Bertelsmann Experiences Strong Growth in Revenues and Profit
- Revenues after nine months of 2006 up 10.3 percent to €13.5 billion
- Operating EBIT grows by 8.3 percent to €982 million
- Positive development benefits from improved environment for key advertising markets
During the first nine months of 2006, the international media company Bertelsmann has increased its revenues and operating profit. Revenues were up 10.3 percent to €13.5 billion (previous year: €12.3 billion). Apart from organic growth, these revenue figures also reflect the positive contribution of acquisitions made in 2005.
Operating EBIT was up by 8.3 percent to €982 million (previous year: €907 million). Bertelsmann was able to benefit from the improved environment for key European advertising markets. Conversely, the music business of the Sony BMG joint venture continues to face challenges, following a sharp decrease in the volume of the recorded music market. Chief Financial Officer Thomas Rabe explained: “We are pleased with the group’s operating result. For the current full fiscal year 2006 we expect a nearly 10 percent increase in operating result and a significantly improved net income year on year.”
In the third quarter of 2006 Bertelsmann increased revenues by 2.4 percent to €4.4 billion (previous year: €4.3 billion). This was a smaller rise than in the first half of 2006 due to the influence of basis effects from acquisitions made the previous year. Operating EBIT improved by 6.8 percent in the third quarter to €281 million (previous year: €263 million).
Net income after nine months was €362 million (previous year: €566 million). In comparison with the previous period this was primarily a reflection of normalized income tax expense as well as minor special items like capital gains. Special items amounted to €-56 million in the first nine months of 2006 (previous year: €79 million). This includes a €48 million settlement with the Universal Music Group regarding the lawsuit involving the former music file-sharing platform Napster.
The €4.5 billion buyback last July of the 25.1 percent stake in Bertelsmann held by Groupe Bruxelles Lambert (GBL) caused the group’s economic debt to increase to €8.9 billion (December 31, 2005: €3.9 billion). “This represented the upper limit. By the end of the year, our economic debt will be much lower due to funds generated from operating activities and the sale of BMG Music Publishing,” stated CFO Thomas Rabe.
“We want to reach our financial targets by the end of 2007. The successful placement of two euro benchmark bonds at a volume of €1.5 billion as well as the affirmation of our rating by rating agencies demonstrates that our financing concept for the buyback is considered sound,” Rabe continued.
Bertelsmann had 94,838 employees worldwide at the end of September 2006 (December 31, 2005: 88,516).
Figures at a glance (in € millions)
Jan 1, 2006 to Sept 30, 2006 | Jan 1, 2005 to Sept 30, 2005 1) | |
| Group revenues | 13,545 | 12,284 |
Operating EBIT divisions Corporate/Consolidation Operating EBIT | 1,042 (60) 982 | 976 (69) 907 |
Special items | (56) | 79 |
EBIT (Earnings before interest and taxes) | 926 | 986 |
Net interest | (126) | (56) |
Other financial expenses | (189) | (220) |
Income taxes | (249) | (144) |
Net income | 362 | 566 |
of which: Share of profit of Bertelsmann shareholders | 243 | 475 |
of which: Minority interest | 119 | 91 |
Investments | 826 | 2,296 |
At Sept. 30, 2006 | At Dec. 31, 2005 | |
Economic debt* | 8,937 | 3,931 |
Employees | 94,838 | 88,516 |
Definition of Operating EBIT: Operating EBIT refers to earnings before interest, taxes and special items.
* Net financial debt plus provisions for pensions and profit participation capital.
1) The comparative figures for 2005 have been adjusted in consideration of IAS 32.
About Bertelsmann AG
The media company Bertelsmann commands globally leading positions in the major markets. Its core business is the creation of first-class media content. Bertelsmann includes RTL Group, Europe’s No.1 in television and radio, as well as the world’s biggest book-publishing group, Random House, with more than 100 publishing imprints (Alfred A. Knopf, Bantam, Goldmann). Gruner + Jahr, the European No.1 in magazine publishing (Stern, Geo, Capital), and the Sony BMG joint venture (Anastacia, Alicia Keys, Beyoncé, Dido, Usher) also stand for creativity and powerful brands. The Arvato division bundles the group’s media and communications services, which include the expanding units Arvato Logistics Services and Arvato Direct Services (distribution, service centers, customer relationship management), along with state-of-the-art printers, storage media production and comprehensive IT-services. Bertelsmann’s direct-to-customer businesses are bundled in Direct Group: book and music clubs with more than 35 million members all over the world.
For further questions, please contact:
Andreas Grafemeyer
Senior Vice President Media Relations
Phone: +49 – 52 41 / 80 24 66
andreas.grafemeyer@bertelsmann.de
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| Name | Size |
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| Q3_2006_engl.pdf | 81 kB |
