Germany's Bertelsmann positioned for growth
CEO calls company 'robust and flexible'COLOGNE, Germany -- After a lean year of belt-tightening, Germany's media giant Bertelsmann is ready to spend again.
"Where the main priority in 2009 was cost and cash management, we will concentrate in this year on steering a course for growth," said Bertelsmann CEO Hartmut Ostrowski at the company's annual press conference on Tuesday.
Ostrowski said cost-cutting last year enabled Bertelsmann, which controls European broadcaster RTL Group, production giant Fremantle Media, publisher Random House and magazine operation Gruner + Jahr, to make it though 2009 relatively unscathed.
Bertelsmann booked a net profit of €35 million ($47 million) last year, down from €270 million in 2008. Revenues were off 5.4% at €16.2 billion ($22 billion). Write offs, particularly at Brit Television group Five and Alpha Media Group in Greece, hit hard, as did the global decline in advertising revenue.
But calling Bertelsmann "robust and flexible," Ostrowski said the company was able to react quickly, chopping around €1 billion ($1.35 billion) from the expense column while maintaining market share in most territories.
Television is a good example. RTL Group slashed budgets to make up for falling TV ad revenue -- in total RTL saw sales drop 6.3% to €5.4 billion ($7.3 billion) across the group and operating EBIT profits fall 14.5% to €927 million ($1.25 billion).
RTL Group was able to hold or increase its audience market shares in most major markets, including Germany, the Netherlands and Belgium. In France, a slight drop in audience figures for RTL's flagship M6 channel was compensated for by a jump in viewers on digital niche network W9. Even Five's bouquet of channels in the U.K. saw a slight increase in overall audience.
"Today, Bertelsmann is fitter than it was a year ago and is well positioned for future growth," Ostrowski added.
Bertelsmann also managed to trim its debt load, reducing net debt by €652 million to around €2.8 billion ($3.8 billion), something that should give the company more room for investment.
One of the big potential deals this year could be the acquisition of EMI. Bertelsmann is thought to be considering a joint bid with Warner Music for the troubled Brit music label, which holds rights to the Beatles and Pink Floyd. Bertelsmann has been eying EMI for its BMG Rights Management, its music joint venture with private equity group KKR.