Bertelsmann’s primary objective is continuous growth of the company’s value through a sustained increase in profitability (see the "Value-Oriented Management System" section).
Bertelsmann aims to achieve a faster-growing, more digital and more international Group portfolio. As well as investments in existing activities, new business segments that provide a broader overall revenue structure are being increasingly explored. The further development of the portfolio is subject to clear investment criteria. Businesses in which Bertelsmann invests should have long-term stable growth, global reach, stable and protectable business models, high market-entry barriers and scalability. The education business is being gradually developed into the third earnings pillar alongside the media and service businesses. Group strategy comprises four strategic priorities, which again constituted the key work aspects for the Executive Board in 2015: strengthening the core businesses, driving the digital transformation forward, developing growth platforms and expanding into growth regions.
In the financial year 2015, Bertelsmann made further significant progress in implementing its strategy. The core television business was strengthened by RTL Group expanding its families of channels and the TV production business. The book publishing business benefited significantly from the continued encouraging progress made in the integration of Penguin and Random House. Gruner + Jahr strengthened and expanded the magazine portfolio with the successful publication of new titles and of new editions of existing titles. The restructuring of Arvato further reinforced the independence of the business units Customer Relationship Management, Supply Chain Management, Financial Solutions, IT Solutions and Digital Marketing. In addition, it was decided to bundle the print businesses in the newly created Bertelsmann Printing Group, effective January 1, 2016. The structurally declining businesses, such as the club and direct marketing businesses, were scaled back further and the printing companies in Spain were sold. Furthermore, Bertelsmann continued to implement a Group-wide earnings improvement program.
The Group also actively pushed forward with the digital transformation. RTL Group continued to expand its online video offering and also bundled the businesses in the multichannel networks and digital advertising marketing in the newly formed RTL Digital Hub. The strategic objective of the RTL Digital Hub consists of the further development of the existing digital businesses of RTL Group, the realization of potential synergies and the development of investment opportunities. Penguin Random House remains the global market leader in the e-book sector. Gruner + Jahr expanded its digital content and advertising marketing offerings both organically and through acquisitions. Arvato enhanced its services for digital businesses, particularly in the e-commerce segment.
The growth platforms were reinforced in the education segment through the expansion of the Relias Learning business, increasing the share of the online learning provider Udacity and the acquisition of participations in the online education platform HotChalk and Alliant International University. Moreover, Bertelsmann bundled its education activities in the Bertelsmann Education Group, which became an independent division effective January 1, 2016. RTL Group’s production subsidiary Fremantle Media acquired several production companies, including the Italian production company Wildside. The music company BMG, which has been managed as an independent division effective January 1, 2016, also expanded its business through further signings and catalog acquisitions. Arvato strengthened the Financial Solutions division through an investment in the Brazilian financial services provider Intervalor.
Bertelsmann achieved progress in all three growth regions in which it is primarily active. In China, the Bertelsmann Asia Investments (BAI) fund made further investments in a large number of startups and increased the value of the investment portfolio. In Brazil, Bertelsmann purchased shares in the online learning provider Affero Lab and the financial services provider Intervalor. In India, the Group made follow-up investments in the online furniture marketplace Pepperfry and in the music streaming service Saavn.
Bertelsmann will push ahead with its transformation into a faster-growing, more digital and more international Group in 2016 in line with the four strategic priorities. Compliance with and achievement of the strategic development priorities are continuously examined by the Executive Board at divisional level through regular meetings of the Strategy and Business Committee and as part of the annual Strategic Planning Dialogue between the Executive Board and the Supervisory Board. In addition, relevant markets and the competitive environment are analyzed on an ongoing basis in order to draw conclusions concerning the further development of the Group’s strategy. The Executive Board is also supported by the Group Management Committee (GMC) on issues of corporate strategy and development. This Committee is composed of executives representing key businesses, countries, regions and selected Group-wide functions.
The Group’s content-based and entrepreneurial creativity will remain very important for the implementation of its strategy. Bertelsmann will therefore continue to invest significantly in the creative core of the businesses. In addition, Bertelsmann needs to have qualified employees at all levels of the Group to ensure its strategic and financial success. Innovation competence is also very important for Bertelsmann and is a key strategic component (see the "Innovations" section).