Business News
Bertelsmann improves 3rd-quarter result and group net income year on year
Wednesday 02. December 2009 - The "2+5" program initiated by the Bertelsmann AG Executive Board, which centers on reducing costs and boosting efficiency, is increasingly showing an impact; the Groups strict cost discipline is producing positive fiscal developments. In Q3/2009, the operating result grew by 14 percent year on year to 284 million (previous year: 249 million). This improved result was achieved with revenues that declined by 4.5 percent to 3.6 billion (previous year: 3.8 billion). Return on Sales amounted to 7.9 percent (previous year: 6.6 percent). Group net income for the period from July to September 2009 was 87 million (previous year: 15 million).
Hartmut Ostrowski, Chairman & CEO of Bertelsmann AG, observed: “Our third-quarter business performance was gratifying, particularly in the context of the economic crisis, to which Bertelsmann is responding resolutely. We are making good progress with the implementation of our 2+5 program, as the increase in our result shows. Were on the right path.”
The Bertelsmann Executive Board adopted the “2+5” program in spring 2009. It is based on two guidelines: a decentralized approach and delegation of responsibility, as well as continuity and value creation. The implementation of the five work packages in the program is advancing successfully, with the aim of stabilizing existing businesses, preserving liquidity and safeguarding the result. Their success is, shown among other things, in the now-tangible savings achieved under the cost and efficiency program, which has thus far exceeded 900 million for 2009. Another element in the program is the continuation of Bertelsmanns solid, long-view financing policy.
Thomas Rabe, Chief Financial Officer of Bertelsmann, said: “Bertelsmann is in a comfortable liquidity position and has a balanced maturity profile. In the first nine months of the year, we achieved good operating cash flow. Our indicator of this, the Cash Conversion Rate, was at around 100 percent. In other words, we actually have every euro generated from our operations on our accounts. We expect to continue achieving good operating cash flow from operations during the fourth quarter.”
In the nine months of the year to date, Group revenues from continued operations came to 10.8 billion (previous year: 11.5 billion). This reflects a 6.6 percent organic decline in revenues. Operating EBIT amounted to 759 million (previous year: 934 million). Return on Sales for the first three quarters was 7.0 percent, after 8.1 percent in 2008. As a result of special items, especially during the second quarter, the Group incurred a net loss of -246 million (previous year: 387 million).
Key indicators for the 3rd Quarter (in millions, continuing operations)
Jul 1, 2009 –
Sep 30, 2009
Jul 1, 2008 –
Sep 30, 2008
Consolidated revenues
3,615
3,785
Operating EBIT
284
249
Return on Sales (ROS)
7.9 %
6.6 %
Group profit or loss
87
15
Overview of figures for the nine month of the year to date (in millions, continuing operations)
Jan 1, 2009 –
Sep 30, 2009
Jan 1, 2008 –
Sep 30, 2008
Consolidated revenues
10,813
11,505
Operating EBIT of divisions
Corporate/Consolidation
Operating EBIT
826
(67)
759
1,017
(83)
934
Special items
(539)
(103)
EBIT (earnings before interest and taxes)
220
831
Financial result
(293)
(327)
Earnings before taxes from continuing operations
(73)
504
Income taxes
(173)
(32)
Earnings after taxes from continuing operations
(246)
472
Earnings after taxes from discontinued operations
–
(85)
Group profit or loss
(246)
387
attributable to: Share of profit of Bertelsmann shareholders
(305)
285
attributable to: Minority interest
59
102
Investments
527
698
Balance as of
Sep 30, 2009
Balance as of
Dec 31, 2008
Net financial debt
3,617
3,445
Economic debt*
6,990
6,627
Employees
102,618
107,154
The comparable figures of the prior period were adjusted.
*Net financial debt plus provisions for pensions, profit-participation capital and present value of operating leases (continuing operations)