Thomas Rabe
Chairman and CEO of Bertelsmann

Dear Readers,
Dear Friends of Bertelsmann,

Despite the economic impact of the coronavirus pandemic, Bertelsmann closed the 2020 financial year with strong results: record operating EBITDA and net profit of €1.5 billion. We benefited from the strong quality of our business portfolio and a high share of digital business models.

Group revenues amounted to €17.3 billion, reflecting a moderate 4.1 percent year-on-year decline, or 1.7 percent when adjusted for currency and portfolio effects. While the book publishing and services businesses in particular saw growth, the advertising-financed and print businesses suffered coronavirus-related losses. Bertelsmann recorded revenue declines primarily in the second quarter, but in the second half of the year, nearly all businesses were already generating revenue growth again, and the fourth quarter was excellent.

Bertelsmann achieved record operating EBITDA of €3.1 billion in 2020, thus exceeding the €3 billion mark for the first time. For the sixth consecutive year, Group net income exceeded €1 billion, this time reaching €1.5 billion. Bertelsmann reduced costs and secured liquidity in good time during the coronavirus crisis. Debt was reduced by over €1 billion, to around €2 billion. Strategic milestones were the acquisition of the minority shares in Penguin Random House and of the US book publisher Simon & Schuster, which is still pending approval by the antitrust authorities.

These positive developments reflect the successful execution of our strategy over the past nearly 10 years:

National Media Champions

RTL Group expanded its streaming offerings and significantly increased the number of subscribers. Mediengruppe RTL Deutschland extended its partnership with Deutsche Telekom in the areas of technology, marketing and content. It also strengthened the emerging fields of advertising technology and addressable TV. RTL Group fully acquired RTL Belgium and sold its stake in Broadband TV. In 2021, RTL Group announced the sale of the ad tech subsidiary SpotX and the full acquisition of Super RTL. Since the beginning of this financial year, Mediengruppe RTL Deutschland and Gruner + Jahr have been looking into expanding their collaboration. In December, Gruner + Jahr announced the sale of its French subsidiary Prisma Media.

Global Content

After Bertelsmann completed its full acquisition of Penguin Random House in April 2020, the Group announced its acquisition of the Simon & Schuster publishing group in November. Bertelsmann is optimistic to receive all approvals required from the competition authorities later this year. Penguin Random House delivered a strong publishing and business performance in the past financial year, especially in connection with the great worldwide success of Barack Obama’s work “A Promised Land,” another global bestseller after Michelle Obama’s memoir “Becoming.” The international production company Fremantle continued the expansion of its scripted formats, in some cases selling top series, such as “La Jauría,” “We Are Who We Are” and “Enslaved,” to more than 130 countries in some cases. The music subsidiary BMG benefited from the continued boom in streaming and numerous releases in its recorded and publishing businesses. Highlights included the expansion of the cooperation with The Rolling Stones.

Global Services

The services division Arvato saw strong growth overall. Arvato Supply Chain Solutions (SCS) grew with its customers in the consumer products, healthcare, IT and tech industries. Arvato SCS expanded several international logistics centers. In June 2020, the international information services provider Experian acquired a majority shareholding in Arvato Financial Solutions’ (AFS) risk management division, in order to strengthen the joint market position. The AFS division collection Germany shall henceforth appear on the market under the name Paigo and with a consumer portal of the same name. The CRM company Majorel achieved double-digit growth in its second financial year, fueled by global customers. Bertelsmann Printing Group (BPG) acquired two sites in the United States, thus becoming the country’s second-largest book manufacturer.

Online Education

Bertelsmann Education Group served the continued high demand for online education and training. Relias invested in new products and technologies. Together with Udacity, Bertelsmann continued its successful three-year #50000Chances campaign. Some 60,600 people from 188 countries applied for one of the 15,000 scholarships in the second round of the “Udacity Technology Scholarship Program” – 25 percent more than in 2019. In total, 50,000 scholarships are being given away over a three-year period.

Investment Portfolio

Bertelsmann continued to expand its global digital investments to around 260 holdings, including 15 “unicorns.”

In 2021, we will further expand our investments. For example, we will invest around €250 million in RTL Group’s streaming activities, and in expanding our Group’s technology and data structure.

2020 was an exceptional year for all of us. Bertelsmann made it through the year of the coronavirus in good shape economically, and in doing so, provided the best possible protection against becoming infected at work to more than 130,000 employees around the world and in all businesses. I would like to thank our employees for their outstanding work in these difficult conditions – and you, dear readers, for your constructive support of our company on the road to the future: on the road to Bertelsmann_next.

Kind regards,
Thomas Rabe