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Bertelsmann bets on digital media, global expansion

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AFP Berlin
Last Updated : Mar 28 2017 | 9:57 PM IST
German media and publishing group Bertelsmann today presented ambitious objectives for 2020, as its bets on digital and international expansion paid off with a second one-billion-euro annual profit in 2016.
"Effectively, what we have to do in the next years is to do what we have done in the last years," chief executive Thomas Rabe told journalists at a press conference.
The group reported net profits of 1.14 billion euros (USD 1.23 billion) in 2016, an increase of 2.6 per cent over 2015's figure.
While higher taxes weighed on the bottom line, operating or underlying profit before taxes and interest stood at 2.6 billion euros, compared with 2.5 billion the previous year.
Bertelsmann, which owns broadcaster RTL, a stable of magazines and most of publisher Penguin Random House, saw revenues slip slightly to 17 billion euros.
Exchange rate effects were to blame for much of the drop, the firm said, as the fall in the value of the pound following Britain's vote to quit the European Union in June meant its UK revenues were worth less.

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Since taking the top seat at the family-owned firm in 2012, Rabe has invested some 4 billion euros to close Bertelsmann's digital gap with other publishers and expand outside Germany.
Looking ahead to 2020, the CEO aims for revenues of 20 billion euros, with some 40 percent generated from "growth" activities such as online media and e-commerce, compared with 30 per cent today.
The group's digital product range has also grown to educational software, while it plans to completely abandon shrinking legacy businesses like its book clubs.
Half of investments will go to the United States, with other big bets on China, India and Brazil.
Within three years, Bertelsmann hopes to make 60 per cent of its revenue in Europe and 40 per cent internationally, including some 30 per cent in the US.
The group offered little detail about its objectives for 2017, saying only that it aims to increase profits and revenues while maintaining its high margins.

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First Published: Mar 28 2017 | 9:57 PM IST

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