At a Glance 2020 Key Figures (IFRS) in € millions Business Development Group revenues Operating EBITDA EBITDA margin in percent1) Bertelsmann Value Added (BVA)2) Group profit Investments3) Consolidated Balance Sheet Equity Equity ratio in percent Total assets Net financial debt Economic debt4) Leverage factor Dividends to Bertelsmann shareholders Distribution on profit participation certificates Employee profit sharing 2020 17,289 3,143 18.2 355 1,459 920 10,725 36.1 29,704 2,055 5,207 1.9 – 44 88 2019 18,023 2,887 16.0 89 1,091 1,240 10,445 38.2 27,340 3,364 6,511 2.6 180 44 96 2018 17,673 2,586 14.6 121 1,104 1,434 9,838 38.8 2017 17,190 2,636 15.3 163 1,198 1,103 9,127 38.5 2016 16,950 2,568 15.2 180 1,137 1,240 9,895 41.6 25,343 23,713 23,794 3,932 6,619 2.7 180 44 116 3,479 6,213 2.5 180 44 105 2,625 5,913 2.5 180 44 105 The figures shown in the table are, in some cases, so-called Alternative Performance Measures (APM), which are neither defined nor described in IFRS. Details are presented in the section “Alternative Performance Measures” in the Combined Management Report. Rounding may result in minor variations in the calculation of percentages. The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information.” 1) Operating EBITDA as a percentage of revenues. 2) Bertelsmann uses BVA as a strictly defined key performance indicator to evaluate the profitability of the operating business and return on investment. Since the financial year 2018, Bertelsmann Value Added has been calculated excluding the Bertelsmann Investments division. 3) Taking into account the financial debt assumed and payments from transactions with non-controlling interests without a change of control, investments amounted to €1,717 million (2019: €1,314 million). 4) Net financial debt less 50 percent of the par value of the hybrid bonds plus pension provisions, profit participation capital and lease liabilities.

Interactive Online Report The Bertelsmann Annual Report can also be accessed online at: ar2020.bertelsmann.com As well as company information and an extensive financial section, the online report offers many extra features, including several videos, podcasts, extracts and additional web links. 2 Financial Information

Combined Management Report Financial Year 2020 in Review Bertelsmann successfully countered the economic effects of the coronavirus pandemic in the financial year 2020, as it benefited from the quality of its business portfolio and the high proportion of revenues from digital business models. Group revenues fell by 4.1 percent to €17.3 billion (previous year: €18.0 billion), and organic revenue decreased by 1.7 percent. This revenue decline, primarily in the advertising and print businesses, was largely attributable to the pandemic, but was substantially compensated by organic growth in the book publishing and service businesses. Operating EBITDA of €3,143 million was well above the previous year’s high amount of €2,887 million, a new record. Growth in earnings was posted in particular by Penguin Random House and Arvato. Disposal proceeds from real estate transactions also boosted operating earnings. The EBITDA margin rose to 18.2 percent (previous year: 16.0 percent). In view of this positive operating business performance, Group profit increased noticeably to €1,459 million (previous year: €1,091 million). Despite the remaining uncertainties, Bertelsmann expects those businesses most strongly affected by the pandemic to continue to recover in 2021. Revenues in € billions Operating EBITDA in € millions1) Group Profit in € millions 17.7 18.0 17.3 20 15 10 5 0 2,586 2,887 3,143 4,000 3,000 2,000 1,000 0 1,104 1,091 1,459 1,600 1,200 800 400 0 2018 2019 2020 2018 2019 2020 2018 2019 2020 • Decline in revenues by • Increase in operating EBITDA • Increase in Group profit to 4.1 percent; organic growth at Penguin Random House, BMG, Arvato and Relias • Coronavirus-related declines in advertising-financed and print businesses partially offset by quality of business portfolio and high proportion of revenues from digital business models to €3,143 million, attributable to increased earnings at Penguin Random House and Arvato as well as to disposal proceeds from real €1,459 million • Group profit also benefited from special items especially from disposal of investments estate transactions • EBITDA margin of 18.2 percent, compared to 16.0 percent during the same period last year 1) As of January 1, 2019, the new financial reporting standard IFRS 16 Leases was applied for the first time. 4 Financial Information Combined Management Report

Bertelsmann Printing Group unites Bertelsmann’s printing activities. They include all the Group’s gravure and offset printing companies in Germany, the United Kingdom and the United States. In addition, various digital marketing services are offered, with a focus on data-driven multichannel marketing, campaign management and customer loyalty. Bertelsmann Printing Group also includes the storage media producer Sonopress, the specialty printer Topac and the multipartner program DeutschlandCard. Bertelsmann Education Group comprises Bertelsmann’s education activities. The digital education and service offerings are primarily in the healthcare and technology sectors, as well as in the university education area. The education activities include the online education provider Relias, a stake in Udacity, the US university Alliant and venture fund investments. Bertelsmann Investments comprises Bertelsmann’s global start-up investments. The activities are focused on the strategic growth markets of Brazil, China, India and the United States. Investments are largely made through the funds Bertelsmann Brazil Investments (BBI), Bertelsmann Asia Investments (BAI), Bertelsmann India Investments (BII) and Bertelsmann Digital Media Investments (BDMI). Regulatory Environment Verwaltungsgesellschaft (BVG) controls all voting rights at the General Meeting of Bertelsmann SE & Co. KGaA and Bertelsmann Management SE (general partner). Strategy Bertelsmann’s strategic focus is on a fast-growing and high- earning digital, international and diversified Group portfolio. Businesses in which Bertelsmann invests should have long- term stable growth, global reach, sustainable business models, high market-entry barriers and scalability. The education business is being developed into the third earnings pillar along- side the media and service businesses. During the financial year 2020, the Group strategy was further developed and focused on five strategic growth priorities. Under the motto “Bertelsmann_next,” the focus in the future will be placed on creating national cross-media champions, expanding global content and service businesses, as well as expanding online education business and investments. Overall, Bertelsmann was able to minimize the economic impact of the corona- virus pandemic, thanks to the successful implementation of the previously used four strategic directions – strengthening the core businesses, digital transformation, expanding growth platforms, and expanding into growth regions. The Group benefited from the quality of its business portfolio and Bertelsmann has television and radio operations in several the high proportion of revenues from digital business models. European countries that are subject to regulation. In In the financial year 2020, additional substantial strategic Germany, for example, the media is subject to oversight by progress was made in the individual divisions. the Commission on Concentration in the Media. Bertelsmann Group companies occupy leading market positions in many lines of business, and may therefore have limited potential for growth through acquisition due to antitrust legislation. Moreover, some education activities are subject to regulatory provisions of government authorities and accreditation bodies. Some of the financial services activities are subject to banking super vision regulations. Because its profit participation certificates and bonds are publicly listed, Bertelsmann is required to comply with capital market regulations applicable to publicly traded companies. Shareholder Structure Bertelsmann SE & Co. KGaA is an unlisted partnership limited by shares. Three foundations (Bertelsmann Stiftung, Reinhard Mohn Stiftung and BVG-Stiftung) indirectly hold 80.9 percent of Bertelsmann SE & Co. KGaA shares, with the remaining 19.1 percent held indirectly by the Mohn family. Bertelsmann Broadcasters and platforms of RTL Group, for example, posted gains in audiences and market share, thanks to their comprehensive news reporting and entertainment offerings. Fremantle continued to expand production of fiction series. The RTL streaming services TV Now in Germany and Videoland in the Netherlands also recorded a substantial increase in paying subscribers. In addition, TV Now’s stream- ing service was integrated into some of Telekom’s rate plans. Furthermore, a partnership between Mediengruppe RTL and Telekom provides the foundation for developing collaboration in the areas of advertising technology, advertising sales and content. In France, Salto marked the start of a joint French pay streaming service involving Groupe TF1, France Télévisions and Groupe M6. Acquiring full ownership of Penguin Random House marked a key milestone for Bertelsmann. The world’s largest trade book publisher accordingly became a wholly owned group subsidiary of the Group in April 2020. Another step toward 6 Financial Information Combined Management Report

The Group’s content-based and entrepreneurial creativity is also very important for the implementation of its strategy. Bertelsmann will therefore continue to invest in the creative core of its businesses. Simultaneously, innovation compe- tence is very important for Bertelsmann and is a key strategic component (see the section “Innovations”). Value-Oriented Management System A key performance indicator for measuring the profitability of the Bertelsmann Group and the divisions is operating EBITDA. Operating EBITDA rose during the reporting period by 8.9 percent to €3,143 million (previous year: €2,887 million). Bertelsmann uses BVA for assessing the profitability of opera- tions and return on invested capital. BVA measures the profit realized above and beyond the appropriate return on invested capital. At €355 million, BVA in the financial year 2020 was below the previous year’s figure of €89 million. Bertelsmann’s primary objective is continuous growth of the Broadly Defined Performance Indicators company’s value, through a sustained increase in profitability with efficient capital investment at the same time. To manage the Group, Bertelsmann has been using a value-oriented management system for many years, which focuses on revenues, operating earnings and optimal capital investment. For formal reasons, Bertelsmann makes a distinction between strictly defined and broadly defined operational performance indicators. Strictly defined operational performance indicators, includ- ing revenues, operating EBITDA and Bertelsmann Value Added (BVA), are used to directly assess current business performance and are correspondingly used in the outlook. BVA is used primarily for management at the Group level, whereas revenues and operating EBITDA, above all, are more meaningful performance indicators for the divisions. As To assess business development, other performance indicators are used that are partially derived from revenues and operating EBITDA or are strongly influenced by these figures. The cash conversion rate serves as a measure of cash generated from business activities, which should be between 90 percent and 100 percent as a long-term average. In the financial year 2020, the cash conversion rate was 118 percent (previous year: 97 percent). The EBITDA margin is used as an additional criterion for assessing business performance. In the financial year 2020, the EBITDA margin of 18.2 percent was above the previous year’s level of 16.0 percent. distinguished from strictly defined performance indicators, Bertelsmann’s financial management system is defined by broader performance indicators are also used and are partially derived from the above-mentioned indicators or are strongly influenced by them. These include the EBITDA margin and the cash conversion rate. The financial management system, with defined internal financing targets, is also part of the broadly defined value-oriented management system. Details of the expected development of performance indicators used in the broader sense are provided at best as additional information and are not included in the outlook. To explain the business performance, and to control and manage the Group, Bertelsmann uses additional alternative performance measures that are not defined in accordance with IFRS (more details are given in the section “Alternative Performance Measures”). Strictly Defined Operational Performance Indicators the internal financial targets outlined in the section “Net Assets and Financial Position.” These financing principles are pursued in the management of the Group and are included in the broadly defined value-oriented management system. The non-financial performance indicators (employees, corpo- rate responsibility and similar topics) are not included in the broadly defined value-oriented management system. As they can still only be measured to a limited extent, it is not possible to make any clear quantifiable statements concerning inter- related effects and value increases. For this reason, the non- financial performance indicators have not yet been used for the management of the Group but are gaining in relevance for Bertelsmann’s businesses. Non-Financial Performance Indicators To control and manage the Group, Bertelsmann uses revenues, operating EBITDA and BVA as performance indica- tors. Revenue is used as a growth indicator of businesses. Group revenues fell in the financial year 2020 by 4.1 percent to €17.3 billion (previous year: €18.0 billion). The organic decline was 1.7 percent after organic growth of 1.2 percent in the same period of the previous year. The following section refers to the non-financial performance indicators at Bertelsmann. For more information about the organization, management and key topics of corporate responsibility, including additional information on employee concerns, please refer to the section “Combined Non- Financial Statement.” 8 Financial Information Combined Management Report

Audio Alliance, “Die Stunde Null – Deutschlands Weg aus der Krise” (“Zero Hour – Germany’s Way out of the Crisis”). “Geolino Spezial” (“Geolino Special”) boasts one of the widest audiences of any children’s podcast in Germany. The digital subsidiary AppLike was expanded into a group of companies. Mobile device game producer Sunday landed an international gaming success with “Cat Escape,” which placed among the Top 10 in the United States in the iOS and Android charts for hyper-casual games. and flows in the debt collection process is at the heart of the new product. The IT services provider Arvato Systems further expanded not only its competency in the field of cloud applications but also its cooperation with the three major hyperscalers, Amazon Web Services (AWS), Google Cloud Platform (GCP) and Microsoft Azure. Majorel further intensified its focus on digital transformation, for example by acquiring Isilis, a digital solutions provider for the banking and financial services sector. Innovation at BMG is based on the company’s strategic pillars: Innovations at Bertelsmann Printing Group involved, in focusing on growth segments, extending and diversifying its particular, developing and optimizing existing processes with repertoire, expanding global presence, and delivering on its core new technologies, and designing innovative products and values while retaining its cost leadership in the sector. Major innovations were the new services added to the BMG port- folio: the strategic move into the live entertainment business segment in Germany through the acquisition of a majority stake in the concert promoter Undercover, and the launch of a boutique neighboring rights service. Among the artists who chose BMG’s new service were The Rolling Stones and Roger Daltrey of the rock band The Who. Other innovations included the opening up of the widely acclaimed myBMG app to non-BMG artists, allowing them to pitch for songs from BMG songwriters; establishing the international music brand The Iconic Song, focused on legendary songs from the BMG catalog; the launch of the label OM Records in cooperation with the French Ligue 1 soccer club Olympique de Marseille; and the migration of a significant proportion of its processes and technology to the cloud. Innovation was achieved in all divisions of Arvato. The three solutions groups at Arvato as well as the CRM company services. On the basis of an innovative partnership model with a renowned printer manufacturer, Bertelsmann Printing Group invested in two new state-of-the-art, sheet-fed printing presses that were put into operation in 2020 at Mohn Media and Vogeldruck. As part of the VIME project, an augmented reality app was added to the digitalization services provided to a large British mail-order customer and the PreMedia department at Mohn Media developed a database solution for publishers and editors based on artificial intelligence. In addition, Bertelsmann Printing Group’s multipartner program DeutschlandCard continued its work on the digital transfor- mation of participant communication, expanding the program app and bringing a digital customer card to market. The innovations at Bertelsmann Education Group mainly con- sisted of developing digital and customized education offer- ings. For example, in the healthcare sector Relias employs health experts (including doctors, nurses and therapists) to continue developing teaching content and platforms for Majorel are using their innovative activities to pursue their training skills specific to clinic and nursing home personnel. main goal of enhancing and digitalizing existing solutions and Data analyses are used more and more frequently to be designing and creating new services. Arvato Supply Chain Solutions pursued its cloud strategy by investing extensively in 2020 in automating and digitalizing its processes as well able to offer users personalized content and thereby ensure training success. In the technology segment, Udacity was able to expand its products, among other things, in the areas as in expanding the digital competence of its employees. Arvato Financial Solutions launched an innovative platform for consumer-oriented receivables management under the umbrella brand Paigo. Extensive digitalization of processes of data science, cloud architecture and artificial intelligence. For example, employees learn about new technologies in Nanodegree programs and help their companies discover new uses for digitalization and automation. 10 Financial Information Combined Management Report

Groupe M6, which belongs to RTL Group, sold the French cashback company iGraal to the German Global Savings Group (GSG) in March 2020. The transaction was conducted in part through a share swap. As a result, Groupe M6 became a shareholder in GSG. Furthermore, a number of real estate transactions were carried out during the reporting period. These included the purchase and resale of a commercial property in Munich, as well as the sale of commercial properties in London and Hamburg. All properties have been leased back with varying terms. As of April 1, 2020, Bertelsmann completed its acquisition of the remaining 25 percent of the shares in Penguin Random House from co-shareholder Pearson after receiving all of the required regulatory approvals. Henrik Poulsen, former chair of the Executive Board of the Danish energy company Ørsted, was newly appointed to the Bertelsmann Supervisory Board in June 2020. In late June 2020, the international information services provider Experian acquired a majority shareholding in Arvato Financial Solutions’ risk management division. This is intended to strengthen the joint market position and to create an innovative platform to the benefit of the customers of the formerly separate companies. In late October 2020, RTL Group completed the sale of its stake in the Canadian digital video network BroadbandTV. At its meeting on November 5, 2020, the Supervisory Board appointed Rolf Hellermann as the new Chief Financial Officer of Bertelsmann. On January 1, 2021, he replaced Bernd Hirsch as CFO and became a member of the Management Board. In November 2020, Bertelsmann announced the acquisition of the publishing group Simon & Schuster from the media company ViacomCBS for US$2.175 billion. The acquisition will strengthen Bertelsmann’s position in the global book publishing business, especially in the United States. This transaction is subject to regulatory approval. Bertelsmann will pay the purchase price with available cash and cash equivalents. The transaction is expected to close in 2021. In December 2020, RTL Group completed the acquisition of all of the remaining outstanding shares in the TV and radio businesses of RTL Belgium. The acquisition was paid from cash funds as well as with treasury shares of RTL Group. In December 2020, Gruner + Jahr initiated exclusive negotia- tions with the French media company Vivendi regarding the sale of the French G+J subsidiary Prisma Media. At year-end, both companies signed a put option. The planned sale is subject to notifying employee representatives at Prisma Media Results of Operations Revenue Development Group revenues fell in the financial year 2020 by 4.1 percent to €17.3 billion (previous year: €18.0 billion). Revenue drops due to the coronavirus pandemic had a particularly negative impact on the advertising-financed and print businesses. However, the book publishing business, music business, services businesses and some of the education businesses have proved to be particularly robust. Adjusted by exchange rate, portfolio and other effects, the Group recorded an organic decline of 1.7 percent. Revenues at RTL Group decreased 9.5 percent to €6,017 mil- lion (previous year: €6,651 million). The organic decrease was 7.2 percent. The decline in revenues is largely attribut- able to significantly lower TV advertising revenues in the second quarter of 2020 and production delays at Fremantle due to the coronavirus pandemic. In contrast, the number of paying subscribers to the streaming services TV Now in Germany and Videoland in the Netherlands showed a positive trend. Revenues at Penguin Random House rose 4.6 percent (previous year: €3,636 million). The organic growth was 6.7 percent. The growth in revenues was due in particular to positive business performance in the US business. Gruner + Jahr reported a decline in revenues of 16.2 percent to €1,135 million (previous year: €1,355 million), due primarily to €3,802 million Revenue Breakdown €18.0 billion -1.0% -1.4% -1.7% €17.3 billion Exchange rates Portfolio and other effects Organic growth 20 10 and holding a hearing, approval from antitrust authorities, and 0 preparing all legal documents. The transaction is expected to 2019 Change 2020 close in the first half of 2021. 12 Financial Information Combined Management Report

Results Breakdown in € millions Operating EBITDA by division RTL Group Penguin Random House Gruner + Jahr BMG Arvato Bertelsmann Printing Group Bertelsmann Education Group Bertelsmann Investments Total operating EBITDA by division Corporate/Consolidation Operating EBITDA from continuing operations Amortization/depreciation, impairments/reversals of impairment losses on intangible assets and property, plant and equipment not included in special items Special items EBIT (earnings before interest and taxes) Financial result Earnings before taxes from continuing operations Income tax expense Earnings after taxes from continuing operations Earnings after taxes from discontinued operations Group profit attributable to: Earnings attributable to Bertelsmann shareholders attributable to: Earnings attributable to non-controlling interests 2020 1,097 691 127 137 662 55 89 (10) 2,848 295 3,143 (918) 51 2,276 (339) 1,937 (478) 1,459 – 1,459 1,152 307 2019 1,417 561 157 138 549 68 84 (1) 2,973 (86) 2,887 (908) (154) 1,825 (309) 1,516 (426) 1,090 1 1,091 729 362 Operating EBITDA Bertelsmann achieved operating EBITDA of €3,143 million in the financial year 2020 (previous year: €2,887 million). The increase of 8.9 percent is largely attributable to disposal proceeds from real estate transactions totaling €376 million. In addition, earnings growth was posted in particular by Penguin Random House and Arvato. Despite effective cost- cutting measures, the sometimes sharp decline in advertising- financed and print businesses is attributable to the negative impacts of the coronavirus pandemic on revenues. The EBITDA margin rose to 18.2 percent (previous year: 16.0 percent). Operating EBITDA at RTL Group fell 22.6 percent to €1,097 million (previous year: €1,417 million). Given the coronavirus pandemic, RTL Group recorded a drop in advertising revenues and TV production delays. Operating EBITDA at Penguin Random House rose by 23.3 percent to €691 million (previous year: €561 million), thanks in particular to the growing US business as well as a larger proportion of digital products in the sales mix. Operating EBITDA at Gruner + Jahr declined by 19.4 percent to €127 million (pre- vious year: €157 million. Pandemic-related revenue shortfalls were largely offset by comprehensive countermeasures. BMG generated a stable operating EBITDA of €137 million (pre vious year: €138 million) and, despite a difficult market environ- ment, benefited from rapid growth in music streaming. Arvato achieved operating EBITDA of €662 million (pre vious year: €549 million). This was an increase of 20.5 percent, reflect- ing higher earnings in particular at the CRM company Majorel as well as in the Supply Chain Solutions business area. Operating EBITDA at Bertelsmann Printing Group declined by 19.8 percent to €55 million (previous year: €68 million). In addition to a continual drop in volumes and persistent pricing pressure, earnings were also heavily affected by the corona- virus pandemic. Operating EBITDA at Bertelsmann Education Group of €89 million (previous year: €84 million) represented an increase of 5.6 percent. The investments of Bertelsmann Investments are generally not consolidated, so operating earnings are not usually reported for this division. 14 Financial Information Combined Management Report

Primarily due to a high operating cash flow, net financial debt decreased. As of December 31, 2020, economic debt decreased to €5,207 million from €6,511 million in the previous year, due to a significant decrease in net financial debt to €2,055 million (December 31, 2019: €3,364 million). As of December 31, 2020, recognized liabilities were €1,355 million (December 31, 2019: €1,392 million). Provisions for pen- sions and similar obligations rose to €2,009 million as of December 31, 2020 (December 31, 2019: €1,967 million). lease Another financial target is the (interest) coverage ratio. This is calculated as the ratio of operating EBITDA, used to determine the leverage factor, to financial result, and should exceed four. In the reporting period, the coverage ratio was 8.3 (previous year: 8.5). The Group’s equity ratio was 36.1 percent (December 31, 2019: 38.2 percent), which remains significantly above the self-imposed minimum of 25 percent. Financing Activities Under a Debt Issuance Program with a volume of up to €5 billion launched in March 2020, Bertelsmann issued a €750 million bond with a coupon of 2.0 percent and a term of eight years in April 2020, and a €750 million bond with a coupon of 1.5 percent and a term of 10 years in May 2020. Private placements totaling €350 million were also issued under this program. In addition, Bertelsmann issued promissory notes with a total volume of €250 million in the reporting period. One of the private placements in the amount of €250 million was already repaid before the end of the year by exercising a termination option. In addition, a €100 million promissory note due in December 2020 and the variable portion of a promis- sory note of €50 million due in 2027 were repaid. To cover short-term funding requirements related to the acqui- sition of the remaining shares of Penguin Random House, a loan in the amount of €675 million with a term of up to 18 months was agreed upon in the reporting period and utilized in March 2020. Furthermore, Bertelsmann carried out various financing measures to secure liquidity. This includes in particular drawing down the revolving syndicated credit facility in the amount of €1.2 billion and drawing down a bilateral, dual-currency credit facility in the amount of US$215 million, both in March 2020, as well as taking out a loan of US$300 million in April 2020 with a term of up to one year. All of the credit facilities that were drawn down during the reporting period were completely repaid in the course of the financial year 2020. Rating Bertelsmann has been rated by the rating agencies Moody’s and Standard & Poor’s (S&P) since 2002. The issuer ratings facilitate access to the international capital markets and are therefore a key element of Bertelsmann’s financial security. Bertelsmann is rated by Moody’s as “Baa2” (outlook: stable) and by S&P as “BBB” (outlook: stable). Both credit ratings are in the investment-grade category. Bertelsmann’s short-term credit quality rating is “P-2” from Moody’s and “A-2” from S&P. Credit Facilities In addition to available liquidity, the Bertelsmann Group has access to a syndicated credit facility with 15 banks. This credit facility that was unutilized as of December 31, 2020, forms the backbone of the strategic credit reserve; Bertelsmann can utilize this with a term until 2025 to draw up to €1.2 billion of revolving funds in euros, US dollars and pounds sterling. Maturity Structure of Financial Debt in € millions 8,000 6,000 4,000 2,000 0 234 49 9 4 4 6,392 5,892 5,144 5,044 4,496 3,601 Other financial debt Bonds and promissory notes 2020 2021 2022 2023 2024 2025 16 Financial Information Combined Management Report

Investments by Division in € millions RTL Group Penguin Random House Gruner + Jahr BMG Arvato Bertelsmann Printing Group Bertelsmann Education Group Bertelsmann Investments Total investments by division Corporate/Consolidation Total investments 2020 210 75 31 92 264 34 19 185 910 10 920 2019 451 124 31 80 216 45 25 260 1,232 8 1,240 Balance Sheet Profit Participation Capital Total assets increased to €29.7 billion as of December 31, 2020 (previous year: €27.3 billion). Cash and cash equiva- lents increased noticeably to €4.6 billion (previous year: €1.6 billion). Equity increased to €10.7 billion (previous year: €10.4 billion). This resulted in an equity ratio of 36.1 percent (previous year: 38.2 percent). Equity attributable to Bertelsmann SE & Co. KGaA shareholders was €9.0 billion (previous year: €8.9 billion). Provisions for pensions and similar obligations increased to €2,009 million (previous year: €1,967 million). Gross financial debt increased to €6,626 million compared to €5,000 million as of December 31, 2019. Apart from that, the balance sheet structure remained largely unchanged from the previous year. Profit participation capital had a par value of €301 million as of December 31, 2020, which is unchanged from the previous year. If the effective interest method is applied, the carrying amount of profit participation capital was €413 million as of December 31, 2020 (previous year: €413 million). The 2001 profit participation certificates (ISIN DE0005229942) account for 94 percent of par value of profit participation capital, while the 1992 profit participation certificates (ISIN DE0005229900) account for the remaining 6 percent. The 2001 profit participation certificates are officially listed for trading on the Regulated Market of the Frankfurt Stock Exchange. Their price is listed as a percentage of par value. Balance Sheet Assets Liabilities 100% 80% 60% 40% 20% 0% 50.6% 47.4% 41.0% 36.1% 38.2% 38.8% 6.6% 37.3% 10.7% 35.9% 9.1% 34.5% 23.7% 19.8% 22.5% 6.8% 7.2% 6.9% 5.5% 6.0% 15.4% 33.4% 34.8% 31.8% 2018 2019 2020 2020 2019 2018 Intangible assets and financial assets Equity including non-controlling interest Property, plant and equipment and right-of-use assets Financial debt and profit participation capital Current assets and other assets Provisions for pensions and similar obligations Cash and cash equivalents Other provisions/other liabilities 18 Financial Information Combined Management Report

Performance of the Group Divisions RTL Group RTL Group saw a decrease in advertising bookings and postponements of productions in the financial year 2020 in the wake of the coronavirus pandemic, leading to lower RTL Group’s content business, Fremantle, faced significant constraints in film and TV production during the corona- virus pandemic in 2020, resulting in fewer show deliveries revenues and operating profit. After a strong decline in TV advertising revenues in the second quarter, the situation stabilized in the third quarter; in the important fourth quarter, RTL Group’s TV advertising revenues increased again year and the postponement of productions, particularly in the second quarter. Following the introduction of protective measures, production resumed in most markets toward the middle of the year. Major creative successes included on year. From mid-March on, RTL Group’s management actively countered the effects of the pandemic with cost and cash flow measures, without compromising the group’s sustain- able business success. More than half of the revenue losses were compensated in this way. For the full year, RTL Group’s revenues decreased 9.5 percent to €6.0 billion (previous year: €6.7 billion), while operating EBITDA fell 22.6 percent to €1.1 billion (previous year: €1.4 billion). The EBITDA margin was 18.2 percent, compared with 21.3 percent in the previous year. At €1.1 billion (previous year: €1.1 billion), 17.5 percent (previous year: 16.1 percent) of revenues were attributable to digital businesses such as online advertising, streaming and advertising technology. The streaming services TV Now in Germany and Videoland in the Netherlands together had 2.2 million paying subscribers at the end of the year, 52 percent more than a year earlier. In France, Groupe M6 grew the number of active users of its advertising-financed streaming service 6play to 16.3 million (previous year: 11.1 million). In October, Salto, the joint pay streaming service of Groupe TF1, France Télévisions and Groupe M6, went live. Upon launch, its offering comprised more than 10,000 hours of programming and access to content from the country’s main TV channels. shows like “American Idol,” reality formats like “Too Hot to Handle” for Netflix, and fiction series productions such as “ Deutschland 89” for Amazon Prime. In October, RTL Group sold its majority stake in the digital video network BroadbandTV to BBTV Holdings Inc. for €102 million paid in cash. This was followed in December by the acquisition of all outstanding shares in RTL Belgium’s TV and radio business, with consideration comprising cash and treasury shares of RTL Group. Revenues by Region in percent (without intercompany revenues) 2.6 Other countries 17.4 United States 24.1 Other European countries 31.7 Germany 20.9 France 3.3 United Kingdom Revenues by Category in percent 5.6 Services 37.5 Rights and licenses Information and entertainment offerings from Mediengruppe RTL Deutschland, Groupe M6 and RTL Nederland were met with significantly increased viewer interest during the 55.4 Advertising 1.5 Own products and merchandise corona virus pandemic. The broadcasters outperformed their commercial competitors on audience ratings. In Germany, the RTL family of TV channels increased its net TV advertis- ing market share significantly year on year. In November, Mediengruppe RTL Deutschland and Deutsche Telekom agreed on a strategic partnership to jointly develop the growth markets of streaming and addressable TV advertising. Meanwhile, RTL Group continued to build an open ad-tech platform based on technology developed by Smartclip and tailored to the needs of European broadcasters and streaming services. 20 Financial Information Combined Management Report Revenue Breakdown 8 6 4 2 0 €6.7 billion -0.4% -1.9% -7.2% €6.0 billion Exchange rates Portfolio and other effects Organic growth 2019 Change 2020

Gruner + Jahr Following sharp pandemic-related declines in the first half of 2020, Gruner + Jahr recorded a significant improvement in advertising and distribution revenues, particularly in the fourth quarter, and successfully continued its transforma- tion. Operating EBITDA decreased to €127 million (previous year: €157 million), and the EBITDA margin was 11.2 percent (previous year: 11.6 percent). Pandemic-related revenue short- falls were largely offset by comprehensive counter measures. Full-year revenues declined 16.2 percent to €1.1 billion (previous year: €1.4 billion), primarily as a result of the corona- virus pandemic and portfolio effects (including the sale of the special-interest publisher Motor Presse Stuttgart). The revenue share attributable to the digital business in Germany and France increased once again to now 37 percent (previous year: 33 percent). The digital offerings of the magazine brands in Germany saw strong growth in revenues and earnings. In addition, the paid digital offerings, such as “Capital” and “Stern,” were expanded. Despite coronavirus-related declines in the print advertising market and the closure of individual distribution channels (e.g., train stations, airports), G+J Germany’s earnings in its core business were only moderately lower year on year, Revenues by Region in percent (without intercompany revenues) 1.5 Other countries 66.7 Germany thanks to active countermeasures. On the other hand, the 1.5 United States magazine distribution business saw a positive development in both supermarket sales and subscriptions. Brands such as “Stern,” “Landlust” and “Schöner Wohnen” posted growing earnings. Territory, one of the leading content communication providers in Europe, also recorded mainly pandemic-related declines in sales and earnings. G+J France posted a strong increase in earnings despite the negative impact of the coronavirus crisis on its advertising and circulation business and the insolvency of a press wholesaler. In December, G+J and Vivendi entered into exclusive sales talks for the French magazine business Prisma Media, and both companies have signed a put option. DDV Mediengruppe’s revenues and earnings were down year on year due to the coronavirus pandemic. 6.0 Other European countries 2.6 United Kingdom 21.7 France Revenues by Category in percent 23.4 Services 1.4 Rights and licenses 45.0 Own products and merchandise 30.2 Advertising G+J continued to play a large and active role in the Revenue Breakdown collaboration of all Bertelsmann’s content businesses in the Bertelsmann Content Alliance. 2020 saw the development and marketing of numerous new cross-divisional formats. For example, several Bertelsmann Content Alliance media covered the publication of Barack Obama’s memoirs. And UFA Show & Factual, G+J, Penguin Random House Verlagsgruppe and Audio Alliance accompanied the biggest Arctic expedition ever exclusively for the German- speaking public, achieving excellent reach with their media 2 1.5 1 0.5 0 offerings. 22 Financial Information Combined Management Report €1.4 billion 0.1% -7.3% -9.0% €1.1 billion Exchange rates Portfolio and other effects Organic growth 2019 Change 2020

Arvato Despite the economic impact of the global coronavirus at Bertelsmann, increased its revenues and earnings in the pandemic, the group’s services activities, pooled in the Arvato division, once again delivered an encouraging business performance in 2020. Besides the CRM company Majorel, 2020 financial year. Internationally, business with customers from the IT and high-tech sectors, among others, was expanded and an innovative communications project for the main drivers were all of Arvato’s Solution Groups. Overall, a customer from the automotive industry in Germany was the internationally operating services group increased both its revenues and operating profit. Revenues grew by 5.0 percent to €4.4 billion (previous year: €4.2 billion), while operating EBITDA increased by 20.5 percent to €662 million (previous year: €549 million). Arvato’s EBITDA margin was 15.1 percent, compared with 13.2 percent in the previous year. successfully implemented. Majorel also supported health authorities and public-sector institutions in Germany and Morocco in dealing with the coronavirus pandemic, estab- lished a new global consulting unit and acquired the French digital services provider Isilis. Arvato Supply Chain Solutions’ logistics services businesses continued to develop positively in the period under review, especially in the areas of e-commerce and healthcare. The Solution Group was able to increase revenues organically and win new customers, with annual revenues exceeding €100 million in key sectors. It enhanced its national and inter- national footprint by opening new sites and expanding existing ones in Germany, the Netherlands, Poland, Turkey, the United States, China and Russia. At the same time, Arvato Supply Chain Solutions systematically and successfully advanced the automation of logistics processes as well as the individual companies’ cloud strategy and digital transformation. Arvato Financial Solutions’ revenues and earnings also developed positively in the period under review. This was primarily supported by good business performance in the risk management and pay-after-delivery areas. The sale of 60 percent of the risk management business to the informa- tion services provider Experian was successfully completed at the end of June. In October, Arvato Financial Solutions launched an innovative platform for consumer-oriented collection management in the German-speaking countries under the Paigo umbrella brand. In the 2020 financial year, the IT service provider Arvato Systems was able to realize various new projects with existing customers as well as win new customers in the retail, energy and media sectors. The company also further developed its business with its own products and platforms, broadened its service portfolio in the future-oriented field of artificial intelligence (AI) and significantly expanded its important cloud business both by strengthening partnerships and by increasing its in-house cloud competencies, where it achieved very high growth rates. Arvato Systems won various business awards in the period under review, underscoring both the company’s expertise and its market perception/reputation as a partner in the transformation to digital. Revenues by Region in percent (without intercompany revenues) 8.7 Other countries 37.2 Germany 7.8 United States 30.2 Other European countries Revenues by Category in percent 98.3 Services 10.7 France 5.4 United Kingdom 1.7 Own products and merchandise Revenue Breakdown €4.2 billion -1.0% -0.5% 6.5% €4.4 billion Exchange rates Portfolio and other effects Organic growth 6 4 2 0 The CRM business unit Majorel, which is jointly operated by 2019 Change 2020 Bertelsmann and the Saham Group and is fully consolidated 24 Financial Information Combined Management Report

Bertelsmann Education Group The Group’s education businesses, which are pooled in of cloud, data and AI during the year under review. In the Bertelsmann Education Group, recorded an increase in revenues in the 2020 financial year, excluding businesses response, more than 60,000 applications were received from 188 countries. sold during the period under review. Operating income also increased. The coronavirus pandemic accelerated the shift from classroom-based to online learning, which benefited the e-learning provider Relias, the online learning platform Udacity and Alliant International University. The Bertelsmann Education Group stepped up its investments in new products and technologies in 2020, laying the foundations for long- term growth. The division generated total revenues of €301 million, down 9.8 percent from the previous year (€333 million). In 2019, a part of the continuing education provider OnCourse, acquired earlier, was sold, followed in 2020 by the majority of the operating business of the US university service provider HotChalk. The Bertelsmann Education Group’s operating EBITDA came to €89 million, putting it 5.6 percent above the previous year’s result of €84 million. The EBITDA margin increased to 29.5 percent (previous year: 25.2 percent). The online courses offered by Relias were in particularly high demand in 2020 and led to organic growth. Relias offered healthcare professionals across the globe COVID-19 prevention courses free of charge, as its contribution to combating the coronavirus pandemic. Relias also invested in cloud-based applications and a virtual classroom that makes it easier for the company’s more than 11,000 institutional clients to conduct healthcare training online and in hybrid learning formats. Udacity, the online learning platform in which Bertelsmann has a significant stake, launched new courses, such as Nanodegree programs in Artificial Intelligence in Healthcare, and training to become an AWS Cloud Architect or a Data Architect. At the same time, the platform saw strong demand from corporate customers seeking to offer their workforces online training to prepare for the changes resulting from digitization. In response to the coronavirus pandemic, Udacity launched an extensive scholarship program and in March offered free courses to gain digital skills and to open up new opportunities for job seekers. Revenues by Region in percent (without intercompany revenues) 96.7 United States 2.3 Other countries 0.7 Germany 0.3 United Kingdom Revenues by Category in percent 100.0 Services Revenue Breakdown International University, which specializes in Alliant psychology and education, kept revenues stable and expanded 400 300 its share of online enrollments further. Alliant’s online 200 segment now accounts for more than a third of total revenues. As part of its three-year #50000Chances program to remedy the shortage of IT specialists, Bertelsmann again offered 15,000 scholarships for Udacity courses in the areas 100 0 €333 million -1.8% -5.7% -2.3% €301 million Exchange rates Portfolio and other effects Organic growth 2019 Change 2020 26 Financial Information Combined Management Report

General Statement by Company Management on the Economic Situation In the financial year 2020, characterized by the effects of the coronavirus pandemic, Bertelsmann benefited from Acquiring full ownership of Penguin Random House marked a key milestone. The world’s largest trade book publisher is now the quality of its business portfolio and large share of a wholly owned group subsidiary of Bertelsmann. Another revenues from digital business models. While the effects of the coronavirus pandemic were felt strongly in the advertising-financed and print businesses, robust perfor- mance was recorded by the book publishing business, step toward strengthening the global content business was the announcement at year-end that Bertelsmann planned to acquire the US publisher Simon & Schuster. The RTL streaming services TV Now in Germany and Videoland in the Netherlands music business, services businesses and some of the recorded a substantial increase in paying subscribers. The education businesses. Moreover, Bertelsmann achieved important milestones for its strategic development and continued to strengthen its businesses. information service provider Experian acquired a majority stake in Arvato Financial Solutions’ risk-management business in order to strengthen its joint market position. The Group strategy was further developed during the financial year 2020 The global outbreak of the coronavirus pandemic put a considerable strain on overall economic development in the economies relevant to Bertelsmann. The assumptions on which the original forecast for 2020 was based were therefore and the focus was placed on five strategic growth priorities. Under the motto “Bertelsmann_next,” the future focus will be on creating national cross-media champions, expanding global content and service businesses, and expanding online no longer applicable for the most part. The outlook from the education businesses and investments. Annual Report 2019 was retracted in the announcement for the first quarter of 2020 and a new assessment of the trend Net assets and financial position remain extremely was announced in the Interim Report 2020. Group revenues in the reporting period declined moderately by 4.1 percent to €17.3 billion from €18.0 billion the previous year, thereby corre- sponding to the adjusted estimates (outlook in the 2019 Annual Report: moderate increase in revenues; adjusted outlook in the Interim Report 2020: moderately to significantly declining rev- enues). The organic revenue decline was 1.7 percent. Operating EBITDA increased strongly by 8.9 percent to €3,143 million compared with €2,887 million in the previous year and was thereby better than the adjusted estimate at mid-year 2020 (outlook in the 2019 Annual Report: stable to slightly lower operating EBITDA/adjusted outlook in the Interim Report 2020: strong decline in operating EBITDA). At €355 million, the BVA used for Group management was also well above the previous year’s figure of €89 million (outlook in the 2019 Annual Report: strongly declining BVA/adjusted outlook in the Interim Report 2020: strongly declining BVA). The major reasons for these positive deviations from the forecast are the increases in earnings at Penguin Random House and Arvato and the solid, thanks to proactive pandemic countermeasures. Bertelsmann’s liquidity was secured early on, thanks in part to good access to the capital market. To reduce the outflow of funds, cost savings measures were initiated and invest- ments reduced without impairing the substance of the busi- nesses. At the same time, the Annual General Meeting of Bertelsmann resolved to suspend dividend payments in the financial year 2020. The leverage factor of Bertelsmann was 1.9, considerably lower than the previous year’s level (December 31, 2019: 2.6). As of December 31, 2020, the cash and cash equivalents, reported at €4.6 billion (December 31, 2019: €1.6 billion), represent sufficient liquidity. The rating agencies Moody’s and S&P currently rate Bertelsmann as “Baa2” and “BBB,” respectively, with a stable outlook. Alternative Performance Measures disposal proceeds from real estate transactions. In this Combined Management Report, the following Alternative In the reporting period, Bertelsmann took effective measures against the pandemic all over the world, early on and at Performance Measures, which are not defined in accordance with IFRS, are used to explain the results of operations and/ or net assets and financial position. These should not be every level, in order to provide employees with the best considered in isolation but as complementary information protection possible. The Group developed good hygiene for evaluating Bertelsmann’s business situation, and they are practices, canceled business trips and had employees work from home as far as possible. All challenges notwithstanding, the financial year 2020 was a time of strategic progress. differentiated in terms of strictly defined and broadly defined key performance indicators, in the same way as in the value- oriented management system. 28 Financial Information Combined Management Report

BVA in € millions Operating EBITDA Amortization/depreciation, impairments/reversals of impairment losses on intangible assets, property, plant and equipment, and right-of-use assets not included in special items Operating EBIT Flat taxes (30 percent) NOPAT (Net Operating Profit After Tax) Average invested capital Cost of capital (8 percent) Correction Bertelsmann Investments BVA 2020 3,143 (918) 2,225 (667) 1,558 16,131 1,290 87 355 2019 2,887 (908) 1,979 (653) 1,326 16,434 1,315 78 89 maintain consistency, the invested capital will be adjusted for the Bertelsmann Investment division; hence, capital costs will be neutralized. Cash Conversion Rate on the operating free cash flow in a way that is methodically consistent with operating EBITDA. Operating EBITDA is used to calculate operating EBIT by deducting amortization and depreciation, provided that these are not included in special items. The Group aims to maintain a cash conversion rate of 90 percent to 100 percent as a long-term average. The cash conversion rate serves as a measure of cash gen- erated from business activities and is calculated as the ratio of operating free cash flow to operating EBIT. The operating Economic Debt free cash flow is determined on the basis of the cash flow Net financial debt is calculated on the basis of gross from operating activities as reported in the consolidated cash flow statement, whereby the impact of paid income taxes and the change in provisions for pensions and similar obligations on cash flow from operating activities is offset. Operating free cash flow is also reduced by investments in intangible assets and property, plant and equipment as well as lease payments, and increased by proceeds from the sale of non- current assets. Further adjustments are made to ensure an allocation of capital flows to the relevant periods, and to off- set the impact of payment flows resulting from special items financial debt, which comprises the balance sheet items current and non-current financial debt, minus cash and cash equivalents. Economic debt is defined as net financial debt less the 50 percent par value component of the hybrid bonds plus provisions for pensions, profit participation capital and lease liabilities. In calculating economic debt, the hybrid bonds are taken into account only at 50 percent, as both bonds are classified by the rating agencies as 50 percent equity. Economic debt is modified for the purposes of calculating the leverage factor. Cash Conversion Rate in € millions Cash flow from operating activities Income taxes paid Change in provisions for pensions and similar obligations Investments in intangible assets and property, plant and equipment (less proceeds from the sale of non-current assets) Lease payments Further adjustments Operating free cash flow Operating EBITDA Amortization/depreciation, impairments/reversals of impairment losses on intangible assets, property, plant and equipment, and right-of-use assets not included in special items Operating EBIT Cash Conversion Rate (in percent) Operating free cash flow/operating EBIT 30 Financial Information Combined Management Report 2020 2,994 214 92 (564) (316) 151 2,571 3,143 (918) 2,225 118 2019 2,060 424 95 (582) (288) 174 1,883 2,887 (908) 1,979 97

Organizations of the Treadway Commission (COSO Enterprise Risk Management – Integrated Framework and Internal Control – Integrated Framework, respectively) and is organized in the subprocesses of identification, assessment, response, control, communication and monitoring. A major element of risk identification is a risk inventory that lists significant risks year by year, from the profit-center level upward. These risks are aggregated step by step at the division and Group levels. This ensures that risks are registered where their impact would be felt. There is also a Group-wide reassessment of critical risks every six months, and quarterly reporting in case the risk situation has changed. Ad hoc reporting requirements ensure that significant changes in the risk situation during the course of the year are brought to the attention of the Executive Board. The risks are compared to risk management and control measures to determine the net risk position. Both one- and three-year risk assessment horizons are applied to enable the timely implementation of risk response measures. The basis for determining the main Group risks is the three-year period, similar to medium-term corporate planning. Risk assessment is the product of the estimated negative impact on Group free cash flow should the risk occur, and the estimated probability of occurrence. Risk monitoring is conducted by Group management on an ongoing basis. The RMS, along with its component ICS, is constantly undergoing further development and is integrated into ongoing reporting to the Bertelsmann Executive Board and Supervisory Board. Corporate Risk Management Committee meetings are convened at regular intervals to ensure compliance with statutory and internal requirements. The Group auditors inspect the risk early-warning system for its capacity to identify developments early on that could threaten the existence of Bertelsmann SE & Co. KGaA according to section 91(2) of Germany’s Stock Corporation Act (AktG), and then report their findings to the Supervisory Board of Bertelsmann SE & Co. KGaA. Corporate Audit conducts ongo- ing reviews of the adequacy and functional capability of the RMS in all divisions apart from RTL Group and Majorel. The RMS of RTL Group and Majorel is evaluated by the respec- tive internal auditing department and by the external auditor. and reliable in accordance with applicable laws, and that information is made available without delay to the various recipients. Reporting should also present a true and fair view of Bertelsmann’s net assets, financial position and results of oper- ation. The following statements pertain to the Consolidated Financial Statements (including the Notes to the Consolidated Financial Statements and the Combined Management Report), interim reporting and internal management reporting. The ICS for the accounting process consists of the follow- ing areas. The Group’s internal rules for accounting and the preparation of financial statements (e.g., IFRS manual, guidelines and circulars) are made available without delay to all employees involved in the accounting process. The Consolidated Financial Statements are prepared in a report- ing system that is uniform throughout the Group. Extensive automatic system controls ensure the consistency of the data in the financial statements. The system is subject to ongo- ing development through a documented change process. Systematized processes for coordinating intercompany trans- actions serve to prepare the corresponding consolidation steps. Circumstances that could lead to significant misinfor- mation in the Consolidated Financial Statements are moni- tored centrally by employees of Bertelsmann SE & Co. KGaA and by RTL Group (for the preconsolidated subgroup), and then verified by external experts as required. Central contact persons from Bertelsmann SE & Co. KGaA and the divisions are also in continuous contact with local subsidiaries to ensure IFRS-compliant accounting as well as compliance with reporting deadlines and obligations. These preventive measures are supplemented by specific controls in the form of automated and manual analyses by the Corporate Financial Reporting department of Bertelsmann SE & Co. KGaA and RTL Group (for the preconsolidated subgroup). The purpose of such analyses is to identify any remaining inconsistencies. The controlling departments at the Group and division levels are also integrated into the internal management reporting. Internal and external reporting are reconciled during the seg- ment reconciliation process. The further aim in introducing a globally binding control framework for the decentralized Any issues that are identified are promptly remedied through accounting processes is to achieve a standardized ICS format appropriate measures. The Bertelsmann Executive Board at the level of the local accounting departments of all fully defined the scope and focus of the RMS based on the specific circumstances of the company. However, even an appropri- ately designed and functional RMS cannot guarantee with absolute certainty that risks will be identified and controlled. Accounting-Related Risk Management System and Internal Control System The objectives of the accounting-related RMS and ICS are to ensure that external and internal accounting are proper consolidated Group companies. The findings of the external auditors, Corporate Audit and the internal auditing depart- ments of RTL Group and Majorel are promptly discussed with the affected companies, and solutions are developed. An annual self-assessment is conducted to establish reporting on the quality of the ICS in the key fully consolidated Group com- panies. The findings are discussed at the divisional level. Like the RMS, each ICS cannot guarantee with absolute certainty that significant misinformation in the accounting process can be prevented or identified. 32 Financial Information Combined Management Report

performance and financial position as well as on cash flow. In addition to risks associated with economic developments and changes in the market environment, significant Group risks in the short to medium term include legal and regulatory risks, customer and supplier risks, pricing and margin risks, and a loss of audience and market share. How these risks develop depends to a large extent on changes in customer behavior due to factors such as the continued digitization of media, the development and implementation of products and services by competitors, bad debt losses, and default and interfer- ence along the production chains in individual sectors such as IT. These trends have accelerated in connection with the coronavirus pandemic. Financial market risks are moderate for Bertelsmann, while risks related to employees and future technological challenges are classified as low in the three-year period under review. A substantial risk for RTL Group is the dependency of the advertising market on the economic situation. If the corona- virus pandemic continues, it may lead to an accelerated decline in the advertising market, with direct effects on RTL Group earnings. RTL Group responds to such economic downturns with ongoing monitoring of market development, planning various scenarios and strict cost control. Further- more, RTL Group aims to widen its earning base by finding sources of income that are not dependent on advertising. Increasing competition and constant change, particularly in the digital environment, are resulting in a stronger fragmen- tation of RTL Group’s markets as audiences increasingly use non-linear TV products amid a growing number of streaming services due to lowering of market-entry barriers. The pos- sible risks of this for RTL Group are decreasing audience and advertising market shares of its advertising-financed channels and therefore, ultimately, lower revenues. To counter these risks, RTL Group is continuously revising and developing the channel and program strategies. By linking traditional, linear offerings with new digital business models and by strength- ening existing investments in the online video market and in advertising technologies, RTL Group counters risks from digitization while actively influencing this development. Increas- ing competition in the area of program acquisition and TV pro- duction, and the growing dependence on individual production The possibility of shifting business models in the audiobook segment constitutes a risk for Penguin Random House. Due to the changing retail landscape, another risk is declining sales volumes in brick-and-mortar book retail. Penguin Random House is addressing these risks by introducing differentiated pricing, increasing online sales of physical books and audiobooks, and continuously examining alter- native selling and marketing options. Any risks of bad debt loss are being limited through debtor management, and in some cases through credit insurance. Procurement risks due to capacity shortfalls at printing companies carrying out orders are countered by continually prioritizing and securing additional printing capacities. In addition to the risk of cost increases, Penguin Random House is finding itself exposed to risks from economic uncertainty, which could lead to lower sales. The risks are addressed through careful management of supplier relationships and innovative marketing activities, and by maintaining a flexible cost structure that allows for a quick response in the event of an economic downturn. For Gruner + Jahr, the possibility of a deterioration of the overall economic environment in the context of the corona- virus pandemic and the resulting declines in advertising and circulation revenues, as well as the continuously changing conditions in the digital business, represent significant risks. A changing market environment, marked by product innova- tions and increased consolidation of agencies and marketers, is confronted with a widespread decrease in demand for print products, which as a result of pressure on prices and conditions can lead to lower margins. Furthermore, there is the risk of losing key customers as advertising customers could switch to other media, notably digital media, for example. Due to these developments, subsequent risks such as bad debt losses or service limitations are possible, because service providers in the areas of distribution or manufacturing could restrict or discontinue their products. The risks are being coun- tered by cost and customer management; the development of new – in particular, digital – forms of offerings; product, price and quality improvements; and scenario analyses. Risks that affect BMG concern the client portfolio, in particular the contract extension with artists and authors as well as companies, coupled with the risk of potential cost increases, could also impact RTL Group’s ability to generate revenues. This risk is being reduced by expanding the share of in-house productions in the program – in particular of local content. To reduce the risk of customer losses, advertising packages with cooperation partners are offered, as well as pursuing the basic aim of establishing long-term customer relationships. contractual relationships with business partners concerning the physical and digital distribution of film, TV, advertising and live concerts. There are also risks in connection with corporate growth, especially for business integration and scaling of the technical platform and organization. Market risks are addressed through high revenue diversification across clients and catalogs, segments and revenue sources 34 Financial Information Combined Management Report

in emergencies, Bertelsmann maintains a network of external partners and is a member of the German Cyber Security Organization (Deutsche Cyber-Sicherheitsorganisation: DCSO). Furthermore, Bertelsmann addresses the increased risk with specific measures that directly strengthen resilience in cyber security – for example, by supporting the activities of Security Operations Centers and authentication technologies. An indicative assessment of risks to information security was Fernsehen GmbH & Co KG filed a motion claiming that the expert was not impartial, with the aim of getting the court to obtain a new expert opinion. IP Deutschland has rejected the motion of lack of impartiality as unfounded. In May 2019, the court announced it would give the expert the opportunity to comment on the motion of lack of impartiality. Because the expert died in February 2020, an expert opinion was not submitted. The court stated that it would appoint a new conducted in the financial year 2020 on the basis of the method expert. It is expected that the process of appointing a new used to assess operative Group risks. The results indicate that expert and the preparation of the expert opinion will take two information security risks are moderate, analogous to the categorization of major Group risks. Legal and Regulatory Risks Bertelsmann, with its worldwide operations, is exposed to a variety of legal and regulatory risks concerning, for example, litigation or varying interpretations of tax assessment criteria. Bertelsmann has television and radio operations in several European countries that are subject to regulation. In Germany, for example, the media is subject to oversight by the Commission on Concentration in the Media. Moreover, education activities are subject to regulatory provisions of government authorities and accreditation bodies. Some of the financial services activities are subject to banking supervision regulations. Bertelsmann Group companies occupy leading market positions in many lines of business, and may there- fore have limited potential for growth through acquisition due to antitrust legislation. Other risks include litigation relating to company acquisitions and disposals, as well as increased data protection regulations leading to growing challenges, especially for data-based business models. These risks are being continu- ously monitored by the relevant divisions within the Group. Several subsidiaries of RTL Group are being sued by the broadcaster RTL 2 Fernsehen GmbH & Co KG and its sales house El Cartel Media GmbH & Co KG before the regional court in Düsseldorf, Germany, seeking disclosure of infor- mation to substantiate a possible claim for damages. The proceedings follow the imposition of a fine in 2007 by the German Federal Cartel Office for abuse of market domi- nance with regard to discount scheme agreements (share deals) granted by IP Deutschland GmbH and SevenOne Media GmbH to media agencies. The German Federal Cartel Office argued that these discounts would foreclose small broadcasters from the advertising market. In 2014, the to three years. It could ultimately take 15 to 20 years after filing (2008) for a final judgment to be handed down. The court case will continue. Similar proceedings from other small broadcasters, initiated in different courts, were unsuccessful or have been withdrawn. In June 2016, the main competitors of Fun Radio alleged that a host of the morning show had influenced Fun Radio’s results by encouraging his listeners to give favorable treat- ment to Fun Radio in the Médiamétrie surveys. In response to these allegations, Médiamétrie decided to remove Fun Radio from its surveys. Following a legal procedure initiated by Fun Radio, Médiamétrie was required to reinstate Fun Radio in the audience results surveys as of September 2016. Never- theless, Médiamétrie decided to lower Fun Radio’s audience results in its published surveys, alleging the existence of a “halo effect.” Following a procedure initiated by Fun Radio, a judicial expert was appointed in December 2017 to examine Médiamétrie’s assessment of the alleged halo effect. The judi- cial expert issued in September 2019 his final report, which confirmed the halo effect but assessed that Fun Radio’s results were overcorrected. As of September 2017, Médiamétrie has again published the full audience results for Fun Radio. In parallel to the above procedure, the main com- petitors of Fun Radio also filed, in December 2016, a claim for damages, claiming unfair competition, but this procedure was suspended until the end of the judicial expertise and will restart in the course of the first quarter of 2020. In the meantime, four of the six claimants withdrew their claim from the proceedings. Negotiations on a settlement with the two remaining claimants failed in late July 2020. For this reason, the court case will continue. On February 22, 2018, the Spanish Competition Authority (CNMC) communicated to Atresmedia the opening of a proceeding for sanctions in relation to possible practices district court of Düsseldorf decided to order an expert report. The expert concluded in February 2018 that the likelihood of damages cannot be proven with certainty. In July 2018, RTL 2 restricting competition prohibited by article 1 of the Spanish Competition Act. On February 6, 2019, the CNMC notified the Statement of Objections in which it assumes proven that 36 Financial Information Combined Management Report

by aligning the leverage factors for the USD and GBP in the long term with the maximum permitted for the Group. Foreign currency translation risks arising from net invest- ments in foreign entities are not hedged. The cash flow risk from interest rate changes is centrally monitored and liquidity needs covered by existing liquidity and available credit facilities. Opportunity Management System controlled as part of interest rate management. The aim is to achieve a balanced ratio of different fixed-interest rates through the selection of appropriate maturity periods for the An efficient opportunity management system enables Bertelsmann to secure its corporate success in the long term, and to exploit potential in an optimal way. Opportunities are originated financial assets and liabilities affecting liquidity, possible future developments or events that could result in a and through the ongoing use of interest rate derivatives. The positive deviation from the outlook or objectives for Bertelsmann. liquidity risk is regularly monitored on the basis of the budget planning. The syndicated loan and appropriate liquidity provi- sions form a sufficient risk buffer for unplanned payments. Counterparty risks exist in the Group in respect to invested cash and cash equivalents, as well as in case a counterparty The opportunity management system is, like the RMS, an integral component of business processes and company decisions. During the strategy and planning process, significant opportunities are determined each year from the profit-center level upward, and then aggregated step by step at the division to derivative transactions defaults. Transactions involving and Group levels. By systematically recording them on several money market securities and other financial instruments are reporting levels, opportunities that arise can be identified and exclusively conducted with a defined group of banks with exploited at an early stage. This also creates an interdivisional high credit ratings. Within the guidelines, a risk limit specified overview of Bertelsmann’s current opportunities. A review of by the Executive Board has been issued for financial assets and derivatives for each counterparty. Compliance with this limit is regularly monitored by the Finance Department. The guidelines concerning the investment of cash and cash equivalents are continuously monitored and extended if necessary. Financial investments are made on a short-term basis, so that the investment volume can be reduced if the major changes in opportunities is conducted at the division level every six months. In addition, the largely decentralized opportu- nity management system is coordinated by central departments in the Group in order to derive synergies through targeted coop- eration in the individual divisions. The interdivisional experience transfer is reinforced by regular meetings of the GMC. credit rating changes. Compared with the situation at the end Opportunities of 2019, the financial market risks have grown to a moderate level. The setup of a strategic and anticipatory liquidity reserve in the wake of the coronavirus pandemic creates an While the above-mentioned opportunities associated with positive development may be accompanied by corresponding increased risk related to investing the liquidity. risks, certain risks are entered into in order to be able to General Statement on the Risk Situation The risks identified in the financial year 2020 are not endangering. Neither are there any substantial discernible risks that could threaten the existence of the Group. The overall risk situation is above the previous year’s level. The pandemic has created significant challenges, in particu- lar the risks in connection with economic development and a changing market environment. In particular, legal and regu- latory risks, customer and supplier risks, pricing and margin risks and possible loss of audience and market share at RTL Group still constitute the key challenges. However, as a result of the diversification of Group businesses, there are no concentration risks stemming from dependency on individual business partners or products in either procure- ment or sales. The Group’s financial position is solid, with exploit potential opportunities. This link to the key Group risks offers strategic, operational, legal, regulatory and financial opportunities for Bertelsmann. Strategic opportunities can be derived primarily from the Group’s further strategic development (see the section “Strategy”). In particular, there are opportunities in some cases for exploiting synergies as a result of the strategic portfolio expansions. There are individual operating opportunities in the individual divisions, in addition to the possibility of more favorable economic development. For RTL Group, a better-than-expected development of the TV advertising markets, as well as higher audience and advertising market shares, are major opportunities. Furthermore, the increasing digitization and fragmentation of the media landscape are opening up opportunities. Professionally pro- duced content can be distributed across multiple platforms 38 Financial Information Combined Management Report

Outlook Anticipated Overall Economic Development Bertelsmann anticipates that economic conditions will develop are expected to remain stable overall. In 2021, in the magazine business in Germany, a strong decline is expected in the print advertising markets, as well as a significant decline in the cir- culation markets, while continued strong growth is expected in as follows in 2021. After a historic decline in the economy, the the digital segment. In the relevant music market, the publishing global economy should expand strongly again in the following market segment is expected to decline significantly, whereas year. The global economic recovery slowed down in the winter of 2020/2021 due to another wave of infection, but the long- term upward trend remains intact. As the rate of immunization strong growth is projected for the recordings market segment. Service markets will likely show moderate growth in 2021, with the exception of the financial services market. The gravure increases and the measures for fighting the pandemic are market in Europe is expected to continue its strong decline in lifted, economic activity will continue to pick up in the course of the year. In its outlook from December 2020, the Kiel Institute for the World Economy (IfW) estimates that global production will increase by 6.1 percent in 2021, compared to a decline of 3.8 percent in 2020. The economic recovery in the eurozone is expected to prog- ress consistently. The IfW estimates real economic growth of 4.9 percent in 2021. The IfW expects GDP for Germany to grow by 3.1 percent in real terms. The growth rate in France is expected to be 6.3 percent in real terms. For the United Kingdom, GDP is expected to rise by 6.5 percent in real terms in 2021. In the United States, a return to positive growth rates is also expected; the forecast for 2021 is real economic growth of 3.7 percent. 2021, a significant decline is expected for the offset market in Europe, and a slight decline is expected in the book printing market in North America. Overall, sustained moderate to strong growth is anticipated for the relevant US education markets. Expected Business Development The following assessments are subject to a particularly high degree of uncertainty. It is only possible to assess the direction of the pandemic and its economic consequences in the short term, therefore making it hard to sufficiently predict the future. This limited unpredictability is currently a challenge when trying to assess the effects on the markets relevant to Bertelsmann and the anticipated overall economic situation. In addition, geopolitical crises, national deficits, currency Anticipated Development in Relevant Markets turbulence or the introduction of higher tariffs as a result of rising protectionist tendencies could interfere with economic The worldwide media industry is primarily influenced by performance. The resulting developments could also adversely global economic developments and the resulting growth affect the overall economic situation, which is a key factor dynamic. The continued trend toward digitization of content influencing Bertelsmann’s business performance. Accordingly, and distribution channels, changes in media usage and the the following expectations are based on the assumption of a increasing influence of emerging economies will continue to present risks and opportunities in the years to come. With its strategic focus, Bertelsmann expects to benefit to an increasing extent from the resulting opportunities. Through recovery in the overall economic situation, and an assumption that most of the forecasted market developments and eco- nomic predictions of the research institutions will be realized. its businesses, Bertelsmann operates in a variety of different markets and regions whose developments are subject to a For the financial year 2021, Bertelsmann anticipates that business development will be driven by a recovery of the range of factors and that do not respond in a linear fashion European TV advertising markets and by stable book markets, to overall economic tendencies. The following takes into as well as by mostly growing service, music and online account only those markets and regions that are large enough education markets. The growth stimuli created through to be relevant for forecasting purposes and whose expected strategic portfolio expansions will continue to have a positive development can be appropriately aggregated and evaluated, impact on Bertelsmann’s growth profile. or that are strategically important from a Group perspective. In 2021, the TV advertising markets are projected to show slight growth in Germany; significant growth in France, the Netherlands and Hungary; and strong growth in Belgium and Spain. The streaming markets in Germany and the Netherlands are expected to continue growing strongly. The book markets In addition to the assumed market developments, the predicted economic developments in the geographic core markets of Western Europe and the United States are the basis of the expected business development. With revenue and earnings share within the eurozone currently expected at around two- thirds, the range of growth is above all based on the forecasted 40 Financial Information Combined Management Report

to positive effects from a corporate transaction and sales of buildings. Other interest income and similar income as well as other income expenses and similar expenses included in the item “Interest income” increased by €31 million and €38 million, respectively. Due to an increase in financing extended to subsidiaries, other interest income and similar income rose. The increase in other income expenses and similar expenses is largely attributable to the issue of bonds and promissory notes. Write-downs of long-term financial assets in the amount of €60 million mainly pertain to a write-down of shares in Gruner + Jahr GmbH, Hamburg. The taxes on income increased to €-212 million in the 2020 financial year (previous year: €-60 million) as a result of increased taxable income of the tax group. Net Assets and Financial Position of Bertelsmann SE & Co. KGaA The total assets of Bertelsmann SE & Co. KGaA increased from €22,366 million in the previous year to €25,513 million. This development is largely attributable to financing measures and measures taken to secure liquidity. A high ratio of equity (40 percent) and long-term financial assets (69 percent) to total assets continues to characterize net assets and financial position. The change in long-term financial assets is attributable to the opposing trends in investments in affiliated companies (increase of €1,014 million) and in securities held as fixed assets (increase of €209 million) on the one hand, and a decrease of €482 million in loans to affiliates on the other hand. Investments in affiliated companies increased due to the contributions to Bertelsmann, Inc., Wilmington in the amount of €835 million, and to Bertelsmann Capital Holding GmbH, Gütersloh, in the amount of €216 million. Loans to affiliated companies decreased as a result of repayment of loans. The increase in receivables and other assets is largely related to financing extended to affiliated companies. The increase in cash and cash equivalents is mainly attributable to the issue of bonds and debentures. Equity increased by €435 million as a result of the net income of the reporting year. Liabilities increased to €14,488 million (previous year: €11,944 million), of which €1,700 million is attributable to bonds and debentures. Financing measures and measures taken to secure liquidity included the issue of four bonds and three debentures. The increase in liabilities to affiliated companies from €6,780 million to €7,601 million is attributable Income Statement of Bertelsmann SE & Co. KGaA in accordance with HGB in € millions Revenues Other operating income Cost of materials Personnel costs Amortization, depreciation and write-downs Other operating expenses Income from other participations Interest income Write-downs of long-term financial assets Taxes on income Earnings after taxes Other taxes Net income Income brought forward Transfer to other retained earnings Net retained profits 42 Financial Information Combined Management Report 2020 109 398 (29) (147) (20) (258) 731 (70) (65) (212) 437 (2) 435 663 (200) 898 2019 113 189 (31) (159) (23) (225) 663 (67) 0 (60) 400 (3) 397 461 (195) 663

Combined Non-Financial Statement Corporate Responsibility Management Organization The following information relates to Bertelsmann SE & Co. KGaA and the Bertelsmann Group (“Bertelsmann”) with its incorporated, fully consolidated subsidiaries (“subsidiaries”) in accordance with sections 315b and 315c of the HGB, in conjunction with sections 289b to 289e of the HGB. Bertelsmann operates in the core business fields of media, services and education in around 50 countries (see the section “Company Profile”). Taking responsibility – for employees, society, the business environment and the natural environ- ment – is firmly anchored in Bertelsmann’s corporate culture. In its corporate responsibility management, Bertelsmann pursues the goal of reconciling commercial interests with social and The advisory body for the strategic development of corporate responsibility (CR) at Bertelsmann is the CR Council. The CR Council is made up of high-ranking managers from the corporate divisions and the Chief Human Resources Officer of Bertelsmann, who chairs the advisory body. The CR Council focuses on Group-wide CR topics in line with the corporate strategy, anchoring CR more strongly in the corporate divisions and the cross-divisional coordination of CR activities within the Group. At the Group level, the Corporate Responsibility department coordinates and supports the work of the CR Council in environmental concerns, within the Group and beyond. close cooperation with the other Group functions. Within When preparing its combined non-financial statement, Bertelsmann follows the Standards (2016) of the Global Reporting Initiative (102 and 103). In addition, voluntary reporting based on the GRI Standards (2016; in accordance: Core option) is published in the middle of the financial year. the Bertelsmann corporate structure, the local management teams are responsible for implementing corporate responsibility through specific measures and projects. The corporate divisions and companies have their own structures and processes in place for this, in accordance with local requirements. Topics Company Principles and Guidelines The prerequisites for a corporate culture in which employees, management and shareholders work together successfully, To identify key CR topics, Bertelsmann carries out regular CR relevance analyses. For each analysis, the company conducts a survey of internal and external stakeholders; the external stakeholders estimate the impact of Bertelsmann’s business respectfully and in a spirit of trust are common goals and activity on the CR topics, while the internal stakeholders shared values. These are set forth in the corporate constitution assess their business relevance. This process serves to identify as well as in the Bertelsmann Essentials “Creativity and Entrepreneurship.” Furthermore, the Bertelsmann Code of Conduct – as a binding guideline – defines minimum standards for ethical and lawful conduct within the company and toward business partners and the public. The Bertelsmann Supplier Code of Conduct sets out the mandatory minimum CR topics that are necessary for understanding the business development, the business performance, the position of the Group and the impact of its activity on the non-financial aspects, which include employee and social matters, respect for human rights, anti-corruption and bribery matters as well as environmental matters. These topics are analyzed within requirements for its business partners in their relationship the company boundaries, unless otherwise stated. In 2020, with Bertelsmann. the Bertelsmann Executive Board confirmed the validity of the current CR relevance matrix. Bertelsmann’s actions are also determined by external guide- lines. The company uses as guidance the recommendations of the German Corporate Governance Code for good and respon- sible corporate governance and largely follows the OECD Guidelines for Multinational Enterprises. Bertelsmann is com- mitted to the principles of the Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights, and the International Labor Organization core labor standards. A member of the United Nations Global Compact, Bertelsmann supports the Agenda 2030 of the UN. CR topics, including non-financial performance indicators, are increasingly important for Bertelsmann’s businesses, but have not yet been incorporated into the value-oriented management system. Due to currently limited measurability, no directly quantifiable statements can be made regarding relevant interdependencies and value increases for the Group. For this reason, the non-financial performance indicators are not used for the management of the Group (see the section “Value-Oriented Management System”). 44 Financial Information Combined Management Report

Targeted Proportion of Women in Top and Senior Management Target for 2021 in percent One-third of positions across all divisions occupied by women Top management 1),2) Senior management 1),3) 2020 27 30 2019 22 30 1) Top and senior management comprises those positions that are of particular importance because of their success-critical function and their strategic relevance for the Group‘s continued transformation and the achievement of its strategic targets. Top management positions comprise GMC positions but not Executive Board positions. 2) Basis: permanent and fixed-term employees as of December 31; with gender indication 2020 (90 percent), with gender indication 2019 (90 percent), limited comparability. 3) Basis: permanent and fixed-term employees as of December 31; with gender indication 2020 (93 percent), with gender indication 2019 (91 percent), limited comparability. for a second year, providing 50,000 scholarships for which fulfil this goal, the targeted proportion of women in the talent both employees and external candidates are eligible to apply. Additional initiatives with an emphasis on strengthening the company’s learning culture and social learning included the pools was set at one-third for the top and senior management pool and 50 percent for the career development pool. These targets were already met in 2019/2020. The proportion of “Kollegen-Campus” (“Campus of Colleagues”), a digital and women in top management was increased. The Bertelsmann international initiative for peer-to-peer learning. In Germany, Supervisory Board is notified annually of the progress in the Bertelsmann training and studies courses were also regard to these targets. adjusted to accommodate the changes caused by the corona- virus pandemic by using adapted learning environments and The Bertelsmann Inclusion Action Plan 2019-2024 aims to form an increasing number of digital work methods. processes and structures in the German companies to maxi- Diversity mize accessibility for employees with disabilities so they may contribute their full potential to the company’s success. The first evaluation of the measures implemented was carried out The diversity and differences in the workforce are prerequi- after one year as planned and is available at the Bertelsmann sites for creativity, innovation and Bertelsmann’s long-term website under www.bertelsmann.com/disability-and-inclusion. business success. This is conveyed in the Bertelsmann The be.queer LGBTIQ employee network, launched in 2017, Essentials. Furthermore, the Bertelsmann Executive Board continued its activities in 2020 and actively assisted in emphasizes in its Diversity Statement its aim of increasing linking the LGBTIQ networks in the divisions. Furthermore, diversity of staff at all levels and in every respect. The diver- sity strategy is implemented by the Corporate Responsibility department, with support from a Group-wide working group. various measures were implemented in the divisions again in 2020, especially as a response to the Black Lives Matter movement. The focus in 2020 was on the following dimensions: gender, disabilities as well as sexual orientation and identity. Some Health divisions set their own additional priorities to reflect the local situation. The Bertelsmann website provides an overview of With a view to designing a health-promoting work environment the measures used for increasing diversity at Bertelsmann and preventing work-related risks of disease, Bertelsmann is under the link www.bertelsmann.com/diversity. On December 31, 2020, the genders were almost evenly distributed across the entire staff, with 54 percent women (previous year: 53 percent) and 46 percent men (previous year: 47 percent). The Group Management Committee (GMC), which advises the Bertelsmann Executive Board on important continually expanding the company health management system at German locations. Bertelsmann Health Management develops and takes responsibility for the Bertelsmann health strategy in cooperation with a cross-functional strategy group. The head of HR Coordination and Shared Services chairs this group and directs implementation of the health strategy. This individual is assisted by the cross-divisional “Health Community,” which is corporate strategy and development matters, as well as other comprised of employees in areas of health and human resources, issues that affect the Group as a whole, comprised 18 members (previous year: 16), of which six were female (previous year: six) as of December 31, 2020. To enhance diversity at the management levels, Bertelsmann aims to achieve the goal of one-third of positions in top and senior management across all divisions being occupied by women by the end of 2021. To works council members and representatives for employees with disabilities and works on topics such as “Minimum Health Standards.” Health representatives in the German companies assist in locally implementing Health Management in business operations. The internal Health Management Consulting provides advising services and support. 46 Financial Information Combined Management Report

voluntary commitments to external guidelines such as the ethics codes of national press councils; and within the com- pany by the Bertelsmann Code of Conduct. In accordance with these principles and guidelines, Bertelsmann’s editorial staff are committed to, among other things, “respecting privacy and the responsible treatment of information, opinion and images.” As a result, the company expects careful The Executive Board Guideline on Data Protection reflects the basic legal data protection framework at Bertelsmann Group based on the European Union’s General Data Protection Regulation (GDPR), and is designed to ensure consistent data protection management across the Bertelsmann Group. A Group-wide data protection management system addresses in particular the implementation of the documentation and research, qualitative reporting and transparency in case of accountability obligations under GDPR. errors. Thorough journalistic skills are more important than ever in the face of online disinformation. Furthermore, the issue of content responsibility is anchored in various ways in the divisions, companies and editorial departments. In accor- dance with the “Editor-in-Chief Principle,” the responsibility for media content lies solely with the managers in the editorial teams and creative departments. Cross-division verification teams continued in 2020 to provide their expertise in discern- ing between authentic and manipulated photos and videos, or those taken out of context. In the area of youth media protection, content is monitored in accordance with different restrictions for each medium and region to see if it could adversely affect the development of children or young people. If there are indications of such, various restrictions come into force, such as broadcasting time restrictions or content and/or product labels. Through voluntary labeling systems, Bertelsmann divisions and companies sometimes go beyond the existing EU and national regulations, particularly in the area of audiovisual media. In Responsibility for customer data protection rests with the management of the individual subsidiaries. To ensure compliance with data protection laws, the subsidiaries in Germany have a data protection organization consisting of central data protection officers and local data protection coordinators. The latter report to the local management, as well as annually or on an event-driven basis to the central data protection officers, who in turn report annually or on an event-driven basis to the Bertelsmann Executive Board. A similar organization exists in subsidiaries outside Germany. An Information Security Management System (ISMS) based on industry-standard ISO 27001 creates the technical and organizational framework for confidential data processing. The ISMS features a regular and structured survey of rele- vant processes and procedures, to ensure compliance with statutory information security requirements, a systematic recording of risks and derivation, and control of related mitigation measures. addition, Bertelsmann companies are active in child and youth Protecting Intellectual Property media protection organizations. Customer Data Protection Bertelsmann attaches great importance to protecting cus- tomer data. This includes safeguarding the personal data Bertelsmann’s businesses also develop, produce, finance, transfer, license and sell products and services that are protected as intellectual property. For Bertelsmann, the protection of intellectual property rights is of particular importance for its analog and digital business. This is also of company customers, as well as personal data provided set forth in the Bertelsmann Code of Conduct: “We respect to Bertelsmann by its business partners regarding their customers. The goal of customer data protection is to protect an individual’s right to determine who has what knowledge and protect all forms of intellectual property and protected content.” For this reason, the company is committed to the highest possible level of global copyright protection about the individual, and when. This also means that personal worldwide, as well as maintaining strong exclusive rights information, or information that could identify a person, and freedom of contract – and in the same measure, also must be handled in accordance with the legal requirements and adequately protected against unauthorized access and that the data subjects must be able to claim their statutory rights. There are various possibilities for data subjects to contact Bertelsmann, including e-mail addresses set up for this purpose. In addition to the Bertelsmann Code of Conduct, customer data protection within the company is regulated by Executive Board guidelines on the topics of information security and IT risk management. to balanced legal conditions that allow for fair competition in the digital market. The Taskforce Copyright, with repre- sentatives from the relevant German content businesses (Mediengruppe RTL Deutschland, Penguin Random House Verlagsgruppe, G+J, BMG and UFA), monitor current in EU and developments and German copyright law and develop joint positions. The focus in 2020 was the transposition of the EU copyright directive in the digital single market into German law. legislative processes 48 Financial Information Combined Management Report

measures in the Group. The most important measures in 2020 include reviewing and voting on a new Code of Conduct as well as designing a new Code of Conduct training program to be rolled out in 2021. The findings of the Bertelsmann Compliance Risk Analysis of 2020 show that the risk of corruption is minimized to the greatest extent possible in view of the measures taken. emissions generated at its sites, by the mobility of its employ- ees and by the manufacture of its own products by 50 percent compared to 2018. Remain- and thus 500,000 tons of CO ² ing emissions will be offset by financing certified climate protection projects. The Group-wide climate protection target was set by the Bertelsmann Executive Board in December 2019 and communicated in February 2020. Fair Competition and Antitrust Law The most important measures for reaching the climate protection target include switching to certified green Bertelsmann is committed to the principle of fair competition, electricity, installing photovoltaic systems, improving and condemns antitrust violations and anticompetitive behavior. The goal is to reduce the risk of antitrust violations to a level at which they do not endanger the company’s energy efficiency and designing new mobility programs. Furthermore, emissions from the print and digital products supply chain are to be reduced in a joint effort with business success. The Bertelsmann Executive Board issued the Group partners. In 2020, the number of sites using green Guideline for Compliance with Antitrust Regulations to electricity increased by 11 sites compared with the previous anchor a reporting requirement for antitrust violations. With year, to 81 sites. The number of sites using green electricity is regard to the supply chain, the Supplier Code Conduct to be increased again next year. obligates Bertelsmann’s business partners to observe the applicable antitrust and competition law. Infringements of antitrust provisions can be reported by Bertelsmann employees and third parties by using the reporting channels of the existing compliance management system. The company acts against any contravention that becomes known, and consults internal or external experts on antitrust and competition issues. The topic of competition and anti- trust law is addressed in the annual Compliance Report submitted to the Executive Board. The Corporate Legal Department provides an obligatory antitrust training program to corporate divisions and the management and employees of these divisions who work in antitrust-related areas. This training program moved to a virtual format in April 2020 due The climate protection target is aligned with Group-wide guidelines on environmental and climate protection as well as on energy and paper procurement. The Group-wide environ- mental efforts include not only the company’s own sites but also relevant parts of the supply chain – for example, paper suppliers, external printers and energy suppliers. Operational responsibility for energy and environmental management, as well as for implementing measures, rests with the manage- ment of the individual companies. The international “be green” working group with representatives from the Bertelsmann cor- porate divisions again provided a platform for cross-divisional exchange on environmental topics in 2020. Cooperation in the current reporting year focused on procuring electricity from to the coronavirus pandemic. The findings of the Bertelsmann renewable energy sources, acquiring knowledge on methods Compliance Risk Analysis of 2020 show that the risk of for quantifying supply chain emissions, as well as continued antitrust violations is minimized to the greatest extent possible development of the Group’s environmental reporting. in view of the measures taken. Environmental Matters Bertelsmann aspires to become climate-neutral by 2030. By that time, the Group aims to reduce the greenhouse gas As part of the annual environmental data survey conducted at the Group sites globally, key figures are collected regarding energy and materials consumption as well as fuels and employee mobility, and greenhouse gas emissions are quan- tified. The Group-wide environmental key figures are pub- lished in the second quarter on the Bertelsmann website at https://www.bertelsmann.com/environmental. 50 Financial Information Combined Management Report

Consolidated Statement of Comprehensive Income in € millions Group profit or loss Items that will not be reclassified subsequently to profit or loss Remeasurement component of defined benefit plans Changes in fair value of equity instruments Share of other comprehensive income of investments accounted for using the equity method Items that will be reclassified subsequently to profit or loss when specific conditions are met Exchange differences – changes recognized in other comprehensive income – reclassification adjustments to profit or loss Cash flow hedges – changes in fair value recognized in other comprehensive income – reclassification adjustments to profit or loss Share of other comprehensive income of investments accounted for using the equity method Other comprehensive income net of tax Group total comprehensive income attributable to: Bertelsmann shareholders Non-controlling interests Notes 17 2020 1,459 (98) 1 – (339) (7) (13) (2) (3) (461) 998 715 283 2019 1,091 (224) (2) (1) 78 6 8 (3) (4) (142) 949 602 347 52 Financial Information Consolidated Financial Statements

Consolidated Cash Flow Statement in € millions Group earnings before interest and taxes Taxes paid Depreciation and write-ups of non-current assets Results from disposals of investments Gains/losses from disposals of non-current assets Change in provisions for pensions and similar obligations Change in other provisions Change in net working capital Fair value measurement of investments Other effects Cash flow from operating activities – thereof discontinued operations Investments in: – intangible assets – property, plant and equipment – financial assets – purchase prices for consolidated investments (net of acquired cash) Disposals of subsidiaries and other business units Disposals of other fixed assets Cash flow from investing activities – thereof discontinued operations Issues of bonds and promissory notes Redemption of bonds and promissory notes Proceeds from/redemption of other financial debt Redemption of lease liabilities Interest paid Interest received Dividends to Bertelsmann shareholders Dividends to non-controlling interests and payments to partners in partnerships (IAS 32.18(b)) Change in equity Other effects Cash flow from financing activities – thereof discontinued operations Change in cash and cash equivalents Exchange rate effects and other changes in cash and cash equivalents Cash and cash equivalents as of 1/1 Cash and cash equivalents as of 12/31 Less cash and cash equivalents included within assets held for sale Cash and cash equivalents as of 12/31 (according to the consolidated balance sheet) The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information.” Changes in Net Liabilities Arising from Financing Activities in € millions Net liabilities arising from financing activities as of 1/1 Cash flow from operating activities Cash flow from investing activities Interest, dividends and changes in equity, additional payments (IAS 32.18(b)) Exchange rate effects and other changes in net liabilities arising from financing activities Net liabilities arising from financing activities as of 12/31 2020 2,276 (214) 1,128 (410) (234) (92) 94 486 (59) 19 2,994 – (313) (350) (216) (41) 337 320 (263) – 1,785 (100) (116) (276) (298) 43 – (10) (736) 38 330 – 3,061 (61) 1,643 4,643 (72) 4,571 2020 (4,756) 2,994 (263) (1,001) (384) (3,410) 2019 1,825 (424) 1,096 (90) (3) (95) (3) (42) (143) (61) 2,060 – (283) (323) (317) (317) 228 330 (682) 1 75 (309) (67) (247) (260) 25 (180) (263) 81 17 (1,128) – 250 (12) 1,405 1,643 (7) 1,636 2019 (5,262) 2,060 (682) (597) (275) (4,756) The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information.” Net liabilities arising from financing activities are the balance of the balance sheet positions “Cash and cash equivalents,” “Financial debt” and “Lease liabilities.” 54 Financial Information Consolidated Financial Statements

Notes Segment Information (Continuing Operations) RTL Group Random House Gruner + Jahr BMG Arvato Penguin in € millions 2020 2019 2020 2019 2020 2019 Revenues from external customers 5,939 6,586 3,801 3,636 1,102 1,319 78 65 1 – 33 36 6,017 6,651 3,802 3,636 1,135 1,355 1,097 1,417 691 561 127 157 2020 599 3 602 137 2019 2020 2019 597 4,315 4,112 3 67 63 600 4,382 4,175 138 662 549 Intersegment revenues Divisional revenues Operating EBITDA EBITDA margin1) Impairment (-)/reversals (+) on intangible assets, property, plant and equipment and right-of-use assets Results from investments accounted for using the equity method Impairment (-)/reversals (+) on investments accounted for using the equity method Invested capital 18.2% 21.3% 18.2% 15.4% 11.2% 11.6% 22.7% 23.0% 15.1% 13.2% (16) 32 (3) 64 (62) (50) – 2 – – 2 – (77) 4 – (1) 10 – – – (1) (1) – – (12) 11 – (9) 10 – 6,547 6,735 2,326 2,582 474 619 1,801 1,927 1,785 1,894 Further details on segment reporting are presented in note 27 “Segment Reporting.” The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information.” 1) Operating EBITDA as a percentage of revenues. 2) The business development of Bertelsmann Investments is presented primarily on the basis of EBIT. EBIT amounted to €1 million (previous year: €107 million). Reconciliation to Operating EBITDA (Continuing Operations) in € millions EBIT from continuing operations Special items – impairment on goodwill and other intangible assets with indefinite useful life as well as gains from business combinations – adjustment to carrying amounts on assets held for sale – impairment (+)/reversals (-) on other financial assets at amortized cost – impairment (+)/reversals (-) on investments accounted for using the equity method – results from disposals of investments – fair value measurement of investments – restructuring and other special items Amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets Adjustments on amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets included in special items Operating EBITDA from continuing operations The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information.” 2020 2,276 116 – 26 62 (410) (59) 214 1,040 (122) 3,143 2019 1,825 27 7 9 51 (90) (143) 293 1,029 (121) 2,887 56 Financial Information Consolidated Financial Statements

General Principles The Bertelsmann SE & Co. KGaA Consolidated Financial Statements as of December 31, 2020, were prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the related interpretations (IFRIC) of the IFRS Interpretations Committee (IFRS IC) that are applicable in the European Union (EU-IFRS). The supplementary requirements set out in section 315e of the German Commercial Code (HGB) were also met. The Consolidated Financial Statements are prepared in euros. Unless otherwise stated, all amounts are given in millions of euros (€ million). For the sake of clarity, certain items in the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet and the consolidated cash flow statement are combined. These items are disclosed and explained in greater detail in the notes. Bertelsmann SE & Co. KGaA is a partnership limited by shares with its registered office in Gütersloh, Germany. It is entered in the commercial register of the Gütersloh Local Court (Amtsgericht) under HRB 9194. The address of the company’s registered headquarters is Carl-Bertelsmann-Strasse 270, 33311 Gütersloh. Bertelsmann is a media, services and education company that operates in about 50 countries around the world. The geographic core markets are Western Europe – in particular, Germany, France and the United Kingdom – and the United States. In addition, Bertelsmann is strengthening its involvement in growth markets such as Brazil, India and China. The Bertelsmann divisions are RTL Group (television), Penguin Random House (books), Gruner + Jahr (magazines), BMG (music), Arvato (services), Bertelsmann Printing Group (printing), Bertelsmann Education Group (education) and Bertelsmann Investments (funds). Further information on the main activities of Bertelsmann SE & Co. KGaA and its subsidiaries is presented in detail in the Combined Management Report. Impact of New Financial Reporting Standards The initial application of new financial reporting standards and interpretations had no material impact on the Bertelsmann Group. Impact of Issued Financial Reporting Standards That Are Not Yet Effective The Bertelsmann Group has not opted for early adoption of any additional standards, interpretations or amendments that have been issued by the IASB or the IFRS IC but are not yet mandatory. The expected impact from the issued financial reporting requirements that are not yet effective is not mate- rial to the Bertelsmann Group. Effects of the Coronavirus Pandemic on the Consolidated Financial Statements The effects of the coronavirus pandemic on the Consolidated Financial Statements of Bertelsmann SE & Co. KGaA, both in terms of operations and balance sheet, vary across media, services, education and investment. While rev- enues from the advertising-financed businesses and printing businesses declined, the less affected music, services and education areas partially or fully compensated these effects. In addition to the Group-wide implementation of extended procedures to monitor cash and receivables, financing measures were taken at the beginning of the looming coronavirus pandemic and its macroeconomic consequences. Furthermore, balance sheet effects were 58 Financial Information Consolidated Financial Statements

Consolidation Principles of Consolidation The Bertelsmann Consolidated Financial Statements include the financial statements of the parent company and its sub- sidiaries, joint ventures and associates. owed by or to the former subsidiary, are accounted for in accordance with the applicable IFRSs from the date when control is lost. Subsidiaries are companies controlled by Bertelsmann SE & Co. KGaA in accordance with IFRS 10. Consolidation begins on the date on which the ability to exercise control exists, and ends when Bertelsmann loses the ability to exercise control. Joint ventures in accordance with IFRS 11 and associates are included in the Consolidated Financial Statements using the equity method in accordance with IAS 28. Associates are companies over which Bertelsmann exercises a significant Profit or loss and each component of total comprehensive income are attributed to the shareholders of the parent company and the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. In accordance with IFRS 3, business combinations are accounted for using the acquisition method. Non-controlling interests are measured at the proportionate fair value of the assets influence. This is generally the case for voting rights between 20 percent and 50 percent. Smaller shareholdings are accounted for using the equity method if there is a significant influence in accordance with IAS 28.6. When changing the accounting treatment of investments to the equity method, IFRS 3 is applied correspondingly so that the fair value of the previously held interest is used in determining the cost of the and liabilities. If the consideration transferred for the business investment accounted for using the equity method on the combination or the fair values attributable to the identifiable transition date. The difference between the fair value and the assets and liabilities of the company acquired can only be carrying amount of the previously held interest is recognized provisionally identified on the date of initial accounting, the in profit or loss. The portfolio of investments held by the business combination is accounted for using these provisional Bertelsmann Investments division includes, among others, values. Initial accounting is completed in accordance with IFRS 3.45, taking into account the one-year measurement period. Comparative information for reporting periods prior to the completion of initial accounting is presented as if it had already been completed on the acquisition date. Changes in the parent’s ownership interest in a subsidiary that do not lead investments in associates recognized at fair value through profit or loss in accordance with IAS 28.18 in conjunction with IFRS 9. When applying the equity method to an associate or a joint venture that is an investment entity, Bertelsmann, which is a non-investment entity, generally retains as investor the fair value measurement applied by the associate or joint venture to a loss of control are accounted for as equity transactions. to its interests in subsidiaries. After the loss of control of a subsidiary, it is deconsolidated in accordance with the requirements of IFRS 10. Any investment retained in the former subsidiary, as well as any amounts The Bertelsmann Group recognizes immaterial investments in accordance with IFRS 9. 60 Financial Information Consolidated Financial Statements

Acquisitions and Disposals The Bertelsmann Group made several acquisitions in the finan- cial year 2020, none of which was material on a stand-alone basis. In total, the impact of these acquisitions on the Group’s financial position and financial performance was also minor. In the financial year 2020, the cash flow from acquisition activities totaled €-41 million (previous year: €-317 million), of which €-33 million (previous year: €-293 million) related to new acquisitions during the reporting period less cash and cash equivalents acquired. The consideration transferred in accordance with IFRS 3 amounted to €77 million (previous year: €326 million) taking into account contingent consider- ation of €2 million (previous year: €3 million). In addition, a put option was recognized in the amount of €9 million (previous year: €8 million) and a forward in the amount of €3 million (previous year: €0 million) in connection with the acquisitions. The acquisitions resulted in goodwill totaling €68 million, which reflects synergy potential and is not tax-deductible. Transaction-related costs were immaterial in the financial year 2020 and have been recognized in profit or loss. Since initial consolidation, all new acquisitions in accor- dance with IFRS 3 in the financial year 2020 have contributed €55 million to revenue and €2 million to Group profit or loss. If consolidated as of January 1, 2020, these would have con- tributed €102 million to revenue and €1 million to Group profit or loss. On the acquisition date, the fair value of the acquired receivables was €66 million. Of that amount, €9 million is attributable to trade receivables and €57 million to other receivables. Trade receivables were not significantly impaired, so that the fair value is equal to the gross amount. The other receivables were impaired in the amount of €9 million, so that the gross amount is €66 million. In accordance with IFRS 3, the fair values of the identifiable assets, liabilities and contingent liabilities acquired are measured primarily using the market price-oriented method. According to this method, assets and liabilities are measured at the prices observed in active markets. If measurement using the market price-oriented method is not feasible, as a rule the capital value-oriented method is to be applied. According to that method, the fair value of an asset or a liability corresponds The purchase price allocations consider all the facts and circumstances prevailing as of the respective dates of to the present value of the future cash inflows or outflows (cash flows). acquisition that were known prior to preparation of the Consolidated Financial Statements. In accordance with IFRS 3, should further facts and circumstances become known within the 12-month measurement period, the purchase price allocation will be adjusted accordingly. The following table shows the fair values of the assets and liabilities of the acquisitions on their dates of initial consolidation based on the purchase price allocations, some of which are currently preliminary: 62 Financial Information Consolidated Financial Statements

7.2 million ordinary shares of Experian plc, the parent company of GUS Treasury Services B.V., for a total of €223 million and a cash payment of €7 million. Net of transaction-related costs, the transaction resulted in an overall gain of €251 million recognized in the item “Results from disposals of investments.” This gain includes €86 million from the fair value measurement of the Bertelsmann Group’s remaining 40 percent interest in informa Solutions GmbH. This remaining 40 percent interest in informa Solutions GmbH is presented in the Bertelsmann Consolidated Financial Statements as an associate in the item “Investments accounted for using the equity method.” The fair value of these shares determined at the time of disposal was €123 million. In October 2020, RTL Group sold its entire interest in BroadbandTV to BBTV Holdings Inc. for €102 million (CAN$159 million) paid in cash. At the same time, and as part of the same transaction, RTL Group obtained a convertible note of €15 million measured at fair value through profit or loss (level 3). Net of transaction-related costs, the transactions resulted in an overall gain of €80 million recognized in the item “Results from disposals of investments.” After considering the cash and cash equivalents dis- posed of, the Bertelsmann Group recorded cash flows in the amount of €337 million (previous year: €228 million) from all disposals. The disposals resulted in a gain from deconsolidation of €399 million (previous year: €72 million), which is recognized in the item “Results from disposals of investments.” The following table shows their impact on the Bertelsmann Group’s assets and liabilities at the time of deconsolidation: Effects of Disposals in € millions Non-current assets Goodwill Other intangible assets Property, plant and equipment and right-of-use assets Other non-current assets Current assets Inventories Other current assets Cash and cash equivalents Liabilities Provisions for pensions and similar obligations Financial debt Lease liabilities Other financial and non-financial liabilities Discontinued Operations iGraal informa Solutions BroadbandTV Other 41 2 – 3 – 20 9 – – – 27 79 10 3 – – 12 10 2 – 2 19 25 6 1 – – 31 14 – 1 1 59 32 8 8 3 15 20 12 2 1 8 33 Total 177 26 12 6 15 83 45 4 2 11 138 Earnings after taxes from discontinued operations of €1 million reported in the comparative period comprise follow-on effects related to the disposal of companies of the former Direct Group division. 64 Financial Information Consolidated Financial Statements

In addition, Gruner + Jahr signed a put option on the disposal of Prisma Media in December 2020. The planned disposal is subject to the information and consultation of Prisma Media's employee representatives, approval from antitrust authorities, and preparing all legal documents. The transaction is expected to be completed in the first half of 2021. For disposal groups, which were measured at fair value less costs to sell, no impairment losses attributable to planned or completed disposals were recognized. The fair values are based on level 3 of the hierarchy of non-recurring fair values. Valuations for level 3 are based on information from contract negotiations. As of December 31, 2020, the carrying amounts of the assets classified as held for sale and related liabilities are mainly attributable to the RTL Group and Gruner + Jahr divisions. In the last quarter of 2020, the management of RTL Group conducted negotiations on the disposal of the SpotX Inc. and its main subsidiaries (“SpotX”). Accordingly, SpotX was reclassified as a disposal group as of December 31, 2020. As of December 31, 2020, €13 million of accumulated other comprehensive income relates to assets classified as held for sale in accordance with IFRS 5. In February 2021 – during the preparation of the Consolidated Financial Statements – RTL Group announced that it had signed an agreement for the sale of SpotX to Magnite. The purchase price consists of US$560 million in cash and 14.0 million shares of Magnite stock. The transaction is subject to approval by regulatory authorities and is expected to close in the second quarter of 2021. Foreign Currency Translation Transactions denominated in a currency other than a are translated into the reporting currency at the closing rate subsidiary’s functional currency are recognized in the at the end of the reporting period, while income statement functional currency at the exchange rate applicable on the day of their initial accounting. At the end of the reporting period, monetary assets and liabilities denominated in foreign items are translated at the average rate for the financial year. Foreign currency translation differences are recognized in other comprehensive income. Such differences arise from currency are revalued into the functional currency using the translating items in the balance sheet at a closing rate that closing rate applicable at that time. As a rule, gains and losses differs from the previous closing rate, and from using the from these foreign currency translations are recognized in profit or loss. Non-monetary balance sheet items in foreign currency are carried at the historical exchange rate. average rate for the period and the closing rate at the end of the reporting period to translate the Group profit or loss. At the time of deconsolidation of Group companies, the respective accumulated exchange differences recognized in The financial statements of subsidiaries, joint ventures other comprehensive income and accumulated in a separate and associates that were prepared in foreign currencies component of equity are reclassified from equity to profit are translated into euros using the functional currency concept set out in IAS 21 before they are included in the Consolidated Financial Statements. Assets and liabilities or loss. The following euro exchange rates were used for currency translation purposes for the most significant foreign currencies for the Bertelsmann Group: Euro Exchange Rates for Significant Foreign Currencies Foreign currency unit per €1 Australian dollar Canadian dollar Chinese renminbi British pound US dollar Average rates Closing rates 2020 1.6524 1.5313 7.8809 0.8896 1.1422 2019 12/31/2020 12/31/2019 1.6096 1.4872 7.7366 0.8777 1.1206 1.5896 1.5633 8.0225 0.8990 1.2271 1.5995 1.4598 7.8205 0.8508 1.1234 AUD CAD CNY GBP USD 66 Financial Information Consolidated Financial Statements

Payments received before satisfaction of the corresponding performance obligation are recognized as a contract liability. If contractual provisions make the invoicing of services com- pleted to date causally dependent on the need to provide basis using the effective interest method in accordance with IFRS 9. Dividends are only recognized in profit or loss when the right to receive payment of the dividend is established. Other income is recognized when the economic benefits are further goods or services, a contract asset is recognized. probable and the amount can be measured reliably. Expenses Receivables from contracts with customers are generally due are deferred on the basis of underlying facts or the period of in less than 12 months. time to which they relate. Interest income and expenses relating to financial assets measured at amortized cost are recognized on an accrual Goodwill In accordance with IFRS 3, goodwill resulting from a business combination is initially recognized at acquisition cost, with annually in accordance with IAS 36. In the Bertelsmann Group, goodwill is tested for impairment as outlined in the subsequent recognition at cost less accumulated impairment section “Impairment.” losses. Goodwill is subject to impairment testing at least Other Intangible Assets Non-current, internally generated intangible assets are capitalized at cost in accordance with IAS 38 if the corre- sponding requirements have been met. Intangible assets acquired separately are carried at acquisition cost less accu- mulated amortization and accumulated impairment losses, also in accordance with IAS 38. Intangible assets acquired as part of a business combination are initially recognized at fair value on the acquisition date in accordance with IFRS 3. Intangible assets with finite useful life are amortized on a straight-line basis over their estimated useful life. Impairment and reversals are determined by applying the requirements for impairment testing in accordance with IAS 36. As a rule, capitalized software has a useful life of between three and five years. Acquired customer relationships are amortized over a period of two to 15 years, while the amortization period for trademarks and music and publishing rights is three to 25 years. Licenses are amortized on a straight-line basis over the term of the license agreement or depending on performance (based on the ratios of income from use generated in the reporting period to the estimated total income from use over the entire useful life). Intangible assets with an indefinite use- ful life are not amortized. Instead, they are subject to at least annual impairment testing in accordance with IAS 36 and, if applicable, written down to their recoverable amount. Property, Plant and Equipment Items of property, plant and equipment are accounted for in accordance with IAS 16 and carried at cost less accumulated depreciation and accumulated impairment losses. Deprecia- tion is determined on a straight-line basis over the estimated useful life of the asset. In the financial year 2020, depreciation was generally based on the following useful lives: • buildings: 10 to 50 years • technical equipment and machinery: four to 15 years • other equipment, fixtures, furniture and office equipment: three to 15 years Land is not subject to depreciation. 68 Financial Information Consolidated Financial Statements

commencement date of the lease, less any lease incentives received. The right-of-use asset is depreciated on a straight- line basis over the shorter of the useful life or lease term. Short-term leases with a lease term of up to one year, and leases for low-value assets for which the Bertelsmann Group does not recognize right-of-use assets or lease liabilities, constitute an exception. For such leases, the payments are recognized on a straight-line basis as expenses in the income statement under “Other operating expenses.” If control of an underlying asset is transferred as defined in IFRS 15, the Bertelsmann Group as the seller and lessee recognizes the asset in the amount of the proportional right of use retained. The gain or loss from the sales transaction as the proportional amount of the rights transferred to the lessor is recognized through profit or loss in the item “Other operating income” or “Other operating expenses.” Financial Assets In accordance with the IFRS 9 classification and measurement approach for financial assets, there are three classification cost. This category mainly comprises trade receivables and other financial receivables. Any gain or loss arising categories for financial assets in the Bertelsmann Group: on derecognition and impairment losses are recognized • at amortized cost, directly in profit or loss. • at fair value with changes in fair value through other comprehensive income (FVOCI) and • FVOCI: Financial assets that are held for collection of contractual cash flows and for selling, where the assets’ • at fair value with changes in fair value through profit or loss cash flows represent solely payments of principal (FVTPL). and interest on the principal amount outstanding, are measured at fair value with changes in fair value through The allocation to the respective classification categories is other comprehensive income. The Bertelsmann Group based on the following criteria: held no debt instruments measured at fair value through • the entity’s business model for managing the financial other comprehensive income. Bertelsmann exercises the assets and option for measurement of equity instruments at fair value • contractual cash flow characteristics of the financial asset. through other comprehensive income mainly for individual Financial assets (with the exception of trade receivables without a significant financing component) are recognized initially immaterial investments. With deferred taxes taken into consideration, the gains and losses resulting from fluctuations in the fair value of these equity instruments at fair value, taking into account transaction costs that are are recognized through other comprehensive income. directly attributable to the acquisition of the financial asset. Gains and losses from the fair value are not reclassified to Transaction costs of financial assets recognized at fair value profit or loss after derecognition of the equity instruments. through profit or loss are immediately expensed in profit or loss. Dividends from such equity instruments continue to be Trade receivables without a significant financing component recognized in profit or loss. are initially recognized at their transaction price. Subsequent measurement of financial instruments depends on the classification categories: • At amortized cost: Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest on the principal amount outstanding are measured at amortized • FVTPL: Financial assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Gains and losses resulting from fluctuations in fair value are recognized in profit or loss. Impairment and measurement of expected credit losses: Bertelsmann applies the expected credit loss (ECL) model in accordance with IFRS 9 for debt instruments at amortized cost 70 Financial Information Consolidated Financial Statements

Inventories Inventories – including raw materials and supplies, finished • Free television other channels: goods, work in progress and merchandise – are accounted for in accordance with IAS 2 and recognized at the lower of historical cost or net realizable value at the end of the reporting period. Similar inventories are measured at average cost or using the FIFO (first-in, first-out) method. In addition, inven- tories include all short-term film, television and similar rights that are intended for broadcast or sale within the Group’s normal operating cycle. In particular, this includes films and TV shows currently in production, co-productions and acquired broadcasting rights. The carrying amount of such items at the end of the reporting period is the lower of historical • • • Entertainment programs such as soap operas, documen- taries, sports and quiz or music programs are written off in full at the initial broadcast date. 50 percent of the carrying amount of children’s pro- grams and cartoons is written off at each of the first two broadcast dates. The consumption of cinema productions and TV feature films and series also spans a maximum of two broad- casts: 67 percent of the value is consumed upon the first broadcast and the remaining 33 percent upon the second broadcast. cost or net realizable value. The consumption of film and • Pay television channels: Program rights are consumed on a television rights starts from the date of initial broadcast and straight-line basis over the license period. depends either on the number of planned broadcasts or the expected revenues. The broadcast-based consumption of film and television rights is as follows: • Free television thematic channels: Program rights are con- sumed on a straight-line basis over a maximum of six runs. The consumption of inventories and current film and television rights, changes in inventories of work in progress and finished goods as well as own costs capitalized, are recognized in the income statement in the position “Cost of materials.” Income Taxes In accordance with IAS 12, income taxes include both current taxes on income and deferred taxes. Current income taxes are Deferred taxes are not recognized for: • temporary differences arising on the initial recognition of calculated on the taxable income of the financial year and on assets or liabilities in a transaction that is not a business all adjustments to taxable income of previous financial years, taking into account the tax rates applicable in each case. For the calculation of current and deferred taxes, the applicable tax combination and that affects neither earnings before taxes nor taxable income • temporary differences associated with investments in laws and tax jurisdictions of the respective country in which the subsidiaries, associates and interests in joint arrangements, consolidated Group companies are registered are considered. where the parent entity is able to control the timing of the In accordance with IAS 12, deferred tax assets and liabilities are recognized for temporary differences between the tax base and the carrying amounts shown on the IFRS consolidated balance sheet, and for as yet unused tax loss carryforwards reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future • taxable temporary differences on initial recognition of goodwill and tax credits. Deferred tax assets are reviewed at each The tax rates applied for computation are those expected as balance sheet date and recognized to the extent it is probable of the date of reversal of temporary differences and use of tax that taxable income will be available against which the loss carryforwards or tax credits, respectively. As a rule, current deductible temporary differences, tax loss carryforwards and and deferred taxes are recognized in profit or loss unless they tax credits can be utilized. Deferred tax assets that are unlikely relate to items recognized in other comprehensive income. In to be realized within a clearly predictable period are reduced this case, current and deferred taxes are recognized in other by valuation allowances. Deferred tax liabilities are generally comprehensive income. recognized for all taxable temporary differences. 72 Financial Information Consolidated Financial Statements

Derivative Financial Instruments As set out in IFRS 9, all derivative financial instruments are recognized at fair value on the balance sheet. Derivative financial instruments are recognized as of the transaction date. is recognized in other comprehensive income. Upon receiving an underlying non-financial asset or a non-financial liability, the amount is reclassified from accumulated other When a contract involving a derivative is entered into, it is comprehensive income to the respective item. In other initially determined whether it serves to hedge a balance sheet item (fair value hedge) or to hedge future cash flows (cash flow hedge). Some derivatives do not meet the requirements included in IFRS 9 for recognition as hedges, despite this being their economic purpose (stand-alone hedge). cases, the reclassification of the previously recognized gains and losses from equity to the income statement is performed when the hedged underlying transaction affects profit or loss. The ineffective portion of the changes in the fair value of the hedging instrument is recognized in profit Changes in the fair values of derivatives are recognized as follows: • Fair value hedge: Changes in the fair value of these deriv- atives used to hedge assets or liabilities are recognized in profit or loss; the corresponding gain or loss on the change in fair value of the underlying balance sheet item is also directly included in the income statement. • Cash flow hedge: The effective portion of the changes in the fair value of derivatives used to hedge future cash flows Share-Based Payments or loss. • Stand-alone hedge: Changes in the fair value of derivatives that do not meet the criteria for recognition as hedges are recognized in profit or loss. In the financial year 2020, no hedge transactions were recog- nized with fair value hedges. Likewise, no hedge of net invest- ment in foreign operations was made. Share-based payments for employees of the Bertelsmann Group include equity-settled share-based payment transactions and cash-settled share-based payment transactions. Equity- settled share-based payment transactions are granted to certain directors and senior employees in the form of share measured using a binomial option pricing model, taking into account the terms and conditions at which the options were granted. The amount recognized as an expense is adjusted to reflect the actual number of share options vesting. Share options forfeited solely due to share prices not achieving the options. The options are granted at the market price on the grant date and are exercisable at that price. For share options, the fair value of the options granted is recognized as personnel costs with a corresponding increase in equity. The fair value is measured at the grant date and allocated over the vesting vesting threshold are excluded. The financial liability arising under cash-settled share-based payment transactions is measured initially at fair value at grant date using an option pricing model. Until the liability is settled, its fair value shall be remeasured at the end of each reporting period and at period during which the employees become unconditionally the date of settlement, with any value changes recognized in entitled to the options. The fair value of the options granted is profit or loss as personnel costs of the period. Non-Current Assets Held for Sale and Related Liabilities Non-current assets or disposal groups are classified as held for sale if the associated carrying amount will be recovered principally through a sale transaction and not from continued use. These non-current assets and the associated liabilities are presented in separate balance sheet positions in accordance with IFRS 5. They are measured at the lower of the carrying amount or fair value less costs to sell. Depreciation/amortization is not recognized if a non-current asset is classified as held for sale or forms part of a disposal group that is classified as held for sale. Components of entities that fulfill the require- ments of IFRS 5.32 are classified as discontinued operations and thus are carried separately in the income statement and 74 Financial Information Consolidated Financial Statements

forecasts and in-house knowledge, with special emphasis on recent experience, is used in forming the assumptions about the development of the various relevant markets in which the Bertelsmann Group operates. The relevant markets are of resources is probable and whether it is possible to reliably determine the amount of the obligation are generally based on the expertise of in-house or third-party specialists. More recent information could change the estimates and thus impact the an area highly exposed to the general economic conditions. Group’s financial position and financial performance. The legal The development of the relevant markets is just one of the and regulatory environment in which Bertelsmann operates key operational drivers the Bertelsmann Group uses when does not bear significant litigation risks. With regard to risk assessing individual business models. The most important provisioning, a provision for potential losses from litigation is assumptions include estimated growth rates, the weighted recognized when the risks of a loss are considered probable average cost of capital and tax rates. All these different elements are variable, interrelated and difficult to isolate as the main driver of the various business models and respective and when a reliable estimate of the anticipated financial impact is possible. For significant contingent liabilities for which the possibility of a future loss is more than remote but less than valuations. Changes to these estimates as a result of more probable, the Bertelsmann Group estimates the possible loss recent information could have a material impact on the where the Group believes that an estimate can be made. amount of the possible impairment. The growth rates applied are based on long-term real growth rates for the relevant economies, growth expectations for the relevant sectors and long-term inflation forecasts for the countries in which the cash-generating units operate. The values allocated to the key assumptions are in line with external sources of information. The figures obtained using the respective discount rates reflect the recoverable amount of the cash-generating units. Material changes in the market or competitive environment may impair the value of cash-generating units. Details on impairment testing for intangible assets (including goodwill) in the Bertelsmann Group are presented in note 9 “Intangible Contingent liabilities from litigation that were of subordinate significance from a Group perspective existed at the end of the reporting period. Management regularly reviews the recognition, measurement and use of provisions along with the disclosure requirements for contingent liabilities. • Leases: Some real estate lease contracts include extension or termination options. Payments from these optional periods are included in the lease liability, provided it is reasonably certain that the lease will be extended beyond the non-cancellable lease period or that a termination option will not be exercised. In assessing whether an option to extend or terminate will be exercised, management considers all facts and circumstances Assets.” In addition, in the case of sports and film rights, that are associated with an economic incentive to exercise estimates are made with regard to anticipated revenues. the option or not to exercise it. These include, in particular, • Pension obligations: Pension obligations are measured using the projected unit credit method. Using this approach, biometric calculations, the prevailing long-term capital market interest rates and, in particular, assumptions about future salary and pension increases are taken into the amount of lease payments compared to market prices in the optional period, completed or expected leasehold improvements, and the importance of the underlying asset to the Bertelsmann Group’s operations. account. As a result of the decrease in the discount rate In the case of purchase price allocations, assumptions are also for measuring provisions for pensions, actuarial losses amounting to €255 million before related tax effects were recognized in the item “Remeasurement component of made regarding the measurement of assets and liabilities assumed as part of business combinations. This applies in particular with regard to the acquired intangible assets, as defined benefit plans.” Details on the assumptions made measurements are based on fair value. As a rule, this is the in pension accounting are presented in note 18 “Provisions present value of the future cash flows after taking into account for Pensions and Similar Obligations.” the present value of the tax amortization benefit. In addition, • Provisions for onerous contracts and warranties are also based to a significant extent on management estimates with regard to their amount and probability of occurrence. Assessments the definition of uniform useful lives within the Group is based on management’s assumptions. General information on use- ful lives is presented in the sections “Other Intangible Assets” of whether there is a present obligation, whether an outflow and “Property, Plant and Equipment.” 76 Financial Information Consolidated Financial Statements

Notes to the Income Statement and the Balance Sheet 1 Revenues In the financial year 2020, Group revenues of €17,007 million were generated from contracts with customers in accordance with IFRS 15 (previous year: €17,783 million). The other revenues amounting to €282 million (previous year: €240 million) not in the scope of IFRS 15 resulted almost entirely from financial services in the Arvato division. The following table only shows the revenues from contracts with customers in accordance with IFRS 15 by division and broken down by revenue source, geographical area and timing of revenue recognition. The categorization of revenue sources and geographical areas shown corresponds to that used in segment reporting. Revenue from Contracts with Customers 2020 Gruner + Jahr BMG Arvato Bertelsmann Printing Group Bertelsmann Education Group Total divisions1) in € millions RTL Group Revenue Sources Own products and merchandise Services Advertising Rights and licenses Geographical Areas Germany France United Kingdom Other European countries United States Other countries Timing Point in time Over time 89 332 3,289 2,229 5,939 1,885 1,242 195 1,430 1,035 152 5,939 1,855 4,084 5,939 1) Excluding Bertelsmann Investments and Corporate activities. 78 Financial Information Consolidated Financial Statements Penguin Random House 3,647 104 – 50 496 258 333 15 3,801 1,102 277 10 454 325 2,208 527 3,801 3,695 106 3,801 735 239 29 67 16 16 1,102 716 386 1,102 43 – – 556 599 45 50 82 71 299 52 599 143 456 599 75 20 – 3,958 1,173 301 – – 20 – – – 4,370 6,126 3,642 2,850 4,033 1,213 301 16,988 1,440 462 233 1,184 337 377 775 50 122 148 108 10 4,033 1,213 101 3,932 4,033 35 1,178 1,213 2 – 1 – 291 7 301 – 301 301 5,159 2,053 1,116 3,225 4,294 1,141 16,988 6,545 10,443 16,988

2 Other Operating Income in € millions Gains from disposals of non-current assets Income from reimbursements Fair value measurement of investments Income from sideline operations Sundry operating income 2020 246 67 59 47 263 682 2019 12 77 143 50 173 455 The item “Fair value measurement of investments” mainly relates to financial instruments held in the portfolio of the Bertelsmann Investments division. Bertelsmann Investments assigns its minority stakes in start-ups and fund-of-fund investments to the fair value through profit or loss category in accordance with IFRS 9. Further details are presented in note 12 “Minority Stakes and Other Financial Assets.” The increase in gains from disposals of non-current assets mainly results from sale-and-leaseback transactions in the financial year 2020 in the total amount of €235 million. The item “Sundry operating income” includes €147 million from the sale of an office space. This was acquired under a purchase option, immediately resold and subsequently leased back. Further details on this transaction are presented in note 10 “Property, Plant and Equipment and Right-of- Use Assets.” Additionally, the item consists of a number of individually immaterial matters in the subsidiaries. 3 Personnel Costs in € millions Wages and salaries Statutory social security contributions Expenses for pensions and similar obligations Profit sharing Other employee benefits The contributions paid by the employer to state pension plans amounted to €320 million (previous year: €367 million) in the financial year 2020. 2020 4,510 693 149 88 182 2019 4,507 701 131 96 210 5,622 5,645 4 Amortization/Depreciation, Impairment and Reversals on Intangible Assets and Property, Plant and Equipment and Right-of-Use Assets in € millions Amortization/depreciation, impairment and reversals on – intangible assets – property, plant and equipment and right-of-use assets 2020 487 553 1,040 2019 492 537 1,029 Further details on amortization/depreciation, impairment and reversals shown are presented in note 9 “Intangible Assets” and note 10 “Property, Plant and Equipment and Right-of-Use Assets.” 80 Financial Information Consolidated Financial Statements

7 Other Financial Income and Expenses in € millions Other financial income Financial income from put options Non-operating foreign exchange gains Sundry financial income Other financial expenses Net interest on defined benefit plans Interest expenses on lease liabilities Dividend entitlement on profit participation certificates Financial expenses from put options Minority interests in partnerships Non-operating foreign exchange losses Other non-operating expenses from derivatives Sundry financial expenses 2020 2019 – – 8 8 (24) (41) (44) (1) (10) (6) (48) (28) 10 3 11 24 (32) (43) (44) – (11) – (65) (34) (202) (229) To better reflect the economic content, income and expenses from non-operating foreign currency hedging transactions are offset against the results from the measurement of the economically hedged items in foreign currency, and are recognized as non-operating foreign exchange gains or losses. In the financial year 2020, the net results from these non-operating foreign currency transactions of €-193 million (previous year: €68 million) were offset against the net results from hedged foreign currency transactions amounting to €187 million (previous year: €-65 million). 8 Income Taxes Income taxes, broken down into current and deferred income taxes, are as follows: Income Taxes in € millions Earnings before income taxes (total) Current income taxes from continuing operations Deferred income taxes from continuing operations Income taxes from continuing operations Current income taxes from discontinued operations Deferred income taxes from discontinued operations Income taxes from discontinued operations Total income taxes Net income after income taxes (total) 2020 1,937 (489) 11 (478) – – – 2019 1,517 (375) (51) (426) – – – (478) 1,459 (426) 1,091 Tax loss carryforwards of €397 million (previous year: €612 million) were utilized in the financial year 2020, reducing current tax expenses by €83 million (previous year: €141 million). Of the tax loss carryforwards utilized, €10 million (previous year: €6 million) was due to German corporate income tax, €11 million (previous year: €6 million) was due to German trade tax and €376 million (previous year: €600 million) was due to foreign income taxes. These amounts include €66 million (previous year: €19 million) for tax loss carryforwards for which no deferred tax assets 82 Financial Information Consolidated Financial Statements

The item “Property, plant and equipment and right-of-use assets” includes deferred tax assets of €11 million (previous year: €2 million) and deferred tax liabilities of €331 million (previous year: €386 million) in connection with right-of-use assets in accordance with IFRS 16. Deferred tax assets in other comprehensive income amount to €595 million (previous year: €536 million). Valuation allowances for deferred tax assets are recognized on temporary differences, tax loss carryforwards and tax credits when it is unlikely that they can be utilized in No deferred tax liabilities were recognized for temporary the foreseeable future. The need to recognize valuation differences in connection with investments in subsidiaries in the amount of €501 million (previous year: €507 million) as Bertelsmann can control their reversal, and it is probable that these temporary differences will not be reversed in allowances is assessed primarily based on existing deferred tax liabilities from temporary differences and projected taxable income within a planning period. the foreseeable future. Current and deferred tax assets Temporary differences, tax loss carryforwards and tax and liabilities are offset against each other if they relate to credits for which no deferred taxes have been recognized the same tax authority and meet the criteria for offsetting. can be carried forward as follows: The term of the deferred taxes on temporary differences is mostly long-term. Expiration in € millions Temporary differences (unlimited carryforward period) Tax loss carryforwards Unlimited carryforward period To be carried forward for more than 5 years To be carried forward for up to 5 years Tax credits Unlimited carryforward period To be carried forward for more than 5 years To be carried forward for up to 5 years 12/31/2020 12/31/2019 99 5,644 132 279 – 2 – 145 5,643 204 65 – 2 1 84 Financial Information Consolidated Financial Statements

Other intangible assets Other rights and licenses Internally generated intangible assets Advance payments Total Goodwill Music and film rights 8,918 3,063 2,295 1,055 14 – – 26 – – – (23) 17 (1) – 19 – – (1) (21) 13 – – – – – – – – – – – – 1 (1) – – – – – 13 17 Total 6,427 15,345 86 126 315 (47) (176) (102) 3 6,632 (264) 23 355 (144) (92) (80) (145) 6,285 141 308 315 (168) (176) (146) 4 15,623 (470) 91 355 (325) (92) (428) (146) 14,608 3,837 4,328 33 378 87 – (15) (171) (62) 45 4,132 (131) 363 13 (5) (123) (86) (47) (139) 3,977 2,308 2,500 35 378 114 – (15) (171) (62) 46 4,653 (153) 363 129 (5) (172) (86) (158) (139) 4,432 10,176 10,970 9 Intangible Assets in € millions Cost Balance as of 1/1/2019 Exchange differences Acquisitions through business combinations Other additions 55 182 – Reductions through disposal of investments (121) Other disposals Reclassifications in accordance with IFRS 5 Reclassifications and other changes Balance as of 12/31/2019 Exchange differences Acquisitions through business combinations Other additions Reductions through disposal of investments Other disposals Reclassifications in accordance with IFRS 5 Reclassifications and other changes Balance as of 12/31/2020 Accumulated amortization Balance as of 1/1/2019 Exchange differences Amortization Impairment losses Reversals of impairment losses Reductions through disposal of investments Other disposals Reclassifications in accordance with IFRS 5 Reclassifications and other changes Balance as of 12/31/2019 Exchange differences Amortization Impairment losses Reversals of impairment losses Reductions through disposal of investments Other disposals Reclassifications in accordance with IFRS 5 Reclassifications and other changes Balance as of 12/31/2020 Carrying amount as of 12/31/2020 Carrying amount as of 12/31/2019 – (44) 1 8,991 (206) 68 – (181) – (348) (1) 8,323 491 2 – 27 – – – – 1 521 (22) – 116 – (49) – (111) – 455 7,868 8,470 86 Financial Information Consolidated Financial Statements 48 – 119 – (112) – (19) 3,099 (114) 2 89 – (48) – (115) 2,913 30 126 128 (31) (47) (94) (16) 2,391 (106) 19 211 (109) (35) (57) (32) 8 – 42 (16) (17) (8) 61 1,125 (43) 2 36 (35) (9) (22) 23 2,282 1,077 1,624 1,252 11 159 – – – (111) – 8 15 166 86 – (3) (44) (58) (4) 1,691 1,410 (32) 150 3 (3) – (46) – (132) 1,631 1,282 1,408 (59) 168 5 – (97) (32) (36) (4) 1,355 927 981 961 7 53 1 – (12) (16) (4) 41 1,031 (40) 45 4 (1) (26) (8) (11) (3) 991 86 94

As part of the complete acquisition of the trade book publisher Penguin Random House on April 1, 2020, German Verlagsgruppe Random House was merged with the international publishing group. The segment Penguin Random House is therefore reported as one cash-generating unit as of December 31, 2020. €13.26 (previous year: €16.78). As the fair value has not fully reached the carrying amount as of December 31, 2020, the value in use was also calculated using a discounted cash flow method (level 3) based on a WACC of 6.9 percent (previous year: 5.9 percent) and a long-term growth rate of 0.0 percent (previous year: 0.0 percent). The value in use determined significantly exceeded the carrying amount. Intangible assets with indefinite useful life primarily concern Groupe M6 trademark rights in France (€120 million; previous year: €120 million) and brands related to Gulli (€38 million), which also belongs to Groupe M6. In determining that the For the other cash-generating units, the recoverable amount equals the fair value, which is derived from discounted cash flows less costs of disposal and which is based on level 3 of M6 brand has an indefinite useful life, management has the fair value hierarchy. Projected cash flows were based on considered various factors such as the historical and expected internal estimates for three detailed planning periods and, as longevity of the brand, the impact of possible changes in broadcasting technologies, the impact of possible evolutions of the regulatory environment in the French television industry, the current and expected audience share of the M6 channel, a rule, two further detailed planning periods were applied. For periods after this detailed horizon, a perpetual annuity was applied, taking into account individual business-specific growth rates. and management’s strategy to maintain and strengthen the trademark “M6.” As of December 31, 2020, based on the analysis of these factors, there is no foreseeable limit to the period of time over which the M6 brand is expected to generate cash inflows. Given their positioning, the market’s awareness of the brands and their history, Gulli-related brands are considered to also have an indefinite useful life. For the purpose of impairment testing in accordance with IAS 36, goodwill from a business combination is allocated to the cash-generating units that are expected to benefit from the synergies of the business combination. The recoverable The cash flow forecasts underlying the impairment testing of the individual cash-generating units bearing material goodwill are based on the following assumptions relating to the market development for the beginning of the detailed planning period: • In 2021, the TV advertising markets are projected to show slight growth in Germany; significant growth in France, the Netherlands and Hungary; and strong growth in Belgium and Spain. The streaming markets in Germany and the Netherlands are expected to continue growing strongly. • The book markets are expected to remain stable overall. amount of the impairment test for RTL Group’s goodwill • In 2021, in the magazine business in Germany, a strong recognized at Group level was determined on the basis of decline is expected in the print advertising markets, as well the market price, which is based on level 1 of the fair value hierarchy. As of December 31, 2020, the market price of RTL Group S.A. shares on the Frankfurt Stock Exchange was €39.74 (previous year: €43.98). No impairment was identified for goodwill carried. In addition, the value in use was calculated using a discounted cash flow method (level 3) based on a WACC of 6.7 percent (previous year: 5.8 percent) and a long-term growth rate of 0.5 percent (previous year: 0.5 percent). The value in use determined exceeded the fair value determined from the stock market price. The fair value of the cash-generating unit Groupe M6 was determined on the basis of the market price, which is based on level 1 of the fair value hierarchy. As of December 31, 2020, the market price of Métropole Télévision shares on the Paris Stock Exchange was as a significant decline in the circulation markets, while continued strong growth is expected in the digital segment. • In the relevant music market, the publishing market segment is expected to decline significantly, whereas strong growth is projected for the recordings market segment. • Service markets will likely show moderate growth in 2021, with the exception of the financial services market. • The gravure market in Europe is expected to continue its strong decline in 2021, a significant decline is expected for the offset market in Europe, and a slight decline is expected in the book printing market in North America. • Overall, sustained moderate to strong growth is anticipated for the relevant US education markets. 88 Financial Information Consolidated Financial Statements

An additional €11 million relates to the cash-generating unit Divimove, which belongs to RTL Group and is recognized under ”Other,” a further €8 million relates to the cash-gener- ating unit rtv, which belongs to Bertelsmann Printing Group and is recognized under ”Other”; and a further €7 million relates to the cash-generating unit Afferolab, which belongs to Bertelsmann Investments. In 2020, Fremantle was adversely impacted by the coronavirus pandemic, but was able to rapidly adjust to the new environ- ment and resume productions. Driven by the high overall market demand for content from a diversified set of potential clients (e.g., broadcasters, platforms and streaming services) and Fremantle’s well-diversified territorial coverage (Fremantle’s network of local production and distribution companies operates in over 30 territories around the world), the expo- sure of Fremantle toward potentially long-lasting recessions of specific economies is limited. The pandemic has given rise to the “stay-at-home” economy, which, in part, has resulted in the streaming platforms continuing to increase their content spend in the race for streaming customers. The key drivers of growth in Fremantle in the coming years are expected to come from initiatives to develop new formats, from expanding its drama and factual entertainment pipeline, and from further diversification of its global footprint. Fremantle’s slate of productions is underpinned by successful entertainment and game show brands such as “Idols,” “Got Talent” and “Family Feud” and bolstered by a growing roster of drama productions, including “American Gods,” “My Brilliant Friend” and “Charité.” Based on the budget assumptions and on a DCF model with a perpetual EBITA margin of 8 percent, the headroom at the level of Fremantle amounts to €213 million (December 31, 2019: €366 million). In the event of an increase in the discount rate by 1.0 percentage point, a decrease in the long-term growth rate of 1.8 percentage points or a decrease in the EBITA margin of 1.2 percentage points, the recoverable amount would fall below the carrying amount. Other material goodwill was not subject to impairment, even given a change by one of the two most important factors: discount rate (increase of 1.0 percentage point) and long-term growth rate (decrease of 1.0 percentage point). 10 Property, Plant and Equipment and Right-of-Use Assets With initial application of IFRS 16, right-of-use assets from leased property, plant and equipment are capitalized. The balance sheet position “Property, plant and equipment and right-of-use assets” comprises property, plant and equipment owned by the Bertelsmann Group and right-of-use assets from leased property, plant and equipment. Property, Plant and Equipment and Right-of-Use Assets in € millions Owned property, plant and equipment Right-of-use assets from leased property, plant and equipment 2020 1,594 1,123 2,717 2019 1,654 1,281 2,935 90 Financial Information Consolidated Financial Statements

As of the end of the reporting period, property, plant and equipment totaling €8 million (previous year: €10 million) were subject to restrictions on disposals. Impairment testing of cash-generating units in the "Other" item of the Bertelsmann Printing Group division identified imputed individual asset level resulted in an impairment of €3 million, which is mainly attributable to technical equipment and machinery. External assessments and appraisals were used in the impairment testing of property, plant and equipment. shortfalls. Subsequent impairment testing of property, plant and equipment amounting to €67 million at the Impairment losses totaling €7 million were recognized for property, plant and equipment (previous year: €11 million). Right-of-Use Assets The vast majority of leases concern rental properties in the Details on the corresponding lease liabilities are presented in RTL Group, Penguin Random House and Arvato divisions. note 22 “Lease Liabilities.” In addition, leases also exist for technical equipment and machinery, vehicles and other fixtures, furniture and office equipment. The existing lease contracts have different terms and a number of property leases include extension or termi- nation options in order to maximize operational flexibility in terms of managing the assets used in the Group’s operations. The following table shows depreciation and impairment, additions and other changes to the right-of-use assets in the financial year 2020 as well as the carrying amounts of the right-of-use assets from leased property, plant and equipment as of December 31, 2020: Change in Right-of-Use Assets in € millions Land, rights equivalent to land and buildings Technical equipment and machinery Other equipment, fixtures, furniture and office equipment Carrying amount of leased property, plant and equipment as of 1/1/2020 Additions Depreciation and impairment Other changes Carrying amount of leased property, plant and equipment as of 12/31/2020 1,240 235 (252) (140) 1,083 6 6 (4) (2) 6 35 19 (19) (1) 34 in € millions Land, rights equivalent to land and buildings Technical equipment and machinery Other equipment, fixtures, furniture and office equipment Carrying amount of leased property, plant and equipment as of 1/1/2019 Additions Depreciation and impairment Other changes Carrying amount of leased property, plant and equipment as of 12/31/2019 1,199 257 (234) 18 1,240 10 3 (4) (3) 6 36 20 (19) (2) 35 Total 1,281 260 (275) (143) 1,123 Total 1,245 280 (257) 13 1,281 The Bertelsmann Group made several sale-and-leaseback transactions in the reporting period. These are in line with Bertelsmann's real estate strategy, according to which office spaces are to be leased where economically viable. Sale-and- leaseback transactions release tied-up capital and generate a more appropriate return on invested capital when reinvested in the operating business. Lease liabilities of €134 million and right-of-use assets of €22 million were recognized in connection with sale-and-leaseback transactions. 92 Financial Information Consolidated Financial Statements

The following table shows summarized financial information subsidiaries, joint ventures and associates. The information on RTL Group and Majorel, including the interests in their disclosed shows the amounts before intercompany eliminations. Financial Information for Subsidiaries with Material Non-Controlling Interests in € millions Non-current assets Current assets Non-current liabilities Current liabilities Bertelsmann shareholders’ equity Non-controlling interests in € millions Revenues Profit or loss – thereof of non-controlling interests Total comprehensive income – thereof of non-controlling interests Dividends to non-controlling interests Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Increase/(decrease) in cash and cash equivalents Investments Accounted for Using the Equity Method RTL Group Majorel 12/31/2020 12/31/2019 12/31/2020 12/31/2019 6,829 4,355 1,603 3,114 5,028 1,439 2020 6,017 636 250 577 237 4 928 (86) (702) 140 7,047 4,039 1,700 3,457 4,696 1,233 2019 6,651 856 289 845 285 184 1,077 (359) (759) (41) 269 570 135 389 155 160 2020 1,375 84 42 71 35 – 223 (45) (58) 120 245 479 144 342 117 121 2019 1,211 15 8 3 2 – 50 (106) (36) (92) The investments accounted for using the equity method relate to joint ventures in the amount of €40 million (previous year: €33 million) and to associates in the amount of €780 million (previous year: €619 million). Investments in Joint Ventures As of December 31, 2020, investments in 21 (previous year: 22) individually immaterial joint ventures were accounted for in the Consolidated Financial Statements. The following table shows summarized financial information on these joint ventures. The information given represents in each case the Bertelsmann Group’s interest. 94 Financial Information Consolidated Financial Statements

Financial Information on Individually Material Associates in € millions Non-current assets Current assets Non-current liabilities Current liabilities Equity in € millions Revenues Earnings after taxes from continuing operations Earnings after taxes from discontinued operations Other comprehensive income Total comprehensive income Dividends received from the associate Atresmedia 12/31/2020 12/31/2019 556 762 357 495 466 2020 866 24 – 3 27 – 583 699 356 486 440 2019 1,039 120 – – 120 19 The reconciliation of the summarized financial information shown to the carrying amount of the interest in Atresmedia in the Consolidated Financial Statements is shown in the following table: Reconciliation to Carrying Amount in € millions Equity Proportionate equity Goodwill Impairment on investments accounted for using the equity method Carrying amount 12/31/2020 12/31/2019 466 87 166 (110) 143 440 82 166 (50) 198 The following table shows summarized financial information immaterial. The information given represents in each case the on associates that management considers individually Bertelsmann Group’s interest. Financial Information on Individually Immaterial Associates in € millions Non-current assets Current assets Non-current liabilities Current liabilities in € millions Earnings after taxes from continuing operations Earnings after taxes from discontinued operations Other comprehensive income Total comprehensive income 12/31/2020 12/31/2019 639 223 52 170 390 179 55 120 2020 2019 70 – (4) 66 75 – (4) 71 The total carrying amount of the investments in all individually immaterial associates amounts to €637 million (previous year: €421 million) as of December 31, 2020. Of that amount, €94 million was attributable to the investment in the online learning platform Udacity (previous year: €104 million). Although at 18.9 percent (previous year: 19.0 percent) the interest is less 96 Financial Information Consolidated Financial Statements

Bertelsmann exercises the option granted by IFRS 9 to measure equity instruments at fair value through other comprehen- sive income mainly for individual immaterial investments and investments in affiliates and recognizes these items in “Other As in the previous year, no other financial assets were subject to restrictions on disposal as of the end of the reporting period. financial assets.” 13 Inventories in € millions Program rights Raw materials and supplies Work in progress Finished goods and merchandise Advance payments 12/31/2020 12/31/2019 1,090 1,088 91 97 259 121 103 104 311 165 1,658 1,771 In the financial year 2020, write-downs on inventories were recognized in the amount of €-111 million (previous year: €-134 million). In addition, reversals of write-downs on inventories were recognized in the amount of €121 million (previous year: €101 million). As in the previous year, no inventories were subject to restrictions on disposal as of the end of the reporting period. In the financial year 2020, the broadcast-based consumption of program rights recognized in profit or loss amounted to €2,083 million (previous year: €2,245 million). Expenses for raw materials and supplies amounting to €753 million (previous year: €939 million) were recognized, and the cost for merchandise amounted to €126 million (previous year: €170 million). Changes in inventories of work in progress and finished goods amounted to €98 million (previous year: €66 million). In addition, own costs capitalized of €63 million (previous year: €62 million) were recognized. 14 Trade and Other Receivables in € millions Non-current Trade receivables Contract assets Other receivables Current Trade receivables Contract assets Receivables from participations Other receivables 12/31/2020 12/31/2019 35 – 34 45 – 44 3,398 3,698 23 45 1,104 40 30 755 Trade receivables are due for payment generally within 12 months. The item “Contract assets” covers the conditional right to consideration for satisfied performance obligations in accordance with IFRS 15. As of January 1, 2019, this item amounted to €34 million. The item “Other receivables” includes, among other things, receivables of €480 million (previous year: €458 million) from the Arvato Financial Solutions business unit, which were recognized in relation to the receivables management service provided. In addition, the item comprises receivables in the amount of €131 million (previous year: €92 million), relating to accounts receivables sold, which are acquired by Arvato Financial Solutions from third parties in the course of conducting its financial services and then resold. As of the end of the reporting period, trade and other receivables totaling €8 million (previous year: €42 million) were subject to restrictions on disposals. 98 Financial Information Consolidated Financial Statements

The change in other comprehensive income after taxes is derived as follows: Changes to Components of Other Comprehensive Income after Taxes in € millions Before-tax amount Taxes 2020 Net-of-tax amount Attributable to Bertelsmann shareholders Attributable to non- controlling interests Items that will not be reclassified subsequently to profit or loss Remeasurement component of defined benefit plans Changes in fair value of equity instruments Share of other comprehensive income of investments accounted for using the equity method Items that will be reclassified subsequently to profit or loss when specific conditions are met Exchange differences Cash flow hedges Share of other comprehensive income of investments accounted for using the equity method Other comprehensive income net of tax in € millions (151) 2 – (346) (22) (3) (520) Before-tax amount Taxes Items that will not be reclassified subsequently to profit or loss Remeasurement component of defined benefit plans Changes in fair value of equity instruments Share of other comprehensive income of investments accounted for using the equity method Items that will be reclassified subsequently to profit or loss when specific conditions are met Exchange differences Cash flow hedges Share of other comprehensive income of investments accounted for using the equity method (305) (2) (1) 84 8 (4) Other comprehensive income net of tax (220) 53 (1) – – 7 – (98) 1 – (346) (15) (3) (96) 1 – (327) (12) (3) (2) – – (19) (3) – 59 (461) (437) (24) 2019 Net-of-tax amount Attributable to Bertelsmann shareholders Attributable to non- controlling interests (224) (205) (19) (2) (1) 84 5 (4) (2) (1) 80 4 (3) (142) (127) – – 4 1 (1) (15) 81 – – – (3) – 78 100 Financial Information Consolidated Financial Statements

Free share plans outstanding at the end of the year have the following terms: Conditions for Free Share Plans (Groupe M6) Expiry date Free share plans 2020 2021 Number of shares (in thousands) 2020 Number of shares (in thousands) 2019 – 613 613 517 785 1,302 As of December 31, 2020, the market price of Métropole Télévision shares on the Paris Stock Exchange was €13.26 (previous year: €16.78). options granted. The estimate of fair value of the services received is measured based on a binomial model. Free shares are valued at the share price at the date they are granted less discounted future expected dividends, which employees are The fair value of services received in return for share options not entitled to receive during the vesting period. granted is measured by reference to the fair value of share Fair Values of Free Share Plans (Groupe M6) Grant date Free share plans 7/27/2017 10/2/2017 7/25/2018 7/30/2019 Total Personnel costs in € millions Share price Risk-free interest rate Expected return Option life 20.59 € 20.59 € 16.92 € 15.35 € (0.17)% (0.17)% (0.10)% (0.30)% 4.31% 4.31% 5.66% 6.97% 2 years 2 years 2 years 2 years 2020 0.5 – 2.1 2.2 4.8 2019 3.2 0.1 3.4 1.2 7.9 There are additional share-based payments within the Bertelsmann Group that are immaterial on a stand-alone basis and in total. 102 Financial Information Consolidated Financial Statements

Provisions are recognized for these defined benefit plans. The following tables show the breakdown of the benefit by plan beneficiary and by type of benefit plan: Plan Beneficiaries Active members Deferred member Pensioners Total – thereof vested Benefit Plans in € millions Flat salary plans/plans with fixed amounts Final salary plans Career average plans Other commitments given Medical care plans Present value of defined benefit obligation – thereof capital commitments Number of employees in € millions 2020 30,621 11,570 17,311 59,502 2019 24,423 11,318 17,053 52,794 2020 1,542 952 2,277 4,771 4,698 2019 1,556 928 2,145 4,629 4,628 12/31/2020 12/31/2019 2,459 1,567 516 173 56 4,771 273 2,397 1,492 521 162 56 4,628 284 The obligations and plan assets available for the existing pension plans are, in some cases, exposed to demographic, economic and legal risks. The demographic risks are primarily the longevity risk for pensioners. Economic risks include, pension plan in the United States is subject to the minimum funding agreements according to the “Employee Retirement Income Security Act of 1974” (ERISA). In general, the aim under this agreement is to have a fully funded pension plan in this respect, mostly unforeseeable developments on the so that the annual contributions to the plan assets are limited capital markets and the associated impacts on plan assets and to the pension entitlements the insured employee has earned pension obligations. Legal risks can result from restrictions to investments and minimum funding requirements. A Group- wide pension guideline was introduced in 2004 to substantially minimize these risks. This stipulates that all new pension plans are, as a rule, only to be designed as defined contribution plans so that the charges from benefit commitments are during the year, as is the case for a defined contribution plan. If the pension obligations are not fully covered by the plan assets, an additional amount sufficient to ensure full financing over a seven-year period must be applied in excess of this contribution. The plans in the United Kingdom are subject to the “Pensions Act 2004,” which includes reviewing the full always acceptable, calculable and transparent, and so that no financing of the pension plan from an actuarial perspective risks can arise that the company cannot influence. In addition, every three years with annual monitoring and, if necessary, the Bertelsmann Group aims, in particular, to transfer existing final salary-related pension agreements to plans with fixed amounts and capital commitments that are independent from trends. As a result of these measures, the obligations are eliminating any deficits that may have arisen by means of further additions to plan assets. There are no other material regulatory conditions over and above the minimum funding regulations in the United States and the United Kingdom. almost entirely due to the plans that have been closed. The Bertelsmann Group has minimum funding obligations for the plans in the United States and the United Kingdom. The Furthermore, one Group company participated in a multi- employer plan with other non-affiliated companies until December 31, 2014. As the relevant information required to 104 Financial Information Consolidated Financial Statements

Changes in the present value of defined benefit obligations and plan assets in the reporting period were as follows: Development of the Defined Benefit Plans Defined benefit obligation Fair value of plan assets Net defined benefit balance in € millions Balance as of 1/1 Current service cost Interest expenses Interest income Past service cost Income and expenses for defined benefit plans recognized in the consolidated income statement Income/expense on plan assets excluding amounts included in net interest income and net interest expenses Actuarial gains (-) and losses (+) – changes in financial assumptions – changes in demographic assumptions – experience adjustments Remeasurements for defined benefit plans recognized in the consolidated statement of comprehensive income Contributions to plan assets by employer Contributions to plan assets by employees Pension payments Cash effects from settlements Change of consolidation scope Changes in foreign exchange rates Other changes Other reconciling items Balance as of 12/31 thereof Germany United Kingdom United States Other European countries Other countries (I) 2020 4,628 2019 4,120 (II) 2020 2,786 (I)-(II)1) 2019 2,502 2020 1,842 64 68 – (5) 127 – 255 1 (13) 243 – 2 59 92 – (10) 141 – 502 4 5 511 – 3 (181) (155) – (4) (55) 11 (227) 4,771 – (31) 36 3 (144) 4,628 – – 44 – 44 92 – – – 92 23 2 (55) – – (52) 3 (79) – – 60 – 60 206 – – – 206 24 3 (32) – (11) 36 (2) 18 2,843 2,786 64 68 (44) (5) 83 (92) 255 1 (13) 151 (23) – (126) – (4) (3) 8 (148) 1,928 2019 1,618 59 92 (60) (10) 81 (206) 502 4 5 305 (24) – (123) – (20) – 6 (161) 1,843 3,704 3,577 1,980 1,913 1,724 1,664 635 183 218 31 593 215 210 33 636 151 64 12 627 175 57 14 (1) 32 154 19 (34) 40 154 19 1) In the financial year 2019, for calculating the “Net defined benefit balance,” the effects of the asset ceiling in accordance with IAS 19 amounting to €1 million were taken into account in the item “Other changes.” In the financial year 2020, no effects from the asset ceiling were recognized. Of the contributions to plan assets, €9 million (previous year: €9 million) pertains to Germany. Employer contributions to plan assets are expected to amount to €13 million in the next financial year. Reimbursement rights for defined benefit obligations in Germany amount to €30 million (previous year: €32 million) and are recognized in the balance sheet position “Trade and other receivables.” 106 Financial Information Consolidated Financial Statements

The maturity profile of the anticipated undiscounted pension payments is presented in the following table: Maturity Profile of Pension Payments in € millions 2021 2022 2023 2024 2025 2026–2030 Expected pension payments 162 160 163 172 178 933 Obligations similar to pensions relate to provisions for gains and losses recognized in profit or loss. Employees in bonuses for employee service anniversaries, amounts due but Germany who are at least 55 years old and have a permanent not yet paid to defined contribution plans, partial retirement employment contract with the company qualify for the partial and severance payments at retirement. Severance payments retirement schemes. The partial retirement phase lasts two to at retirement are made when employees leave the company six years. and are based on statutory obligations, primarily in Italy and Austria. Provisions for employee service anniversary bonuses The following table shows the breakdown in obligations and severance payments at retirement are recognized in similar to pensions: the same way as defined benefit plans, but with actuarial Breakdown of Obligations Similar to Pensions in € millions Provisions for employee service anniversaries Provisions for old-age part-time schemes Other Obligations similar to pensions 12/31/2020 12/31/2019 30 13 15 58 29 12 42 83 19 Other Provisions in € millions Onerous contracts Litigation Restructuring Other employee benefits Other 12/31/2019 of which > 1 year 89 86 120 28 69 392 19 50 62 15 32 178 Additions Reversal Usage 93 24 100 6 43 266 (4) (10) (10) (3) (11) (38) (61) (10) (43) (3) (8) (125) Other effects Change of consolida- tion scope Accrued interest (1) (6) (1) (2) 4 (6) (1) (1) (1) – – (3) – – 2 – – 2 12/31/2020 115 83 167 26 97 488 of which > 1 year 9 58 18 15 36 136 The provisions for onerous contracts concern RTL Group in the amount of €84 million (previous year: €64 million) and were recognized mainly for program rights. Of that amount, a total of €68 million (previous year: €46 million) relates to 108 Financial Information Consolidated Financial Statements

In April 2020, Bertelsmann placed a fixed-interest publicly listed bond in the amount of €750 million with a term of eight years, and a floating-rate promissory note in the amount of €100 million with a term of three years was agreed upon. In May 2020, Bertelsmann placed another fixed-interest publicly listed bond in the amount of €750 million with a term of 10 years. In addition, a €150 million promissory note with a term of seven years was agreed upon, €100 million of which is at a fixed rate and €50 million at a floating rate. The variable- interest portion of €50 million was already repaid early in November 2020. A fixed-interest bond in the amount of €100 million with a term of seven years was also issued in May 2020 as part of a private placement. In addition, Bertelsmann issued a fixed-interest bond of € 250 million with a term of two years as part of a private placement in July 2020. This was repaid early by exercising a call option in December 2020. The fixed-interest promissory note loan of €100 million maturing in December 2020 was repaid on schedule. At the end of the reporting period, the Group had bonds, private placements and promissory notes outstanding with a nominal volume of €6,425 million (previous year: €4,725 million). The differences in carrying amount versus nominal amount in the table below result from transaction costs, premiums and discounts. Bonds and Promissory Notes Interest rate; emission; maturity; fixed interest 0.774%; 2015; 2020; fixed-interest promissory note 0.250%; 2017; 2021; fixed-interest bond1) 2.625%; 2012; 2022; fixed-interest bond1) 6-mon. EURIBOR + 125 bp.; 2020; 2023; floating-rate promissory note 1.500%; 2017; 2024; fixed-interest bond 1.750%; 2014; 2024; fixed-interest bond1) 1.250%; 2018; 2025; fixed-interest bond1) 1.787%; 2015; 2025; fixed-interest promissory note 1.125%; 2016; 2026; fixed-interest bond1) 1.000%; 2019; 2026; floating- and fixed-interest promissory note2) 1.600%; 2020; 2027; fixed-interest promissory note 1.000%; 2020; 2027; fixed-interest bond 2.000%; 2020; 2028; fixed-interest bond1) 1.500%; 2020; 2030; fixed-interest bond1) 3.700%; 2012; 2032; fixed-interest bond 3.000%; 2015; 2075; fixed-interest hybrid bond1) 3.500%; 2015; 2075; fixed-interest hybrid bond1) 1) Listed. 2) €10 million floating rate (6-month EURIBOR + 100 bp). Nominal amount Carrying amount Fair value 12/31/2020 12/31/2019 12/31/2020 12/31/2019 in € millions 100 500 750 100 50 500 750 150 500 75 100 100 750 750 100 650 600 – 500 748 100 50 498 745 150 497 75 100 99 743 742 99 649 597 100 499 747 – 50 498 743 150 496 75 – – – – 99 648 597 – 501 785 104 53 536 800 164 534 79 110 106 844 825 131 673 648 101 503 802 – 53 538 790 164 526 78 – – – – 135 691 669 6,392 4,702 6,893 5,050 The documentation of the bonds from Bertelsmann SE & Co. KGaA in 2012, 2014, 2016, 2017, 2018 and 2020 is within the framework of a base documentation for debt issuance programs. The hybrid bonds and promissory notes as well as the unlisted bond of 2017 were issued on the basis of sepa- rate documentation. The bonds mainly have a rating of “Baa2” (Moody’s) and “BBB” (Standard & Poor’s). The debt issuance program was last renewed in March 2020. Transaction costs and agreed discounts or premiums are taken into account in the interest result over the term, impacting the carrying amount of the bonds and promissory notes. This led to a difference to the nominal volume of €33 million (previous year: €23 million) at the end of the year. As a rule, the quoted prices at the end of the reporting period are used to determine the fair value of the bonds issued. 110 Financial Information Consolidated Financial Statements

23 Liabilities in € millions Non-current Trade payables Derivative financial instruments Sundry financial payables Contract liabilities Sundry non-financial payables Current Trade payables Refund liabilities Derivative financial instruments Sundry financial payables Contract liabilities Sundry non-financial payables – personnel-related liabilities – tax liabilities – social security liabilities – deferred items – other 12/31/2020 12/31/2019 133 7 106 39 362 174 83 106 9 370 3,583 3,642 455 32 763 655 456 44 698 601 1,271 1,307 655 226 119 35 236 721 225 118 18 225 The item “Contract liabilities” includes payments received by Bertelsmann in advance; that is, prior to satisfaction of the contractual obligations in accordance with IFRS 15. They are recognized as revenue as soon as the contractual obliga- tion has been rendered. Accordingly, revenues amounting to €523 million were recognized in the financial year 2020 (previous year: €530 million), which were included in the balance of contract liabilities at the beginning of the financial year. As in the previous year, as of the end of the reporting period the contract liabilities are primarily attributable to services to be provided by the Arvato division, as a rule in the following period. As of January 1, 2019, contract liabilities amounted to €606 million. In accordance with IFRS 15, the item “Refund liabilities” mainly comprises liabilities for expected returns of the Penguin Random House and Gruner + Jahr divisions of €306 million (previous year: €309 million). Correspondingly, in the balance sheet position “Other non-financial assets,” an asset for an immaterial amount is recognized for the customers’ right to recover products from customers upon settling the refund liability. The item “Sundry financial payables” includes, among other things, payables of €118 million (previous year: €97 million) from the Arvato Financial Solutions business unit, which were recognized in relation to the receivables management service provided. In addition, the item comprises payables in the amount of €133 million (previous year: €113 million) relating to accounts receivables sold, which are acquired by Arvato Financial Solutions from third parties in the course of conducting its financial services and then resold. Non-current sundry financial payables also include liabilities from put options relating to shareholders with non-controlling interests of €17 million (previous year: €24 million), minority interests in partnerships of €33 million (previous year: €33 million) and liabilities from the acquisition of assets in the amount of €44 million (previous year: €31 million). Current sundry financial payables also comprise liabilities from the acquisition of assets in the amount of €110 million (previous year: €75 million) and liabilities to participations in the amount of €29 million (previous year: €23 million). 112 Financial Information Consolidated Financial Statements

25 Additional Disclosures on Financial Instruments Both the following tables show the carrying amounts and measurement categories of financial assets and financial liabilities in accordance with IFRS 9 as of December 31, 2020: Carrying Amounts and Measurement Categories of Financial Assets in € millions Financial assets measured at amortized cost – loans – trade receivables – receivables from participations – sundry financial receivables – bank balances and cash on hand – cash equivalents Financial assets measured at fair value through other comprehensive income – other financial assets Primary financial assets measured at fair value through profit or loss – loans – fund-of-fund investments – minority stakes in start-ups – sundry financial receivables – other financial assets – cash equivalents Derivative financial instruments Continuing involvement Carrying Amounts and Measurement Categories of Financial Liabilities in € millions Financial liabilities measured at amortized cost – profit participation capital – bonds and promissory notes – liabilities to banks – other financial debt – trade payables – liabilities to participations – other Primary financial liabilities measured at fair value through profit or loss Derivative financial instruments Continuing involvement 114 Financial Information Consolidated Financial Statements 12/31/2020 12/31/2019 54 3,433 45 1,045 1,867 2,698 67 40 216 812 9 91 6 94 84 71 3,743 30 737 1,610 18 68 37 317 705 8 125 8 60 54 10,561 7,591 12/31/2020 12/31/2019 413 6,392 126 108 3,716 29 1,194 17 39 84 413 4,702 138 160 3,816 23 1,151 32 127 54 12,118 10,616

Financial Liabilities Measured at Fair Value Based on Level 3 in € millions Balance as of 1/1/2020 Total gain (+) or loss (-) – in profit or loss – in other comprehensive income Purchases Sales/settlements Balance as of 12/31/2020 Gain (+) or loss (-) for assets still held at the end of the reporting period in € millions Balance as of 1/1/2019 Total gain (+) or loss (-) – in profit or loss – in other comprehensive income Purchases Sales/settlements Transfers out of level 3 Balance as of 12/31/2019 Gain (+) or loss (-) for assets still held at the end of the reporting period Financial assets measured at fair value Primary and derivative financial assets held for trading 1,118 (77) (27) (50) 309 (283) 1,067 (32) – – – – – – – – Financial assets measured at fair value Primary and derivative financial assets held for trading 983 225 229 (4) 459 (406) (143) 1,118 84 – – – – – – – – – Total 1,118 (77) (27) (50) 309 (283) 1,067 (32) Total 983 225 229 (4) 459 (406) (143) 1,118 84 In the financial year 2020, the acquisitions mainly relate to various new and follow-up investments by the Bertelsmann Investments division, including in the digital service provider Deepexi, the online education provider JoJo and the open- source and cloud-native database PingCap. In addition, Bertelsmann Investments invested in the online fitness app Keep and the fintech company Rupeek. The major part of the disposals in the financial year relates to a larger partial exit of the indirect investment in the Brazilian education company Afya via the Crescera Educacional II fund, a further partial exit of the Indian education company Eruditus and a complete exit from the music streaming platform Saavn. In the financial year 2020, there were neither transfers out of level 3 nor transfers into level 3. 116 Financial Information Consolidated Financial Statements

Financial Liabilities Measured at Fair Value Based on Level 3 in € millions Balance as of 1/1/2020 Total gain (-) or loss (+) – in profit or loss – in other comprehensive income Purchases Settlements Transfers out of/into level 3 Balance as of 12/31/2020 Gain (-) or loss (+) for liabilities still held at the end of the reporting period in € millions Balance as of 1/1/2019 Total gain (-) or loss (+) – in profit or loss – in other comprehensive income Purchases Settlements Transfers out of/into level 3 Balance as of 12/31/2019 Gain (-) or loss (+) for liabilities still held at the end of the reporting period Financial liabilities measured at fair value through profit or loss 32 (16) (15) (1) 4 (3) – 17 (1) Financial liabilities measured at fair value through profit or loss 31 1 1 – 7 (7) – 32 1 Total 32 (16) (15) (1) 4 (3) – 17 (1) Total 31 1 1 – 7 (7) – 32 1 Level 1: remaining term of the transactions. The fair value of interest The fair value of the listed financial instruments is determined rate derivatives is calculated on the basis of the respective on the basis of stock exchange listings at the end of the market rates and yield curves at the end of the reporting reporting period. Level 2: For measuring the fair value of unlisted derivatives, Bertelsmann uses various financial methods reflecting the prevailing market conditions and risks at the respective period. The fair value of forward commodity transactions is derived from the stock exchange listings published at the end of the reporting period. Any mismatches to the standardized stock exchange contracts are reflected through interpolation or additions. balance sheet dates. Irrespective of the type of financial Level 3: instrument, future cash flows are discounted at the end of the reporting period based on the respective market interest rates and yield curves at the end of the reporting period. The fair value of forward exchange transactions is calculated using If no observable market data is available, fair value measurement is based primarily on cash flow-based valuation techniques. As a rule, so-called qualified financing rounds are used for minority stakes in the Bertelsmann Investments the average spot prices at the end of the reporting period and division. Listed financial instruments with contractual lockups taking into account forward markdowns and markups for the are also based on level 3. 118 Financial Information Consolidated Financial Statements

Based on this, the loss allowance as of December 31, 2020, was determined as follows for both trade receivables and contract assets: Credit Risk for Trade Receivables and Contract Assets in € millions Expected loss rate Trade receivables and contract assets Loss allowance for expected credit losses Balance as of 12/31/2020 in € millions Expected loss rate Trade receivables and contract assets Loss allowance for expected credit losses Balance as of 12/31/2019 Not overdue 0.70% 2,130 (15) 2,115 Not overdue 0.34% 2,345 (8) 2,337 Collective impairment Overdue 1 to 30 days 0.78% Overdue 31 to 90 days Overdue more than 90 days 2.48% 11.76% 383 (3) 380 121 (3) 118 119 (14) 105 Collective impairment Overdue 1 to 30 days 0.86% Overdue 31 to 90 days Overdue more than 90 days 1.75% 11.54% 465 (4) 461 171 (3) 168 130 (15) 115 Individual impairment n/a 910 (129) 781 Individual impairment n/a 878 (149) 729 The expected loss rates correspond to the average rates for the respective division-specific or business unit-specific groups of receivables. In the financial year 2020, impairment losses and reversals amounting to €-50 million (previous year: €-18 million) were recognized on trade receivables and contract assets. The following table shows a reconciliation from the opening balance to the closing balance of loss allowances for trade receivables and contract assets in the financial year 2020: Reconciliation of Loss Allowance for Trade Receivables and Contract Assets in € millions Balance as of 1/1 Additions Usage Reversal Change of consolidation scope Exchange rate effect Balance as of 12/31 2020 (179) (108) 22 58 35 8 2019 (162) (57) 11 39 (7) (3) (164) (179) 120 Financial Information Consolidated Financial Statements

The following table presents the contractually fixed at the earliest date at which the Bertelsmann Group can be undiscounted cash flows of the financial liabilities for held liable for payment. settlement. The figures are based on undiscounted cash flows Maturity Analysis for Non-Derivative Financial Liabilities in € millions Profit participation capital Fixed-interest bonds and promissory notes Floating-rate bonds and promissory notes Liabilities to banks Other financial debt Trade payables Liabilities to participations Other Balance as of 12/31/2020 Profit participation capital Fixed-interest bonds and promissory notes Floating-rate bonds and promissory notes Liabilities to banks Other financial debt Trade payables Liabilities to participations Other Balance as of 12/31/2019 Carrying amount Undiscounted cash flows Up to 1 year 1 to 5 years Over 5 years 413 6,282 110 126 108 3,716 29 1,295 12,079 413 4,692 10 138 160 3,816 23 1,237 10,489 – 500 – 113 102 3,583 29 1,190 5,517 – 100 – 134 154 3,642 23 1,131 5,184 413 2,200 100 13 1 130 – 110 2,967 413 1,800 – 4 6 168 – 73 2,464 – 3,615 10 – 5 3 – – 3,633 – 2,815 10 – – 6 – 33 2,864 Total 413 6,315 110 126 108 3,716 29 1,300 12,117 413 4,715 10 138 160 3,816 23 1,237 10,512 Current cash outflows from financial liabilities are offset by The maturity analysis for lease liabilities as of December 31, planned cash inflows from receivables and other financial assets. To cover current cash flows, Bertelsmann SE & Co. KGaA also has adequate financial reserves in the amount of cash and cash equivalents and unutilized credit facilities in place at the end of the reporting period. 2020, is presented in note 22 “Lease Liabilities.” 122 Financial Information Consolidated Financial Statements

Risk Management of Financial Instruments Financial Risk Management The Bertelsmann Group is exposed to various forms of financial operating risk and hedges risks using derivative financial risk through its international business operations. Above all, instruments as necessary. However, subsidiaries are not this includes the effects of changes in foreign exchange rates obliged to use the services provided by this department for and interest rates. Bertelsmann’s risk management activities their operating risks. Some subsidiaries, such as RTL Group are designed to effectively mitigate these risks. The Executive Board establishes basic risk management policy, outlining general procedures for hedging currency and interest rate risk and the utilization of derivative financial instruments. The Central Financial Department advises subsidiaries on in particular, have their own finance departments. They report their hedge transactions to the Central Finance Department each quarter. Further information on financial market risks and financial risk management is presented in the Combined Management Report. Currency Risk Bertelsmann is exposed to exchange rate risk in various foreign the cash flow hedge model. A number of subsidiaries are currencies. Its subsidiaries are advised, but not obliged, to based outside the eurozone. The resulting translation risk is hedge themselves against foreign currency risks in the local managed through the relationship of economic financial debt reporting currency by signing forward agreements with banks to operating EBITDA of key currency areas. Over the long term, that have a high credit rating. Loans within the Bertelsmann the Group aims to achieve a reasonable relationship between Group that are subject to currency risk are hedged using financial debt and results of operations for each currency derivatives. If foreign currency transactions designated as area. Bertelsmann’s focus is on the maximum leverage factor hedged items adequately meet effectiveness requirements, hedge accounting as defined by IFRS 9 is applied under permitted for the Group. Interest Rate Risk There are interest rate risks for interest-bearing assets and financial debt. Interest rate risk in the Bertelsmann Group is analyzed centrally and managed on the basis of the Group’s planned net financial debt. A key factor in this management relationship between floating rates and long-term fixed- interest rates, depending on the absolute amount, forecast performance of the interest-bearing liability and interest level. This is implemented using underlying and derivative financial is the Group’s interest result over time and its sensitivity instruments for control. to interest rate changes. The Group aims for a balanced Liquidity Risk Liquidity risks may arise through a lack of rollover financing (liquidity risk in a narrow sense), delayed receipt of payment and unforeseen expenditure (budgeting risk). Budgeting risk is determined by comparing deviations in actual spending unplanned transactions (e.g., acquisitions) are continuously tracked. The maturity profile of financial assets and liabilities is also reconciled on a regular basis. Budget risks are managed through effective cash management and constant monitoring with budget and reserve amounts. In a narrow sense, liquidity of projected versus actual cash flows. Debt maturities are risk depends on the volume of debt due within a given period. Liquidity risk is monitored on an ongoing basis with reference to the budget for current and future years. New and also diversified to ensure that rising financing costs do not have a short-term impact. Credit facilities with banks are also maintained for unplanned expenditures. 124 Financial Information Consolidated Financial Statements

The cash flow or present value risks existing at the end of the debt, cash and cash equivalents, and derivatives at the end reporting periods are analyzed using a sensitivity calculation as an after-tax observation. A parallel shift in the interest rate curve of plus or minus 1 percent is assumed for all significant currencies. The analysis is performed on the basis of financial of the reporting period. The underlying total risk position amounts to €3,791 million (previous year: €1,645 million). The results are shown in the following table: Sensitivity Analysis of Cash Flow and Present Value Risks in € millions Cash flow risks (income statement) Present value risks (income statement) Present value risks (equity) 12/31/2020 12/31/2019 Shift +1% Shift -1% Shift +1% Shift -1% 28 – – (28) – – 12 12 – (12) (12) – The analysis of foreign currency sensitivity includes the Group’s financial debt and operating transactions at the end of the reporting period and the hedging relationships entered into. The calculation is performed for the unsecured net exposure on the basis of an assumed 10 percent appreciation of the euro versus all foreign currencies, and is presented after tax. Based on a total risk position of €210 million (previous year: €107 million), a uniform devaluation of foreign currencies would have resulted in a change in the carrying amount recognized in profit or loss of €-15 million (previous year: €-7 million). Thereof, €-7 million (previous year: €-2 million) relates to fluctuations in the US dollar exchange rate with a net exposure of US$118 million (previous year: US$39 million). Shareholders’ equity would have changed by €-15 million (previous year: €-22 million) as a result of fluctuations in the fair values of documented cash flow hedges. Thereof, €-16 million (previous year: €-24 million) relates to fluctuations in the US dollar exchange rate on the basis of a documented cash flow hedge volume of US$282 million (previous year: US$389 million). If there had been a uniform increase in the value of foreign currencies, this would have led to opposite changes in these amounts for the Bertelsmann Group. Financial Derivatives Bertelsmann uses standard market financial derivatives, primarily unlisted (OTC) instruments. These include, in particular, forward agreements, currency swaps, currency options, interest rate swaps and individual commodities forwards. Transactions are entered into solely with banks with a high credit rating. As a rule, the Central Financial Department’s transactions are only performed with a group of and 27 percent) is due to financial derivatives used to hedge currency rate risks from operating activities as of the end of the reporting period. Financial derivatives are also used to hedge against interest rate risks from interest-bearing receivables and liabilities. Financial derivatives are used exclusively for hedging purposes. banks approved by the Executive Board. The nominal volume All relationships between hedging instruments and hedged is the total of all underlying buying and selling amounts of the items are documented, in addition to risk management respective transactions. The majority of the financial derivatives at the end of the reporting period with a nominal volume of €4,620 million (previous year: €5,734 million) are used to hedge currency rate risks from intercompany financing activities. These financial derivatives account for a total of €2,869 million and 62 percent, respec- tively (previous year: €3,723 million and 65 percent) as of the end of the reporting period. A total of €1,271 million and 28 percent, respectively (previous year: €1,531 million objectives and strategies in connection with the various hedges. This method includes linking all derivatives used for hedging purposes to the underlying assets, liabilities, firm commitments and forecasted transactions. Furthermore, the Bertelsmann Group assesses and documents the degree to which changes in the fair values or cash flows of hedged items are effectively offset by changes in the corresponding derivatives used as hedging instruments, both when the hedges are initiated and on an ongoing basis. 126 Financial Information Consolidated Financial Statements

The following table provides an overview of the carrying amounts of the derivative financial instruments, which correspond to their fair values. A distinction is made between derivatives that are included in an effective hedging relation- ship in accordance with IFRS 9 and those that are not. Derivative Financial Instruments in € millions Assets Forward contracts and currency swaps – without hedge relation – in connection with cash flow hedges Interest rate swaps – without hedge relation – in connection with cash flow hedges Other derivative financial instruments without hedge relation Equity and liabilities Forward contracts and currency swaps – without hedge relation – in connection with cash flow hedges Interest rate swaps – without hedge relation – in connection with cash flow hedges Other derivative financial instruments without hedge relation The following table presents the remaining terms of the contractual amounts to be exchanged in a derivative financial instrument for which gross cash flows are exchanged: Liabilities from Derivatives with Gross Settlement in € millions Cash outflow Cash inflow Balance as of 12/31/2020 Cash outflow Cash inflow Balance as of 12/31/2019 Carrying amount on 12/31/2020 Carrying amount on 12/31/2019 80 8 6 – – 29 10 – – – 27 26 7 – – 122 5 – – – Remaining term of liabilities Up to 1 year 1 to 5 years Over 5 years (2,327) 2,297 (30) (2,399) 2,353 (46) (383) 374 (9) (989) 894 (95) – – – (1,048) 886 (162) 128 Financial Information Consolidated Financial Statements

The following tables show the cash changes and non-cash changes of liabilities arising from financing activities: Changes in Liabilities Arising from Financing Activities Cash changes Non-cash changes Acquisitions through business combinations Disposals through business combinations Exchange rate effects Other changes 12/31/2020 1,585 100 (58) (316) (58) 1,253 – – 50 2 4 56 – – – (8) (2) (10) – – (4) (58) 5 (57) 6 (1) – 343 (1) 347 5,968 424 126 1,355 108 7,981 Cash changes Non-cash changes Acquisitions through business combinations Disposals through business combinations Exchange rate effects Other changes 12/31/2019 (100) (134) (120) (288) 53 (589) – – 2 9 4 15 – – – (3) (14) (17) – – – 18 – 18 5 – – 287 6 298 4,377 325 138 1,392 160 6,392 1/1/2020 4,377 325 138 1,392 160 6,392 1/1/2019 4,472 459 256 1,369 111 6,667 in € millions Bonds Promissory notes Liabilities to banks Lease liabilities Other financial debt Liabilities arising from financing activities in € millions Bonds Promissory notes Liabilities to banks Lease liabilities Other financial debt Liabilities arising from financing activities As of December 31, 2020, the other non-cash changes in lease liabilities mainly relate to lease contracts newly concluded in the financial year 2020. Analogously, as of December 31, 2019, the other non-cash changes in lease liabilities mainly related to lease contracts newly concluded in the financial year 2019. 130 Financial Information Consolidated Financial Statements

The following table shows the reconciliation of segment information to the Consolidated Financial Statements: Reconciliation of Segment Information to Group Profit or Loss in € millions Operating EBITDA from continuing operations Amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets Adjustments on amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets included in special items Special items EBIT Financial result Earnings before taxes from continuing operations Income tax expense Earnings after taxes from continuing operations Earnings after taxes from discontinued operations Group profit or loss 28 Related Party Disclosures 2020 3,143 1,040 (122) (51) 2,276 (339) 1,937 (478) 1,459 – 1,459 2019 2,887 1,029 (121) 154 1,825 (309) 1,516 (426) 1,090 1 1,091 For the Bertelsmann Group, related parties as defined in IAS 24 are those persons and entities that control or exercise a significant influence over the Bertelsmann Group, and those persons and entities controlled or jointly controlled by the Bertelsmann Group, or over which it exercises a significant influence. Accordingly, certain members of the Mohn family, the members of the Executive Board of Bertelsmann owns more than 50 percent of the shares in Bertelsmann Management SE and of Bertelsmann SE & Co. KGaA. Reinhard Mohn Verwaltungsgesellschaft mbH continues to own more than one-quarter of the shares in Bertelsmann Management SE and in Bertelsmann SE & Co. KGaA, respectively. Management SE as the general partner, and the Supervisory Board of Bertelsmann SE & Co. KGaA, including close members of their families and including the companies that In the legal form of a KGaA, the business is managed by a general partner. In the case of Bertelsmann SE & Co. KGaA, Bertelsmann Management SE, represented by its Executive are controlled or jointly managed by them, and the joint Board, is responsible for the management of the business. ventures and associates forming part of the Bertelsmann Group and their subsidiaries, are defined as related parties. Furthermore, Bertelsmann Pension Trust e. V. is considered a related party (further details on this are presented in note 18 “Provisions for Pensions and Similar Obligations”). The statutory bodies consist of the Supervisory Board and the General Meeting at the Bertelsmann SE & Co. KGaA level and the Executive Board, Supervisory Board and General Meeting at the Bertelsmann Management SE level. The Supervisory Board of the KGaA is elected by the limited partners at the General Meeting. The members of the Bertelsmann Bertelsmann Verwaltungsgesellschaft mbH (BVG), Gütersloh, a holding company with no operating activities, has control of the Bertelsmann Group. Johannes Mohn GmbH has informed Bertelsmann SE & Co. KGaA that it directly Management SE Supervisory Board are appointed at the General Meeting of Bertelsmann Management SE. BVG controls the voting rights at the Bertelsmann SE & Co. KGaA and Bertelsmann Management SE General Meeting. 132 Financial Information Consolidated Financial Statements

Contingent liabilities from joint ventures amounted to €25 million as of December 31, 2020 (previous year: €18 million). As of the end of the reporting period, commitments for RTL Group joint ventures existed in an immaterial amount (previous year: €7 million). As in the previous year, no expenses were recognized for bad or doubtful debts due from joint ventures in the financial year 2020. As of December 31, 2020, loans of €11 million were granted to joint ventures (previous year: €2 million). Loans were received from joint ventures in the amount of €3 million (previous year: €23 million). Capital contributions were made to joint ventures in an immaterial amount in the financial year 2020 (previous year: €0 million). 29 Events after the Reporting Period In November 2020, Penguin Random House announced its acquisition of the global publisher Simon & Schuster for US$2.175 billion. The transaction is subject to the approval of regulatory authorities. Bertelsmann intends to pay the shares of Magnite stock. The transaction is subject to approval by regulatory authorities and is expected to close in the second quarter of 2021. Further details are presented in the section “Assets Held for Sale and Liabilities Related to Assets purchase price in cash from existing liquid assets. The closing is expected during the year 2021. Held for Sale.” In January 2021, Bertelsmann terminated a floating-rate promissory note of €100 million due in April 2023. The promissory note will be repaid ahead of schedule in April 2021. In addition, a €500 million bond due in May 2021 was terminated early in March 2021. Repayment will take place in April 2021, one month before the original maturity date. In February 2021, RTL Group announced that it had signed an agreement for the sale of SpotX to Magnite. The purchase price consists of US$560 million in cash and 14.0 million In March 2021, Mediengruppe RTL Deutschland also announced that it had signed an agreement for the acquisition of the remaining 50 percent of the shares in Super RTL (RTL DISNEY Fernsehen GmbH & Co. KG) from The Walt Disney Company (Buena Vista International Television Investments, Inc.). The purchase price amounts to €105 million on a “cash and debt free” basis. The expected fair value remeasurement for the existing 50 percent amounts to approximately €79 million. The transaction is subject to the approval of regulatory authorities (Germany and Austria) and is expected to be closed in the first half of 2021. 134 Financial Information Consolidated Financial Statements

Name of the entity infoscore Finance GmbH infoscore Portfolio Management International GmbH inmediaONE] GmbH IP Deutschland GmbH justDice GmbH Majorel Chemnitz GmbH1) Place Name of the entity Baden-Baden RTL Group Vermögensverwaltung GmbH Gütersloh RTL Hessen GmbH RTL interactive GmbH Gütersloh RTL Journalistenschule GmbH Cologne RTL Nord GmbH Hamburg RTL Radio Berlin GmbH Chemnitz RTL Radio Deutschland GmbH Majorel Neubrandenburg GmbH1) Neubrandenburg RTL Radio Luxemburg GmbH Majorel Schwerin GmbH1) Majorel Stralsund GmbH1) mbs Nürnberg GmbH MEDIASCORE Gesellschaft für Medien- und Kommunikationsforschung mbH Schwerin Stralsund RTL STUDIOS GmbH RTL West GmbH Nuremberg rtv media group GmbH Cologne smartclip Deutschland GmbH smartclip Europe GmbH Mediengruppe RTL Deutschland GmbH Cologne Sonopress GmbH Mohn Media Energy GmbH Mohn Media Mohndruck GmbH Gütersloh Gütersloh SSB Software Service und Beratung GmbH SUNDAY GmbH MSP Medien-Service und Promotion GmbH Hamburg TERRITORY Content to Results GmbH Next Level Integration GmbH Paigo GmbH Cologne TERRITORY EMBRACE GmbH Verl TERRITORY Influence GmbH Penguin Random House Verlagsgruppe GmbH Gütersloh TERRITORY MEDIA GmbH Prinovis Ahrensburg Weiterverarbeitung und Logistik GmbH Hamburg TERRITORY webguerillas GmbH TERRITORY webguerillas Nord GmbH Prinovis GmbH Prinovis Klebebindung GmbH PRINOVIS Service GmbH Print Service Gütersloh GmbH Probind Mohn media Binding GmbH PSC Print Service Center GmbH Random House Audio GmbH Reinhard Mohn GmbH Relias Learning GmbH rewards arvato services GmbH RM Buch und Medien Vertrieb GmbH RM Elfte Beteiligungsverwaltungs GmbH RTL Audio Center Berlin GmbH RTL Audio Vermarktung GmbH RTL Group Central & Eastern Europe GmbH RTL Group Financial Services GmbH RTL Group GmbH RTL Group Licensing Asia GmbH RTL Group Markenverwaltungs GmbH Gütersloh trndnxt GmbH Nuremberg trndsphere blue GmbH Hamburg UFA Distribution GmbH Gütersloh Gütersloh Oppurg Cologne UFA Fiction GmbH UFA Fiction Production GmbH UFA Film und Fernseh GmbH UFA GmbH Gütersloh Ufa Radio-Programmgesellschaft in Bayern mbH Berlin UFA Serial Drama GmbH Munich UFA Show & Factual GmbH Gütersloh Gütersloh Undercover GmbH Verlag RM GmbH Berlin Berlin Cologne Cologne Cologne Cologne Cologne Verlegerdienst München GmbH versorgung.plus GmbH VIVENO Group GmbH Vogel Druck und Medienservice GmbH VOX Holding GmbH VSG Schwerin - Verlagsservicegesellschaft mbH webmiles GmbH 1) The financial year of this subsidiary ended on October 31, 2020. Place Cologne Frankfurt am Main Cologne Cologne Hamburg Berlin Berlin Cologne Cologne Cologne Nuremberg Cologne Düsseldorf Gütersloh Munich Hamburg Hamburg Bochum Munich Munich Munich Hamburg Munich Munich Potsdam Potsdam Potsdam Cologne Potsdam Ismaning Potsdam Cologne Schwülper Gütersloh Gilching Dortmund Gütersloh Höchberg Cologne Schwerin Munich 136 Financial Information Consolidated Financial Statements

The following table shows the number of employees as of December 31, 2020, and on an annual average: Number of Employees RTL Group Penguin Random House Gruner + Jahr BMG Arvato Bertelsmann Printing Group Bertelsmann Education Group Bertelsmann Investments Corporate Total Number of employees (closing date) Number of employees (average) 15,686 10,871 8,777 974 85,662 7,183 1,626 390 1,673 15,700 10,783 8,799 947 82,776 7,363 1,649 399 1,714 132,842 130,130 32 Proposal for the Appropriation of Net Retained Profits The general partner Bertelsmann Management SE and the Supervisory Board of Bertelsmann SE & Co. KGaA will propose to the General Meeting that the remaining net retained profits of Bertelsmann SE & Co. KGaA of €898 million be appropriated as follows: Net Retained Profits for Bertelsmann SE & Co. KGaA in € millions Net retained profits Dividends to shareholders Carried forward to new financial year The dividend per ordinary share thus amounts to €2,149. 898 (180) 718 138 Financial Information Consolidated Financial Statements

Responsibility Statement To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, liabilities, development and performance of the business and the position of the Bertelsmann Group and Bertelsmann SE & Co. KGaA, together with a description of the material opportunities financial position and profit or loss of the Group, and the Combined Management Report includes a fair review of the and risks associated with the expected development of the Bertelsmann Group and Bertelsmann SE & Co. KGaA. Gütersloh, March 17, 2021 Bertelsmann SE & Co. KGaA Represented by: Bertelsmann Management SE, the general partner The Executive Board Thomas Rabe Markus Dohle Rolf Hellermann Immanuel Hermreck 140 Responsibility Statement

into account in connection with our audit of the consolidated financial statements as a whole and in forming our audit opinion; we do not provide a separate audit opinion on these matters. Recoverability of goodwill As a result of the impairment tests that were carried out, the Company recognised an impairment loss of EUR 116 million. There is a risk for the consolidated financial statements that impairment existing as at the reporting date was not identi- fied. There is also a risk that the related disclosures in the notes are not appropriate. Please refer to the general principles set out in the notes to the consolidated financial statements for information on the Our audit approach accounting policies applied. Please also refer to Section 9 of the notes to the consolidated financial statements concerning the assumptions used. With the support of our valuation specialists, we assessed, among other things, the appropriateness of the key assump- tions as well as of the Company’s valuation model. To this Risk for the financial statements end, we discussed the expected business and earnings The goodwill amounts to EUR 7,868 million as at 31 December 2020 and, at 26% of the total assets and 73% of the group equity, constitutes a significant proportion of the assets. development in the detailed planning period as well as the assumed long-term growth rates with those responsible for the planning. We also carried out reconciliation with the 2021 budget drawn up by the Executive Board and approved by the Supervisory Board and made an assessment of the planning continuation into the detailed planning period. The recoverability of goodwill is reviewed each year at the level of the cash-generating units to which the relevant goodwill is allocated, without this requiring a specific reason. We furthermore satisfied ourselves of the Company’s planning accuracy by comparing plans from earlier financial If indications arise in the course of the year that the goodwill years with the results actually realised and analysing might be impaired, an ad hoc impairment test is additionally carried out during the year. For the goodwill impairment test, the carrying amount is compared with the recoverable amount of the relevant cash-generating unit. If the carrying amount exceeds the recoverable amount, an impairment loss any deviations. We compared the assumptions and data underlying the discount rate, especially the risk-free interest rate, the market risk premium and the beta factor, with our own assumptions and publicly available data. has to be recognised. The recoverable amount is the higher of the fair value less costs of disposal and the value in use of the cash-generating unit. The reporting date for the impairment test is 31 December 2020. In order to ensure that the valuation model used was math- ematically accurate, we verified the Company’s calculations and validated elements selected from a risk-oriented per- spective on the basis of our own calculations. For the listed cash-generating units RTL Group and M6 Group, the market capitalisation is compared to the carrying amount of the cash-generating unit. Further, on the basis of the expected cash flows, applying DCF method, the recoverable amount is calculated and compared to the carrying amount of the cash-generating unit. No impairment requirements were identified. The goodwill impairment test is complex and based on a num- ber of discretionary assumptions. These include the expected business and earnings development of the cash-generating units for the next three and five years, the long-term growth rates that are assumed and the discount rate that is used. In order to take existing forecast uncertainty into account, we investigated the effects of potential changes in the discount rate, in the earnings performance and in the long-term growth rate on the recoverable amount by verifying the sensitivity analyses performed by the Company and comparing them with the valuation results. Finally, we assessed whether the disclosures in the notes regarding recoverability of goodwill are appropriate. This also included an assessment of the appropriateness of the disclosures in the notes pursuant to IAS 36.134(f) on sensitivities in the event of a reasonably possible change in key assumptions underlying the valuation. 142 Auditor’s Report

Our conclusions The valuation models underlying the calculation of the non- controlling interests in start-ups and fund-to-fund investments are appropriate and consistent with the applicable measure- ment principles. The Company’s assumptions and data under- lying the measurement are appropriate. As at 30 June 2020, the pro rata market capitalisation was lower than the carrying amount of the investment in the associate. The subsequent ad-hoc impairment test as at 30 June 2020 on the basis of a DCF method resulted in an impairment loss of EUR 60 million. After impairment the carrying amount was EUR 143 million. As at 31 December 2020, the pro rata market capitalisation Recoverability of the investments in associates of Atresmedia was still lower than the carrying amount of Please refer to the sections “General principles” and “ Principles identify any additional impairment loss. of consolidation” in the notes to the consolidated financial statements for information on the accounting policies applied. The Company’s disclosures on the investments in associates The calculation of the fair value using the income dis- counted cash flow model is complex and, with regard are included in Section 11 of the notes to the consolidated to the assumptions that are made, dependent to a great the investment. The subsequent impairment test did not financial statements. Risk for the financial statements Investments accounted for using the equity method of EUR 820 million are reported under the non-current assets in the consolidated financial statements of Bertelsmann SE & Co. KGaA as at 31 December 2020, assets, of which EUR 780 million is attributed to investments in associates. extent on the Company’s estimates and assessments. This is particularly true for the estimate of the future cash flows and long-term growth rates, the determination of the discount rate and other assumptions in connection with the effects of the corona pandemic on the business performance of the individual investments in associates, especially Atresmedia. There is the risk for the consolidated financial statements that an impairment existing as at the reporting date was not The investments in associates are recognised using the equity identified and was not recorded in the appropriate amount for method pursuant to IAS 28. The recoverability of the investments Atresmedia. There is also a risk that the related disclosures in in associates is assessed in relation to specific causes if there are the notes are not appropriate. indications that the carrying amount of the relevant investment in the associate might be impaired. To this end, the carrying amount Our audit approach is compared with the relevant recoverable amount. If the carrying amount exceeds the recoverable amount, an impairment loss has To begin with, we used the information obtained in the to be recognised. The recoverable amount is the higher of the fair value less costs to sell and the value in use of the relevant investment in the associate. For the investment in Atresmedia, which is listed in Spain and significant from the Group, the recov- erable amount is assessed based on the value in use. For the other investments in associates accounted for using the at-equity method, the valuation is performed based on the fair value less costs of disposal, the recoverable amount is derived from the course of our audit to assess at which investments in associates there are indications of a need for write-downs. Together with our valuation experts, we subsequently assessed the appropriateness of the key assumptions as well as the Company’s valuation model. To this end, we discussed the expected cash flows as well as the assumed long-term growth rates with the people responsible for the planning. We also carried out reconciliations with the value in use on the basis of the discounted cash flow model. planning for the associated companies. We additionally The cash flows used for the discounted cash flow model are market forecasts. based on plans for individual investments for the next three and five years, which are adjusted using assumptions on long- term growth rates. The relevant discount rate is measured at We furthermore assessed the Company’s planning accuracy by comparing plans from earlier financial years with the the weighted average cost of capital. results actually realised and analysing any deviations. assessed the consistency of the assumptions with external 144 Auditor’s Report

enable the preparation of a combined management report provide a basis for our opinions. The risk of not detecting that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropri- ate evidence for the assertions in the combined manage- ment report. a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. The Supervisory Board is responsible for overseeing the Group’s financial reporting process for the preparation of the consolidated financial statements and of the combined management report. Auditor’s responsibilities for the audit of the consolidated financial statements and of the combined management report • Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and measures (systems) relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems. • Evaluate the appropriateness of the accounting policies used by the Executive Board and the reasonableness of the esti- mates made by the Executive Board and related disclosures. Our objectives are to obtain reasonable assurance about • Conclude on the appropriateness of the Executive Board’s whether the consolidated financial statements as a whole are use of the going concern basis of accounting and, based free from material misstatement, whether due to fraud or error, on the audit evidence obtained, whether a material and whether the combined management report as a whole uncertainty exists related to events or conditions that may provides an appropriate view of the Group’s position and, in all cast significant doubt on the Group’s ability to continue as material respects, is consistent with the consolidated financial a going concern. If we conclude that a material uncertainty statements and the knowledge obtained in the audit, complies exists, we are required to draw attention in the auditor’s with the German legal requirements and appropriately report to the related disclosures in the consolidated financial presents the opportunities and risks of future development, as statements and in the combined management report or, if well as to issue an auditor’s report that includes our opinions such disclosures are inadequate, to modify our respective on the consolidated financial statements and on the combined opinions. Our conclusions are based on the audit evidence management report. obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease Reasonable assurance is a high level of assurance, but is to be able to continue as a going concern. not a guarantee that an audit conducted in accordance with Section 317 HGB and the EU-AR and in compliance with the German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this combined management report. We exercise professional judgement and maintain profes- sional scepticism throughout the audit. We also: • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance with the IFRS as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express opinions on the consolidated financial statements and on the combined management • Identify and assess the risks of material misstatement of report. We are responsible for the direction, supervision the consolidated financial statements and of the combined and performance of the group audit. We remain solely management report, whether due to fraud or error, design responsible for our opinions. and perform audit procedures responsive to those risks and • Evaluate the consistency of the combined management obtain audit evidence that is sufficient and appropriate to report with the consolidated financial statements, its 146 Auditor’s Report

the combined management report pursuant to Section 328(1) sentence 4 no. 1 HGB and for marking up the consolidated financial statements pursuant to Section 328(1) sentence 4 no. 2 HGB. In addition, the Executive Board of the Company is responsible for such internal control as it has determined necessary to enable the creation of the ESEF documents that are free from material violations, whether due to fraud or error, of the requirements of Section 328(1) HGB relating to the electronic reporting format. The Executive Board of the Company is furthermore respon- sible for submitting to the operator of the German Federal Gazette the ESEF documents together with the auditor’s report and the accompanying audited consolidated financial statements and the audited combined management report as well as other documents to be disclosed. The Supervisory Board is responsible for overseeing the creation of the ESEF documents as part of the financial reporting process. Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material violations, whether due to fraud or error, of the requirements of Section 328(1) HGB. We exercise professional judgement and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material breaches of the requirements of Section 328(1) HGB, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion; • obtain an understanding of internal control relevant to the audit of the ESEF documents in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these controls; the requirements of Delegated Regulation (EU) 2019/815, as amended as at the balance sheet date, relating to the technical specification for this file; • assess whether the ESEF documents enable the audited consolidated financial statements and the audited combined management report to be reproduced in XHTML with the same contents. • assess whether the mark-up of the ESEF documents with Inline XBRL technology (iXBRL) enables an appropriate and complete machine-readable XBRL copy of the XHTML reproduction to be made. Other disclosures in accordance with Article 10 EU-AR We were elected as the auditor of the consolidated financial statements by the Annual General Meeting on 28 August 2020. We were engaged by the Supervisory Board on 31 August 2020. We have been the group auditor of Bertelsmann SE & Co. KGaA since the financial year 2020. We declare that the audit opinions expressed in this auditor’s report are consistent with the additional report to the Audit Committee pursuant to Article 11 EU-AR (audit report). Responsible auditor The auditor responsible for the audit is Frank Thiele. Bielefeld, 18 March 2021 KPMG AG Wirtschaftsprüfungsgesellschaft Dr Tonne Thiele • assess the technical validity of the ESEF documents, i.e. whether the file containing the ESEF documents meets Wirtschaftsprüfer (German Public Auditor) Wirtschaftsprüfer (German Public Auditor) 148 Auditor’s Report

The Supervisory Board of Bertelsmann SE & Co. KGaA supervises the management of the business by the general partner and uses its extensive information and control rights for this purpose. In addition, the Supervisory Boards advise the Executive Board on strategic matters and significant transactions. The Executive and Supervisory Boards work in close, trusting cooperation and are able to reconcile the demands of effective corporate governance with the need for rapid decision-making processes. Fundamental matters of corporate strategy and their implementation are discussed preparation of draft resolutions for submission to the plenary session of the Supervisory Board. Furthermore, the committee addresses issues relating to compliance, in particular the effectiveness and proper functioning of the compliance orga- nization, as well as with the related topics of integrity within the Group and audits of the Non-Financial Statement. Other important topics of the Audit and Finance Committee are data protection and cybersecurity in the Group. These commit- tees prepare the topics to be addressed during the plenary meetings of the Supervisory Boards. The committee chairs – openly and coordinated in joint sessions. Any significant or, where applicable, their representatives – then report to the measures to be taken by the Executive Board are subject to the approval of the Supervisory Board. The Supervisory Board reviews the Annual and Consolidated Financial Statements, the Combined Management Report of Bertelsmann SE & Co. KGaA and the Group, and the proposal for the appropriation of net retained profits. It approves the Annual Financial Statements of Bertelsmann SE & Co. KGaA and the Consolidated Financial Statements, taking into account the results of the prelimi- nary review conducted by the Audit and Finance Committee and the audit reports prepared by the auditor. The Bertelsmann SE & Co. KGaA and Bertelsmann Management SE shareholders exercise their rights and vote at the respective General Meetings. The General Meetings vote on matters such as amendments to the articles of association and the appropriation of net income, and elect the members of the respective Supervisory Boards. The members of the Executive and Supervisory Boards are obliged to serve the company’s best interests in their work. For some time, the delegation of tasks to committees of experts has been an integral com- ponent of the Supervisory Boards’ work at Bertelsmann. This increases the monitoring efficiency and advisory exper- tise of the Supervisory Boards. The Supervisory Board of Bertelsmann Management SE has formed a Personnel Com- mittee and a Program Committee, and the Supervisory Board of Bertelsmann SE & Co. KGaA has formed an Audit and Finance Committee and the Working Group of Employee and Management Representatives. The tasks of a Nomination Committee were also assigned to the Personnel Committee, plenary meetings on the work performed. The Supervisory Boards’ decision-making powers have been transferred to the committees to the extent permitted by law. The breadth and range of responsibilities and tasks delegated to these com- mittees are continuously reviewed through various evaluation processes. The appropriate size of the Supervisory Boards and the experience and professional expertise of their members, who are drawn from a broad range of industries and areas of activity, are key factors in the effectiveness and indepen- dence of the work carried out by the Supervisory Board and reflect the specific ownership structure at Bertelsmann. With the exception of Supervisory Board members who are also members of the Mohn family (Dr. Brigitte Mohn, Christoph Mohn, Liz Mohn) and the employee representatives on the Supervisory Board (Kai Brettmann, Günter Göbel, Christiane Sussieck) or the representative of the Bertelsmann Management Representative Committee (Ian Hudson, until April 30, 2020), the Supervisory Board considers all other members of the Supervisory Board (Prof. Dr. Werner Bauer, Dr. Thomas Buberl (until December 31, 2020), Bernd Leukert, Gigi Levy-Weiss, Hans Dieter Pötsch, Henrik Poulsen (from June 25, 2020) and Bodo Uebber) to be independent for the purposes of the German Corporate Governance Code. Accordingly, the Supervisory Board has an appropriate number of independent members among the shareholders. For details of the work of the Supervisory Board, please refer to the Report of the Supervisory Board (p. 152 ff.). in which capacity it recommends to the plenary session of Diversity in Practice the Supervisory Board suitable candidates for the Supervisory Board, to be nominated at the General Meeting. The Program At a global company like Bertelsmann, diversity within the Committee, instead of the Supervisory Board, decides on the approval of the Supervisory Board to enter into program workforce is a prerequisite for creativity and entrepreneurship, and therefore for the Group’s long-term economic success. supply deals – for example, for feature films, series or sports rights. The Audit and Finance Committee of the Supervisory Board of Bertelsmann SE & Co. KGaA is also involved in financial reporting, the financial reporting process, and monitors the effectiveness of the risk monitoring and risk management system, the internal control system and the internal auditing system. One focus of the Audit and Finance Committee is a review of the Annual and Consolidated Financial Statements, a detailed discussion of the auditor’s reports, and the Bertelsmann pursues the goal of further increasing staff diversity at all levels and in various facets. A Group-wide international working group has been tasked with promoting diversity within the Group (see “Combined Non-Financial Statement” within the Combined Management Report, p. 44 ff.). The focus of its efforts in 2020 – in addition to measures addressing disabilities as well as sexual orientation and identity – was on increasing gender diversity. As of 150 Corporate Governance

Report of the Supervisory Board the reporting period, In the Supervisory Board of Bertelsmann SE & Co. KGaA again diligently fulfilled the duties incumbent upon it by law and under the articles of association and bylaws. Its members regularly advised and monitored the general partner, Bertelsmann Management SE, represented by its Executive Board, in the task of managing and directing the company’s operations. This report covers the activities of the Supervisory Board of Bertelsmann SE & Co. KGaA. The activities of the Supervisory Board of Bertelsmann Management SE, which in turn serves as the Supervisory Board of the general partner of Bertelsmann SE & Co. KGaA, are not the subject of this report. Christoph Mohn Chairman of the Supervisory Board of Bertelsmann SE & Co. KGaA Advising and Monitoring the Executive Board of Bertelsmann Management SE Dear shareholders, As part of its advisory and monitoring activities, the Supervisory Board of Bertelsmann SE & Co. KGaA was directly involved in important company decisions and transactions at an early stage, and discussed and reviewed these at length on the The global economic developments in the 2020 reporting basis of reports from the Executive Board. period were shaped by the economic ramifications of the coronavirus pandemic. Due to the considerable economic The general partner, represented by the Executive Board of repercussions of the crisis, growth was uneven in markets Bertelsmann Management SE, provided the Supervisory relevant to Bertelsmann. The European TV advertising Board with regular, prompt and comprehensive written and markets recorded a significant decline, while the relevant verbal reports on all significant issues of strategy, planning, streaming markets continued their strong growth. The business performance, intended business policies and other relevant markets for printed books achieved positive growth overall, and the publisher sales of e-books and digital audiobooks climbed strongly in the United States and the United Kingdom. The magazine markets in Germany and France were characterized by declines in both print advertising and the circulation business, while the trends in the digital market showed a decline in Germany but stable development in France. A moderate decline was posted in the relevant music markets for publishing rights, but the fundamental management issues. A wide range of topics and projects were presented for discussion at the meetings of the Supervisory Board. Reporting of the Executive Board concerned, but was not limited to, the position and development of the company, especially the current business and financial position, and material business transactions, particularly major planned investments and divestments. Instances where business performance deviated from official projections and targets were discussed in detail with the recording market segment continued to grow. The service Supervisory Board, which reviewed these matters on the markets also showed sustained growth in sectors relevant basis of the documentation submitted. The Supervisory to Bertelsmann, except for a decline in the market for IT Board regularly obtained information concerning financial services. The European printing markets showed further debt levels. The Supervisory Board also focused on the risk decline, with the offset printing markets again seeing more situation and risk management. The internal control system, robust development than the gravure printing markets. risk management system and internal auditing system The educational markets that are relevant to Bertelsmann, were the subjects of regular reports and discussions. The in contrast, continued to show sustained growth. In this Supervisory Board also received regular reports on corporate diverse market environment, the Bertelsmann Group was governance and compliance developments at Bertelsmann. able to completely offset the overall slight organic decrease The Executive Board and the Supervisory Board report jointly in revenue through lower costs and to increase its operating on corporate governance and compliance at Bertelsmann on result – including strategic building transactions – to over pages 149–151. Another focus of the Supervisory Board’s €3 billion. The growth businesses’ contribution to Group activities involved addressing management development and revenues remained stable. routine succession planning for the Executive Board. 152 Report of the Supervisory Board

In the last Supervisory Board meeting of the financial year, Supervisory Board Audit and Finance Committee on November 5, 2020, the Supervisory Board once again addressed the business and financial position of the Group and was updated on the status of planned investments and divestments. In addition, the Executive Board gave the Supervisory Board a report on the outlook for the overall financial year 2020. The annual Strategic Planning Dialogue of the Executive Board and the Supervisory Board took place as part of the meeting of the Supervisory Board on November 5, 2020. The Supervisory Board was first updated on the status of strategy implemen- tation and the progress made in the transformation of the Group portfolio since the last Strategic Planning Dialogue. Bertelsmann is still pursuing the strategic goal of being a faster- growing, more digital, more international and more diversified Within its sphere of responsibility, the Supervisory Board of Bertelsmann SE & Co. KGaA established the Audit and Finance Committee to perform its tasks efficiently. The Audit and Finance Committee has four members; the Chair of the Supervisory Board does not lead this committee. The Chair of the Audit and Finance Committee is Bodo Uebber. The German Corporate Governance Code stipulates that the Chair of the Audit and Finance Committee is independent as defined by the Code and has special knowledge and experience in the application of accounting standards and internal control procedures. All members of the Audit and Finance Committee are familiar with the sectors in which Bertelsmann SE & Co. KGaA operates. company, while also being less dependent on advertising. The Supervisory Board was satisfied that Bertelsmann has already made considerable progress toward this goal, both in the transformation of its Group businesses and in the corre- sponding improvement of its portfolio quality. As a result, the In particular, and in accordance with its mandate for the reporting year, the Audit and Finance Committee discussed issues of corporate financing, the financial position of the Group, financial planning, fiscal policy and individual negative deviations of the performance of Group businesses Group is well positioned – also in view of the fierce competition from budgeted performance. The Committee also extensively with global technology platforms. Nevertheless, the Executive addressed the accounting process and monitored the Board still has an intense work schedule ahead of it. While effectiveness and functional capability of the risk monitoring focusing on data strategy, the deliberations showed that the and risk management system, the internal control system application of new technologies and the utilization of data are and the internal audit system. It also requested regular crucial to Bertelsmann’s future success. In this respect, the reports from the Head of Corporate Audit and Consulting. technology and data strategy is becoming an increasingly An important topic in this regard concerned monitoring important part of Bertelsmann’s Group strategy and serves the purpose of cultivating the Group into a leading user of new technologies in the media, services and education industries. In addition, the HR strategy has further evolved and consti- tutes a significant element in the successful implementation of the Group strategy. Based on the insights gained during the the effectiveness of the internal audit system in view of the limited possibilities for on-site auditing at the Group businesses during the coronavirus pandemic. The Head of Corporate Audit and Consulting provided regular reports on this matter to the Committee. Furthermore, the Committee addressed issues relating to compliance, in particular the strategy retreat, the Supervisory Board believes that the Group effectiveness and proper functioning of the compliance is continuing to make very good progress. The Supervisory Board Chairman maintained ongoing con- tact with the Executive Board outside the framework of Supervisory Board meetings, in particular with the Executive Board Chairman, in order to stay abreast of the current busi- ness situation and significant transactions. All Supervisory Board members attended at least half of the Supervisory Board meetings convened. No potential conflicts of interest arose on the Supervisory Board. The Supervisory Board discussed the standards set out in the German Corporate Governance Code and Bertelsmann’s compliance with the code. A joint report by the Supervisory and Executive Boards of Bertelsmann Management SE on corporate governance within the com- pany is provided on page 149 ff. of this Annual Report. As an unlisted company, Bertelsmann does not issue a formal declaration of compliance as per section 161 of the German Stock Corporation Act. management system. In this connection, the Committee heard reports on significant compliance-related events in the Group. In the financial year 2020, the Audit and Finance Committee also deliberated over the Group’s fiscal policy and tax structure in relation to the two main functions of tax strategy and tax compliance. In addition, the Audit and Finance Committee reviewed at length the implementation of the EU’s General Data Protection Regulation (GDPR) at Bertelsmann, a process that has progressed well. During this part of the meeting, the Audit and Finance Committee was briefed on the further development of the data protection strategy, the status of its implementation and the structure of the data protection organization within the Group. An issue regularly addressed in the meetings of the Audit and Finance Committee was the situation and ongoing development of the Group’s cybersecurity and IT security structure. The expansion of 154 Report of the Supervisory Board

Statements documents as well as the audit reports of the auditor effective December 31, 2020, in agreement with the were submitted to all members of the Supervisory Board by the specified deadline in advance of the financial review meeting. On March 26, 2021, the auditor attended the financial review meet- ings of both the Audit and Finance Committee and the plenary session of the Supervisory Board, where he gave an extensive report and answered questions. He was able to confirm that, in the course of the audit, no significant weaknesses had been identified in the accounting-related internal control system. The Audit and Finance Committee discussed the Annual Financial Statements documents and audit reports in detail. The findings of the auditor of the Annual Financial Statements were carefully reviewed in an internal audit of the Annual and Consolidated Financial Statements. The Audit and Finance Committee reported comprehensively to the plenary session of the Supervisory Board concerning the audit of the Annual and Consolidated Financial Statements and the audit reports. On March 26, 2021, the plenary session of the Supervisory Board reviewed and discussed the Annual Financial Statements, Consolidated Financial Statements and Combined Management Report in detail, taking into account the recommendations of the Audit and Finance Committee and those contained in the audit reports and following further discussion with the auditor. The Supervisory Board concurred with the audit findings. After its own final scrutiny of the Annual and Consolidated Financial Statements and the Combined Management Report, the Supervisory Board – acting in accordance with the Audit and Finance Committee’s recommendation – raised no objections. The financial statements prepared by the Bertelsmann Supervisory Board. The Supervisory Board sincerely thanks Mr. Hirsch for his service and regrets his departure. During his tenure, Bernd Hirsch made vital headway in the Group’s strategic development and the businesses of Arvato Financial Solutions and Arvato Systems. Dr. Rolf Hellermann was appointed as the new Chief Financial Officer on November 5, 2020, and took up his position on the Executive Board on January 1, 2021. The financial year also saw the following changes to the Supervisory Board: On June 25, 2020, the Annual General Meeting of Bertelsmann SE & Co. KGaA elected Henrik Poulsen, then-CEO of the Danish energy company Ørsted, as a new member of the Supervisory Board, with immediate effect. Dr. Thomas Buberl resigned from the Supervisory Board of Bertelsmann effective December 31, 2020. The Supervisory Board would like to thank Dr. Buberl for the excellent and trusting cooperation. At present, all nine members of the Supervisory Board of Bertelsmann Management SE are also members of the currently 12-strong Supervisory Board of Bertelsmann SE & Co. KGaA. The “Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector Act” does not apply to the Supervisory Board of Bertelsmann SE & Co. KGaA as it is an unlisted company. However, the Supervisory Board does support the aim of the act. From a strategic point of view, the Supervisory Board also aims to properly fulfill its monitoring and consulting function by ensuring Management SE Executive Board were thus approved. diversity among its members. The Supervisory Board will Moreover, the Supervisory Board approved the Report of not at this time, however, set any target quota for women the Supervisory Board for the Annual General Meeting and on the Supervisory Board. It firmly believes that suitable the Corporate Governance Report, as well as its resolution measures have been taken within the company in the areas proposals concerning the agenda items for the ordinary Annual of succession planning, management development and the General Meeting on May 6, 2021. The Supervisory Board selection processes to ensure the equal participation of men has furthermore reviewed the Bertelsmann Management SE and women on an ongoing basis. In the Supervisory Board, Executive Board proposal as to the amount of net retained the aim is to ensure that the existing proportion of women profits for appropriation to shareholders, and concurs with said will not be reduced when new members are appointed. proposal. The amount of the dividend proposed by the Executive Board of Bertelsmann Management SE is appropriate, in the view of the Supervisory Board, in consideration of the level of net retained profits, the economic environment, the company’s economic situation and the interests of the shareholders. Changes in the Executive Board of Bertelsmann Management SE and in the Supervisory Board, Objectives for the Composition of the Supervisory Board The following personnel change took place in the composi- tion of the Executive Board of Bertelsmann Management SE: Bernd Hirsch resigned his post as Executive Board member and Chief Financial Officer of Bertelsmann Management SE Ideally, the backgrounds of new members will show links to Bertelsmann’s growth regions and markets. (See also the “Diversity in Practice” section in the Corporate Governance Report on page 150 f.) Apart from the three representatives of the Mohn family and the three employee representatives, the Supervisory Board of Bertelsmann SE & Co. KGaA consists exclusively of independent Supervisory Board members. The Supervisory Board recognizes the intention of the Government Commission on the German Corporate Governance Code in its call for a specification of targets for an age limit and a standard limit for length of service on the Supervisory Board. In view of Bertelsmann’s particular shareholder structure and the age limit regulations already contained in the company’s articles of association, the Supervisory Board does not feel 156 Report of the Supervisory Board

Supervisory Board Christoph Mohn Chairman Chairman of the Reinhard Mohn Stiftung Managing Director, Christoph Mohn Internet Holding GmbH • Bertelsmann Management SE (Chairman) Günter Göbel Chairman of the Corporate Works Council, Bertelsmann SE & Co. KGaA Ian Hudson (until April 30, 2020) Chairman of the International Management Representative Committee of Bertelsmann SE & Co. KGaA (BMRC) • Which? Limited Bernd Leukert Member of the Executive Board for Technology, Data and Innovation of Deutsche Bank AG (since January 1, 2020) • Bertelsmann Management SE • DWS Group GmbH & Co. KGaA (since July 21, 2020) • TomTom NV (until April 7, 2020) Prof. Dr.-Ing. Werner J. Bauer Vice Chairman Former Executive Vice President of Nestlé AG for Innovation, Technology, Research and Development • Bertelsmann Management SE (Vice Chairman) • Givaudan S.A. (Vice Chairman) • LONZA S.A. • SIG Combibloc Group AG Kai Brettmann Editorial Director RTL Nord GmbH, Hamburg Chairman of the RTL Group European Works Council Chairman of the Mediengruppe RTL Deutschland Corporate Works Council Chairman of the Works Council of RTL Nord Dr. Thomas Buberl (until December 31, 2020) Chief Executive Officer and Director, AXA S.A. • Bertelsmann Management SE (until December 31, 2020) • Equitable Holdings, Inc. (until February 6, 2020) • Equitable Life Insurance Company (until February 6, 2020) • Equitable Financial Life Insurance Company of America (formerly MONY Life Insurance Company of America) (until February 6, 2020) • IBM, USA (since April 28, 2020) • Membership of statutory domestic supervisory boards • Membership of comparable domestic and foreign supervisory bodies of business enterprises 158 Boards/Mandates Supervisory Board

Bertelsmann SE & Co. KGaA’s Supervisory Board Committees 2020 Bertelsmann Management SE’s Supervisory Board Committees 2020 Audit and Finance Committee Bodo Uebber (Chairman) Kai Brettmann Christoph Mohn Hans Dieter Pötsch Working Group of Employee Representatives Liz Mohn (Chairwoman) Kai Brettmann Günter Göbel Christiane Sussieck Personnel Committee Christoph Mohn (Chairman) Prof. Dr.-Ing. Werner J. Bauer Liz Mohn Hans Dieter Pötsch Bodo Uebber (since July 9, 2020) Program Committee Christoph Mohn (Chairman) Prof. Dr.-Ing. Werner J. Bauer Dr. Brigitte Mohn Hans Dieter Pötsch 160 Boards/Mandates Supervisory Board

Selected Terms at a Glance Alternative Performance Measures Corporate Governance Additional financial measures that are not directly specified by The term for responsible corporate management and control financial reporting regulations. These are determined by means of a company-specific reconciliation and are based on manda- tory (IFRS) measures. in the interest of creating sustainable value. Bertelsmann Value Added (BVA) A performance indicator for assessing the profitability of operations and return on invested capital. BVA is calculated as the difference between net operating profit after tax (NOPAT) and the cost of capital. NOPAT is calculated on the basis of operating EBITDA. By deducting amortization, depreciation, impairment and reversals, and adjusting for special items, and after modifications and less a flat tax, NOPAT, which is used as the basis for calculating BVA, is determined. Cost of capital is the product of the weighted average cost of capital (WACC, where uniform WACC after taxes is 8 percent) and the level of capital invested (Group’s operating assets less non-interest- bearing operating liabilities). Coverage Ratio The (interest) coverage ratio is a financing target. It represents the ratio of operating EBITDA to financial result. Amounts reported in the Annual Financial Statements are modified in calculating the coverage ratio. Equity Method The equity method is a method of accounting to recognize associates and joint ventures, whereby the investment is ini- tially recognized at cost and adjusted thereafter for the post- acquisition change in the investor’s share of the investee’s net assets. Goodwill Cash Flow Goodwill represents the future economic benefits arising from those assets acquired in a business combination that are not A company’s cash inflows and outflows during a specific period. individually identified and separately recognized. Contractual Trust Arrangement (CTA) The concept of funding and insolvency protection of pension obligations by transferring assets into a structure similar to a trust. Assets are classified as plan assets under IFRS and are netted against the company’s pension obligations. 162 Additional Information Selected Terms at a Glance

Financial Calendar May 6, 2021 Announcement of figures for the first three months of 2021 May 7, 2021 (expected) Payout of dividends on profit participation certificates for the 2020 financial year August 31, 2021 Announcement of figures for the first half of 2021 November 4, 2021 Announcement of figures for the first nine months of 2021 Production Credits Publisher Bertelsmann SE & Co. KGaA Carl-Bertelsmann-Strasse 270 33311 Gütersloh Germany Responsible Karin Schlautmann Bertelsmann SE & Co. KGaA Executive Vice President Corporate Communications Project Management Simone Fratczak Bertelsmann SE & Co. KGaA Corporate Communications Design and Production Territory Content to Results GmbH, Gütersloh Photo Credits Sebastian Pfütze 164 Additional Information Production Credits Contact For Journalists Phone: +49 (0) 52 41-80-24 66 press@bertelsmann.com Investor Relations Phone: +49 (0) 52 41-80-23 42 investor.relations@bertelsmann.de Recruiting Services createyourowncareer@bertelsmann.com www.createyourowncareer.com Corporate Responsibility Phone: +49 (0) 52 41-80-750 21 responsibility@bertelsmann.com The Annual Report and current information about Bertelsmann are also posted on: www.bertelsmann.com The Annual Report is also available in German.

Bertelsmann SE & Co. KGaA Carl-Bertelsmann-Strasse 270 33311 Gütersloh Germany www.bertelsmann.com