Elvis rocks earnings gains for media group
BERLIN — Gunter Thielen, chief exec of German media group Bertelsmann, expects a hike in earnings in 2002 as restructuring of its music business and book clubs continues.
Bertelsmann’s results would be “better this year than last year,” Thielen told reporters at a press club dinner Thursday.
Although he said a new strategy for Bertelsmann’s music division was still in the works, the group would get between $80 million and $100 million in extra revs thanks to the recent Elvis Presley release “Elvis 30 No. 1 Hits” from RCA. Bertelsmann expects to sell 10 million units. BMG is taking over Zomba Records, which company said would improve BMG’s global position.
Thielen said the group would have net debt of some $3.6 billion at the end of the year following the acquisition of Zomba, but would cut this to $2 billion-$2.5 billion, partly through asset sales.
Company wants to sell its scientific and trade publishing unit BertelsmannSpringer, which Thielen said was worth around $975 million, as well as Internet holdings like online book business BOL. Company is reportedly on the verge of selling German Internet service provider Pixelpark.
Bertelsmann expects all of its business divisions to be profitable or at least at breakeven by next year and is aiming to lift sales margins from 3 to 4% to 10% within the next three years.
Thielen, who replaced high-flying former CEO Thomas Middelhoff in July, said the group was looking at small acquisitions in areas like publishing and the music business as well as for its pan-European TV unit RTL Group. It’s also looking to grow in Asia and the U.S.
Company’s full-year results for last year have not been released as the group is changing to calendar-year reporting and switching from German accounting methods to International Accounting Standard (IAS) rules. Comparative figures are to be released in March.
Bertelsmann reported sales of $16 billion and a pre-tax profit of $2 billion in 2000-01, its last full business year before the change to calendar year reporting and IAS standards.
(Reuters contributed to this report.)