Random House Reports Earnings, 200% E-book Sales Growth
The internationally networked outsourcing services provider Arvato increased its revenues during the first half of the year; meanwhile, operating EBIT was below the previous year's level, partly due to increases in the price of energy and raw materials as well as start-up costs. Revenues reached €2.4 billion (H1 2010: €2.3 billion), operating EBIT was €66 million (H1 2010: €99 million). The reorganization of Arvato into strategic business units that was initiated at the start of the year has now been successfully completed. These individual business units now target specifically defined markets and, thanks to this reorganization, some major customer contracts have been won. As a result of Arvato's strategy of offering integrated service chains in all segments, the production-oriented divisions are increasingly becoming service businesses. During the period under review the growth drivers were again the businesses in France and the business units Arvato Infoscore and Arvato Systems. However, the development of Arvato's business activities in Southern Europe and the U.S. was difficult. Revenues generated from customers in the entertainment sector declined in the U.S. in particular, but also in Europe. The direct marketing activities bundled at Inmediaone also experienced difficulty. Arvato expanded its investment activities year on year and increased the number of employees.
Corporate
The Corporate division, which includes the Bertelsmann Corporate Center and Corporate Investments, reported a higher year-on-year operating loss of €-67 million in the first half year (H1 2010: €-50 million). The BMG music rights business operated jointly with KKR continued to build up its operations in the first half year. BMG successfully completed the takeover of the long-established UK music publisher Chrysalis and new contracts were signed with a number of well-known artists. The BDMI and BAI funds, which are part of Corporate Investments, had a total of 32 holdings at the closing date. The division also acquired shares in various European venture capital funds as well as holdings in three digital firms in China. Following the sale of the Direct Group businesses in France, which was completed at the end of May, Direct Group was dissolved as an independent segment of the Bertelsmann Group, effective June 30, 2011. The remaining club and direct marketing businesses in Germany and Spain have since been transferred to Corporate Investments.
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