Bertelsmann at a Glance

Organisational structure

Bertelsmann AG is a capital-market-oriented but unlisted stock corporation. It serves 
as a management holding company and exercises central corporate functions such as the development of Group strategy, capital allocation, financing, and management development. Internal corporate management and reporting follow the Group’s organizational structure, which consists of the four operating divisions of RTL Group, Random House, Gruner + Jahr, and Arvato, plus Corporate.

Strategy

Bertelsmann is a global media enterprise occupying leading market positions in its core sectors of television, books, newspapers, and outsourcing services. Bertelsmann develops media and communication offerings that excite people around the world and provide customers with innovative solutions. Bertelsmann’s overriding objective is continuous growth of the company’s value through a sustained increase in profitability. Bertelsmann Value Added (BVA) is used as a central performance indicator for assessing the profitability from operations and return on invested capital. BVA measures the profit realized above and beyond the appropriate return on invested capital.

*The GMC advises and assists the Executive Board on important matters of corporate strategy and corporate development and other Group-wide issues.

**Corporate comprises the Corporate Center and Corporate Investments, which includes the music rights business BMG, the BAI and BDMI funds, and the club and direct-marketing businesses in Germany and Spain.

Thomas Rabe, who took over as Chairman and CEO of Bertelsmann on January 1, 2012, began by convening a Groupwide dialog with executives and employee representatives from all key Bertelsmann markets and sectors to discuss the state of the company, the future orientation, and the overall conditions this requires. The new strategy will be presented at a management meeting in the fall of 2012. 

The importance of strategy at Bertelsmann is underscored with the creation of the new Executive Board function for Corporate Development and New Businesses, which was assigned to Thomas Hesse effective February 1, 2012. The Executive Board will also receive support with issues of corporate strategy and development from the newly established Group Management Committee (GMC), composed of executives representing key businesses, countries, regions, and selected enterprise-wide functions. The international and complementary composition of the GMC will enable a great diversity of input, which is intended to ensure effective corporate development 
and support with the digital transformation of the operations. 

The Executive Board seeks to put Bertelsmann on a path of stronger growth with a greater focus on international markets and to drive the digital transformation forward. This means an increasing emphasis on penetrating international and digital business segments. These should complement the traditional businesses and provide a 
broader-based revenue structure. 

The music rights business, launched in 2008, was further expanded both organically and through acquisitions in 2011. In 2011, Bertelsmann also became the anchor investor in the University Ventures Fund, thereby entering the promising education market. Other potential growth platforms in areas such as information services are currently being explored. 

Bertelsmann’s core markets currently lie in Western Europe and the United States. Increased investments in the growth regions of China, India, and Brazil are intended to broaden the base of the company geographically. Random House, Gruner + Jahr, and RTL Group expanded their presence in India over the last fiscal year, for example, and Arvato expanded its operations in both Brazil and China. 

Bertelsmann aims to achieve full ownership of its businesses. Partnerships may be practical or necessary in justified exceptions such as the establishment of new businesses. The general objective is to reduce existing shares of non-controlling interests unless there is a strategic reason not to do so. In fiscal 2011, for example, 
RTL Group acquired all remaining shares in the Hungarian subsidiary M-RTL, the Croatian television company RTL Hrvatska, and RTL Nederland.