Bertelsmann at a Glance

Description of the Business

Bertelsmann operates in the core business fields of media, services and education in around 50 countries worldwide. The geographic core markets are Western Europe – in particular, Germany, France and the United Kingdom – and the United States. In addition, Bertelsmann is active in Brazil, India and China. The Bertelsmann divisions are RTL Group (entertainment), Penguin Random House (books), BMG (music), Arvato Group (services), Bertelsmann Marketing Services (direct marketing and printing activities), Bertelsmann Education Group (education) and Bertelsmann Investments (venture capital activities and Bertelsmann Next growth area).

Organizational Structure

Bertelsmann SE & Co. KGaA is a capital market-oriented but unlisted partnership limited by shares. As a group holding company, it exercises key corporate functions such as the definition and further development of group strategy, capital allocation, financing and management. Internal corporate management and reporting follow the Group’s organizational structure, which consists of the operating divisions and Corporate.

Strategy

Bertelsmann’s strategic focus is to build a digital, international and diversified Group portfolio that achieves profitable growth. Businesses in which Bertelsmann invests should have long-term profitable growth, global reach, sustainable business models, high market-entry barriers and scalability. The strategy pursues five strategic growth priorities: national media champions, global content, global services, education and investments. At the start of 2024, Bertelsmann expanded its Group strategy and has since been driving growth with two programs. The first program, “Boost,” was initiated by Bertelsmann back in 2021 with the aim of accelerating the growth dynamic. Bertelsmann has continued to invest heavily in its businesses in line with its Boost strategy. The Group aims to grow in new lines of business through organic initiatives and acquisitions. By the end of 2026, Boost investments will reach in total around €8 billion. The second program, “Boost+,” comprises the strategic priorities “Next,” “Regional Boost” and “Breakout.” “Next” involves the planned establishment of two new lines of business with long-term revenue potential of around €1 billion. “Regional Boost” encompasses the development and expansion of business in particularly promising regions. Finally, “Breakout” involves larger mergers of existing businesses with other companies. The following topics form the basis for the successful implementation of the strategy: tech & data, people, communication and ESG. In terms of strategy, Bertelsmann made the following progress on the five growth priorities in the 2024 financial year.

National Media Champions

For the national media champions, RTL Group achieved continued dynamic growth in the streaming business. The streaming services RTL+ in Germany and Hungary, M6+ in France and Videoland in the Netherlands increased their paid subscriber base by 20.6 percent to a combined total of 8.38 million in 2024; streaming revenues grew by 36.2 percent to €546 million (previous year: €401 million). In June and July, RTL Deutschland and Groupe M6 broadcast selected UEFA Euro 2024 matches, achieving high reach on linear television and streaming. At the end of 2024, RTL Deutschland expanded its programming portfolio with the purchase of two rights packages for the Bundesliga and the 2. Bundesliga from the 2025/26 season onwards. RTL Deutschland has also started an exclusive five-year contract with TV entertainer Stefan Raab. In France, Groupe M6 secured the free TV broadcasting rights for the most popular matches of the FIFA World Cups in 2026 and 2030 and launched its streaming service M6+. In addition, Groupe M6 and the French media authority Arcom announced the renewal of the Digital Terrestrial Television (DTT) licenses for

W9, Gulli and Paris Première in July.

Global Content

Bertelsmann continued to invest in the expansion of the global content businesses. RTL Group subsidiary Fremantle acquired the production companies Asacha Media Group and Beach House Pictures in the reporting period. Penguin Random House acquired the independent US book publisher Hay House, one of the country’s leading self-help, health and wellness publishers, and increased its stake in Sourcebooks. BMG acquired various catalogs in the reporting period, signed new label contracts with artists including Blake Shelton, Chace and K. Michelle, and recorded successful releases by artists such as Lainey Wilson, Sum 41, Mustard, Travis and Rita Ora.

Global Services

Global services were also further expanded. Arvato’s logistics business was launched in September with the construction of a new distribution center in the Netherlands. Arvato also implemented new automation solutions at several of its facilities around the globe. Financial services provider Riverty partnered with payment platform Mollie, and Arvato Systems agreed to collaborate with Delos Cloud for the provision of a sovereign cloud platform for the public sector in Germany. The closure of the Prinovis site in Ahrensburg, Germany, at the end of January 2024 marked Bertelsmann Marketing Services’ full exit from the gravure segment.

Education

Bertelsmann further expanded its education business. The stake in Afya, a leading provider of medical training and education in Brazil, was increased again during the reporting period. Relias further expanded its digital platform for training healthcare personnel in the United States and in Germany. The acquisition of US-based company Feedtrail Healthcare XM, a specialist in patient and employee surveys and reputation management, ideally complements Relias' portfolio of HR solutions. Combining feedback from patients with Relias HR solutions offers clients a unique opportunity to translate patient feedback into a concrete improvement roadmap based on skills assessments and targeted training. The Alliant International University welcomed its first students at its newly opened campus for nursing and health sciences in Phoenix, United States. In July 2024, Afya completed the acquisition of Unidom Participações S.A., a medical college in northeastern Brazil.

Investment

Bertelsmann expanded its investment portfolio with 34 new and 24 follow-on investments during the reporting period. As of the end of 2024, Bertelsmann Investments (BI) held a total of 379 investments through its international funds. The Bertelsmann Next growth area increased its engagement in the pharma-tech sector with the acquisition of Extedo, a leading provider of software solutions and services in the field of regulatory information management. At the end of 2024, Bertelsmann Investments also acquired the e-learning platform Vocanto, thereby accelerating the further expansion of its HR technology provider Embrace. In the Digital Health Ventures business segment, BI further expanded its investments in the companies Doccla and Deepc and made new investments in the startups Guardoc Health and PI Health. In the reporting period, Bertelsmann Asia Investments (BAI) made a successful exit from smartphone provider Xiaomi along with other achievements, and concluded a follow-up investment in Stori, a leading neobank in Mexico. Bertelsmann India Investments (BII) invested in the Indian start-up Basic Home Loan, a technology-based marketplace for mortgage loans.