Values

76
Group Management Report
Bertelsmann’s planning for fi scal year 2010 is characterized by
lingering uncertainties in the market. At this time, economic
conditions are expected to begin stabilizing in 2010, leading
to a slight revenue and earnings recovery compared to fi scal
year 2009. If the economic expectations for an uncertain and
irregular picture in the fi rst months of this year persist, Bertelsmann
assumes that Group revenues and operating EBIT will
post comparatively moderate overall growth in fi scal years 2010
and 2011 and, based on a return on sales of 9.3 percent in fi scal
year 2009, a gradual movement toward the profi tability level
of 10 percent. Irrespective of the anticipated market environment,
the objective of an average Group-level return on sales of
10 percent throughout the economic cycle remains. Acquisitions
are not anticipated to contribute signifi cantly to revenues,
as no major investments or acquisitions are planned for 2010
given the continued uncertain situation. Th e Executive Board’s
top priority remains actively safeguarding and strengthening
the company following the rapid cooling-off of the economy
in 2009. Existing businesses are undergoing continuous review
to identify further optimization potential, and cost structures
are likewise being optimized and brought into alignment with
business expectations.
Target fi nancial parameters remain unchanged – in particular
the maximum leverage factor of 3.0. Bertelsmann expects to
move closer to this internal target in fi scal year 2010. Depending
on how the economy develops, Bertelsmann does not currently
anticipate interest rate changes to have any material impact
on the average fi nancing costs of the company’s medium- to
long-term fi nancing.
It is anticipated that individual divisions will be impacted to
varying degrees by the expected economic developments. Th e
following business estimates for 2010 and 2011 are in relation
to fi scal year 2009 fi gures. Th is means above all that they are
adjusted for portfolio and exchange rate eff ects:
RTL Group expects TV advertising markets in the core countries
to decline further or remain stable in 2010. RTL Group assumes
a stable revenue and earnings trend. Random House expects
book markets to be largely stable and revenues and earnings to
rise slightly in fi scal years 2010 and 2011. Gruner + Jahr expects
a slowing downward trend in the magazine advertising market
in fi scal year 2010. A continued stabilization of the revenue and
earnings trend can be expected in 2010 and 2011. Th e focus in
the print business will remain on a cautious investment policy
and further cost savings. Arvato expects a slight recovery in
its businesses in fi scal years 2010 and 2011, although no such
trend is discernible at present. Arvato is anticipating a moderate
increase in revenues. Th e expected rise in earnings can
be attributed in part to the cost-cutting measures introduced
in fi scal year 2009, the full eff ect of which will be felt in 2010.
Direct Group expects the business environment to remain diffi
cult and revenues to further decline in 2010 and 2011. Th e
expected improvements in earnings can be attributed to an
improved costs structure and the continued restructuring of
businesses, especially among the clubs.
Th ese forecasts are based on Bertelsmann’s current business
strategy as outlined in the “Business and Economic Conditions”
section. In general, the forecasts refl ect a careful consideration
of risks and opportunities and are based on operational planning
and the medium-term outlook for the corporate divisions.
Th e severity of the economic impact resulting from the economic
crisis on Bertelsmann businesses cannot be reliably assessed
at this time. All statements regarding potential economic
developments represent opinions advanced on the basis of
information currently available. Should underlying suppositions
fail to apply and/or further risks arise, actual results may
diff er from those expected. Accordingly, no assurances can be
provided concerning the accuracy of such statements.
Bertelsmann Annual Report 2009