Bertelsmann at a Glance

Organisational structure

Bertelsmann AG functions as an operative management holding company and controls the business policy and strategic management of the international media company. Bertelsmann AG is an unlisted stock corporation under German law with a two-tier system of management and governance. The Executive Board is responsible for the entrepreneurial management of the group. The group is managed and controlled on the basis of its articles of incorporation and the decisions of the Executive Board, Supervisory Board and the Annual General Meeting. This process incorporates the group’s strategic guidelines, corporate objectives and corporate culture. Internal financial management and reporting follow the company’s decentralized structure - the RTL Group, Random House, Gruner + Jahr, Arvato and Direct Group divisions.

Strategy

Bertelsmann’s core businesses is focused on media content and media-related services and production activities. While developing the existing businesses further, Bertelsmann is focusing on moving into new growth markets. Bertelsmann sees the geographic core markets of Western Europe and the U.S. as the focus of its future investments as well. Over the medium to long term, Bertelsmann is working to expand its presence in major growth markets such as China.

Most of the businesses hold leading positions in attractive, developed markets. Future investments are focused on business fields with strong organic growth.

In keeping with the objective of operational management, Bertelsmann aims for 100-percent ownership of its businesses wherever possible. At present, two divisions (RTL Group, Gruner + Jahr) are not 100-percent controlled.



The Executive Board manages and develops Bertelsmann as a unified corporation. This means continually analyzing the structure of the businesses and Group portfolio. The Executive Board is focused on optimizing operations and utilizing organic growth opportunities close to the core business. Non-core businesses will be divested as the market permits. Th aim is to gradually enter new growth businesses with an eye on the financial targets.

In fiscal year 2009, the work of the Executive Board was centered around developing and implementing measures to respond to the global economic crisis. Scenario analyses were used to simulate various courses the crisis might take, develop alternative options for action and define appropriate countermeasures. In addition to a cautious investment policy and greater orientation on cash flow in managing business, a series of measures were taken to ensure liquidity. Significant cost-cutting measures were implemented across the board through a variety of individual business-specific initiatives that produced sustainable savings of some €1 billion.

Bertelsmann remains committed to accelerating organic growth for the Group by optimizing the portfolio, investing in growth business and promoting innovation. The achievement of this goal must be seen in the context of the ongoing nature and ramifications of the global economic crisis.