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Combined Management Report

Financial Year 2014 in Review

In financial year 2014, Bertelsmann posted positive business performance and made significant progress in its transformation into a faster-growing, more digital and more international Group. With the acquisition of Relias Learning, Bertelsmann entered the education business, which in the medium term is to be developed into a third pillar alongside media and services. Group revenues from continuing operations rose 3.1 percent to €16.7 billion (previous year: €16.2 billion), thus reaching a seven-year high. These were primarily attributable to the merger of Penguin and Random House as well as further acquisitions. Operating EBITDA increased by 2.7 percent to €2,374 million (previous year: €2,311 million). The EBITDA margin remained high at 14.2 percent (previous year: 14.3 percent). Increased earnings were generated by the book-publishing businesses in the United States and in the UK, the German television business and the music-rights business. This was contrasted by start-up losses for new businesses of €-83 million (previous year: €-58 million), structurally declining businesses and market-related lower earnings contributions from French businesses. Group profit of €573 million was below the previous year’s figure of €885 million. The decline is attributable to costs for profit-improvement measures, scaling back the print and direct-marketing businesses, an impairment loss in the Hungarian TV business and the absence of positive special items from the previous year. Total investments, including acquired financial debt, in the reporting period were €1.6 billion (previous year: €2.0 billion). The net financial debt was €1,689 million (previous year: €681 million). For 2015, Bertelsmann expects positive business performance and continued progress in the implementation of its strategy.

Revenues in € billions1)

Revenues in € billions
  • Revenue growth of 3.1 percent
  • Portfolio measures are key growth drivers
  • Revenue losses due to structurally declining businesses, including scaling back, closure and sale

Operating EBITDA in € millions1)

Operating EBITDA in € millions
  • Operating EBITDA above previous year’s high level
  • EBITDA margin at 14.2 percent
  • Positive performance of the book-publishing businesses; record earnings at Mediengruppe RTL Deutschland

Group Profit in € millions1)

Group Profit in millions
  • Group profit burdened by costs related to profitability program, scaling back and sale of print and direct-marketing businesses and an impairment loss in Hungary
  • Previous year’s figure benefited from positive special items
  • Financial result up €66 million year on year

1) The figures from the previous year have been adjusted. Further details are presented in the “Prior Year Information” section. Figures for financial year 2012 have been adjusted.

Fundamental Information about the Group

In this Management Report, the Group is for the first time using the option to combine the Group Management Report and the Management Report of Bertelsmann SE & Co. KGaA. This Combined Management Report outlines the business performance, including the business result and the position of the Bertelsmann Group and Bertelsmann SE & Co. KGaA. Information about Bertelsmann SE & Co. KGaA in accordance with the German Commercial Code (HGB) will be detailed in a separate section. The Combined Management Report will be published instead of the Group Management Report within the Bertelsmann Annual Report.