Overall Economic Developments

The global economy recorded limited growth in the first half of 2016. The recovery in the advanced economies was moderate, and the growth momentum in many emerging countries declined significantly.

The overall moderate economic recovery in the eurozone continued during the reporting period. According to Eurostat, the statistical office of the European Union, real gross domestic product (GDP) in the eurozone rose by 0.6 percent in the first quarter of 2016 compared to the previous quarter and by 0.3 percent in the second quarter.

The continued recovery in Germany was primarily driven by strong domestic economic activity. According to the Federal Statistical Office, real GDP rose by 0.7 percent in the first quarter of 2016 compared to the previous quarter and by 0.4 percent in the second quarter.

Following a solid beginning to the year, the French economy stagnated over the remainder of the reporting period. According to Insee, the French National Institute for Statistics and Economic Studies, real GDP rose by 0.7 percent in the first quarter of 2016 but stagnated in the second quarter.

Since the UK’s referendum result in favor of leaving the EU only occurred halfway through the year, it did not have any concrete quantifiable effects on real GDP. Real GDP rose by 0.4 percent in the first quarter of 2016 and by 0.6 percent in the second quarter.

In the first few months of the current financial year, growth in the United States was weaker than originally expected. Real GDP rose in the first quarter of 2016 at a projected annual rate of 0.8 percent. In the second quarter, real GDP increased by a projected annual rate of 1.2 percent according to initial calculations by the Bureau of Economic Analysis.

So far, the overall economic developments are slightly below the current-year trend anticipated in the 2015 Combined Management Report.

Developments in Relevant Markets

The European TV advertising markets experienced primarily positive growth in the first six months of 2016. The TV advertising markets in Germany, France, the Netherlands, Belgium and Croatia showed slight to moderate growth, while the TV advertising market in Spain once again reported strong growth. The Hungarian TV advertising market, in contrast, declined.

The physical book markets experienced mostly positive growth in the first six months of 2016. The physical book markets in the United States and the UK recorded significant to strong growth, whereas these markets in Spain and Germany reported little change.

The magazine markets in Germany and France were characterized by moderate to strongly falling print advertising business and declining circulation business during the reporting period, whereas the digital markets recorded strong growth.

The global music publishing and recorded music markets experienced moderate growth.

The service markets relevant to Arvato showed moderate to significant growth in the first half of 2016.

The relevant European print markets in Germany, France and the UK declined in the first six months of 2016, while the offset market showed much more stable development than the gravure printing market. The North American book printing market saw a moderate decline over the same period.

As expected, the education markets in the United States grew strongly in the first half of 2016 in the market segments where Bertelsmann is involved – namely, e-learning in the healthcare and technology sectors, online services and university education.

So far, the developments in the relevant markets are mainly within the current-year trend anticipated in the 2015 Combined Management Report.