Building A New Bertelsmann Annual Report 2014 At a Glance Key Figures (IFRS) in € millions 2014 2013 2012 2011 2010 Business Development Group revenues 16,675 16,179 16,065 15,368 15,065 Operating EBITDA 2,374 2,311 2,210 2,243 2,355 EBITDA margin in percent 1) 14.2 14.3 13.8 14.6 15.6 Operating EBIT 1,769 1,763 1,732 1,755 1,825 Bertelsmann Value Added (BVA) 2) 188 283 362 359 378 Group profit 573 885 612 612 656 Investments 3) 1,578 1,312 655 956 753 Consolidated Balance Sheet Equity 8,381 8,761 6,083 6,149 6,486 Equity ratio in percent 38.9 40.9 32.2 33.9 34.7 Total assets 21,546 21,418 18,864 18,149 18,702 Net financial debt 1,689 681 1,218 1,809 1,913 Economic debt 4) 6,039 4,216 4,773 4,913 4,915 Leverage factor 2.7 2.0 2.3 2.4 2.3 Employees (in absolute numbers) Germany 40,846 38,611 38,434 37,519 36,462 Other countries 71,191 72,488 65,852 65,233 61,066 Total 112,037 111,099 104,286 102,752 97,528 Dividends to Bertelsmann shareholders 180 180 180 180 180 Distribution on profit participation certificates 44 44 44 44 44 Employee profit sharing 85 101 92 107 108 Figures adjusted for financial year 2013; figures before 2013 are the most recently reported previous year’s figures. 1) Operating EBITDA as a percentage of revenues. 2) Bertelsmann uses the BVA as a strictly defined key performance indicator to evaluate the profitability of the operating business and the return on investment. 3) Taking into account the financial debt assumed, investments amounted to €1,601 million (2013: €1,988 million). 4) Net financial debt plus pension provisions, profit participation capital and net present value of operating leases. Total Revenues by Segments in percent 5) Operating EBITDA by Segments in percent 5) 35.1 RTL Group 20.1 Penguin Random House 55.6 RTL Group 18.8 Penguin Random House 6.0 Be Printers 10.6 Gruner + Jahr 6.9 Gruner + Jahr 28.2 Arvato 2.7 Be Printers 16.0 Arvato 5) Based on total from segments not including Corporate Investments, Corporate and Consolidation. Bertelsmann is a media, services and education company that operates in about 50 countries around the world. It in- cludes the broadcaster RTL Group, the trade book publisher Penguin Random House, the magazine publisher Gruner + Jahr, the service providers Arvato and Be Printers, the music rights company BMG and the e-learning provider Relias Learning. The company has more than 112,000 employees and generated revenues of €16.7 billion in financial year 2014. Bertelsmann stands for creativity and entrepreneurship. This combination promotes the creation of first-class media content and innovative service solutions that inspire customers around the world. www.bertelsmann.com The Bertelsmann Divisions in € millions 2014 2013 2012 2011 2010 Revenues 5,808 5,824 6,002 5,814 5,591 Operating EBITDA 1,334 1,324 1,253 1,311 1,305 Employees 11,768 11,491 11,931 12,184 12,339 RTL Group is the leading European entertainment network, of the largest international producers outside the United States. with interests in 52 television channels and 29 radio stations and Combining the catch-up TV services of its broadcasters, content production throughout the world. Its television portfo- the multichannel networks BroadbandTV and StyleHaul and lio includes RTL Television in Germany, M6 in France, the RTL Fremantle Media’s more than 210 YouTube channels, channels in the Netherlands, Belgium, Luxembourg, Croatia and RTL Group has become the leading European media company Hungary and Antena 3 in Spain. The group also operates the in online video. RTL Group also owns a majority stake in the channels RTL CBS Entertainment HD and RTL CBS Extreme HD programmatic video-advertising platform SpotXchange. With a in Southeast Asia. The Group’s flagship radio station is RTL in more than 75 percent shareholding, Bertelsmann is the majority France, and it also owns or has interests in other stations in France, shareholder of RTL Group. Germany, Belgium, the Netherlands, Spain and Luxembourg. www.rtlgroup.com RTL Group’s content production arm, Fremantle Media, is one in € millions* 2014 2013 2012 2011 2010 Revenues 3,324 2,654 2,142 1,749 1,828 Operating EBITDA 452 363 352 211 201 Employees 12,812 11,838 5,712 5,343 5,264 With nearly 250 independent imprints and brands on five the international imprint DK. Its publishing lists include more continents, more than 15,000 new titles and more than than 70 Nobel Prize laureates and hundreds of the world’s 800 million print, audio and e-books sold annually, Penguin most widely read authors. Penguin Random House champions Random House is the world’s leading trade book publisher. the creative and entrepreneurial independence of its publish- The company, which employs more than 12,500 people glob- ers, who work tirelessly to maximize readership for its authors ally, was formed on July 1, 2013, by Bertelsmann and Pearson, and to protect their intellectual property. who own 53 percent and 47 percent, respectively. Penguin www.penguinrandomhouse.com Random House is committed to publishing adult and children’s fiction and nonfiction print editions and is a pioneer in digital The German-language Verlagsgruppe Random House publishing. Its book brands include storied imprints such as in Munich, with renowned publishers such as Goldmann Doubleday, Viking and Alfred A. Knopf (United States); Ebury, and Heyne, is managed by Bertelsmann outside Penguin Hamish Hamilton and Jonathan Cape (UK); Plaza & Janés and Random House. Alfaguara (Spain) and Sudamericana (Argentina), as well as www.randomhouse.de in € millions 2014 2013 2012 2011 2010 Revenues 1,747 2,014 2,218 2,287 2,259 Operating EBITDA 166 193 213 279 309 Employees 8,168 10,556 11,585 11,822 11,637 Gruner + Jahr reaches readers and users in more than 59.9 percent of Motor Presse Stuttgart, one of Europe’s biggest 20 countries with its more than 500 magazines and digital of- special-interest magazine publishers. Gruner + Jahr is wholly ferings. Gruner + Jahr publications include “Stern,” “Brigitte,” owned by Bertelsmann. “Geo,” “Capital,” “Gala,” “Eltern,” “P.M.” group’s titles, “Essen & www.guj.com Trinken” and “National Geographic.” Gruner + Jahr owns 2 in € millions 2014 2013 2012 2011 2010 Revenues 4,662 4,388 4,419 4,201 5,225 Operating EBITDA 384 397 391 416 572 Employees 70,653 66,303 63,627 61,257 65,182 Arvato is a leading international technology-services provider. digital marketing solutions, as well as all services related to the More than 70,000 employees design and produce innova- creation and distribution of printed products and digital storage tive solutions for business customers from all over the world, media. Arvato is wholly owned by Bertelsmann. covering a wide range of business processes along integrated www.arvato.com service chains. These include CRM, SCM, financial, IT and in € millions 2014 2013 2012 2011 2010 Revenues 996 1,122 1,214 1,199 – Operating EBITDA 64 92 115 128 – Employees 4,108 6,201 6,571 7,068 – Be Printers runs printing operations in Germany and the UK produce magazines, catalogs, brochures and books for their (Prinovis), Spain (Southern Europe) and the United States customers. The company also offers finishing, creative and (Americas). The group employs more than 4,000 employ- digital services. ees at eleven production sites. Be Printers covers the entire www.beprinters.com range of contemporary printing (gravure, web- and sheet- fed offset printing and digital printing). The printing plants Corporate Investments, which is comprised of all of The Corporate Center fulfills tasks in the fields of account - Bertelsmann’s activities at Group level, includes the music- ing and reporting, taxes, legal, human resources, information rights company BMG as well as the Group’s Education technology, internal auditing and financing, as well as businesses, including the online-education provider handling the management, control and strategic develop- Relias Learning. The Bertelsmann Digital Media Invest- ment of the Group, providing the necessary financing and ments (BDMI), Bertelsmann Asia Investments (BAI) funds risk management. and other fund activities in growth regions are also part www.bertelsmann.com of Corporate Investments, as are Bertelsmann’s remaining club and direct-marketing businesses. *Figures for the period 2010 to 2012 refer to Random House only. Bertelsmann Annual Report 2014 3 Interactive Annual Report The Bertelsmann Annual Report can also be accessed online at: ar2014.bertelsmann.com As well as company information and the extensive financial section, the online report offers lots of extra features, including several videos and extracts. The Annual Report is also available as a free app on the Apple App Store and in Google Play. 4 Contents Company Information Financial Information 6 Letter from the CEO 72 Combined Management Report 10 Executive Board 12 Group Management Committee 105 Consolidated Financial Statements 14 Bertelsmann Strategy 194 Corporate Governance 16 Strengthening the Core 28 Digital Transformation 197 Report of the Supervisory Board 40 Growth Platforms 52 Growth Regions 200 Boards / Mandates 200 Supervisory Board 64 Bertelsmann Essentials 203 Executive Board 66 Corporate Responsibility 204 Auditor’s Report 205 Responsibility Statement 206 Additional Information 206 Selected Terms at a Glance 208 Financial Calendar / Contact 208 Production Credits Bertelsmann Annual Report 2014 5 “We have made massive progress in implementing our strategy: Bertelsmann has become a more digital, more international and faster-growing company.” Thomas Rabe Chairman & CEO of Bertelsmann 6 Company Information Letter from the CEO Dear Readers, Dear Friends of Bertelsmann, 2014 was a good year for Bertelsmann.