Business News

Bertelsmann Significantly Improves First Quarter Operating Results

Monday 19. May 2008 - First-quarter Operating EBIT improves by 9.6 percent year-over-year Adjusted revenues down by 1.7 percent Full-year forecast confirmed

Bertelsmann, the international media company, today reported strong first quarter fiscal 2008 results. First-quarter operating profits (Operating EBIT) were up by 9.6 percent compared with the previous year. Operating EBIT for the period under review amounted to €217 million (Q1/2007: €198 million). These developments were driven by the continuing positive performance of the major core businesses. Group net income improved to €35 million (Q1/2007: €-70 million).

Meanwhile, revenues declined by 3.9 percent year-over-year to €4.2 billion. Adjusted for portfolio changes and foreign-exchange effects, revenue decreased 1.7 percent year-over-year. The revenue performance reflected negative foreign-exchange effects due to the Euro’s strength relative to the U.S. dollar and British pound. Revenues were also impacted by declines in sales of physical recordings and revenues at Direct Group in North America.

Adjusted for portfolio changes and foreign-exchange effects, Bertelsmann expects a moderate rise in revenues for 2008. The Company expects operating results for 2008 will be on par or slightly above the high levels seen in 2007. Group net income will be well above 2007 due to fewer special items and lower interest expenditure.

Bertelsmann’s Chief Financial Officer Thomas Rabe said: “We have started the year well in an environment fraught with economic uncertainty. Bertelsmann confirms its full-year forecast for 2008.”

Economic debt was €7.35 billion at March 31, 2008 (December 31, 2007: €7.72 billion), putting the Group below its self-imposed ceiling of 3.0 for the Leverage Factor (ratio of economic debt to operating EBITDA).

The number of employees in the Group grew to 103,140 (December 31, 2007: 102,397).

Figures at a Glance (in million €)

Jan 1, 2008 to

Mar 31, 2008

Jan 1, 2007 to
Mar 31, 2007

Consolidated Revenues

4,208

4,377

Operating EBIT in the divisions

Corporate/Consolidation

Operating EBIT

243


(26)

217

215


(17)

198

Special items

(3)

(114)

EBIT (Earnings before interest and taxes)

214

84

Financial result

(97)

(90)

Income taxes

(82)

(64)

Net income

35

(70)

attributable to: Share of profit of Bertelsmann shareholders

(3)

(117)

attributable to: Minority interest

38

47


Investments

205

248


At Mar 31, 2008

At Dec 31, 2007

Economic debt 1)

7,351

7,720

No. of employees

103,140

102,397


Definition of Operating EBIT: Operating EBIT refers to the earnings before interest, taxes and special items.

1) Net financial debt plus provisions for pensions, profit participation capital and net present value of operating leases.