The following analysis of earnings performance relates to continuing operations as of December 31, 2015. Please refer to the “Performance of the Group Divisions” section for a more detailed picture of the earnings situation.
Group revenues increased by 2.8 percent to €17.1 billion in the financial year 2015. Besides an exchange rate-related increase, growth was also boosted by successful business development of the German TV activities, digital businesses of RTL Group and Gruner + Jahr as well as a number of Arvato’s service businesses. The continued expansion of BMG and the development of the education business also had a positive impact. This was primarily offset by the continued scaling back of structurally declining businesses. The Group achieved organic growth of 0.4 percent, adjusted for portfolio and exchange rate effects. Exchange rate effects amounted to 4.2 percent and portfolio effects to -1.8 percent.
Revenues at RTL Group rose 3.8 percent to €6,029 million in 2015 (previous year: €5,808 million). The positive performance was largely attributable to Mediengruppe RTL Deutschland, positive exchange rate effects and the further expansion of digital activities. Year on year, revenues at Penguin Random House increased by 11.8 percent to €3,717 million (previous year: €3,324 million), mainly as a result of positive exchange rate effects and higher printed book sales. Gruner + Jahr’s revenues were down 12.0 percent to €1,538 million (previous year: €1,747 million) due to divestments and the continuing decline in the advertising and circulation markets. At €4,847 million, Arvato’s revenues were up 4.0 percent year on year (previous year: €4,662 million). Arvato was able to expand existing customer relationships in the Customer Relationship Management and Financial Solutions segments in particular and gain new customers. Revenues at Be Printers were down 25.5 percent to €742 million (previous year: €996 million) due to the sale of various operations, falling print circulations and price pressure. Corporate Investments performed very well overall, helped in particular by the ongoing expansion of BMG and the expansion of the education business. Revenues increased by 22.4 percent to €624 million (previous year: €510 million).
Revenues by Division
|in € millions||2015||2014|
|Germany||Other countries||Total||Germany||Other countries||Total|
|Penguin Random House||281||3,436||3,717||279||3,045||3,324|
|Gruner + Jahr||856||682||1,538||886||861||1,747|
|Total divisional revenues||6,034||11,463||17,497||6,099||10,948||17,047|
The geographical revenue distribution was more diversified compared to the previous year. Against the background of positive exchange rate effects for existing operations and the continued development of new businesses in the United States, particularly in education, the European revenue share declined overall. The share of revenues generated in Germany was 33.9 percent compared with 35.2 percent in the previous year. The revenue share generated by France amounted to 13.2 percent (previous year: 14.2 percent). In the UK, the revenue share was 6.7 percent (previous year: 6.4 percent). The share of total revenues generated by the other European countries amounted to 17.7 percent compared with 18.4 percent in the previous year. The revenue share generated by the United States increased to 21.6 percent (previous year: 18.6 percent), and the other countries achieved a revenue share of 6.9 percent (previous year: 7.2 percent). This means that the share of total revenues generated by foreign business was 66.1 percent (previous year: 64.8 percent). Year on year, there was a slight change in the ratio of the four revenue streams (own products and merchandise, advertising, services, rights and licenses) to overall revenue.
The revenue share generated by the growth businesses increased to 28 percent overall (previous year: 25 percent) thanks to organic growth and acquisitions, while the revenue share of structurally declining businesses minimized to 5 percent overall (previous year: 8 percent) as a result of disposals and scaling back. The growth businesses comprise those activities which post continuous revenue increases thanks to sustained positive market factors and which have been identified as growth priorities as part of Group strategy. These include the digital businesses of RTL Group and of Gruner + Jahr, the TV production business, the music business, and the service businesses in the SCM, Financial Solutions and IT Solutions segments, as well as the education business and the fund activities. The structurally declining businesses comprise those activities which post sustained revenue losses due to market factors. These include in particular the gravure printing activities, the storage media replication business and the club and direct marketing business.
Bertelsmann achieved an increase in operating EBITDA to €2,485 million in the financial year 2015 (previous year: €2,374 million). The operating EBIT as well as revenues benefited from positive exchange rate effects. Furthermore, as part of the implementation of the transformation and growth strategy, the share of structurally declining businesses generating low earnings was reduced and the Group-wide earnings improvement program was further implemented. In particular, the American book publishing business and the German TV business delivered a good earnings performance. This was counteracted by start-up losses for new businesses and the costs of the ongoing Group transformation. The EBITDA margin of 14.5 percent was above the high level of 14.2 percent in the previous year.
Operating EBITDA of RTL Group increased to €1,355 million (previous year: €1,334 million). A good earnings performance at Mediengruppe RTL Deutschland was contrasted in particular by lower earnings contributions at Fremantle Media. Penguin Random House achieved a significant increase in operating EBITDA to €557 million (previous year: €452 million) thanks to positive exchange rate effects and cost savings as part of the integration. Operating EBITDA at Gruner + Jahr fell to €128 million (previous year: €166 million). This stems primarily from lower revenues in the German and international advertising business as well as start-up losses for new businesses and for the transformation to digital. Arvato achieved an operating EBITDA of €394 million (previous year: €384 million). The growth in earnings is attributable to the CRM and SCM segments. This was offset by burdens in the IT Solutions and Print Solutions segments. Operating EBITDA at Be Printers declined to €47 million (previous year: €64 million) as a result of the general decline in the print business and disposals. At Corporate Investments, operating EBITDA nearly doubled from €44 million to €80 million. The significant increase mainly results from organic growth and growth through acquisitions in the music and education segments.
|in € millions||2015||2014 (adjusted)|
|Operating EBITDA by division|
|Penguin Random House||557||452|
|Gruner + Jahr||128||166|
|Total operating EBITDA by division||2,561||2,444|
|Operating EBITDA from continuing operations||2,485||2,374|
|Amortization/depreciation, impairments/reversals of intangible assets and property, plant and equipment not included in special items||(613)||(606)|
|EBIT (earnings before interest and taxes)||1,681||1,149|
|Earnings before taxes from continuing operations||1,451||854|
|Income tax expense||(346)||(286)|
|Earnings after taxes from continuing operations||1,105||568|
|Earnings after taxes from discontinued operations||3||4|
|Group Profit or Loss||1,108||572|
|attributable to: Earnings attributable to Bertelsmann shareholders||677||162|
|attributable to: Earnings attributable to non-controlling interests||431||410|
Special items normalized in the financial year 2015. The previous year’s figure included one-time high burdens from an impairment on RTL Group’s TV operations in Hungary as well as restructuring expenses, impairments and losses on disposal as part of the scaling back of the print businesses and of the club and direct marketing businesses. In the reporting period, Penguin Random House posted lower integration costs year on year. The value of some of the participations in the education business was increased based on transactions, thus compensating for the burdens compared to the previous year.
Special items in the financial year 2015 totaled €-191 million (previous year: €-619 million). They consist of impairments and reversals on impairments totaling €-40 million (previous year: €-101 million), fair value remeasurement of investments of €82 million (previous year: €24 million), proceeds from sales of participations totaling €24 million (previous year: €-155 million) and restructuring expenses and other special items totaling €-257 million (previous year: €-340 million). In the reporting period, there were no adjustments to carrying amounts on assets held for sale, compared to €-47 million in the previous year.
Adjusting operating EBITDA for special items totaling €-191 million (previous year: €-619 million) and the amortization, depreciation, impairments and reversals of impairments on intangible assets and property, plant and equipment totaling €-613 million (previous year: €-606 million), which were not included in special items, EBIT amounted to €1,681 million in the financial year 2015 (previous year: €1,149 million). The increase compared to the previous year’s figure is primarily attributable to the lower overall charges related to special items.
Group Profit or Loss
The financial result increased by €65 million to €-230 million year on year. The increase in interest expenses due to the issue of bonds in the reporting period was more than compensated for by the positive deviation in other financial expenses. The previous year’s figure included burdens from the full takeover of Gruner + Jahr. The income tax expense amounted to €-346 million (previous year: €-286 million). The year-on-year deviation is partly attributable to the use of tax loss carryforwards realized in the previous year. This produced after-tax earnings from continuing operations of €1,105 million (previous year: €568 million). Taking into account the after-tax earnings from discontinued operations of €3 million (previous year: €4 million), this resulted in a Group profit of €1,108 million (previous year: €572 million). The increase compared to the previous year’s figure is attributable to the positive operating EBITDA development and lower overall charges related to special items. The share of Group profit held by noncontrolling interests came to €431 million (previous year: €410 million). The share of Group profit held by Bertelsmann shareholders was €677 million (previous year: €162 million). At the Annual General Meeting of Bertelsmann SE & Co. KGaA, an unchanged year-on-year dividend payout of €180 million will be proposed for the financial year 2015 (previous year: €180 million).