NEWS IN ENGLISH | Bertelsmann Again Generates Half-Year Profit Exceeding €500 million
Thanks to numerous strategic advances, the international media, services, and education company further improved its growth profile, and again achieved Group profit of over half a billion euros.
Bertelsmann's organic revenue growth rose to 2.4 percent (H1 2017: 1.4 percent). The Group's growth businesses collectively achieved a 9.2 percent organic increase in revenues to EUR2.9 billion (H1 2017: EUR2.7 billion). These businesses now account for around one third of total revenues. The digital activities of RTL Group, Fremantle Media, Arvato and Bertelsmann Education Group did notably well. Despite high negative exchange rate effects - in particular from the U.S. dollar - reported revenues were up by 1.3 percent to EUR8.2 billion (H1 2017: EUR8.1 billion), the highest result in eleven years. Bertelsmann generates approximately 20 percent of its revenues in the United States.
Operating EBITDA was EUR1.07 billion (H1 2017: EUR1.10 billion) and, before exchange rate effects, again reached the high prior-year level. The services subsidiary Arvato, whose four Solutions Groups all exceeded their prior-year results, recorded a good 20 percent increase in earnings. RTL Group, BMG and Bertelsmann Education Group also reported growth. Start-up losses for digital and new business had a countervailing effect.
At EUR501 million (H1 2017: EUR502 million), Group net profit once again exceeded the half-billion-euro mark despite negative exchange rate effects and lower positive special items. The Bertelsmann Investments division's fund activities made a substantial contribution Group profit.
Thomas Rabe, Chairman and CEO of Bertelsmann, said: "Bertelsmann's organic growth in the first half of 2018 was the strongest it has been in years. The expansion of our growth businesses is bearing ever more visible fruit. It is particularly gratifying that the investments made in our services business in recent years are increasingly paying off. We want to continue improving the company's growth profile. To this end, we are investing heavily in our businesses, especially in creative content. So as not to jeopardize this expenditure, there is an urgent need to modernize the regulatory framework for creative industries in Europe. This concerns areas such as data protection, copyright, antitrust law, advertising law, media law, and taxation."
Thomas Rabe emphasized that Bertelsmann had made significant progress on its four strategic priorities - strengthening the core, digital transformation, expansion of growth platforms, and expansion in growth regions - in the first six months of the year.
Strengthening the core
Expansion of growth platforms
Expansion in growth regions
Thomas Rabe: "In the first half of 2018, Bertelsmann made further progress towards becoming stronger, more digital, more international, and more diversified. Despite the increasing political uncertainties in connection with Brexit or the trade dispute between the United States and China, we are confident that we will achieve our targets for the full year."
Bertelsmann is currently reviewing strategic options for the further development of Arvato's CRM activities. Besides a complete or partial sale, the review also covers partnerships. Preliminary results are expected in the second half of 2018.
Bertelsmann's Chief Financial Officer Bernd Hirsch added: "Bertelsmann continues to enjoy a solid financial position. We are optimistic about the full year and continue to expect higher revenues and continued high operating profitability. Our Group net profit will once again surpass the billion-euro mark."
RTL Group Highlights
RTL Group recorded a positive business performance with revenue and earnings growth in the first half of 2018. RTL Group revenues increased by 2.3 percent to EUR3.0 billion (H1 2017: EUR3.0 billion). This was driven by the growing digital businesses, rising platform revenues and, in particular, the positive performance of Fremantle Media and RTL Nederland. RTL Group's Operating EBITDA improved by 3.0 percent to EUR643 million (H1 2017: EUR624 million). Alongside a significant improvement in earnings at RTL Nederland, the two largest business units - Mediengruppe RTL Deutschland and Groupe M6 - also recorded higher earnings. Despite the FIFA World Cup 2018 being broadcast by competitors, the families of channels in the core markets of Germany, France and the Netherlands were largely able to maintain their position in the net TV advertising markets. In Germany, the flagship channel RTL Television once again was the only channel to attract a double-digit audience share in its core target demographic; the channels RTL Plus and Super RTL both achieved higher ratings in the first half of 2018. In France, the Groupe M6 family of channels largely maintained its audience share in its core target group. The Dutch family of channels led by the flagship RTL 4 remained number one among young audiences in the Netherlands. Fremantle Media recorded a significant rise in revenues despite negative exchange rate effects. The upturn is mainly due to the positive performance of Fremantle Media North America, driven by the return of "American Idol" and UFA. RTL Group's digital businesses, including its multi-platform networks and ad-tech businesses, continued their dynamic growth.