Berlin The media giant Bertelsmann sees itself armed with a record profit in the back to cushion the consequences of the coronavirus crisis. “Bertelsmann is well prepared,” said CEO Thomas Rabe on Tuesday. With the broad positioning of the business “we are less susceptible to economic fluctuations and can continue to invest in our future without going into substance.”
Business was largely stable in the first quarter, but it will be “more difficult” in the second quarter, Rabe announced. Further forecasts are currently not reliable. A few hundred of the roughly 126,000 employees worldwide are already on short-time work. This instrument is being examined in particular in some areas of the service business.
The media, services and education group wants to cushion the consequences of the epidemic with various measures. This is about liquidity management, said Rabe and emphasized: “We are profitable, have a high level of liquidity and a comfortable equity ratio.” sales increased by two percent to 18 billion euros.
Rabe expects headwind in the advertising business. For example, some customer campaigns could be postponed because products may be difficult to access due to closed stores.
Bertelsmann’s European TV subsidiary RTL Group had recently announced that it would be registering first line item cancellations and production impacts. According to Rabes, Bertelsmann has also noticed positive effects since the beginning of the crisis: The audience figures at RTL Group have increased. At Penguin Random House, there is more demand, especially for e-books and audio books. In addition, the music subsidiary BMG is benefiting from more streaming and the education sector is feeling a higher demand for online learning offers.
“Strategy remains unchanged – Corona or not”
In this extraordinary situation, all media are of social and systemic importance, said Rabe. “We are part of the critical infrastructure in Germany that needs to be maintained and supported right now.” You provide serious information and entertain millions of people.
Despite the epidemic, Bertelsmann wants to keep an eye on its long-term goals. “Bertelsmann’s strategy remains unchanged – Corona or not.” This year the group plans to continue investing heavily in its own technological expertise – especially in the areas of cloud, data and artificial intelligence.
“In addition, we will continue to advance cooperation and alliances, both internally and with external partners,” said Rabe. The Bertelsmann Content Alliance in the content area in Germany and the Ad Alliance in advertising marketing are to be expanded. “In this way, we will expand the Bertelsmann Content Alliance to the markets in France, Great Britain and later the USA.”
The share of digital business in sales climbed above the 50 percent mark for the first time in 2019. The contribution of high-growth businesses reached 36 percent and is expected to increase to 40 percent in the coming years.
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