Europe’s biggest media company Bertelsmann saw a surge in group profit last year caused by rapid expansion financed with record investment. The Germany-based group now aims for even bigger growth in sales and profits.
Bertelsmann's 2013 group profit is the highest since 2006, improving by 42 percent to a total of 870 million euros ($1.2 billion), Europe's biggest media company, which is based in Gütersloh, Germany, announced in its annual report released Wednesday.
The result was achieved in spite of only small growth in revenues from 16.1 billion euros in 2012 to 16.4 billion euros last year.
"In 2013, Bertelsmann demonstrated its high profitability. All signs point to expansion and we have the resources available for it," Bertelsmann Chief Financial Officer Judith Hartmann said in the report.
Already in 2013, the media company invested heavily in expanding its business, spending 2 billion euros - Bertelsmann's highest annual investment since 2005. The money was primarily spent on realigning key business units, including the merger of publishers Penguin and Random House, as well as on acquisitions such as BMG music rights company and Gothia Financial Group. Moreover, Bertelsmann stepped up its activities in regional and technological growth areas.
Noting that these investments will contribute to future growth, Bertelsmann Chief Executive Thomas Rabe said: "We are on track to increase our revenue volume to around 20 billion euros by 2017, and gradually increase group profit to over one billion euros."
For 2014, Rabe said he expected stronger revenue growth than in 2013 by making Bertelsmann more digital and more international. He announced fresh investment in growth areas such as education and music rights. Education especially, where the group wanted to invest in online services, was to become Bertelsmann's third revenue mainstay, he added.
uhe/mz (dpa, Reuters, AFP)