Risk Management System

The purpose of the Bertelsmann risk management system (RMS) is the early identification and evaluation of, as well as response to, internal and external risks. The internal control system (ICS), an integral component of the RMS, monitors the effectiveness of the risk response measures that have been implemented. The aim of the RMS is to identify, at an early stage, material risks to the Group so that risk response measures can be taken and controls implemented. Risks are possible future developments or events that could result in a negative deviation from outlook or objective for Bertelsmann. In addition, risks can negatively affect the achievement of the Group’s strategic, operational, reporting and compliancerelated objectives.

The risk management process is based on the internationally accepted frameworks of the Committee of Sponsoring Organizations of the Treadway Commission (COSO Enterprise Risk Management – Integrated Framework and Internal Control – Integrated Framework, respectively) and is organized in subprocesses of identification, assessment, response, control, communication and monitoring. A major element of risk identification is a risk inventory that lists significant risks year by year, from the profit center level upward. It is then aggregated step by step at the division and Group levels. This ensures that risks are registered where their impact would be felt. There is also a Group-wide reassessment of critical risks every six months and quarterly reporting in case the risk situation has changed. Ad hoc reporting requirements ensure that significant changes in the risk situation during the course of the year are brought to the attention of the Executive Board. The risks are compared against risk response and control measures to determine the so-called net risk. Both oneyear and three-year risk assessment horizons are applied to enable the timely implementation of risk response measures. The basis for determining the main Group risks is the three-year period, similar to medium-term corporate planning. Risk assessment is the product of the estimated negative impact on Group free cash flow should the risk occur and the estimated probability of occurrence. Risk monitoring is conducted by Group management on an ongoing basis. The RMS, along with its component ICS, is constantly undergoing further development and is integrated into ongoing reporting to the Bertelsmann Executive Board and Supervisory Board. Corporate and Divisional Risk Management Committee meetings are convened at regular intervals to ensure compliance with statutory and internal requirements.

The auditors inspect the risk early-warning system for its capacity to identify developments early on that could threaten the existence of Bertelsmann SE & Co. KGaA according to section 91 (2) of Germany’s Stock Corporation Act (AktG), then report their findings to the Supervisory Board. Corporate Audit conducts ongoing reviews of the adequacy and functional capability of the RMS in the Penguin Random House, Gruner + Jahr, Arvato and Be Printers as well as the Corporate Investments and Corporate Center segments. RTL Group’s risk management system is evaluated by the respective internal auditing department and by the external auditor. Any issues that are identified are promptly remedied through appropriate measures. The Bertelsmann Executive Board defined the scope and focus of the RMS based on the specific circumstances of the company. However, even an appropriately designed and functional RMS cannot guarantee with absolute certainty that risks will be identified and controlled.

Accounting-Related Risk Management System and Internal Control System

The objectives of the accounting-related RMS and ICS are to ensure that external and internal accounting is proper and reliable in accordance with applicable laws and that information is made available without delay. Reporting should also present a true and fair view of Bertelsmann’s net assets, financial position and results of operation. The following statements pertain to the Group financial statements (including the “Notes to the Group Financial Statements” and “Combined Management Report” sections), interim reporting and internal management reporting.

The ICS for the accounting process consists of the following areas. The Group’s internal rules for accounting and the preparation of financial statements (e.g., IFRS manual, guidelines and circulars) are made available without delay to all employees involved in the accounting process. The Group financial statements are prepared in a reporting system that is uniform throughout the Group. Extensive automatic system controls ensure the consistency of the data in the financial statements. The system is subject to ongoing development through a documented change process. Systematized processes for coordinating intercompany transactions serve to prepare the corresponding consolidation steps. Circumstances that could lead to significant misinformation in the Group financial statements are monitored centrally by employees of Bertelsmann SE & Co. KGaA and by RTL Group (for the preconsolidated subgroup), then verified by external experts as required. Central contact persons from Bertelsmann SE & Co. KGaA and the divisions are also in continuous contact with local subsidiaries to ensure IFRS-compliant accounting as well as compliance with reporting deadlines and obligations. These preventive measures are supplemented by specific controls in the form of analyses by the Corporate Financial Reporting department of Bertelsmann SE & Co. KGaA and RTL Group (for the preconsolidated subgroup). The purpose of such analyses is to identify any remaining inconsistencies. The controlling departments on Group and division level are also integrated into the internal management reporting. Internal and external reporting are reconciled during the quarterly segment reconciliation process. The further aim in introducing a globally binding control framework for the decentralized accounting processes is to achieve a standardized ICS format at the level of the local accounting departments of all fully consolidated Group companies. The findings of the external auditors, Corporate Audit and the internal auditing department of RTL Group are promptly discussed with the affected companies and solutions are developed. An annual self-assessment is conducted to establish reporting on the quality of the ICS in the key Group companies. The findings are discussed in Audit and Finance Committee meetings at the divisional level. Like the RMS, each ICS cannot guarantee with absolute certainty that significant misinformation in the accounting process can be prevented or identified.

Corporate Audit and the internal auditing department of RTL Group evaluate the accounting-related processes as part of their auditing work. As part of the auditing process, the Group auditor also reports to the Audit and Finance Committee of the Bertelsmann SE & Co. KGaA Supervisory Board about any significant vulnerabilities of the accounting-related ICS that were identified during the audit and the findings regarding the risk early-warning system.

Major Risks to the Group

Bertelsmann is exposed to a variety of risks. The major risks to Bertelsmann identified in the risk reporting are listed in order of priority in the table below. In line with the level of possible financial loss, the risks are classified as low, moderate, significant, considerable or endangering, for the purposes of risk tolerability. The risk inventory carried out did not identify any risks that would be classified as considerable or endangering.

Given the diversity of the businesses in which Bertelsmann is active and the corresponding diversity of risks to which the various divisions are exposed, the key strategic and operational risks to the Group identified below are broken down by business segment. Risks from acquisitions and information security risks were identified as the primary risks and are therefore described separately. This is followed by an outline of legal and regulatory risks and financial market risks. These risks are largely managed at the corporate level.

Overview of Major Risks to the Group  

Risk Classification
PriorityType of riskLowModer­ateSig­nifi­cantCon­sider­ableEn­danger­ing
1Pricing and discounting    
2Customer risks    
3Supplier risks    
4Audience and market share    
5Changes in market environment    
6Cyclical development of economy    
7Financial market risks    
8Employee-related risks    
9Legal and regulatory risks    
10Technological challenges    

Strategic and Operational Risks

In 2015, the global economy continued to expand in a modest and uneven way. In 2016, the global economy is expected to remain on a moderate and uneven growth path. In view of the recent deterioration in the global economic outlook and the ongoing uncertainty in the markets, Bertelsmann’s business development is still subject to risks. Assuming a continuing normalization of the overall economic situation, Bertelsmann expects positive development of Group revenues for 2016. In the short to medium term, in addition to the risk associated with economic development, other significant Group risks include pricing and discounting risks, customer risks, supplier relationship risks, and loss of audience and market share as well as risks from changes in the market environment. How these risks develop depends, among other things, to a large extent on changes in customer behavior due to factors such as the continued digitization of media, the development and implementation of products and services by new or existing competitors, and bad debt losses, as well as default and interference along the production chains in individual sectors, such as IT. Financial market risks, employee-related risks and legal and regulatory risks are moderate risks for Bertelsmann, while risks from future technological changes in the three-year period under review are classified as low.

The following presentation of the risks relates to the segment structure and portfolio composition at the end of the financial year 2015. In the future, as a result of the revised reporting structure effective January 1, 2016, including the newly created Bertelsmann Printing Group and the future independent divisions of BMG, Bertelsmann Education Group and Bertelsmann Investments, possible risks will be allocated differently in organizational terms but without changing the overall risk profile from a Group perspective.

The ongoing digitization is resulting in an increasing fragmentation of RTL Group’s markets as audiences will have more choice (for example through online platforms) and, at the same time, the market-entry barriers are being lowered. The possible risks of this for RTL Group are decreasing audience and advertising market shares of its advertising-financed channels and therefore, ultimately, lower revenues. In order to counter these risks, RTL Group is continuously revising and developing the channels and program strategies – for example, by establishing complementary families of channels and constantly adapting these to international program trends. RTL Group is addressing the risks associated with digitization and is actively helping to shape this trend through a range of investments in the fast-growing online video advertising market. Increasing competition in the area of program acquisition and TV production as well as the growing dependence on individual production companies, coupled with the risk of potential cost increases, could also impact RTL Group’s ability to generate revenues. This risk is being reduced by expanding the program share of own productions and signing long-term contracts with major content providers. Furthermore, economic development directly impacts the TV advertising markets and therefore RTL Group’s revenue. This risk is being countered by focusing on developing non-advertising revenue streams, e.g., distribution revenues from platform operators. To reduce the risk of customer losses, active customer relationship management is established.

Falling e-book sales constitute one risk for Penguin Random House, triggered in particular by changes to the sales conditions for e-books. A further risk is the trend toward consolidation in bricks-and-mortar book retail which is being seen in the reduction of retail space for books or even branch closures. Penguin Random House is countering these risks by introducing differentiated pricing, employing additional advertising measures and continuously examining alternative marketing options. Any risk of bad debt loss is being limited through debtor management and in some cases through credit insurance. In addition, Penguin Random House is finding itself exposed to the risk of cost increases. There are also risks from the general economic uncertainty which could lead to lower sales. Management controls these risks through careful management of supplier relationships and by maintaining a flexible cost structure that allows for a quick response in the event of an economic downturn. Risks from the integration of Penguin and Random House have fallen significantly as the integration has essentially been completed.

For Gruner + Jahr, besides the risk of a deterioration of the overall market environment and the resulting declines in advertising and circulation revenues, supplier risks represent significant challenges. A changing market environment, in which price pressure and declining revenues as a result of further concentration in the agency market and more aggressive advertising conditions on the part of competitors cannot be ruled out, may lead to falling margins. Furthermore, there is the risk of losing key customers as advertising customers could switch to other media, notably digital media. The risks are being countered by active cost and customer management, the development of new, including digital, forms of offerings as well as product, price and quality improvements. Through association work, the Group is responding to the advertising restrictions discussed at EU level (e.g., car advertising) which could lead to declining advertising revenues.

Arvato sees itself as particularly exposed to risks from customer and supplier relationships as well as risks from a changing market environment. The potential loss of key customers is being countered through contracts offering comprehensive service packages with simultaneously flexible cost structures.
On the supplier side, key risks include the quality of goods and services purchased as well as the procurement costs if the increase cannot be passed on to the customers. As a result of a simultaneous increase in dependency on a few suppliers, margin pressure is increasing in a number of segments. Countermeasures include entering into long-term contracts, an active exchange with existing suppliers and monitoring the supplier market. Competition is intensifying because competitors are following Arvato’s strategy and expanding their value chains. At the same time, new competitors entering the market could intensify the competitive pressure and lead to lower margins. By developing the range of services, the aim is to improve the competitive position and to increase customer loyalty through integrated solutions. A worsening of the economic environment could result in declining revenues and thus lower margins, which would necessitate cost-cutting measures and capacity downsizing. Broad diversification across customers, sectors and regions helps to reduce this risk. Digitization entails further risks for individual customer segments of Arvato, particularly in physical product distribution. These risks are being addressed, for example, by developing digital services. Furthermore, business segments that offer no strategic or economic prospects are being deliberately scaled back.

For Be Printers, customer risks, in particular greater dependence on a few major customers, are the most significant risks. The aim is to minimize the risks by taking out credit insurance, utilizing active debtor management and entering into more flexible customer contracts. Furthermore, deterioration in the economic environment also may lead to declining circulations with a negative impact on earnings. There are further risks on the supplier side associated with rising raw material prices – particularly for paper – that cannot be passed on to customers and with the quality of the raw materials purchased. In addition, price and margin pressures result from a market environment which is characterized by overcapacity as well as existing trends toward consolidation. Similarly, the increasing use of digital media is accelerating the decline in circulations. These risk minimization strategies are based, in particular, on constantly optimizing cost structures and making them more flexible, as well as using price adjustment clauses and ongoing market monitoring.

Corporate Investments mainly comprises the strategic growth segments of BMG and the Bertelsmann Education Group as well as the fund activities. Risks that affect BMG primarily concern the business structure (including currency risks and customer relations), corporate growth (including acquisitions and integrations) and the profitable scalability of the company (including technical platform and organization). Market risks are addressed through high revenue diversification (clients/ catalogs, segments, regions) as well as currency hedging (hedging of royalty liabilities in foreign currencies) and contractual protection clauses (hedging the recouping of advances). Operational risks are countered through process and resource bundling, control mechanisms and continuous optimization of the IT platform. The Bertelsmann Education Group is exposed to risks as a result of the competition with other online providers, particularly in the US healthcare segment, which is being addressed through strategic, and in some cases exclusive, partnerships. The key risks for the fund activities consist of falling market value indicators or a lack of exit opportunities. These risks are being addressed through suitable investment processes and continuous monitoring. From a Group perspective, the identified risks for Corporate Investments are of minor importance for the three-year period under review.

The increasing pace of change in the markets and in Bertelsmann’s business segments means that employees will need to be more willing and able to adapt in the future. There are also continuing demographic risks which impact the recruitment, development and retention of talent as a result of shifts in the age distribution of the workforce. To counteract this, employees are being offered further individual education, comprehensive health programs, a competitive salary and flexible working models. Bertelsmann is also extending its recruitment measures and making it easier for employees to switch jobs within the Group by harmonizing processes and structures.

Acquisition-Related Risks

The Group strategy focuses on acquisitions of businesses as well as organic growth. The risk of potential mistakes when selecting investments and the allocation of investment funds is limited by means of strict investment criteria and processes. Acquisitions present opportunities as well as risks. For example, integration into the Group requires one-time costs that are usually offset by increased benefits in the long term thanks to synergy effects. The risks here are that the integration costs may be higher than expected or the predicted level of synergies may not materialize. The integration processes are therefore being monitored by management on an ongoing basis.

Information Security Risks

For a global media company like Bertelsmann, the reliability and security of information technology is crucial and can often give the company a competitive edge. The ability to provide and process information in a timely, comprehensive, error-free and confidential way is crucial to Bertelsmann’s success. Challenges arise, on the one hand, from the many non-standardized internal processes as well as from external potential risks such as cyber attacks, which are still increasing dramatically in the market and competitive environment. The use of cloud-based IT solutions and the significant growth of mobile solutions present further challenges. Bertelsmann has responded to the stricter regulatory conditions with the information security management system (ISMS, based on industry standard ISO 27001) which was introduced across the Group in 2014. The ISMS includes regular and structured monitoring of compliance with the regulations as well as systematic recording of information security risks and deriving appropriate mitigation measures.

Legal and Regulatory Risks

Bertelsmann, with its worldwide operations, is exposed to a variety of legal and regulatory risks ranging from litigation to varying interpretations of tax-assessment criteria. Bertelsmann has television and radio operations in several European countries that are subject to regulation. In Germany, for example, media are subject to oversight by the Commission on Concentration in the Media. Bertelsmann Group companies occupy leading market positions in many lines of business and may therefore have limited potential for growth through acquisition due to antitrust legislation. Moreover, the education activities are subject to regulatory provisions of government authorities and accreditation bodies. These risks are being continuously monitored by the relevant divisions within the Group.

In November 2008, RTL II filed legal actions against IP Deutschland, a wholly owned subsidiary of RTL Group, and Seven One Media (“SOM”) as a result of the 2007 proceedings of the German Federal Cartel Office against the discount scheme agreements (“share deals”) offered by IP Deutschland and SOM. RTL II’s claim is currently limited to access to information, on the basis of which the claimants want to prove that they suffered damages from these discount schemes. The court of first instance in Düsseldorf decided to order an expert report. Similar proceedings of other smaller broadcasters initiated in different courts were unsuccessful or have been withdrawn.

Foreign investments in the People’s Republic of China are highly regulated. In view of this, in order to secure Bertelsmann’s rights it is standard market practice to invest through so-called VIE structures by means of trust vehicles. However, there is the risk that it will not be possible to safeguard such vehicles through Chinese courts if the People’s Republic changes its policies toward foreign investments or if courts and authorities change their case law or administrative practice. Currently, a draft of a revised “PRC Foreign Investment Law” is being discussed politically. To what extent Chinese investment policy will change as a result of this will not be apparent until the end of 2016 at the earliest. The current draft stipulates a wide-reaching ban on trust structures in regulated markets. However, there is also no provision whatsoever for dealing with existing trust structures. In an extreme case it is conceivable that the total investment could be lost. In the past, however, such measures have only been reported in exceptional cases. By contrast, observers are anticipating solutions that will only have a minor impact on the Chinese economy. These developments would affect BMG, Arvato, Gruner + Jahr and Bertelsmann Asia Investments (BAI).

Aside from the matters outlined above, no further significant legal and regulatory risks to Bertelsmann are apparent at this time.

Financial Market Risks

As an international corporation, Bertelsmann is exposed to various forms of financial market risk, especially interest rate and currency risks. These risks are largely controlled by the Central Financial Department on the basis of guidelines established by the Executive Board. Derivative financial instruments are used solely for hedging purposes. Bertelsmann uses currency derivatives mainly to hedge recorded and future transactions involving foreign currency risk. Some firm commitments denominated in foreign currency are partially hedged when they are made, with the hedged amount increasing over time. A number of subsidiaries are based outside the eurozone. The resulting translation risk is managed based on economic debt in relation to operating EBITDA (leverage factor). Bertelsmann’s long-term focus is on the maximum leverage factor permitted for the Group. Foreign currency translation risks arising from net investments in foreign entities are not hedged. The cash flow risk from interest rate changes is centrally monitored and controlled as part of interest rate management. The aim is to achieve a balanced ratio of different fixed interest rates through the selection of appropriate maturity periods for the originated financial assets and liabilities affecting liquidity and through the ongoing use of interest rate derivatives. Liquidity risk is monitored on an ongoing basis with reference to the budget for current and future years. The syndicated loan and appropriate liquidity provisions form a sufficient risk buffer for unplanned payments. Counterparty risks exist in the Group in an amount equivalent to the invested cash and cash equivalents and in the default of a counterparty in derivatives transactions. Financial transactions and financial instruments are restricted to a rigidly defined group of banks with a high credit rating (Investment Grade). Within the guidelines a risk limit specified by the Bertelsmann Executive Board has been issued for financial assets and derivatives for each counterparty. Compliance with this limit is regularly monitored by the Central Financial Department. The guidelines concerning the investment of cash and cash equivalents are continuously monitored and if necessary extended. The financial investments are generally made on a short-term basis so that the investment volume can be reduced if the credit rating changes. The financial market risks are estimated as moderate.

Overall Risk

The overall risk position is slightly below the previous year’s level. Overall, the top ten Group risks have not changed significantly compared to the previous year. While the integration risk at Penguin Random House no longer constitutes a key Group risk thanks to the largely completed integration, continuing technological changes and digitization are creating challenges for all divisions. In particular, pricing and discounting risks, customer and supplier relationship risks and a changing market environment still constitute the key Group challenges. However, as a result of the diversification of Group businesses, there are no concentration risks stemming from dependency on individual business partners or products in either procurement or sales. The Group’s financial position is solid, with liquidity needs covered by existing liquidity and available credit facilities.

No risks endangering Bertelsmann’s continued existence were identified in the financial year 2015, nor are any substantial risks discernible from the current perspective that could threaten the continued existence of the Group in the future.

Opportunity Management System

An efficient opportunity management system enables Bertelsmann to secure its corporate success in the long term and to exploit potential in an optimum way. Opportunities are possible future developments or events that could result in a positive deviation from outlook or objective for Bertelsmann. The opportunity management system, like the RMS, is an integral component of the business processes and company decisions. During the strategy and planning process, significant opportunities are determined each year from the profit center level upward, and then aggregated step by step at the division and Group levels. By systematically recording them on several reporting levels, opportunities that arise can be identified and exploited at an early stage. This also creates an interdivisional overview of Bertelsmann’s current opportunities. A review of major changes in opportunities is conducted at the divisional level every six months. In addition, the largely decentralized opportunity management system is coordinated by central departments in the Group in order to derive synergies through targeted cooperation in the individual divisions. The interdivisional experience transfer is reinforced by regular meetings of the Group Management Committee.


While the above-mentioned opportunities associated with positive development may be accompanied by corresponding risks, certain risks are entered into in order to be able to exploit potential opportunities. This link to the key Group risks offers strategic, operational, legal, regulatory and financial opportunities for Bertelsmann.

Strategic opportunities can be derived primarily from the Group’s four strategic priorities. Strengthening core businesses, driving forward the digital transformation, developing growth platforms and expanding in growth regions constitute the most important long-term growth opportunities for Bertelsmann (see the “Strategy” section). In particular, there are general opportunities for exploiting synergies as a result of the portfolio expansions. There is potential for efficiency improvements in the individual divisions and individual operational opportunities in addition to the possibility of more favorable economic development.

For RTL Group, a better-than-expected development of the TV advertising markets and higher audience and advertising market shares are major opportunities. Furthermore, the increasing digitization and fragmentation of the media landscape is opening up opportunities. Professionally produced content can be distributed across multiple platforms nationally and internationally. New revenue streams could be generated by exploiting existing TV content across different platforms and by creating native digital content. Also, with an increased presence in the digital sector, RTL Group could increase online video advertising sales on all devices and TV platforms and establish pay models in the on-demand business. In this way, new advertising sales could be generated through the offering of new interactive or targeted forms of advertising (HbbTV, IPTV or mobile television). As an established content producer with a global presence, RTL Group could further expand its digital distribution through multichannel networks and digital streaming platforms.

The combination of Penguin and Random House has enhanced the publishing opportunities for Penguin Random House. With market share gains, the publishing group could further increase its leading market position, attract new authors and publish even more bestselling debut publications. As the world’s largest trade book publisher, Penguin Random House also has the opportunity to invest more heavily than its competitors. Especially in emerging and multilingual markets, the publishing group could take advantage of the fast-growing demand and offer its products to the widest possible readership. Further acquisitions could also offer significant opportunities for growth. In this context, Penguin Random House could also generate greater synergies through the integration of the acquired businesses. The increasing digitization of the book markets offers opportunities for new product development and more efficient marketing channels. The development of new products and enhancements to existing offerings could make books more appealing to a wider audience and offer new experiences to readers. Moreover, building networks and tools could help authors to connect better with their readers.

For Gruner + Jahr, a better development of the advertising and sales markets represents significant opportunities. The transformation from magazine publisher to a house of content is providing further opportunities. The structure of G+J Germany introduced in 2014 integrates the printing and digital businesses, thus allowing it to implement product innovations faster and more efficiently. Besides the expansion and development of existing media brands, there are opportunities for growth, particularly in the development and expansion of digital activities and in cooperation with other publishers. There are also opportunities for developing additional services, such as commerce and paid services. In terms of marketing, G+J could gain new customers through new forms of advertising in the online, mobile and video media channels. Developing new special advertising formats and implementing integrated campaigns could also help to attract potential new customers.

The restructuring of Arvato implemented in July 2015 enables better exploitation of growth potential. Under the new management structure, the Arvato business units will in the future be able to act independently and flexibly and be able to respond more quickly to market conditions. The global responsibility of the individual Solution Groups can provide additional opportunities for acquiring new customers, particularly key international customers. There are potential business opportunities, primarily in the Financial Solutions and E‑Commerce business segments. The global e‑commerce market will continue its dynamic growth over the next few years as a result of ongoing digitization. Arvato could benefit significantly from this growth, primarily through the services offered by the Solutions Groups SCM and Financial Solutions. A further growth opportunity from the digital transformation lies in providing support to customers with CRM solutions via multiple digital channels.

The Be Printers print businesses may decline less steeply through additional volumes of existing and new customers. This would provide opportunities from the targeted servicing of market segments that are still growing. Moreover, the prospect of further consolidation of the printing market could effectively strengthen Be Printers’ market position.

Corporate Investments comprises the growth platforms BMG and the Bertelsmann Education Group as well as various fund activities and the club and direct marketing businesses. Further takeovers of music catalogs and additional signings of contracts with artists, which could be managed on the existing platform at marginal cost, offer growth opportunities for BMG. The rapid market acceptance of streaming and subscription offers also provides the opportunity to implement more legal digital offers in an international framework (including emerging markets). The education business is to be developed into Bertelsmann’s third earnings pillar alongside media and service businesses. Entry into rapidly growing markets and online education offerings focusing on the healthcare and technology segments offers further growth opportunities. The education business could benefit from a faster shift away from traditional classroom-based tuition toward online and skill-based training as well as an increasing demand for training in the healthcare and technology segments. Relias Learning offers additional organic growth potential through the expansion of the business to the related healthcare segments and through international expansion. The participation in Udacity benefits from the short lifespan of knowledge and content in the technology sector which will ensure a high repetitive training requirement. This and the shortage of qualified IT staff give Udacity the opportunity to build up a premium brand in the IT/technology training sector. The range of services offered by HotChalk is targeted at the growing number of universities which require support in the implementation of online programs as a result of the growing acceptance of online training offerings. For fund activities, there is the opportunity to realize higher-than-expected profits thanks to increasing market value indicators. In the club and direct marketing businesses, lower restructuring and closure costs could boost business performance.

The current innovation efforts detailed in the “Innovations” section offer further potential opportunities for the individual divisions.

Other opportunities could arise from changes to the legal and regulatory environment.

The financial opportunities are largely based on a favorable development of interest and exchange rates from Bertelsmann’s point of view.