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In order to manage and control the Group, Bertelsmann uses revenue, operating EBITDA and Bertelsmann Value Added (BVA) as strictly defined key performance indicators to directly assess business development; these correspondingly form the basis of the outlook.

Revenue as a growth indicator of businesses increased in the first half of 2015 by 2.5 percent to €8.0 billion (H1 2014: €7.8 billion). Operating EBITDA is determined as earnings before interest, tax, depreciation and amortization and is Fundamental Information about the Group Corporate Profile adjusted for special items. This makes it a meaningful key performance indicator for determining a sustainable operating result. Operating EBITDA of €1,063 million during the reporting period was above the previous year’s figure (H1 2014: €1,018 million).

The central performance indicator for assessing the profitability from operations and return on invested capital is BVA. BVA measures the profit realized above and beyond the appropriate return on invested capital. This form of value orientation is reflected in strategic investment, portfolio planning and the management of Group operations and is the basis for management compensation. BVA is calculated as the difference between net operating profit after tax (NOPAT) and the cost of capital. The starting point for the calculation of NOPAT is operating EBITDA. Depreciation, amortization and impairment losses are deducted and adjustments made for special items. Then, after modifications and deduction of a flat 33-percent tax, the result is the NOPAT used to calculate BVA. Cost of capital is the product of the weighted average cost of capital (WACC) and the level of capital invested. The uniform WACC after taxes is 8 percent. Invested capital is calculated on the basis of the Group’s operating assets less non-interest-bearing operating liabilities. The present value of operating leases is also taken into account when calculating the invested capital. In the first half of 2015, BVA decreased to €-21 million (H1 2014: €6 million) despite the overall improvement in the operating results. This development is primarily due to the acquisitions which led to an increase in the invested capital.

Bertelsmann’s financial management and controlling system is defined by the internal financial targets outlined under “Net Assets and Financial Position.” The Group is managed and controlled on the basis of these financing principles; they form part of the value-oriented management system in the broader sense of the term, along with the EBITDA margin, the cash conversion rate and non-financial performance indicators.