Bertelsmann Interim Results 2008 Investor Conference Call

Transcription

1 Bertelsmann Interim Results 2008 Investor Conference Call August 28, 2008 Dr. Thomas Rabe, Member of the Executive Board and Chief Financial Officer, Bertelsmann AG

2 Highlights HY 2008 Solid performance in first six months of 2008 Sale of SonyBMG and DG North America consistent with growth strategy Cautious outlook for FY 2008 reflecting overall macroeconomic environment 2

3 Half year reporting affected by Portfolio Management - Disclosure of discontinued operations according to IFRS 5 Continuing operations Discontinued operations Germany France Italy Spain Portugal DG North America UK, Australia + NZ Netherlands Eastern Europe Asia 3

4 Bertelsmann HY 2008 Continuing Operations Organic growth in revenues, Operating EBIT below HY07 EUR in m HY 2007 HY 2008 Change Revenues 7,728 7, % Operating EBIT ROS 9.6% 8.9% -0.7%-p. Organic growth analysis Revenues Operating EBIT EUR in bn % 7.6 EUR in m % 681 HY 2007 HY 2008 HY 2007 HY

5 Segment reporting Organic growth at RTL Group, Arvato and Random House Revenues (EUR in m) HY 2007 HY 2008 Reported Adjusted 1) -0.9% -7.9% -1.9% +1.2% -1.2% +0.3% +1.9% -1.9% +5.4% -1.0% -21.6% -17.5% 2,891 2,864 2,243 2, ,3871, , RTL Group Random House 1) Adjusted for portfolio and exchange rate effects. G+J Arvato DirectGroup Discontinued Operations 5

6 Segment results Gruner+Jahr and Arvato above previous year Operating EBIT (EUR in m) HY 2007 HY 2008 ROS HY % 4.0% 8.6% 4.5% -1.9% -1.9% RTL Group Random House G+J Arvato DirectGroup Discontinued Operations 6

7 Bertelsmann HY 2008 Continuing operations with balanced revenue structure by region and source Group revenues in HY 2008 by region Group revenues in HY 2008 by revenue source Other Germany European Advertising countries 36% 48% 30% 35% Media services USA 12% 4% Other countries Content 23% 12% Direct-tocustomer 7

8 Bertelsmann HY 2008 EBIT, Net income significantly increased EUR in m HY 2008 Deviation HY 2007 Operating EBIT Divisions Corporate / Consolidation Operating EBIT Special Items EBIT Financial result Income taxes Result of discontinued operations Net Income

9 Bertelsmann HY Impact of special items significantly reduced EUR in m HY 2008 HY 2007 Special items (continuing operations) Restructuring and integration expenses Impairments Capital gains and losses Sum

10 Bertelsmann HY 2008 Operating Cash flow increased, Cash Conversion > 100% EUR in m HY 2008 HY 2007 EBIT Taxes paid Amortization/Depreciation Change in working capital/other =Cash flow from operating activities Capex (net) Acquisitions & Desinvestments =Cash flow from investing activities Dividend payments Change in financial debt (incl. interest paid and swap HY07) =Cash flow from financing activities Operating Free Cash Flow Cash Conversion Rate 111% 86% 10

11 Sound maturity structure - Maturities in FY 2009 largely covered by liquidity EUR in bn /08 12/08 12/09 12/10 12/11 12/12 12/13 12/14 12/15 12/16 Capital market redemptions Bank loans Capital Market Finance Leases Operating Leases Pensions PPC 11

12 Bertelsmann HY 2008 Organic growth in continuing operations, discontinued operations are shrinking Revenues (EUR in m) Continuing Operations -2.7% +0.1% +1.4% 7,728 7,635 Discontinued Operations -7.9% 1, % -17.5% 964 HY 2007 Exchange Portfolio- & Organic HY 2008 rates other effects growth 12

13 Sale of 50 percent holding in Sony BMG Increases scope for profitable growth 1 Sony BMG Music Entertainment 2 Reasons for exit Joint venture between Bertelsmann and Sony established in 2004 #2 world wide in music recording business In 2009, exit option for both partners BMG Music Publishing (not part of the JV) sold in 2006 to Vivendi Market Environment: Decreasing market attractiveness Business Forecast: Further restructuring efforts and investment needs Business Evaluation: Continued decline expected in the next years Consistent with growth strategy 3 Economic assessment 4 Implications for Bertelsmann Agreed purchase price is 1.2 bn USD Sony to assume in full available cash, provisions for pensions and operating lease obligations Bertelsmann obtains additional dividend payout, extension of Arvato contracts (production, distribution), tax advantages, extraction of music rights Closing to be expected in Q Stronger portfolio of assets Lower earnings volatility Take over of some recording-catalogs music rights basis for new music business (BMG rights management) 13

14 Repositioning of Direct Group Positive impact on growth, return on invested capital 1 Strategic review 2 Decision: partly withdrawal from certain Direct Group businesses 3 Sale of Direct Group North America (DGNA) 4 New direction: focus on Europe Started in 2007, preliminary outcome announced in Spring 2008 Exit from China, Korea, South and North America Sale process launched for DG North America Sale of DG North America to Najafi Companies Closing in Aug 2008 Focus of Direct Group businesses on the large European markets 14

15 Outlook 2008 Nearly confirmed for continuing operations despite of overall macroeconomic development Revenue, net income Operating EBIT Growth Profitability Operating free cash flow Leverage Above previous year on a comparable basis Slightly below previous year on a comparable basis Modest organic growth ROS near 10 percent Cash conversion rate around100 percent In line with internal targets and rating expectations 15

16 Q&A-Session August 28, 2008 Dr. Thomas Rabe, Member of the Executive Board and Chief Financial Officer, Bertelsmann AG