Bertelsmann returns to profit in Q3
Heavy cost cutting pays dividends to bottom lineCOLOGNE, Germany -- German media giant Bertelsmann returned to profit in the third quarter of this year after slashing some €900 million ($1.35 billion) from its expense account and more than 4,500 employees from its rolls.
Bertelsmann's net profit jumped to €87 million ($130 million) in Q3 2009 from €15 million over the same period last year, despite revenues slipping 4.5% to €3.6 billion ($5.4 billion).
"We are making good progress...as the increase in our result shows, we're on the right path" said CEO Hartmut Ostrowski.
Bertelsmann's broadcast division RTL Group reported Tuesday that it also booked a net profit in Q3 and group CEO Gerhard Zeiler forecast a positive result for the full year. In addition to belt-tightening, RTL is steadily expanding the proportion of its revenue that comes from non-advertising dependent sources. Zeiler has said that, mid-term, RTL wants half of its revenue to be independent of the advertising cycle.
Bertelsmann might be seeing green shoots, but sharp declines at the beginning of the year continue to weigh on its accounts. Revenue for the nine months to Sept. 30 was down 6.6% to €10.8 billion ($16 billion). Bertelsmann -- which also owns book publisher Random House, magazine group Gruner + Jahr, the music, book and DVD clubs organization Direct Group and media services operation Arvato -- booked a €246 million ($368 million) loss for the period.