German Media Giant Bertelsmann Posts Strongest Figures Since 2007

Thomas Rabe - PR Head Shot - H - 2011

“We are moving forward on our path to become a 'New Bertelsmann,' ” says CEO Thomas Rabe, as the European TV and print giant invests heavily in digital media and business in China, India and Brazil.

Bertelsmann, the European media giant, has posted strong first half results, with revenues topping $9.02 billion (€8.04 billion), the highest figure since 2007. 

Group profits at the German-based conglomerate, whose subsidiaries include TV production unit FremantleMedia, publisher Penguin Random House and music licensing company BMG, were $446 million (€398 million), from $288 million (€257 million) a year earlier. Operating EBITDA hit $1.19 billion (€1.063 billion), a new record for the 180-year-old firm. 

Bertelsmann Chairman and CEO Thomas Rabe took the figures as a sign that Bertelsmann, whose core business is in the European “old media” of television, books and magazine publishing, was well on its way to become a global digital giant. TV division RTL Group, which owns FremantleMedia, was still the top contributor to Bertelsmann's revenues ($3.13 billion) and operating profits ($702 million) but the division has been aggressively moving into the digital domain. RTL's recent acquisitions include French online group Oxygem, aggregator sites BroadbandTV and StyleHaul and online ad platform SpotXchange. In June, RTL bundled its digital businesses, which posted double digit revenue growth in the first half, into a new unit, the Digital Hub.

Bertelsmann is also trying to diversify beyond its core markets in Europe and the U.S. and has invested heavily in high-growth territories including Brazil, India and China. Music division BMG recently entered the Chinese market, signing a wide-ranging sales deal with Chinese e-commerce giant Alibaba.

“This signifies how well we are progressing in making Bertelsmann a faster-growing, more digital and more international company,” said Rabe. “Our highly profitable core businesses form a strong foundation from which we are expanding into new growth areas. We will continue to invest in the months ahead to move forward on our path to becoming a ‘New Bertelsmann.’ ”

But some old media continues to perform well for Bertelsmann. Book division Penguin Random House saw sales of $1.9 billion (€1.697 billion) and operating profits of $232 million (€207 million) on the strength of bestsellers including E. L. James' Grey, the follow-up to the blockbuster Fifty Shades series, as well as Paula Hawkins' debut novel The Girl on the Train, which was the top selling title in the first half of the year, shifting more than 4.5 million copies. 

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