Bertelsmann SE & Co. KGaA | Financial Statements

Consolidated Income Statement

in € millions	Notes	2020	2019
Revenues	1	17,289	18,023
Other operating income	2	682	455
Cost of materials	13	(5,133)	(5,685)
Royalty and license fees		(1,650)	(1,580)
Personnel costs	3	(5,622)	(5,645)
Amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets	4	(1,040)	(1,029)
Other operating expenses	5	(2,684)	(2,877)
Results from investments accounted for using the equity method	11	86	124
Impairment and reversals on investments accounted for using the equity method	11	(62)	(51)
Results from disposals of investments		410	90
EBIT (earnings before interest and taxes)		2,276	1,825

Interest income	6	10	13
Interest expenses	6	(155)	(117)
Other financial income	7	8	24
Other financial expenses	7	(202)	(229)
Financial result		(339)	(309)

Earnings before taxes from continuing operations		1,937	1,516
Income tax expense	8	(478)	(426)
Earnings after taxes from continuing operations		1,459	1,090

Earnings after taxes from discontinued operations		–	1

Group profit or loss		1,459	1,091

attributable to:
Bertelsmann shareholders
Earnings from continuing operations		1,152	728
Earnings from discontinued operations		–	1
Earnings attributable to Bertelsmann shareholders		1,152	729

Non-controlling interests
Earnings from continuing operations		307	362
Earnings from discontinued operations		–	–
Earnings attributable to non-controlling interests		307	362
The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information”.

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

in € millions	Notes	12/31/2020	12/31/2019
Assets
Non-current assets
Goodwill	9	7,868	8,470
Other intangible assets	9	2,308	2,500
Property, plant and equipment and right-of-use assets	10	2,717	2,935
Investments accounted for using the equity method	11	820	652
Minority stakes and other financial assets	12	1,196	1,320
Trade and other receivables	14	69	89
Other non-financial assets	15	881	922
Deferred tax assets	8	1,124	1,087
		16,983	17,975
Current assets
Inventories	13	1,658	1,771
Trade and other receivables	14	4,570	4,523
Other financial assets	12	178	63
Other non-financial assets	15	992	1,092
Current income tax receivables		56	178
Cash and cash equivalents	16	4,571	1,636
		12,025	9,263
Assets held for sale		696	102
		29,704	27,340

Equity and liabilities
Equity	17
Subscribed capital		1,000	1,000
Capital reserve		2,345	2,345
Retained earnings		5,751	5,509
Bertelsmann shareholders’ equity		9,096	8,854
Non-controlling interests		1,629	1,591
		10,725	10,445
Non-current liabilities
Provisions for pensions and similar obligations	18	2,009	1,967
Other provisions	19	136	178
Deferred tax liabilities	8	93	118
Profit participation capital	20	413	413
Financial debt	21	5,911	4,612
Lease liabilities	22	1,098	1,116
Trade and other payables	23	246	363
Other non-financial liabilities	23	401	379
		10,307	9,146
Current liabilities
Other provisions	19	352	214
Financial debt	21	715	388
Lease liabilities	22	257	276
Trade and other payables	23	4,833	4,840
Other non-financial liabilities	23	1,926	1,908
Current income tax payables		216	78
		8,299	7,704
Liabilities related to assets held for sale		373	45
		29,704	27,340
The prior-year comparatives have been adjusted. Further details are presented in the section "Prior-Year Information".

Consolidated Cash Flow Statement

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

Consolidated Statement of Changes in Equity

	Subscribed capital	Capital reserve¹⁾	Retained earnings					Bertels- mann share- holders’ equity	Non- controlling interests	Total
			Other retained earnings	Accumulated other comprehensive income²⁾
in € millions			Other retained earnings	Exchange differences	Fair value reserve	Cash Flow Hedges	Share of other com- prehensive income of investments accounted for using the equity method
Balance as of 1/1/2019	1,000	2,345	5,200	(85)	12	(3)	5	8,474	1,364	9,838
Adjustment	–	–	(38)	–	–	–	–	(38)	(12)	(50)
Balance as of 1/1/2019³⁾	1,000	2,345	5,162	(85)	12	(3)	5	8,436	1,352	9,788
Group profit or loss	–	–	729	–	–	–	–	729	362	1,091
Other comprehensive income	–	–	(205)	80	(2)	4	(4)	(127)	(15)	(142)
Group total comprehensive income	–	–	524	80	(2)	4	(4)	602	347	949
Dividend distributions	–	–	(180)	–	–	–	–	(180)	(254)	(434)
Changes in ownership interests in subsidiaries that do not result in a loss of control	–	–	(13)	8	–	–	–	(5)	126	121
Equity transactions with shareholders	–	–	(193)	8	–	–	–	(185)	(128)	(313)
Other changes	–	–	3	–	(2)	–	–	1	20	21
Balance as of 12/31/2019	1,000	2,345	5,496	3	8	1	1	8,854	1,591	10,445
						1	1
Balance as of 1/1/2020	1,000	2,345	5,496	3	8	–	–	8,854	1,591	10,445
Group profit or loss	–	–	1,152	–	–	(12)	(3)	1,152	307	1,459
Other comprehensive income	–	–	(96)	(327)	1			(437)	(24)	(461)
Group total comprehensive income	–	–	1,056	(327)	1	(12)	(3)	715	283	998
Dividend distributions	–	–	–	–	–	–	–	–	(6)	(6)
Changes in ownership interests in subsidiaries that do not result in a loss of control⁴⁾	–	–	(465)	(7)	–	–	–	(472)	(255)	(727)
Equity transactions with shareholders	–	–	(465)	(7)	–	–	–	(472)	(261)	(733)
Other changes	–	–	(1)	–	–	–	–	(1)	16	15
Balance as of 12/31/2020	1,000	2,345	6,086	(331)	9	(11)	(2)	9,096	1,629	10,725
¹⁾ The capital reserve mainly includes share premiums received from the issue of ordinary shares in excess of their par values. ²⁾ As of December 31, 2020, €8 million relate to assets classified as held for sale in accordance with IFRS 5 (December 31, 2019: €4 million). ³⁾ The adjustments result from the initial application of the financial reporting standard IFRS 16 Leases as of January 1, 2019. ⁴⁾ Changes in ownership interests in subsidiaries that do not result in a loss of control result primarily from the increase of shareholdings in Penguin Random House. Further details are presented in note 11 “Interests in Other Entities”.

Segment Information (Continuing Operations)

	RTL Group		Penguin Random House		Gruner + Jahr		BMG		Arvato		Bertelsmann Printing Group		Bertelsmann Education Group		Bertelsmann Investments²⁾		Total divisions		Corporate		Consolidation		Continuing operations
in € millions	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
Revenues from external customers	5,939	6,586	3,801	3,636	1,102	1,319	599	597	4,315	4,112	1,213	1,405	301	333	8	13	17,278	18,001	11	22	–	–	17,289	18,023
Intersegment revenues	78	65	1	–	33	36	3	3	67	63	149	163	–	–	4	–	335	330	32	34	(367)	(364)	–	–
Divisional revenues	6,017	6,651	3,802	3,636	1,135	1,355	602	600	4,382	4,175	1,362	1,568	301	333	12	13	17,613	18,331	43	56	(367)	(364)	17,289	18,023

Operating EBITDA	1,097	1,417	691	561	127	157	137	138	662	549	55	68	89	84	(10)	(1)	2,848	2,973	298	(86)	(3)	–	3,143	2,887

EBITDA margin ¹⁾	18.2%	21.3%	18.2%	15.4%	11.2%	11.6%	22.7%	23.0%	15.1%	13.2%	4.0%	4.4%	29.5%	25.2%	82.2%	-4.6%	16.2%	16.2%	n/a	n/a	n/a	n/a	18.2%	16.0%

Impairment (-)/reversals (+) on intangible assets, property, plant and equipment and right-of-use assets	(16)	(3)	–	–	(77)	(1)	(1)	–	(12)	(9)	(27)	(14)	(1)	(101)	(7)	–	(141)	(128)	–	–	(1)	(1)	(142)	(129)

Results from investments accounted for using the equity method	32	64	2	2	4	10	–	–	11	10	–	–	38	39	–	–	87	125	–	–	(1)	(1)	86	124
Impairment (-)/reversals (+) on investments accounted for using the equity method	(62)	(50)	–	–	–	–	–	(1)	–	–	–	–	–	–	–	–	(62)	(51)	–	–	–	–	(62)	(51)

Invested capital	6,547	6,735	2,326	2,582	474	619	1,801	1,927	1,785	1,894	6	106	1,139	1,292	1,025	1,059	15,103	16,214	345	136	–	2	15,448	16,352
Further details on segment reporting are presented in note 27 "Segment Reporting". ¹⁾ Operating EBITDA in percent of revenues. ²⁾ The business development of Bertelsmann Investments is determined primarily on the basis of EBIT. EBIT amounted to €1 million (previous year: €107 million).

	Germany		France		United Kingdom		Other European countries		United States		Other countries		Continuing operations
in € millions	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
Revenues from external customers	5,334	5,806	2,053	2,213	1,117	1,180	3,342	3,413	4,294	4,211	1,149	1,200	17,289	18,023
Non-current assets ¹⁾	3,212	3,461	1,205	1,360	1,263	1,362	3,436	3,455	3,410	3,841	367	426	12,893	13,905
¹⁾ Non-current assets comprise intangible assets (including goodwill), property, plant and equipment and right-of-use assets. Details on segment reporting are presented in note 27 ”Segment Reporting”.

Annual Report 2020

Annual Report 2020

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Financial Statements

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Changes in Net Liabilities Arising from Financing Activities

Consolidated Statement of Changes in Equity

Segment Information (Continuing Operations)

Reconciliation to Operating EBITDA (Continuing Operations)

Information by Geographical Areas (Continuing Operations)

Information on Revenue Sources (Continuing Operations)

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in € millions	2020	2019
EBIT from continuing operations	2,276	1,825
Special items
– impairment on goodwill and other intangible assets with indefinite useful life as well as gains from business combinations	116	27
– adjustment to carrying amounts on assets held for sale	–	7
– impairment (+)/reversals (-) on other financial assets at amortized cost	26	9
– impairment (+)/reversals (-) on investments accounted for using the equity method	62	51
– results from disposals of investments	(410)	(90)
– fair value measurement of investments	(59)	(143)
– restructuring and other special items	214	293
Amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets	1,040	1,029
Adjustments on amortization/depreciation, impairment and reversals on intangible assets, property, plant and equipment and right-of-use assets included in special items	(122)	(121)
Operating EBITDA from continuing operations	3,143	2,887
The prior-year comparatives have been adjusted. Further details are presented in the section “Prior-Year Information”.