaugg SA in 1970 as general manager, since 1995 chairman of the board of Grisoni-Zaugg SA and Grisobi Holding SA, Bulle, member of Caisse interprofessionnelle AVS de la Fédération des Entreprises Romandes, Geneva.

Gilles Samyn (1950) Non-executive member.

Belgian citizen, distribution engineer of the Université Libre de Bruxelles (Solvay Brussels School of Economics and Management), vice-president and managing director of Compagnie Nationale à Portefeuille, Gerpinnes (Belgium), president, member and member, respectively, of the committees, boards of directors or supervisory boards of various subsidiaries of Compagnie Nationale à Portefeuille in Belgium and abroad, lecturer at the Solvay Brussels School of Economics and Management (ULB).

Robert Schmidli (1950) Non-executive member.

Swiss citizen, certified corporate economist with further education in sales, marketing, management and corporate leadership. Experienced expert in the Swiss media and advertising market. Successful senior-management experience at Xerox, Bertelsmann and PubliGroupe AG. Member of the Family Advisory Board of the Oschmann Group (Müller Medien, Nürnberg, Germany), member of the advisory board of ABTell Wertschöpfungs AG, Cham, member of the corporate advisory board of Docu Media GmbH, Rüschlikon, member of the board of directors of search.ch AG. Klaus Hug (1940) Non-executive member, left as at May 26, 2011.

Swiss citizen, Dr. iur., attorney-at-law, director of the Federal Office for Industry, Trade, and Labor (OFIAMT) from 1984 to 1991, president of the Swiss Retail Federation from 1992 to 2005; from 1995 to 2007 president of the Council of the Federal Institute for Intellectual Property, Bern, and member of the Federal Competition Commission; member of the executive board of Economiesuisse until 2007, member of the board of directors of ACE Casino Holding AG, Zürich, of Westiform Holding AG, Bern, and of various Swiss SMEs.

Markus Scheidegger (1965) Non-executive member.

Handles executive duties in the subsidiaries Impacta AG and Ecofer AG. Swiss citizen, attorney-at-law, managing director of Impacta AG and of Ecofer AG, Bern, two associated companies of Affichage Holding SA, delegate of the board of directors of Interplakat AG, Bern, member of the board of directors of Polymedia Holding AG, Bern, chairman of the board of directors of Maxomedia AG, Bern, chairman of the board of directors of Serigraphie Uldry AG, Hinterkappelen, member of the board of directors of various Swiss SMEs, member of the Legislative Council of Burgergemeinde Bern.

45

Until May 26, 2011, the following members of the Board of Directors were represented in the Audit Committee: Binz (chairperson), Hug, and Samyn. Thereafter, the Committee was composed of Directors Binz (chairperson) and Schmidli. It has the following tasks: − to supervise the independence and efficiency of external audits − to review risk management in the finance and operations areas − to review the organization and efficiency of internal audits, analyzing the reports and forwarding them to the Board Internal organizational structure of Directors According to the law and the articles of incorporation, the − to determine the investment strategy and the real estate Board of Directors is the supreme management body of policy the Group. It has authority to decide on all matters which, − to analyze the consolidated intermediate and annual stateaccording to the law and the articles of incorporation, are not in the competence of the General Meeting, or which ments and forward them to the Board of Directors it has not delegated to other bodies through regulations and decisions. It determines by majority vote the strategic, In the year under report, the Audit Committee held two ordinary meetings (in February, November) with particiorganizational, financial, and accounting guidelines to pation of the CEO and the CFO. At one meeting, the be followed by the Affichage Group. In the event of a tie, external auditors were present. the Chairman does not have a casting vote. The Board of Directors elects, for one-year terms, the chairmen, viceUntil November 2, 2011, the following members of the chairmen, and members of the committees.

Board of Directors were represented in the Nomination and Remuneration Committee: Decaux (chairperson), and Binz.

The Board of Directors meets as often as business requires Since then, the Committee is composed of the Board but at least once per quarter. Each member of the Board members Schmidli (chairperson) and Binz. This committee of Directors may ask the Chairman to convoke a meeting. reviews: In financial 2011, the Board of Directors held five ordinary meetings with the regular participation of Executive Board − the remuneration policy − the selection criteria for the members of the Executive members. The average duration of individual meetings Board is one or half a day. Most meetings were attended by all − their basic conditions of employment members of the Board of Directors. − the proposals regarding their remuneration and participation The Board of Directors has appointed two permanent committees to assist it in its activities: the Audit Committee − management development and succession planning and the Nomination and Remuneration Committee. Their In the year under review, the Nomination and Remuneration tasks and competences are defined in the regulations of Committee held one meeting (in November), with particithe Board committees and encompass primarily functions of assessment, consulting, and supervision. In some individ- pation of the CEO and the Head of Human Resources. ual cases, delegated by the Board of Directors, they also To ensure the continuous improvement of its operation, the have decision-making powers. The committees prepare the activities of the Board of Directors in the domains assigned Board of Directors annually undertakes a self-evaluation procedure. to them and directly inform the Board on all important matters.

Elections and terms of office According to the articles of incorporation, the Board of Directors comprises three to five members, which must be nominated from the circle of shareholders and must own at least 100 shares. They are individually elected by the General Meeting of Shareholders for a maximum term of three years and may be re-elected without restrictions.

Members who have reached age 71 are required to resign on the date of the subsequent General Meeting.

46

Delimitation of the areas of responsibility between Board of Directors and Executive Board The Board of Directors decides on all matters entrusted to it by the law, the articles of incorporation, and the organization regulations. Implementing and complementing article 716a of the Swiss Code of Obligations and article 27 of the articles of incorporation, the following decisions in particular are in the exclusive authority of the Board of Directors: − Determination of business policies and financial strategies − Approval of sales, cost, and investment budgets of the Affichage Group − Establishment, acquisition, sale, liquidation, or merger of subsidiaries − Exercise of voting rights in the general meetings of the subsidiaries and drafting of the recommendations to private individuals who represent the company on the boards of directors or in other bodies of subsidiaries − Conclusion of loan contracts (whether as lender or borrower), contracts of surety, or any other form of guaranty contracts – excluding concession contracts – which involve obligations by the company toward third parties in excess of CHF 2 million − Conclusion of contracts for non-budgeted items whose amount exceeds CHF 1 million The Board of Directors has entrusted the Executive Board, under the direction of the CEO, with the management of current operations. The Executive Board is responsible for all matters which, according to the law, the articles of incorporation, or the organization regulations, are not in the competence of the Board of Directors or any other body of the company.

Information and control instruments vis-à-vis the Executive Board In addition to the tasks assigned to the Audit and the Nomination and Remuneration Committees, the Board of Directors is provided at every meeting with the relevant information pertaining to management, revenue, and profit of each associated company. The Board of Directors is informed orally and in writing about the following financial data for each associated company and for the corporation as a consolidated whole: − quarterly, semi-annual and annual statements (balance sheet, statement of income, cash flow) − annual budget figures, regular comparisons of actual with budgeted figures, and projections − three-year medium-term planning − extraordinary occurrences In addition, the Chairman of the Board of Directors is in constant contact with the CEO. Extraordinary occurrences must be reported immediately by the members of the Executive Board to the CEO, who shall inform without delay the Chairman of the Board of Directors. If required, the Chairman of the Board of Directors participates in the meetings of the Executive Board. With the consent of the Chairman, each member of the Board of Directors may request management to provide information on the Group’s business performance, as well as access to records and documents. The Board of Directors assigns signatory powers to staff members. Basically, signatory powers are collective (two signatures required).

47

The new Executive Board of Affichage Holding und APG|SGA as of April 1, 2012, left to right: Marcel Seiler, Christian Gotter, Daniel Strobel, Beat Hermann, Daniel Hofer, Beat Holenstein, Thomas Rainer, Markus Ehrle

Management Executive Board

since

Daniel Hofer (1963), Swiss citizen, Dr. MBA/ DBA

Chief Executive Officer

2010

Ulrich von Bassewitz (1961), Swiss/German citizen, Dr. oec. HSG

Chief Financial Officer

2000 1

Beat Hermann (1969), Swiss citizen

Chief Financial Officer

Thomas Rainer (1971), Italian citizen, Dott. econ. az.

International Markets

2010

Daniel Strobel (1962), Swiss citizen

Advertising Market & Subsidiaries Switzerland

2011 3

Beat Holenstein (1968), Swiss citizen

Partner & Product Management

2007

Markus Ehrle (1965), Swiss citizen

Marketing & Business Development

2011 4

Walter Robert Oeschger (1949), Swiss citizen

Logistics

2006 5

Christian Gotter (1970), Swiss citizen

Logistics

Marcel Seiler (1963), Swiss citizen

Human Resources

2

6

2011 7

Left as at June 30, 2011 Oliver Achermann (1969), Swiss citizen Left as at March 31, 2012 Entry as at March 1, 2012 3 Entry as at March 1, 2011 4 Entry as at April 1, 2011 5 Left as at February 29, 2012 6 Entry as at January 1, 2012 7 Entry as at July 1, 2011

Head of Corporate Center

1

2

On October 1, 2010, Daniel Hofer was appointed Chief Executive Officer of Affichage Holding and APG. From 2006 to 2010, he was a member of the management board of the NZZ Media Group and director of publications at NZZ AG. Previously, his career included a long tenure with Publigroupe SA, where he managed several business units in Switzerland and then, as a member of the executive board and CEO from 2002 to 2005, headed up the International Division with numerous sales subsidiaries in Europe, Asia, and the USA. He has been president of the Swiss Chapter of the IAA International Advertising Association since 2008. He is also a member of the supervisory board of SW Schweizer Werbung, vice president of FEPE International (Fédération de la Publicité Extérieure) and president of AWS Outdoor Advertising Switzerland. He holds a master’s degree in business administration (University of Rochester, NY) and a doctorate of business administration (UniSA, Adelaide).

48

Ulrich von Bassewitz was active in international top management consulting and training, working – among others – for SMP Management Programm St. Gallen AG Group and Bossard Consultants / Gemini Consulting before he joined the Affichage Group. He holds a degree in business economics from the University of St. Gallen (Dr. oec. HSG).

Beat Hermann joined the company on March 1, 2012, and was appointed CFO of Affichage Holding and APG effective April 1, 2012; in this position, he is responsible for finance, IT, and infrastructure. He began his career as an internal auditor and later controller with the Volcafe / ED&F Man Group in Switzerland in Latin America. As of the year 2000, he was director finance & administration with Sony Music Entertainment in Switzerland. Within the Lindt & Sprüngli Group, he first worked as a senior corporate controller and from 2006 to 2011 served as the CFO of the Ghirardelli Chocolate Company (Lindt & Sprüngli Group) in San Francisco (USA). He holds a degree in business administration (lic. oec. publ.) from the University of Zürich.

Thomas Rainer was head of International Business with Out of Home specialist Wall AG, Berlin (Germany) for nearly two years before he joined the Affichage Group in 2010.

Previously, he had already worked for Affichage Holding SA for six years as head of Europlakat International Werbegesellschaft m.b.H., Vienna (Austria), and was responsible for the Group’s foreign business in Central Europe. Additionally, he was Vice President of FEPE International, Federation of Outdoor Advertising, for several years. He holds a degree in business administration from Leopold Franzens Universität (Mag. rer. soc. oec.), Innsbruck (Austria), and a doctoral degree from Università Cà Foscari (Dott. Econ. Az.), Venezia (Italy).

Daniel Strobel came to APG from the NZZ Media Group, where he was responsible for the Magazines & Specials department. He has enjoyed a long career with Publigroupe SA, where he held a variety of senior management positions.

From 2002 to 2008, he was CEO of Publimedia AG, which at the time was the national key account company of Publicitas with over 100 employees. He holds diplomas in marketing communication planning, marketing planning, media management and communication management.

Beat Holenstein was employed by Zürcher Kantonalbank in marketing and organization functions before joining APG in 1996. Within the company, he consecutively held positions as an agency manager, implementation manager, and manager of the Zürich branch with national key account management responsibility. In 2009, he was appointed Head of Marketing /Acquisition and Deputy General Manager of APG. Since 2011, as a member of the Executive Board, he has been in charge of Partner and Product Management.

He is a member of the board of AWS Outdoor Advertising Switzerland and holds Swiss federal diplomas in organization, marketing planning, and sales management.

Markus Ehrle has had a long career at Publigroupe SA, including positions as account director, marketing director and deputy CEO of Publimedia AG; he was also member of the board of various subsidiaries (including web-based companies). Most recently he worked for the NZZ Media Group, where he was in charge of the Advertising Market & Business Development department. He has degrees in communication management and marketing management and is member of the board of the AWS Outdoor Advertising Switzerland association.

49

Compensations, participations, and loans Walter Robert Oeschger joined APG in 1987 as operations manager. Before his current function as head of logistics, he served for 7 years as implementation manager and subsequently headed the Basel and Aarau branch offices as branch office manager from 1995 to 2006. After completing a technical apprenticeship and further education, he earned a Higher Business Management Diploma (HWD) and subsequently held an executive position as head of manufacturing at Obrist AG, Magden, from 1977 to 1981. From 1981 to 1987, he served on the management committee of Chematec AG, Möhlin. He also completed in-service training, earning Swiss Federal diplomas in sales management and logistics management.

Scope and stipulation procedure of compensations The Nomination and Remuneration Committee submits to the Board of Directors annually proposals for approval of the remuneration policy and the compensations of the members of the Board of Directors. The members of the Board of Directors receive a fixed and a variable compensation. The variable compensation is dependent on the consolidated net income. It is paid in cash and in the form of Affichage Holding SA shares which are blocked for three years.

Marcel Seiler graduated in business economics before taking a postgraduate master’s degree in personnel management, as well as completing the VSKP (Swiss course for HRM executives) and an international Executive Programme at INSEAD (Fontainebleau / Singapore). He has previously worked in a variety of management functions in the human resources field, including around eight years with the Migros Group, nine with ABB and most recently a spell with SIX Group (financial sector). As of July 1, 2011, Marcel Seiler has become the new Head of Human Resources for the entire Affichage Group.

The disclosure of remunerations as well as of shares held by the members of the Board of Directors and the members of the Executive Board is provided on pages 44 – 45 of the financial report.

The salaries of the Executive Board are determined by the Board of Directors upon a proposal by the Nomination and Remuneration Committee and reviewed annually. All emHis previous roles have enabled Christian Gotter to acquire ployees of the Affichage Group receive a fixed salary plus broad specialist knowledge of logistics, supply chain manage- an optional incentive bonus dependent on the financial rement and distribution. His former employers include ABB sult. The variable portion for members of the Executive Turbo Systems, ABX Logistics, Central Station and Planzer Board depends on the profit earned by the consolidated net Transport. Since 2009 he has worked at Tobler Haustechnik, income of the Group. It is paid in cash and in the form where, as Head of Logistics and Transport, he had manaof Affichage Holding SA shares which are blocked for three gerial responsibility for 200 members of staff. Christian years. The mean variable salary portion for members of Gotter has undergone commercial training, is a qualified the Executive Board amounts to 28% of their total remuforwarding agent and has completed the Certificate of neration, of which 25% (CEO 50%) is paid out in the form Advanced Studies SME management course at the Univerof Affichage shares valued at the average December sity of St. Gallen. share price.

Management contracts Affichage Holding SA and its associated companies have concluded no management contracts with third parties.

50

Shareholders’ participation rights Restriction and representation of voting rights At the General Meeting of Affichage Holding SA, each individual share entitles its owner to one vote. A shareholder may directly or indirectly exercise the voting rights for shares that he / she owns or represents, but no single shareholder may execute voting rights for more than 5% of all share votes. Legal entities and partnerships linked with one another by means of capital or voting rights, by combined management, or by similar means shall be considered as single shareholders with regard to their voting rights.

The voting right can only be exercised if the shareholder is registered in the share register and thus entitled to participate at the General Meeting. Shareholders may be represented at the General Meeting by third parties authorized by written power of attorney. The shares are indivisible and the company recognizes only one single representative per share.

Statutory quorums The following decisions require the votes of at least two thirds of the represented shares and the absolute majority of the par value of the represented shares: − changing the company purpose − introduction of shares carrying voting rights − authorized or conditional capital increase − capital increase from shareholders’ equity, with non-cash contributions or acquisitions in kind, and granting special privileges − limitation or elimination of subscription rights − relocation of the company domicile − dissolving the company without liquidation

Convocation of the General Meeting of Shareholders The ordinary General Meeting of Shareholders shall take place every year within six months after the close of the financial year. Extraordinary General Meetings shall be convoked as often as necessary, particularly in cases provided by statute. Shareholders representing a par value of at least 10 percent may demand the convocation of an extraordinary General Meeting. Any such demand must be made no less than 50 days prior to the proposed meeting date. The convocation of the General Meeting of Shareholders by the Board of Directors shall be dispatched no less than 20 days in advance of the day of the meeting and shall list the agenda and the motions of the Board of Directors and the shareholders.

Agenda Shareholders representing a par value of CHF 225,000 may demand inclusion of an item in the agenda. Any such demand must be made no less than 50 days prior to the proposed meeting date.

Registrations in the share register No registrations are performed between the time of dispatching the invitation to and the closing of a General Meeting.

Any amendments to or elimination of regulations regarding the limitation of transferability of shares or the annulment of statutory voting right limitations shall require a decision by the General Meeting approved by at least 80% of the represented votes and 80% of the par value of the represented shares.

51

Changes of control and defensive measures Duty to make an offer There are no statutory opting-out or opting-up clauses.

Clauses on changes of control Currently, the employment contracts of a member of the Executive Board and of a further employee of the Affichage Group contain clauses concerning a change of control. If the working relationships of these persons are terminated by the employer without important reasons as a consequence of a change of control of the employer, initiated by a public takeover or swap bid that is not endorsed by the employerâ&#x20AC;&#x2122;s Board of Directors, these persons shall be entitled to claim severance pay. This remuneration shall consist of two yearsâ&#x20AC;&#x2122; salary based on their gross annual salary as well as the premiums they received in the year prior to the change of control. It shall be owed when the contractual period of notice of at least one year has expired.

This entitlement to severance pay also applies if the contractual relationship is terminated by these persons for important (but not without important) reasons. Furthermore, these persons are not entitled to claim severance pay if their employment contract is terminated by the employer for important reasons. The respective member of the Executive Board leaves the company effective March 31, 2012, so that as of April 1, 2012, no members of the Executive Board have a clause on changes of control in their employment contracts.

Gewista Werbegesellschaft mbH (Austria) (Gewista) and JCDecaux SA (France) (JCDecaux) on the one hand and Affichage Holding SA on the other hand have terminated the joint venture contract governing their mutual relationship in conjunction with Europlakat International Werbegesellschaft mbH (Austria) (EPI) in whose stock capital Gewista and Affichage Holding SA participated with 50% each. The contract concluded on October 26, 2007, grants both parties mutual rights of pre-emption as well as change-of-control-related purchasing options in the participating interests that were split up within the scope of the dissolution of the joint venture. Additionally, the contract grants JCDecaux SA pre-emption rights as well as purchasing options in certain foreign subsidiaries of Affichage Holding SA, whereby such options are conditional upon a change of control in Affichage Holding SA. In this context, JCDecaux has agreed not to expand its current participation in Affichage Holding SA (30%).

Affichage Holding SA is entitled to a purchasing option of maximally 4.9% of its own share capital in case JCDecaux should fail to comply with the obligations stated above.

The preferential price of the purchasing option is the average closing price of Affichage Holding SA shares in the last thirty days before exercise of the option.

Should a change of control at Affichage Holding SA occur as a result of a takeover offer not endorsed by the Board of Directors, Polymedia Holding AG, Bern (Polymedia), which currently holds 50% of the share capital of Impacta AG and of Ecofer AG, would be entitled to purchase from Affichage Holding SA one additional percent (1%) of the share capital of these companies. In case of a change of control over Polymedia, Affichage Holding SA has an analogous purchasing right. Markus Scheidegger is both a member of the board of directors of Polymedia (which is owned by the Scheidegger family) and a member of the Board of Directors of Affichage Holding SA.

52

Auditors

Information policy

Duration of mandate and term of office of the auditor in charge Arthur Andersen / Ernst & Young has been the statutory auditor of Affichage Holding SA and the group auditor of its Swiss associated companies since 1999. Fredi Widmann, the auditor in charge, has held this position since 2009.

The Audit Committee shall assure that the auditor in charge is rotated after no more than 7 years.

The Affichage Group implements an open information policy toward the financial market and the general public.

The shareholders receive semi-annual letters informing them about the Group’s business performance.

Auditing honorarium and additional honorariums For financial 2011, the auditing honorarium of Ernst & Young for services in conjunction with the auditing of the financial statements totaled CHF 427,000. For fiscal counsel, Ernst & Young has invoiced CHF 115,000.

The annual report, the detailed Financial Report, the letters to shareholders, the stock price, as well as media releases are available at www.affichage.com. Financial media and analysts conferences are held at least once per year. The publication of share-price-relevant facts is governed by the provisions concerning ad-hoc publicity of SIX Swiss Exchange. Subscriptions to the media releases can be ordered at www.affichage.com / mediaannouncements.

The most important dates − Closing date: Information instruments of the auditors December 31 On behalf of the Board of Directors, the Audit Committee annually reviews the independence, qualification, perfor- − Announcement of annual results: February 29, 2012 mance, and honorariums of the auditors. It prepares for − Financial media and analysts conference: the Board of Directors a proposal for the election of February 29, 2012 the auditor, which is then submitted by the Board to the General Meeting. The Board of Directors annually reviews − Publication of the annual report: April 24, 2012 the extent of the external audit, the audit plans, and the respective procedures and discusses the audit results with − General Meeting: May 23, 2012 the external auditors. At least once a year in a joint − Closing date for semi-annual results: meeting, the auditor reports to the Audit Committee of June 30 the Board of Directors on the auditing work and its key results. A regular exchange of information takes place − Announcement of semi-annual results: July 31, 2012 between the auditor and the CFO.

53

Extract of the Financial Report

Explanation of financial terms EBITDA Earnings before interest, taxes, depreciation of property, plant, and equipment, and amortization of intangible assets

P / E ratio Price / earnings ratio: Ratio of share price to earnings per share ROE Return on equity: Net income in % of average shareholdersâ&#x20AC;&#x2122; equity

The detailed Financial Report has been published in English. It is available free of charge or can be downloaded from www.affichage.com / report.

EBIT Earnings before interest and taxes ROIC Return on invested capital: operating Free cash flow Cash flow from operations income in % of average capital employed, minus cash flow from investments without cash and cash equivalents, less interest-free liabilities Gearing Degree of debt, also called leverage: net debt in % of equity Net current assets Trade accounts receivable plus inventories minus trade accounts payable Net debt Debt-serviced borrowed capital minus interest-bearing current assets (cash and cash equivalents, marketable securities) Payout ratio Payout in % of net income

55

Condensed consolidated balance sheet Assets Property, plant, and equipment Investments in associated companies

in CHF 1 000

31.12.2011

31.12.2010

78 751

87 907

345

333

5 372

2 043

Intangible assets

69 178

75 263

Deferred taxes

14 733

15 195

168 379

180 741

Other financial investments

Non-current assets Inventories

2 746

3 424

Trade accounts receivable

39 849

44 366

Other accounts receivable

15 457

11 692

6 845

8 210

Deferred expenses and accrued income Marketable securities

408

430

77 534

26 253

Current assets

142 839

94 375

Total

311 218

275 116

Cash and cash equivalents

Shareholders’ equity and liabilities Share capital Group reserves Net income Equity held by Affichage Holding SA shareholders Non-controlling interests

7 800

7 800

74 097

144 268

41 787

– 52 306

123 684

99 762

2 825

1 163

126 509

100 925

Provisions

56 425

29 628

Deferred taxes

10 160

7 588

28

15 732

Non-current liabilities

66 613

52 948

Trade accounts payable

21 589

18 336

Current accounts payable to banks

15 001

15 770

Shareholders’ equity

Long-term financial liabilities

Taxes payable Other accounts payable Accrued liabilities and deferred income

1 937

3 036

23 444

28 753

56 125

55 348

Current liabilities

118 096

121 243

Liabilities

184 709

174 191

Total

311 218

275 116

56

Consolidated income statement in CHF 1 000

2011

2010

Change

Advertising revenue

311 795

304 280

2.5%

Real estate revenue

2 453

2 298

6.7%

Operating revenue

314 248

306 578

2.5%

Fees and commissions

– 139 104

– 141 406

– 1.6%

Personnel expenses

– 65 955

– 68 337

– 3.5%

Operating and administrative costs

– 42 556

– 45 508

– 6.5%

Other income

6 391

EBITDA Depreciation Amortization of intangible assets Impairment Operating income / loss (EBIT) Financial income Financial expenses Income from associates Income (loss) before income tax Income taxes

51 327

42.3%

– 14 266

– 20.5%

– 4 780

– 5 392

– 11.4%

– 785

– 70 767

– 98.9%

56 118

– 39 098

468

1 083

– 1 431

– 3 072

62

57

55 217

– 41 030

– 12 236

– 11 690

Consolidated net income (loss) 1

42 981

– 52 720

– of which non-controlling interests

1 194

– 414

41 787

– 52 306

14.23

– 17.82

Advertising revenue

EBITDA

Net income

2011

280.5

71.8

47.9

2010

259.0

68.1

42.0

2011

1.9

4.2

4.2

2010

10.7

– 16.0

– 21.9

2011

29.3

4.7

– 4.8

2010

34.4

3.4

– 79.4

2011

3.2

– 7.2

– 16.7

2010

3.2

– 4.2

0.8

Restatement of consolidated income

2011

– 3.1

– 0.5

11.1

2010

– 3.1

Total

2011

311.8

73.0

41.8

2010

304.3

51.3

– 52.3

– of which Affichage Holding SA shareholders (net income) Basic and diluted earnings per share, in CHF 1

73 024 – 11 341

From continuing operations

Segment information in CHF m Switzerland Greece Other foreign countries Holding

6.2

57

Consolidated statement of comprehensive income in CHF 1 000

Gross

Income tax effect

– 25

1

Consolidated net income (loss)

Gross

Income tax effect

– 24

– 165

41

– 124

2 599

– 5 318

– 1 239

– 6 557

– 21 179

– 8 703

2 176

– 6 527

42 981

Unrealized gains / losses on available-for-sale securities Currency translation differences

2 599

Actuarial gains / losses from defined-benefit plans

– 28 239

7 060

Comprehensive income (loss) – of which Affichage Holding SA shareholders

– 65 928

833

– 370

23 544

– 65 558

Share of Affichage Holding SA shareholders

Consolidated statement of changes in equity Share capital

Capital reserves Premiums

Treasury shares

Translation differences

7 800

5 632

– 6 979

– 13 327

311

– 6 600

– 124

– 6 600

– 124

as at January 1, 2010 Comprehensive income (loss)

Available for-sale Revaluation securities reserves 46 221

–of which consolidated net income (loss) –of which other comprehensive income (loss) Reclassification of reserves

– 162

Retained eamings

Total

– 2 560 7 800

5 632

– 9 539

Comprehensive income

– 19 927

187

2 960

– 24

46 059

–of which consolidated net income –of which other comprehensive income

2 960

– 24

Shareholders’ equity

125 590

165 248

1 926

167 174

– 65 558

– 370

– 65 928

– 52 306

– 52 306

– 414

– 52 720

– 6 528

– 13 252

44

–13 208

162

Changes in scope of consolidation

as at December 31, 2010

Total Noncontrolling interests

– 58 834

Distributions to non-controlling interests Changes in treasury shares

2010 Net – 52 720

24 377

– of which non-controlling interests

in CHF 1 000

2 011 Net

4

4

– 397

– 397

1 163

100 925 24 377

2 632

72

69 550

99 762

20 608

23 544

833

41 787

41 787

1 194

42 981

– 21 179

– 18 243

– 361

– 18 604

1 471

1 471

Changes in scope of consolidation

72

Purchase of non-controlling interests

21

21

Distributions to non-controlling interests Changes in treasury shares as at December 31, 2011

332 7 800

5 632

– 9 207

– 16 967

163

46 059

25

357

90 204

123 684

– 21 – 621

– 621

2 825

126 509

357

58

Condensed consolidated statement of cash flows in CHF 1 000

2011

2010

Consolidated net income (loss)

42 981

– 52 720

Depreciation, amortization and impairment

16 906

90 425

– 24

– 124

7 586

6 787

Unrealized gains / losses on securities Change in provisions, taxes, and interest Gain / loss from the sale of non-current assets Income from associates Cash flow Change in inventories Change in accounts receivable Change in marketable securities Change in accounts payable Change in other deferred expenses, accrued income, accrued liabilities, and deferred income Net cash provided by operating activities Capital expenditures in non-current assets Sale of non-current assets Net cash used in investing activities Purchase and sale of treasury shares Change in current accounts payable to banks Change in long-term financial liabilities

– 3 439

565

– 62

– 57

63 948

44 876

622

– 37

4 400

31 985

22

124

1 014

– 25 891

2 727

4 631

72 733

55 688

– 10 840

– 24 297

5 499

1 244

– 5 341

– 23 053

358

143

– 15 769

– 30 232

– 10

4 782

Dividends to Affichage Holding SA shareholders Distributions to non-controlling interests

– 621

– 397

Net cash used in financing activities

– 16 042

– 25 704

Currency translation effect on cash and cash equivalents

– 69

– 1 579

Change in cash and cash equivalents

51 281

5 352

Cash and cash equivalents as at January 1

26 253

20 901

Cash and cash equivalents as at December 31

77 534

26 253

59

Contact

Headquarters Affichage Holding SA 23, rue des Vollandes Case postale 6195 CH -1211 Genève 6 T +41 58 220 72 20 F +41 58 220 72 98 investors@affichage.com www.affichage.com

APG|SGA Digital and analog poster advertising along streets, on squares, in railway stations, on points of sale, and points of interest: www.apgsga.ch Internal and external advertising panels on public transport vehicles: www.apgsga.ch / traffic Airport advertising: www.apgsga.ch / airport Fixed and temporary big poster panels: www.apgsga.ch / megaposter Advertising and communication systems in the mountains: www.apgsga.ch / mountain

Participating interests Railway-station poster advertising: www.impacta.ch Railway-station non-poster: www.ecofer.ch

International Serbia: www.almaquattro.rs Montenegro: www.affichage.com Romania: www.affichage.ro

60

Involvements AWS Outdoor Advertising Switzerland D / A / CH Exchange of Expertise Committee Germany /Austria / Switzerland FEPE International Federation of Outdoor Advertising IFER International Federation of Railway Advertising Companies

Credits Publisher: Affichage Holding SA Concept and copy: Jürg Sager, Luzern Photography: Bruno Eberli, Horw Affichage Holding SA Design: Rolf Stocker, Luzern Cover: Wirz Corporate AG, Zürich Typesetting, separations, printing: UD Print AG, Luzern This report is available in French, German, and English. The detailed Financial Report has been composed in English. Both documents are available free of charge or can be downloaded from www.affichage.com / report.

Circulation English: 200 German: 800 French: 500 Printed in Switzerland 2012 © by Affichage Holding SA All rights reserved APGMobility ®, APGPosterAward ®, APGTraffic ®, APGVis ®, Cityplan200L ®, Citystar200L®, InterMediaMap ®, PosterDirect ®, Poster Performance Index PPI ®, PosterPlus ®, Rail Citystar200L®, Rollingstar200L®, Rollingstar12L® are registered trademarks.

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