BMG Parent Bertelsmann Posts Highest 9-Month Revenue in a Decade

BMG parent company Bertelsmann has reported its highest nine-month revenue growth since 2007. The German mega-conglomerate said this week that, despite negative exchange rate effects, revenue for its companies increased by 2.4 percent year-over-year to €12.4 billion ($14 billion), up from €12.1 billion at the end of September last year.

The company's high-growth businesses, including BMG, RTL Group, Gruner + Jahr, Fremantle, Arvato and the Bertelsmann Education Group, recorded a 10-percent organic increase in revenues to €4.2 billion. Operating EBITDA remained high at €1.62 billion, down slightly from the previous year's €1.64 billion. 

Bertelsmann's music subsidiary BMG was able to complete a number of publishing catalog purchases and signings, including an exclusive worldwide record deal with Swiss pop and soul singer Stefanie Heinzmann. BMG also released U.S. singer Lenny Kravitz’s new album "Raise Vibration" in September. Bertelsmann declined to break out nine-month revenue figures for BMG when asked by Billboard. At the half-year mark, BMG had posted a 3.3 percent sales increase to €241 million.

In the United States, Penguin Random House had 373 titles on the New York Times bestseller lists in the first nine months of the year, 50 of them at number one. In Germany, Verlagsgruppe Random House acquired the audiobook publisher DAV, thus expanding its offering in the fast-growing audio market.

RTL TV-Group continued to record a positive business performance. The positive performance of Fremantle and growing digital businesses especially contributed to this. The Group’s families of channels in its core markets of Germany, France, and the Netherlands were largely able to maintain their positions in the TV advertising markets. The online video platform “Videoland,” part of RTL Nederland, recorded a three-digit percentage increase in paying subscribers.

In September, Bertelsmann announced the combination of major parts of Arvato's customer relationship management (CRM) businesses with Saham’s activities. The new company will be fully consolidated by Bertelsmann and will generate revenues of around €1.2 billion with approximately 48,000 employees in 25 countries. The completion of the transaction is subject to regulatory approvals and the consultation process with employee representatives. The new company is expected to be formed by January 2019. 

Bertelsmann chairman & CEO Thomas Rabe said: “The 2018 financial year is going well for Bertelsmann. Our growth profile improved further. For instance, we achieved a 10-percent increase in revenues from our high-growth businesses under our own steam. This positive business performance is accompanied by major progress in the execution of our strategy in recent months. We are opening a new chapter for our CRM business at Arvato and are entering into a long-term partnership with Saham. The newly formed group will occupy leading market positions in Europe, Africa, and the Middle East, combined with a strong presence in America and Asia. In addition, the acquisition of OnCourse Learning will massively strengthen our educational activities in the U.S.”

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