Bertelsmann SE & Co. KGaA

An overview of the key financial figures

    Berlin (ots) - The international media company Bertelsmann
achieved revenues of 20.04bn EUR in Fiscal Year 2000/01 (ended June
30, 2001). At 3.5bn EUR above the previous year's turnover (16.5bn
EUR), this translates to a 21 percent increase. This growth is
attributable to the first-time full-year consolidation of RTL Group
(1.4bn EUR), as well as to acquisitions (1.4bn EUR) and exchange-rate
effects (0.7bn EUR). Organic growth in companies including RTL Group,
Bertelsmann Services Group (part of the media service provider
Arvato), and Random House was offset by dwindling revenues at BMG.
    Net income improved by 296m EUR or 44 percent to 968m EUR (PY:
672m EUR). Thanks to high capital gains, earnings before taxes,
interest and amortization amounted to 3.16bn EUR; 1.39bn EUR or 79
percent above the previous year's figure of 1.77bn EUR. At 1.20bn
EUR, the divisional result - i.e., ongoing operating results before
Internet businesses and positive/negative one-off items - nearly
reached the previous year's level of 1.25bn EUR. The Bertelsmann
Value Added (BVA) for the group, which is equivalent to earnings
before interest, taxes and amortization minus 15 percent capital
costs, was improved by 139 percent to 1.31bn EUR (PY: 550m EUR).
    Divisional Revenues and Profits
    Bertelsmann's corporate divisions - TV and Radio (RTL Group), Book
(Random House), newspapers and magazines (Gruner + Jahr), music
(BMG), specialist information (BertelsmannSpringer), Media Services
(Arvato) and direct-to-customer businesses (DirectGroup) - all
registered increases in revenue except BMG. In terms of profit, the
television business provided a special highlight.
    RTL Group with its 23 television channels and 17 radio stations in
ten countries had revenues of 4.1bn EUR (PY: 1.7bn EUR; six months
consolidation). Thus, including the takeover of Pearson TV (now:
FremantleMedia), RTL's income rose by 32 percent in Bertelsmann's FY
2000/01. The group's major channels were able to defend their
market-leading positions in audience and advertising share;
meanwhile, the publicly traded company extended its strong market
presence in the production and sports rights distribution sectors.
Series, shows and other productions were sold to more than a hundred
countries. The divisional result (EBITA) soared to a record value of
537m EUR, with a 13.2 percent return on sales (PY: 13.2 percent).
    Random House, which is comprised of more than one hundred and
fifty publishers worldwide, was able to broaden its position as the
world's leading trade book publisher. Despite flat book markets in
the US and Germany, Random House revenues climbed by 9.3 percent to
2.1bn EUR (comparable figure in the previous year: 1.9bn EUR). In the
previous fiscal year, Bertelsmann's book ventures did business as
Buch AG and included not only the popular publishers but also the
clubs, which have since been assigned to DirectGroup Bertelsmann.
This year, Random House Group publishers released approximately 8,000
new publications, numerous literary awards and an unprecedented
number of bestsellers. The divisional result (EBITA) grew
disproportionately to 180m EUR, while the return on sales was 8.7
percent (PY: 5.0 percent).
    During the second half of the year, Gruner + Jahr, Europe's
largest magazine publisher, was able to increase its revenues by 3.3
percent to 3.0bn EUR (PY: 2.9bn EUR), despite a steep decline in
advertising. Successful magazine concepts underwent further
internationalization ("Capital" in Spain, "National Geographic" in
the Netherlands, "Gala" in Russia and Poland). By acquiring the
business titles "Inc." and "Fast Company", Gruner + Jahr rose to
become one of the five top magazine publishers in the US market. Its
flagship, "stern" magazine, was able to extend its leading position
as the highest-reach weekly magazine in Germany, and the "Financial
Times Deutschland", launched in Spring 2000, has become well
established in the market. The economic and publishing successes were
offset by the weak advertising market, a steep increase in paper
prices and publishing investments, primarily in the US. These factors
were responsible for bringing the divisional result (EBITA) down to
292m EUR. Return on sales was 9.6 percent (PY: 13.1).
    The Bertelsmann Music Group (BMG), which owns more than 200 labels
in 44 countries, looks back on a year of new beginnings. A new
management team was installed, and its fields of business were
restructured to focus on the company's core competencies: developing
artists and promoting music. The music clubs became part of
DirectGroup Bertelsmann, while the Storage Media division was
assigned to the media service provider Arvato after the end of the
fiscal year. During the period under review, BMG artists placed
numerous titles in the charts and won more than a hundred awards; 16
performers alone each sold more than a million albums. Nevertheless,
the turnover and profit figures reflect not only a challenging market
environment, but structural weaknesses as well: revenues dwindled by
7.6 percent to 3.7bn EUR (comparable figure for last year: 4.0bn
EUR), and the division had a negative result (EBITA) of five million
EUR (previous year's return on sales: 5.6 percent). The new
management plans to exploit the streamlined structure to bring about
a revenue turnaround in the current fiscal year.
    The professional-information division BertelsmannSpringer has
strengthened its position as the unchallenged No. 1 in Germany, and
as one of the leading international providers of scientific and
specialist literature. Following the successful integration of
Springer scientific publishing, the focus during the past fiscal year
was on boosting the efficiency of the core businesses and on
realigning the company's online activities. Revenues grew by 9.5
percent to 749m EUR (PY: 684m EUR); the divisional result (EBITA)
came to 68m EUR. Return on sales amounted to 9.0 percent (PY: 9.3
    The Arvato division showed a strong increase in revenues, stable
profits and international expansion, all of them proof of the growing
demand for networked media services. Revenues from its logistics
ventures, customer care operations for major international clients
and modern printing operations were up by 17 percent to 3.0bn EUR
(PY: 2.5bn EUR), while the divisional result (EBITA) came to 186m
EUR. Arvato's focus has been on continued internationalization with
new sites in Great Britain, the Netherlands, Singapore, Australia and
India, and the determined expansion of activities in France. The
division's return on sales amounted to 6.2 percent (PY: 6.8 percent).
    The direct-to-customer businesses bundled in the newly created
DirectGroup include Bertelsmann's book clubs, music clubs and
e-commerce activities. While the book clubs are currently being
outfitted with a modern IT system, the music clubs have benefited
from the acquisition of the US online music vendor CDNOW. Together,
the music clubs and CDNOW now form the world's biggest music
retailer, to be complemented at a later date by file-sharing
services. Revenues generated by DirectGroup companies, including all
e-commerce ventures (and especially BOL), were up by 19 percent to
3.8bn EUR (comparable figure for the previous year: 3.2bn EUR). Not
including the Internet ventures, the divisional result (EBITA) was at
minus 54m EUR.
    Internet start-up losses have peaked
    The Internet has now been integrated into all divisions. In the
period under review, startup losses incurred by the Internet ventures
add up to 888m EUR (previous year's multimedia expenditure: 261m EUR)
and therewith have reached the peak. The largest items are 499m EUR
for DirectGroup, which bundles Bertelsmann's e-commerce businesses,
Gruner + Jahr (98m EUR), the RTL Group (51m EUR) and Arvato (42m
EUR). A number of measures, including the integration of the online
media seller BOL into the book clubs and of CDNOW into the music
clubs, and the increasing success of RTL New Media in the market will
considerably reduce start-up losses during the following fiscal year.
    High gains from AOL Europe and mediaWays
    Bertelsmann achieved capital gains of 3.2bn EUR from the sale of
the Internet network and services provider mediaWays to Telefónica,
and the partial sale of holdings in the Internet service provider AOL
Europe. Under the terms of the agreement, the balance of the sales
proceeds is expected in the year 2002. In all, the capital gains
realized during the period under review total 3.5bn EUR (PY: 836m
    One-off expenditures of 538m EUR were largely comprised of costs
for restructuring BMG, expenditures for the Corporate Center as the
group-wide "PC4All!" campaign (free Internet PCs for all employees)
and Bertelsmann's EXPO presence, along with costs for restructuring
DirectGroup, in particular for a new IT system throughout the clubs.
    Record capital expenditures for continued growth
    During FY 2000/01, Bertelsmann's capital expenditures hit a new
record at 3.27bn EUR, or 59 percent more than last year's figure of
2.05bn EUR. Of this, 1.84bn EUR was invested in acquisitions of
holdings and financial assets - such as Gruner + Jahr's acquisition
of magazines and the takeover of CDNOW in the US as well as the
purchase of shares in Antena 3 in Spain - and 442m EUR was expended
on intangible assets such as movie and publishing rights. Tangible
assets, including the modernization of operating facilities at Arvato
and Gruner + Jahr, accounted for capital expenditures totaling 986m.
    Balance sheet total up again
    At the end of the fiscal year, the group had total assets of
17.6bn EUR, 20 percent more than last year. The increase is
attributable primarily to the acquisitions mentioned above, to the
merger with Pearson TV (FremantleMedia), and the upsurge in liquid
assets. Intangible assets, in particular the various companies'
goodwill, now amount to 4.2bn EUR (PY: 3.9bn EUR). The net financial
debt - i.e. the financial debt balanced against liquid assets -
dwindled by 12 percent to 1.88bn EUR (PY: 2.15bn EUR). Capital
resources were at 4.4bn EUR, 22 percent above the previous year's
figure of 3.6bn EUR. At 25.3 percent, the equity ratio is slightly
above the previous year's level of 24.8 percent.
    Cash flow amounted to 672m EUR (PY: 1.32bn EUR). This does not
take into account the fact that Bertelsmann's management acts on the
principle of financing Internet startup losses from capital gains
realized on divestitures. Thus, the cash flow is strained by Internet
start-up losses and all special items such as costs for restructuring
core businesses, but does not reflect compensatory influx of funds
such as the gains realized by selling the AOL Europe and mediaWays
holdings, which were set aside to cover start-up losses.
    18.4 percent return on profit-participation certificates
    FY 2000/01 saw a 17.4 percent return on assets, resulting in a
estimated distribution of 18.4 percent of the basic amount both for
the new profit-participation certificates 2001 and for the
profit-participation certificates that were not swapped, for which
the old dividend rules still apply. Thus, for the first time since
the profit-participation certificates were introduced on the stock
market in 1986, the target distribution of 15 percent has been
exceeded. An estimated 95m EUR will be distributed on October 16,
    The profit-participation capital was switched from DM to Euro in
Spring 2001. Bertelsmann had also offered investors the option of
trading in their existing profitparticipation certificates for
profit-participation certificates with partially changed conditions -
in particular with new dividend regulations. More than 90 percent of
investors took advantage of the offer.
    Bertelsmann adds more employees
    At the end of the Fiscal Year, Bertelsmann employed 82,162 people;
5,905 employees or eight percent more than the year before (76,257
employees). Acquisitions and newly consolidated companies
(FremantleMedia) added 3,861 employees, while ongoing operations
created 2,044 new jobs. The media service provider Arvato (e.g. the
Services Group) registered the strongest job growth, adding 1,791
jobs during the period under review. At the end of the Fiscal Year,
Bertelsmann had 784 trainees.
    Chart in EUR
    Revenues                                                    20.04 bn
    Foreign revenues                                        13.90 bn
    Group earnings before interest,
    taxes and amortizations                              3.16 bn
    Divisional earnings (EBITA)                        1.20 bn
    Net income                                                      968 m
    Capital expenditures                                  3.27 bn
    - Investments in tangible assets                1.84 bn
    - Investments in intangible assets                442 m
    - Acquisition of holdings/financial assets  986 m
    Amortization of goodwill                            1.66 bn
    Cash Flow                                                        672 m
    Total assets                                              17.55 bn
    Fixed assets                                                8.45 bn
    Liquid assets                                                 826 m
    Equity                                                         4.44 bn
    Income taxes                                                1.32 bn
ots Originaltext: Bertelsmann. AG
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For further Questions:
Oliver Herrgesell,
Bertelsmann AG
Media Relations
Phone + 49 - 52 41 - 80 24 66
Fax + 49 - 52 41 - 80 66 13

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