Earnings: Bertelsmann ‘08 Profit Down By Third After Five Writedown
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After slashing the value of its RTL-owned broadcaster Five, German media group Bertelsmann’s saw its annual net profit slump by one third to €270 million (£250.2 million) in 2008.
SEE ALSO: Sony Has It All Now: Acquisition Of Bertelsmann’s 50 Percent Stake In Sony BMG Done, BMG Dropped
After writing off €337 million (£312 million) off Five’s value earlier this month, Bertelsmann also made similar “value adjustments” at RTL’s radio business, online and physical bookseller Direct Group and outsourcing business Arvato, while restructuring took place across the company - so recorded a one-off, non-cash charge of €520 million. Revenues came in at €16.1 billion £14.9 million), down from €16.2 billion in 2007, and the best the company’s release can say about the figures is that they’re “solid”.
It’s been a tumultuous few months at Five, where 87 staff are being made redundant, a quarter of its 354-strong workforce. Bertelsmann says restructuring was carried out due the direction of ad revenue and “as a precaution for 2009”. Chairman and CEO Hartmut Ostrowski says “the global economic crisis with its implications for consumer behavior and ad bookings will be a severe test for some areas of Bertelsmann.”
—RTL: Revenues at RTL grew 1.2 percent over the year to €5.8 billion (£5.3 billion), thanks to improved sales in Germany at FremantleMedia, though operating profit was down 5.2 per cent at €927 million (£859.1 million). The group increased its VOD and catch-up services, including the re-launch of Demand Five, and it says the digital channels it launched across Europe were doing well, without providing figures.
—Sell-offs and M&A: While previous years have seen Bertelsmann enthusiastically investing in music and TV, 2008 saw it selling off unprofitable investments such as its 50 percent stake in the Sony (NYSE: SNE) BMG JV and parts of its Direct Group business. At the same time, the company launched BMG Rights Management, rights trading body UFA Sports and a range of “new digital media and services”. BMG became full owners of the Wer-kennt-wen.de social network (literally: “who knows whom”). Bertelsman got a share of the €50 million paid out to shareholders after the liquidation of Lycos Europe, thanks to its stake of around 20 percent.
—Gruner + Jahr: The magazine publisher had a hard time with a 2.2 percent drop in revenues to €2.8 billion (£2.59 billion) and pre-tax profits 14.8 percent lower at €225 million (£208.5 million). Gruner is growing its online protfolio: it claims that its G+J Electronic Media Sales division saw a “double digital percentage gain in internet advertising revenues”. G+J launched the multinational Parenting Network of sites.
@psmith
Mar 24, 2009 9:48 AM ET
Posted In: Media & Publishing, TV, Companies, Five, Countries, Europe, Germany, bertelsmann
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