Values

52
Group Management Report
Group Management Report
In the face of the global economic crisis, Bertelsmann recorded both declining revenues
and earnings in fiscal year 2009. Revenues reached €15.4 billion, following €16.2 billion
in the previous year, and operating EBIT was €1,424 million, down from €1,575 million
in the previous year. Some €1 billion in cost-cutting and efficiency measures significantly
slowed the decline in earnings. Strict cash orientation resulted in high liquidity from operations
and a reduction in net financial debt by €652 million to €2,793 million. Net income
of €35 million (previous year: €270 million) was achieved despite one-time expenses.
Bertelsmann does not anticipate a noticeable economic recovery in 2010. Visibility regarding
further economic development remains low, especially in the advertising markets.
Business and Economic Conditions
Description of Business and Organizational Structure
Bertelsmann’s core business consists of media content as well
as media-related production and services businesses. Th e
company is a global player in television, radio and television
production (RTL Group); books (Random House); magazines
(Gruner + Jahr); media services (Arvato); and media clubs and
bookstores (Direct Group). Revenues are broadly diversifi ed.
Th e Group companies generate revenues from the sale of products
and merchandise, advertising, services, rights and licenses.
Th e company’s core markets are Western Europe (in particular
Germany, U.K., France, Spain) and the U.S. Th e diversifi cation
by business fi eld and region helps mitigate the company against
economic risks.
Operating EBIT in € millions Revenues in € billions
2,000
1,500
1,000
500
0
1,575
1,424
2008 2009
Bertelsmann AG is a stock corporation under German law and
as such has a two-tier system of management and governance.
Th e stock of Bertelsmann AG is unlisted. Bertelsmann AG acts
as an operational management holding company for the corporation.
Its responsibilities include both business policy and
strategic management of the Group. Th e Executive Board is
responsible for the entrepreneurial management of the Group.
Th e Bertelsmann AG Articles of Association and resolutions
adopted by the Executive Board, Supervisory Board and the Annual
General Meeting form the basis for corporate governance.
Internal fi nancial management and reporting are conducted
on the basis of the Group’s organizational structure, consisting
20.0
15.0
10.0
5.0
0
16.2
15.4
2008 2009
Bertelsmann Annual Report 2009