Bertelsmann focuses on growth

New CEO outlines strategy

Bertelsmann’s chairman and CEO designate Hartmut Ostrowski unveiled bold plans to hike revenues at the pan-European media giant by splashing out some e7 billion ($10.28 billion) on growth over the next five years.

Ostrowski, who takes the reins from Gunter Thielen in January, aims to up revenue from the current e20 billion ($29 billion) to more than $44 billion by 2015, with operating profit targeted to improve from $2.75 billion to more than $4.3 billion.

After a year of retrenchment at Bertelsmann, it was a bullish Ostrowski who addressed 600 of the conglom’s managers in Berlin during an end-of-the-year pep rally Thursday, urging them “to develop new ideas and explore paths that no one has ever gone down before.”

The group counts pan-European broadcasting group RTL and book publisher Random House among its main assets.

He cited the successful launch of Random House Films as an example of seizing market opportunities by using new distribution paths and broadening the definition of markets. The new company is producing films based on “The Attack,” by Yasmina Khadra, and “Curveball,” by Bob Drogin.

Ostrowski said Bertelsmann would invest in burgeoning new markets like education, the services industry and the Internet.

Sounding very much in command, Ostrowski told his crew: “Growth is the basis of everything. Only through growth can we maintain, or attain, market leadership. Only then will we have done our job.”

Ostrowski also made it clear that the media giant would shed assets that did not grow.

“It is equally the responsibility of the entrepreneur to acknowledge that, in most cases, you’re not going to turn a lamb into a lion. That means we have to evaluate our business areas and — if necessary — take tough decisions. It goes without saying that we will keep an especially close eye on operations whose business is shrinking.”

The incoming topper called on division execs to take advantage of their entrepreneurial freedom and underscored the need for fresh blood and bold ideas. Leadership also means “finding young, talented people and training them to take on leadership themselves.”

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