Bertelsmann Profit Declines 35%, Revenue Up

   By Ellen Emmerentze Jervell 

BERLIN--Bertelsmann SE Tuesday said its net profit fell 35% in 2014, due to extraordinary costs, an increase in investments, and the absence of special items that boosted group profits last year.

Europe's biggest media company's net profit for the full year fell to EUR573 million ($620.8 million), compared with EUR885 million a year earlier. The company said the decrease was caused by a special TV tax in Hungary, downscaling costs at its declining printing business and investments in future profit-generating units.

Bertelsmann's full-year revenue increased 3.1% to EUR16.7 billion in 2014. Almost a fifth of that was generated in the U.S. Its operating earnings before interest, taxes, depreciation, and amortization, Ebitda, rose, up 2.7% to its highest level in seven years.

"We will keep up this brisk pace and continue to invest," said Chief Executive Thomas Rabe. He said the year 2014 was "one of the best in Bertelsmann's history."

The owner of book publisher Penguin Random House, music rights manager BMG, customer service provider Arvato and internet education provider Relias Learning, among others, said it had a positive start to 2015 and that it expects revenue to grow to EUR20 billion mid-term.

In 2014, Bertelsmann invested EUR1.6 billion in what it expects to be profit-generating units. It increased its share in German publisher Gruner + Jahr to 100%, bought several education provider companies and continued its business expansion in China and Brazil.

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