RTL Group Boosts Earnings at Germany's Bertelsmann

German media giant Bertelsmann on Tuesday reported improved financials for the first nine months of 2013 thanks to its RTL Group, which saw stronger results at its German networks group.

RTL's TV production arm, FremantleMedia, also contributed to the results. Fremantle, which produces such hit formats as The X Factor, Idol and Got Talent, as well as The Apprentice, posted a higher profit for the nine months when excluding a one-time benefit from a building sale in the year-ago period.

Bertelsmann's overall profit for the first three quarters rose 19 percent to $832 million (€622 million), surpassing the full-year 2012 result. The company said it expects its profit for the full year to end up more than 20 percent higher than 2012.

Operating profit for the nine months reached a company record of $1.47 billion (€1.10 billion). Revenue rose slightly, from $15.29 billion (€11.42 billion) to $15.33 billion (€11.45 billion).

“This performance makes us optimistic about the remainder of the financial year," said Bertelsmann chairman and CEO Thomas Rabe. "We have taken important strategic steps in recent months towards making Bertelsmann a faster-growing, more digital and more international group.”

For example, music rights company BMG, of which Bertelsmann has taken full control, has signed new contracts with such stars as Mick Jagger, Keith Richards, Robbie Williams and the Backstreet Boys, the company highlighted.

In terms of digital growth, Bertelsmann highlighted "the massive expansion" of the online video business at European TV giant RTL Group, which it controls. Online video views over the first nine months of 2013 rose by 122 percent over the year-ago period to more than 10 billion.

Bertelsmann CFO Judith Hartmann said on a conference call that the company would be able to invest several billion euros. Bertelsmann has been spending money to strengthen its core operations and make acquisitions.

RTL Group, which houses the German networks and Fremantle, reported a 41.2 percent profit improvement for the first nine months of 2013 to $716 million (€535 million), even though revenue dropped 1.5 percent.

"FremantleMedia’s major talent shows -- Got Talent, Idol and The X Factor -- remained highly popular with audiences worldwide, being produced in more countries than ever before," the firm said. "In 2013, the company launched 39 new formats -- up 25 percent year-on-year."

But TV advertising trends remain mixed.

"Advertising market conditions remained challenging in the first nine months of 2013, in line with local macro-economic developments in Europe," RTL Group said. It added that "only the German TV advertising market was stable (+0.1 percent), while all other markets were down." In Germany, a revenue gain and cost discipline boosted the bottom line.

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