‘In Print, Together’
Thomas Rabe, Chairman and Chief Executive Officer of Bertelsmann, gives the rationale behind the formation of the Bertelsmann Printing Group.
“What belongs together will grow together” – In today’s letter to employees, Thomas Rabe alluded to Willy Brandt’s famous quote about German reunification in announcing the formation of a new Bertelsmann division on 1 January 2016: the Bertelsmann Printing Group. In an interview with BENET, the CEO explains why Bertelsmann is founding this new division and merging the print businesses previously managed separately by Arvato and BePrinters.
Mr. Rabe, what is the significance of today’s announcement for Bertelsmann?
Thomas Rabe: This is an important day for Bertelsmann from a strategic, but certainly also from a historical point of view. Strengthening our core is one of our four strategic priorities. It was the rationale behind such significant measures as the combination of Penguin and Random House, the full acquisition of Gruner + Jahr, and the dismantling of our club and direct-marketing businesses. And now it has led to the founding of the Bertelsmann Printing Group. Bertelsmann is creating the best possible conditions to ensure that it can hold its own at the forefront of a challenging market.
... And what is the significance of this step for the printing industry?
Thomas Rabe: Of course, the formation of the Bertelsmann Printing Group is a logical, perhaps even necessary response to the changes in the printing industry. As the market leader in Europe, the Group commands a good competitive position. Megatrends such as digitization, fragmentation and individualization present the printing industry with major challenges to which we have already responded with various measures in the past two years. In addition, the overlap between gravure and offset printing is increasing due to technical innovations, and the market is converging. In the future, no one will be able to meet such challenges as well as the Bertelsmann Printing Group can.
What are the specific benefits of the merger?
Thomas Rabe: Besides being able to better adapt to the realities of the industry, the technology and the market, the decisive advantage is that our printing companies market will be able to work the market together and under a unified management going forward. We will, as it were, be in print, together – and no longer separately. We are pooling Bertelsmann’s collective printing expertise under a shared umbrella. This strengthens our print businesses. Ultimately, this is better for everyone involved. Specifically, besides a clear management structure and a concentration of expertise, we expect improvements in efficiency and effectiveness in areas such as purchasing and backoffice.
What consequences does the decision have for the employees of our print businesses?
Thomas Rabe: In the actual businesses, i.e. the printing companies, nothing will change from today or even after Jan 1 - except that the conditions for positive development have improved. Operational management and responsibility for the businesses remain on-site as is usual at Bertelsmann. Brand names already established in the marketplace -- such as Mohn Media and Prinovis -- will be retained. However, the new division creates a much stronger framework within which these businesses can develop.
And what has changed at the head of the print businesses?
Thomas Rabe: The new division will be led by Bertram Stausberg and Axel Hentrei as Co-CEOs and Ulrich Cordes as CFO. Constanze Hufenbecher, currently CFO of Be Printers, will support the integration of the print businesses and then move on to a new entrepreneurial assignment. The new division’s headquarters will be in Gütersloh, in the historic Mohn Media administration building on Carl-Bertelsmann-Strasse, where a lean administration team will manage the group. The central administrative functions of Be Printers and Prinovis, which were based at the administrative offices in Hamburg until now, will be moved to Gütersloh or to Prinovis sites in Germany.
This is a massive upgrade for Bertelsmann's Gütersloh location...
Thomas Rabe: Indeed. On the one hand, the choice of Gütersloh as the Group’s base underlines the importance of Mohn Media within the Bertelsmann Printing Group. Mohn Media is a very successful business. Its management and staff representatives have repeatedly succeeded in reacting to new developments in the market, be it with innovative offerings or partnership packages. Secondly, Gütersloh will now be the headquarters of a second large Bertelsmann division with many thousands of employees in addition to Arvato.
Speaking of Arvato... with its print businesses it will lose around one billion euros in revenues, but you say the decision is still beneficial for Arvato – why?
Thomas Rabe: Because Arvato can focus fully on its growing services business in the areas of customer relationship management, supply chain management, financial solutions and IT from now on. At the beginning of July, we first set the strategic course for this with the new structure and management. Today’s decisions mark a further course setting. For this reason, we will also transfer another production business, the replication business, into the new Bertelsmann Printing Group. The same goes for the printing-related German lettershop buisiness and RTV.