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HY 2010_engl

HY 2010_engl

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Published by: galleycat on Aug 31, 2010
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09/04/2010

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Page 1 of 6
 
Press Release
Bertelsmann raises its forecast for 2010 afterfirst-half leap in profits
Group turnover rises to €7.4 billion
Operating EBIT soars to record €755 million
Group result improved by more than half-billion Euros
2010 Revenues and Operating EBIT expected to rise above previous year
Group result for the full year to exceed € 500 millionGütersloh, August 31, 2010 – The international media group Bertelsmann reports a surge inprofits during the first six months of the year 2010. Against the backdrop of an upturn inEurope’s advertising markets and the long-view cost-cutting measures of the previous year,operating EBIT from continued operations rose to €755 million for the period from January toJune (H1 2009: €497 million), a new record. The Group improved its result by more than half-billion Euros, for a net profit of €246 million (H1 2009: €-333 million). Group turnover, nowadjusted for the British TV channel Five which has since been sold, amounted to €7.4 billion forthe first six months of the year (H1 2009: 7.1 billion €); Return on Sales increased to10.3 percent (H1 2009: 7.0 percent).“I am very pleased that business is going so remarkably well in the year of our 175
th
 anniversary. Our operating result has achieved a record high. The economy and especially theadvertising markets are friendlier. We now are profiting from having expanded our market-leading positions, while also having lastingly improved our cost structures. This makes usconfident for the rest of the year, and that is why we are raising our profit forecast,” declaredBertelsmann’s Chairman & CEO Hartmut Ostrowski. “We are well equipped for the future andwill systematically continue to develop our many different businesses. The entire field ofdigitization will play an increasingly important role.”Growth was mainly fueled by the advertising-driven divisions, RTL Group and Gruner + Jahr,and by Random House where the U.S. business and digital activities have shown particularlypositive development. At RTL Group, all units played a part in boosting profits, and especiallyMediengruppe RTL Deutschland, Groupe M6 in France, and RTL Nederland.Gruner + Jahr benefited from an improved advertising environment and has gained marketshare. Arvato did well, as its services business thrived and the print sector made a recovery,while Direct Group continued to adjust its portfolio during the period under review. The savingsfrom the previous year's costs program contributed significantly to the positive performanceacross all of Bertelsmann's companies and divisions.
 
 
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The first half of the year also saw strong operating free cash flow from operations. Debt wasfurther reduced: at the reporting date of June 30, 2010, net financial debt was €2.78 billion(December 31, 2009: €2.79 billion). Bertelsmann has significantly reduced its debt by more than€800 million in the past twelve months. At 2.8, the Leverage Factor remains below the mark of3.0. In relation to net financial debt, the factor was 1.2.“Bertelsmann is financially solid. After the measures taken during the previous year, there wasno need for adjustments to the first-half balance sheet,” explained Bertelsmann’s CFO ThomasRabe. “We are raising our forecast for the full year. Instead of the stable revenue and operatingEBIT performance predicted at the Annual Press Conference in March, we now expect to see ayear-on-year increase in both, and a Return on Sales of around 10 percent. We are increasingthe predicted Group result corridor of between €400 and €500 million to over € 500 million.Nonetheless, visibility for the important fourth quarter still remains low in the advertisingmarkets.”On June 30, 2010, Bertelsmann had 100,151 employees worldwide (December 31, 2009:102,704).
Corporate divisions:RTL Group
Highlights 
 
RTL Group’s operating EBIT and return on sales reach record levels for a first half year 
 
All RTL Group profit centers report higher earnings 
 
RTL Group’s online platforms generate over 715 million video downloads in six months – an increase of 50 percent 
In the first half of 2010, Europe’s leading entertainment network benefited from powerful growthin the TV advertising markets in Western Europe and comprehensive cost-cutting measuresintroduced in the previous year. Both revenues and operating EBIT increased significantly. Allunits of RTL Group contributed to the increase in earnings, but in particular Mediengruppe RTLDeutschland, which outperformed the overall market, the French Groupe M6 and RTLNederland. RTL Group maintained its leading positions in audience markets in key countries,even though almost all of the World Cup matches with the highest ratings were broadcast bycompetitors. The German family of channels achieved a record 34.8 percent audience share inthe main target group. In France the digital free TV channel W9 continued its strong growth, andthe main channel M6 also significantly increased its revenues and operating EBIT in the firsthalf year. Fremantle Media, the production arm of RTL Group, also saw higher revenues andoperating EBIT, thanks to many successful international formats.
 
 
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Random House
Highlights 
 
Random House increases sales and profitability, especially in U.S.
 
Rapid growth in e-book sales and digital publishing programs 
 
Pulitzer Prizes for three Random House titles 
The world’s largest trade book publishing group, despite difficult market conditions, significantlyincreased its first-half 2010 sales and operating EBIT, driven by major increases in revenuesand profits from its U.S. division and rapidly rising digital sales. Random House placed 138 titleson the “New York Times” bestseller lists, including the Stieg Larsson Millennium trilogy, whichsold 6.5 million print and e-books in the U.S. and Germany during the half year. Random HouseUK contributed one quarter of the “Sunday Times” bestsellers. Verlagsgruppe Random Housegrew its market share in a flat overall market. Random House U.S. ebook sales surged 300percent in the first six months, and comparably in Germany and UK. The company’s e-bookprogram in these countries cumulatively expanded to 20,000 titles. The UK Group’s NigellaLawson digital cooking app became an immediate global bestseller. Random House announcedthe discontinuation of its publishing operations in Japan and Korea.
Gruner + Jahr
Highlights 
 
Operating EBIT up sharply due to above-market performance and 2009 cost-cutting 
 
 
Corporate Publishing expands across Europe: Audi, Red Bull, Danone and other big names turn to G+J for customer communication services 
 
G+J EMS leads coverage and quality in Germany’s mobile segment with over 650 million mobile page impressions a month 
Europe’s leading magazine publisher recorded stable revenues in the period under review;operating EBIT increased significantly as a result of comprehensive cost-cutting measures inthe previous year and a performance that outpaced the market. G+J was able to improve itscompetitiveness by adapting its structures to new market conditions and further lowering its costbase. Advertising revenues rose thanks to better overall economic performance, while G+Jgained additional market shares. In Germany, several new titles began regular publicationfollowing successful market tests. The online marketing activities of G+J EMS were significantlyextended, while G+J EMS maintained its leading position in coverage and quality in the Germanmobile segment. International business performance varied: business in China continued togain momentum, while performance in Eastern Europe, Italy and Spain was more modest in amuch weaker market environment. The Corporate Publishing division successfully expandedacross Europe. Meanwhile, the Prinovis and Brown print units saw a slight recovery.

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