Notes to the consolidated
Semi-Annual Financial Statements

1.Corporate information

Telegraaf Media Groep N.V. (the “Company”) is domiciled in Amsterdam, the Netherlands. Its activities are primarily the publication of print media and the operation of, and participation in, digital media and radio. The Company’s certificates shares are listed on the NYSE EuroNext in Amsterdam.

The Company’s consolidated semi-annual report for the first six months of 2017 comprises the Company, its subsidiaries and entities over which the Company has joint control (together referred to as Telegraaf Media Groep) and its interests in associates.

The consolidated financial statements for the financial year 2016 are available upon request at the Company’s postal address, P.O. Box 376, 1000 EB Amsterdam, or digitally via www.tmg.nl.

The interim report, unaudited, was approved by the Executive Board and the Supervisory Board for publication on 27 July 2017.

2.Statement of compliance

The consolidated semi-annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board (IASB) and as adopted by the European Union, and the interpretations of these standards by the IASB.

The consolidated semi-annual financial statements have been presented in euros, rounded to the nearest thousand.

The consolidated semi-annual financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The report does not contain all the information required for complete financial statements and should be read in combination with the consolidated financial statements of Telegraaf Media Groep for 2016.

3.Basis for preparation

The principles applied by Telegraaf Media Groep in these consolidated interim financial statements are the same as the accounting policies applied in the consolidated statements for the year 2016 and are in accordance with the International Financial Reporting Standards (IFRS) approved by the European Commission.

As far as relevant, all IFRS standards and interpretations, including the amendments effective as of 1 January 2017, have been applied by TMG as of 1 January 2017. These changes do not affect the financial position and accounting policies and also have no retrospective effect.

4.Critical accounting estimates and judgements

In the process of compiling interim reports, management has made judgements, estimates and assumptions that affect the application of the accounting principles, the reported value of assets and liabilities, and the amounts of income and expenses. The resulting accounting estimates will, by definition, seldom equal the related actual results. Interim results are not necessarily indicative for full-year results.

Unless stated otherwise, the estimates made by the management in applying the accounting principles of Telegraaf Media Groep and the principal estimate sources used are identical to the judgements and sources that were applied for the consolidated financial statements 2016.

5.Financial risk management

Risk categories and factors affecting the financial position of Telegraaf Media Groep have been reported in the financial statements 2016. In the first half year of 2017, no significant changes with regard to risk occurred, as a result of which this report merely refers to the 2016 financial statements.

In recent years, there has been a structural change in media usage, as a result of which traditional media is under pressure and new media and new technologies are seeing growing consumer use.

For further information on market conditions, see the notes to the semi-annual results 2017.

6.Segment reporting

Operating segments

Telegraaf Media Groep N.V. comprises the following main operating segments:

• TMG Media: The publishing of national newspapers, regional newspapers, free door-to-door papers, magazines, print-related internet activities and video productions (for example Telegraaf VNDG).
• TMG Digital: The digital activities include, among others, GeenStijl, GroupDeal, Dumpert, GasPedaal and Relatieplanet.
• Facilitating Services: Other activities include, among others, the printing and distribution of newspapers, the provision of office space and related facilities, primarily for the TMG Media segment.
• Head Office and Other/Eliminations: Head Office includes the corporate departments and the continued Classic FM and MyRadio activities. In addition, intercompany eliminations are included.

In the first half of 2017, the activities of TMG Landelijke Media and Holland Media Combinations were merged into the new business unit TMG Media. Comparative figures have been modified for this structure change.

Assets and liabilities of Keesing Media Group are presented as 'held for sale', and results are presented as discontinued operations.

7.Seasonality of business activities

A part of the business operations of Telegraaf Media Groep is subject to seasonal influences. During the first and third quarters of the year, advertising revenues are normally lower than during the remainder of the year. The single-copy sales of De Telegraaf are significantly higher in the third quarter. The fourth quarter is normally the most important quarter for advertising revenues.

Cash flow is the strongest in the fourth quarter because, in addition to quarterly subscriptions, annual subscriptions are also received in advance.

8.Business combinations

In the first half year of 2017, TMG did not make any acquisitions. On 28 April 2016, TMG Landelijke Media B.V. acquired 100% of the shares in International Fashion Week B.V.

9.Discontinued operations

On 26 June 2017, the Board of Directors and the Supervisory Board decided to initiate the process of selling Keesing Media Group. Over the past few years, as part of TMG, Keesing Media Group has shown strong growth in revenue and profitability. It is the opinion of the Board of Directors and Supervisory Board that a sale will enable Keesing Media Group to further develop its international growth. Pending this sale, this activity is considered as discontinued.

On 15 January 2016, TMG entered into a strategic partnership with Talpa. As a result, the radio stations Sky Radio and Radio Veronica, among others, were transferred to a newly established radio company. TMG has sold Sky Radio Group to Radio Newco B.V. and in exchange gained an interest of 22,85% in Radio Newco B.V. (per 30 June 2017 an interest of 23%). On 30 September 2016, the sale was completed. This activity is presented as a discontinued operation in the period of 1/1 - 30/6/2016.

10.Financial income and expenses

The share in the result of associates (879) concerns TMG's share in the result of Radio Newco B.V. in the first half year of 2017.

11.Income tax

The income tax is based on the best estimate for the expected 2017 average tax rate attributable to the result before tax for the first half year of 2017. The deviation from the effective tax burden in the first half year of 2017 compared to the Dutch nominal tax rate was due to non taxable results of associates and non-deductible expenses.

The effective tax burden on discontinued operations is higher than the Dutch tax rate due to a higher tax burden on some foreign entities of Keesing Media Group.

12.Property, plant and equipment

At the end of 2016, it was decided to hold the office buildings and car park in Amsterdam for sale, along with certain regional properties of Holland Media Combinatie (in total 15,510 end of 2016). At that time, there was an appraisal of the expected proceeds less costs to sell. This led to an impairment of certain properties (2,073). In the first half year of 2017, TMG decided to revoke the decision to sell the office buildings and car park in Amsterdam, partly in view of the intended sale of Keesing Media Group. As a consequence, the office buildings and car park in Amsterdam have been reclassified to assets in use and they are again subject to depreciation.

13.Assets held for sale

Assets held for sale comprise the business unit Keesing Media Group and the office buildings and printing presses of Holland Media Combinatie in Alkmaar (5,616 as of 30 June 2017). The expected return value of the office building in Alkmaar is estimated to be higher, and part of the previously booked impairment losses have therefore been reversed (998). On the other hand, a further impairment (429) has taken place on the printing presses.

14.Shareholders' equity

During the first half year of 2017, TMG paid out no dividend to its shareholders (the first half year of 2016: 7,416).

The movements in non-controlling interests in 2016 concern the acquisition of the remaining shares in Sienna Holding B.V., resulting
in an increase of the share in Sienna Holding B.V. from 90% to 100%.

15.Provisions

Restructuring provision

In the first half year of 2017, severance costs were paid to the amount of 7,148 (2016: 27,905).

16.Interest-bearing loans and borrowings

In the first half year of 2017, TMG used 17,093 of its existing credit facilities to deal with severance payments, acquisition costs and seasonal effects in the cash flow. The total credit facility mid 2017 is 22,093. The interest payable for the facility is 3-month Euribor, with a premium of 1.50%.

17.Related parties

In the first half year of 2017, Telegraaf Media Groep paid a premium of 3,728 (first half year of 2016: 4,829) to Stichting-Telegraafpensioenfonds 1959. Including employees' contributions, the premium amounted to 5,593 (first half year of 2016: 7,244).

18.Subsequent events

On 18 July 2017, TMG announced the sale of Keesing Media Group to form a partnership with Ergon Capital Partners III ('Ergon'). The agreed valuation of 100% of Keesing is EUR 150 million (enterrprise value, debt and cash fee). TMG takes a 30% stake in the new partnership. The net cash flow from the transaction is used to fully settle the credit facilities with the banks. It also provides capacity to finance operations and future plans for TMG's key brands. The transaction is subject to approval by the shareholders of TMG and advice from TMG's works councils, and is expected to be completed in September.