2013 was a successful financial year for Bertelsmann, in which progress was made in all strategic priorities. Of the existing businesses, the German television business in particular achieved solid growth. Despite the uneven development of the European advertising markets and the structurally declining businesses, Bertelsmann was able to fulfill its revenue and earnings expectations. In 2013, Bertelsmann generated consolidated revenues of €16.4 billion, an increase of 1.8 percent. On an organic basis, adjusted for currency and portfolio effects, consolidated revenues fell by 2.8 percent. The organic revenue decline is attributable to the weak European advertising markets overall, the extraordinarily strong previous year at Random House, the impact of structurally declining businesses and deliberately managed revenue development at Arvato. Taking into account the normalized book publishing business, revenue development was in line with expectations (outlook in Annual Report 2012: stable or slightly declining). Operating EBIT of €1,754 million (previous year: €1,732 million) was slightly above the previous year (outlook in Annual Report 2012: moderately below the previous year’s figure). Operating EBIT includes investments in digitization projects and start-up losses for new businesses. Return on sales achieved a solid level of earnings at 10.7 percent (outlook in Annual Report 2012: at least 10 percent).
In 2013, the successful implementation of strategic measures paved the way for Bertelsmann to become a faster-growing, more digital and more international Group. Strengthening the core businesses in the reporting period resulted in the expansion of the families of channels at RTL Group, the merger of Penguin and Random House and the new organizational structures at Gruner + Jahr and Arvato. At the same time the structurally declining businesses were scaled back. This is shown in the initiated closure of the gravure printing location at Itzehoe, the disposal of the replication business in Brazil as well as the announcement that the activities of the direct marketing company Inmediaone will be terminated. The digital transformation was driven forward through the expansion of the nonlinear TV offerings at RTL Group, the increase in e-book revenues at Penguin Random House and the specific alignment of Gruner + Jahr Germany according to defined Communities of Interest. The growth platforms were developed in particular through the acquisition of the financial service provider Gothia, the full takeover of BMG and additional investments in University Ventures. The presence in growth regions was strengthened in particular by RTL Group’s participation in RTL CBS Asia Entertainment Network in Southeast Asia, the growth of Arvato China and through Bertelsmann Asia Investments.
Bertelsmann’s net assets and financial position remain positive. The financial strength was improved as a result of the proceeds generated from the reduction in the RTL shareholding in the reporting period. In view of the cash and cash equivalents available as of December 31, 2013, of €2.7 billion, the liquidity situation is good. The ratings agencies Moody’s and S&P rated Bertelsmann as “Baa1” and “BBB+” respectively and with a stable outlook. Taking into account the solid liquidity and financing base as well as the positive business performance, Bertelsmann considers that the Group’s overall financial situation is positive and thus provides a suitable starting basis for further implementation of the strategic growth targets.
