The following analysis of earnings performance relates to continuing operations as of December 31, 2014. Please refer to the “Performance of the Group Divisions” section for a more detailed picture of the earnings situation.
Group revenues from continuing operations rose 3.1 percent in financial year 2014 to €16.7 billion (previous year: €16.2 billion). The key drivers of the revenue growth were the transactions implemented since 2013. Revenues were boosted in particular by the full-year inclusion of Penguin Random House for the first time and the acquisitions of BMG, Gothia and Netrada. This was counteracted by strategic divestments such as the sale of Brown Printing and the Italian print business of Be Printers. The exchange rate effects were -0.1 percent; portfolio and other effects were 4.2 percent. Organic growth was therefore -1.0 percent.
Revenues at RTL Group fell marginally to €5,808 million (previous year: €5,824 million) in the reporting period. This was primarily attributable to lower revenues in France, at Fremantle Media and at UFA Sports. Penguin Random House increased its revenues by 25.2 percent to €3,324 million (previous year: €2,654 million). The strong increase is primarily attributable to its first-time inclusion for the full year. Penguin Random House also generated higher organic revenues as a result of successful new releases, particularly in the United States. Revenues at Gruner + Jahr were down 13.3 percent to €1,747 million (previous year: €2,014 million). The sharp decline mainly resulted from the sale of Brown Printing. The decline in the advertising business in France, Germany, Austria and China could only be partially offset by the revenue growth from digital businesses. Arvato increased its revenues year on year by 6.2 percent to €4,662 million (previous year: €4,388 million), mainly through acquisitions. Be Printers saw its revenues decline by 11.2 percent to €996 million (previous year: €1,122 million), mainly due to the sale of the Italian print business and the continuing structural decline of print businesses in general. The revenue for Corporate Investments, at €510 million, was 6.6 percent down from the previous year’s figure of €546 million. The decline in the club and direct-marketing businesses was largely compensated by the first-time inclusion of BMG for the full year and by organic growth in the music-rights business.
Revenues by Division
|in € millions||2014||2013|
|Penguin Random House||279||3,045||3,324||262||2,392||2,654|
|Gruner + Jahr||886||861||1,747||919||1,095||2,014|
|Total divisional revenues||6,099||10,948||17,047||5,867||10,681||16,548|
The changes in the geographical distribution of revenues reflect the progress made in the transformation of the Group portfolio. The proportion of revenues generated in Germany increased to 35.2 percent compared with 34.8 percent in the previous year. The revenue share generated by France amounted to 14.2 percent (previous year: 15.5 percent). In the UK, the revenue share was 6.4 percent (previous year: 6.0 percent). The share of total revenues generated by the other European countries amounted to 18.4 percent compared with 19.3 percent in the previous year. The revenue share generated by the United States increased to 18.6 percent (previous year: 17.5 percent), and the other countries achieved a revenue share of 7.2 percent (previous year: 6.9 percent). This means that the share of total revenues generated by foreign business was 64.8 percent (previous year: 65.2 percent). Year on year, there was a slight change in the ratio of the four revenue streams (own products and merchandise, advertising, services, rights and licenses) to overall revenue.
Bertelsmann achieved an operating EBITDA of €2,374 million in financial year 2014 (previous year: €2,311 million). The EBITDA margin of 14.2 percent remained in line with the previous year’s high level of 14.3 percent.
Operating EBITDA of RTL Group increased to €1,334 million (previous year: €1,324 million). The German TV business recorded strong year-on-year growth while the earnings contributions from Fremantle Media, the French radio business and the Hungarian television business declined. Penguin Random House achieved an operating EBITDA of €452 million (previous year: €363 million). The strong increase is primarily attributable to the merger and to a strong bestselling performance in the United States and UK. Operating EBITDA of Gruner + Jahr was down year on year from €193 million in the previous year to €166 million. This was primarily attributable to the sale of Brown Printing. Arvato achieved an operating EBITDA of €384 million (previous year: €397 million). Earnings growth in the SCM and Financial Solutions Solution Groups was contrasted by start-up losses and increasing margin pressure in CRM. Operating EBITDA at Be Printers declined to €64 million (previous year: €92 million) as a result of the persistently declining print market. At Corporate Investments, operating EBITDA increased to €44 million compared with €20 million in the previous year. The improved earnings are mainly attributable to the full acquisition and growth of BMG.
|in € millions||2014||2013|
|Operating EBITDA by division|
|Penguin Random House||452||363|
|Gruner + Jahr||166||193|
|Total operating EBITDA by division||2,444||2,389|
|Operating EBITDA from continuing operations||2,374||2,311|
|Amortization/depreciation, impairments/reversals of intangible assets and property, plant and equipment not included in special items||(605)||(548)|
|EBIT (earnings before interest and taxes)||1,150||1,717|
|Earnings before taxes from continuing operations||855||1,356|
|Earnings after taxes from continuing operations||569||943|
|Earnings after taxes from discontinued operations||4||(58)|
|Group Profit or Loss||573||885|
|attributable to: Earnings attributable to Bertelsmann shareholders||163||513|
|attributable to: Earnings attributable to non-controlling interests||410||372|
The special items are primarily attributable to the strategic measures implemented in financial year 2014. The scaling back of structurally declining businesses continued and led to restructuring costs and impairment losses in print businesses and in the club and direct-marketing businesses. In addition, capital losses resulted from the sale of the Italian print business of Be Printers. Profit-improvement measures to strengthen the core businesses resulted in expenses at divisional and Group level. These include the integration costs at Penguin Random House, the costs of the transformation program at Gruner + Jahr and burdens from the implementation of the profitability improvement program at Arvato. An impairment loss was recognized in the Hungarian television business resulting from a new tax on advertising revenues imposed by the Hungarian parliament.
Special items in the reporting period totaled €-619 million (previous year: €-46 million). They consist of impairments and reversals on impairments totaling €-101 million (previous year: €44 million), fair value remeasurement of investments of €24 million (previous year: €110 million), proceeds from sale of participations totaling €-155 million (previous year: €111 million), restructuring expenses and other special items totaling €-340 million (previous year: €-297 million). In the reporting period, there were adjustments to carrying amounts on assets held for sale in the amount of €-47 million (previous year: €-14 million).
Operating EBIT, which was used as an operational performance indicator up until the previous year, was €1,769 million (previous year: €1,763 million). After adjustment for special items of €-619 million (previous year: €-46 million), EBIT was €1,150 million. The increase of €567 million compared to the previous year’s figure of €1,717 million is primarily attributable to the increased overall charges related to special items.
Group Profit or Loss
The financial result increased by €66 million to €-295 million year on year. The deviation was primarily attributable to lower interest expenses as a result of the repayment of financial debt at a comparatively high interest rate at the start of the reporting period. The decline in tax expense from €-413 million in the previous year to €-286 million is primarily attributable to non-period income from current and deferred income taxes. This produced after-tax earnings from continuing operations of €569 million (previous year: €943 million). Taking into account the after-tax earnings from discontinued operations of €4 million (previous year: €-58 million), this resulted in a Group profit of €573 million (previous year: €885 million). The decline compared to the same period in the previous year can be attributed to higher overall charges related to special items. The share of Group profit held by non-controlling interests came to €410 million (previous year: €372 million). The share of Group profit held by Bertelsmann shareholders was €163 million (previous year: €513 million). At the Annual General Meeting of Bertelsmann SE & Co. KGaA, an unchanged year-on-year dividend payout of €180 million will be proposed for financial year 2014 (previous year: €180 million).