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Bertelsmann Announces 2013 Fiscal Year Results, Part II

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In 2013, positive contributions came primarily from portfolio expansions and the German television business. During the reporting period, revenues increased by 1.8% to €16,400,000,000 from €16,100,000,000 in 2012. However, portfolio expansion growth “was offset by normalized revenues in the book business, generally weak advertising markets in Europe, and the scaling back of structurally declining business,” the Bertelsmann Group stated.

Organically, revenues decreased by 2.8%. Exchange rate effects amounted to -1.2%; portfolio and other effects added 5.8%.

The operating result increased in 2013 despite startup losses in building new businesses…

The Bertelsmann Group generated operating EBIT (earnings before interest and taxes) of €1,750,000,000 after €1,730,000,000 in 2012. Return on sales was again in the double digit range at 10.7%, a slight decrease from 2012 when it was 10.8%.

In particular, the result reflects a strong business performance by Mediengruppe RTL Deutschland, thriving IT and SCM services at Arvato, and the strategic portfolio measures taken during the reporting period.

Operating EBITDA from continuing operations rose to €2,300,000,000 from €2,200,000,000 in 2012. The consolidation of BMG contributed to this increase. The EBITDA margin was 14.1% (whereas it had been 13.8% in 2012). Bertelsmann Group profit improved by 42% in 2013 to €870,000,000 over €612,000,000 in 2012 – the highest it has been since 2006.

The business expansion in 2013 led to the highest investments in eight years. Including financial debt assumed, the Bertelsmann Group invested €2,000,000,000 (whereas it invested €655,000,000 in 2012), mainly in the acquisitions of BMG and Gothia as well as for the purchase of various music catalogs and film rights.

Thanks to the proceeds from the placement of RTL Group shares and a high level of operating cash flow, net financial debt was reduced to €636,000,000 at year-end (whereas in 2012 it was €1,218,000,000). The Bertelsmann Group stated its “broader economic debt was down to €4,178 million at December 31, 2013, after €4,773 million in the previous year. Adjusted operating free cash flow amounted to €1.8 billion (previous year: €1.9 billion).”

Bertelsmann C.F.O. Judith Hartmann added, “In financial year 2013 Bertelsmann demonstrated its high profitability, and the Group is in excellent financial shape. All the signs point to expansion and we have the resources available for it. The successful placement of RTL Group shares alone brought us proceeds of €1.5 billion. For 2014, Bertelsmann expects strong revenue growth, continued high profitability, and a positive development of Group profit.”

Bertelsmann employees are participating in the successes achieved. For fiscal year 2013, they will receive profit participation amounting to €101,000,000 (whereas they received €92,000,000 in 2012), the third-highest total in the company’s history to date.

In accordance with the terms governing the Bertelsmann 2001 profit participation certificate, 15% on the nominal value will again be paid out on May 12, 2014. The pay-out for the 1992 profit participation certificate is 7.49% (whereas in 2012 it was 7.39%).

Total assets increased significantly to €21,400,000,000 as of December 31, 2013 (from €18,900,000,000 in 2012). The increase is mainly attributable to the reduction in shares in RTL Group, the merger of Penguin and Random House, the acquisition of the remaining BMG shares and the purchase of Gothia.

Cash and cash equivalents remained at the same high level as in 2012 (€2,700,000,000). The income from the reduction in shares in RTL Group and the merger of Random House and Penguin increased the equity to €8,700,000,000 (from €6,100,000,000 in 2012). As a result of this increase, the equity ratio increased from 32.2% in 2012 to 40.7%.

At the end of the fiscal year, the Bertelsmann Group had 111,763 employees worldwide (whereas it had 104,286 in 2012). The increase of 7,477 employees is attributable primarily to strategic portfolio expansions. In 2013, there were 1,304 people serving in trainee positions in Bertelsmann companies in Germany (whereas there were 1,254 trainees in 2012).

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