Over the financial year 2017, Bertelsmann’s businesses posted positive overall development. The Group increased its revenues,and Group profit year on year and in some cases exceeded the expectations expressed at the start of the year. Bertelsmann also made good progress with its transformation into a faster-growing, more digital, more international and more diversified Group.
Group revenues in the reporting period rose slightly by 1.4 percent to €17.2 billion from €17.0 billion in the previous year and were therefore in line with the estimates put forward (outlook in 2016 Annual Report: slight increase in revenues). The organic revenue growth was 1.7 percent. Operating EBITDA recorded a positive deviation from the outlook, increasing to €2,636 million from €2,568 million in the previous year (outlook in 2016 Annual Report: stable development), attributable among other things to a capital gain of €94 million from the sale of buildings in Paris. At €121 million, the BVA used for Group management was considerably below the previous year’s figure of €147 million (outlook in 2016 Annual Report: strongly declining BVA). The expected development reflects the strong increase in the average level of capital invested, primarily due to investments, which overcompensated for the positive effect of an improved operating result.
In the financial year 2017, the Executive Board continued to focus on the four strategic priorities: strengthening the core businesses, driving the digital transformation forward, developing growth platforms and expanding into growth regions. For example, the core businesses were strengthened in particular through the merger of RTL Radio France and Groupe M6, the shareholding increase in Penguin Random House to 75 percent, and Gruner + Jahr’s ongoing focus on the core markets in Germany and France. The Group also pushed forward with the digital transformation at RTL Group through the full takeover of SpotX and strong growth in the online video segment at RTL Group, among other things. The expansion of the growth platform BMG includes the acquisition of the company BBR Music Group and other investments and artist signings. In education, Relias continued to expand its business organically and through the acquisition of WhiteCloud Analytics. Further new and follow-up investments were made in the growth regions.
Net assets and financial position remain solid despite the increased economic debt. Despite the financing of the shareholding increase in Penguin Random House, the leverage factor during the reporting period was 2.5, which is in line with the previous year’s level. As of December 31, 2017, the cash and cash equivalents reported at €1.4 billion (December 31, 2016: €1.4 billion) represent sufficient liquidity. The ratings agencies Moody’s and S&P continued to rate Bertelsmann as “Baa1” and “BBB+,” respectively, with a stable outlook. Overall, Bertelsmann ended the financial year 2017 with a successful performance and has a solid financial basis.