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INSIDE The magazine for employees – May 2017 2016 FINANCIALS Rising Results EMPLOYEE SURVEY Rising Confidence Bertelsmann in Britain Fifty Years of Business and Stories
Employee Survey 2016
All results in the current insert
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The Results
More information on BENET:
www.benet.bertelsmann.com
News / Hot Topics /
Employee Survey
2016
EDITORIAL
A Positive
Perspective
B
ertelsmann employees – in other words, you – take
a much more positive view of the future than you
did just a few years ago. That is probably one of the
most gratifying results of the Employee Survey 2016.
And there is every reason for this confidence, as an
economic taking stock of the previous financial year shows.
In this issue, we present both to you: the results of the Em-
ployee Survey and the 2016 financials. In an interview, our CEO
Thomas Rabe elaborates on the strategic progress Bertelsmann
has made in becoming a much more international, more digital,
faster-growing and more diversified company. Chief Human
Resources Officer Immanuel Hermreck talks about the results of
the global Employee Survey, to which we have also devoted a
special supplement containing all the facts and figures.
The third main focus of this issue is a look at the UK, where
Bertelsmann has been active since 1967 – exactly 50 years. Today,
the country is one of our most important and creative markets.
This should not and will not be altered by Brexit. Bertelsmann
and Britain’s shared history is older than the country’s EU mem-
bership. Everything will be done to ensure that this connection
remains as alive and vital as ever – in the interests of both sides.
INSIDE traces the history of Bertelsmann in the UK, and pre-
sents our British entrepreneurs and businesses. In a guest article,
Publisher Gail Rebuck, a member of the House of Lords, outlines Karin Schlautmann
the implications of Brexit for the British creative industry and for Executive Vice President Corporate Communications
Bertelsmann. Bertelsmann SE & Co. KGaA
I wish you an inspiring read.
Yours,
Karin Schlautmann
INSIDE BERTELSMANN / MAY 2017 03
CONTENTS
INSIDE
06 Annual Press Conference
In Berlin, the Executive Board presented the figures for the 2016
financial year – an overview of all the major developments
14 Interview
Thomas Rabe on a Bertelsmann that has become more
international, more digital, faster-growing, and more diversified 06
16 Employee Survey 2016 FINANCIALS
Immanuel Hermreck on the Group-level results of the worldwide The business figures from the last year were
Employee Survey presented in Berlin at the end of March
SPOTLIGHT ON BRITAIN
20 Bertelsmann in Britain
INSIDE presents Bertelsmann’s history and businesses in
Great Britain
22 Foreword
Thomas Rabe believes that the UK will remain one of
Bertelsmann’s most important markets
23 Facts & Figures
Interesting facts & figures about Bertelsmann and the UK
24 Chronicle
Bertelsmann Group has had operations in the UK for
50 years – milestones
28 Guest Article
Baroness Gail Rebuck on Bertelsmann, the British, and Brexit 16
32 Global Brand MAJOR IMPROVEMENT
Ian Hudson is the first and only British member of the Bertelsmann Immanuel Hermreck presents the
Supervisory Board, chairs the BMRC, and is the CEO of DK results of the employee survey
36 British Bestsellers
The most popular authors, music stars and products of Bertelsmann
companies in and from the UK
38 Company Portrait 54 Print
The British television production company Boundless, which is part Prinovis UK has been mastering the challenges of Britain’s difficult
of RTL Group, specializes in Factual Entertainment formats printing market for more than 10 years
42 Entrepreneur Portrait 58 Education
As CEO of Penguin Random House UK, Tom Weldon heads Britain’s Deanna Roepke is managing the expansion of Relias from the U.S.
largest trade publishing group, with more than 50 imprints and
to Britain and Europe
2,000 employees
46 Music 60 Commitment
Year after year, many British colleagues support a variety of good
The UK is the world’s second most important music market after
the U.S. – but songwriters and musicians in other countries are also causes in multiple ways
looked after from Britain
50 Services 62 Magazine
Arvato UK concentrates on individual industries with growth News from the Bertelsmann world
potential and relies on innovative technologies in customer services
67 Publishing Credits
04 INSIDE BERTELSMANN / MAY 2017
INSIDE • MAY 2017
Leeds
Liverpool
Manchester
Sheffield
ENGLAND
Norwich
Birmingham
WALES
Cardigan
Cardiff Slough
London
Dover
Bournemouth
28
IMPRESSIONS FROM
THE HOUSE OF LORDS
Gail Rebuck shares her view on
the impending exit of the United
Kingdom from the EU
32
THE BRITON ON THE
SUPERVISORY BOARD
Ian Hudson on the special
relationships between
Bertelsmann and Great Britain
INSIDE BERTELSMANN / MAY 2017 05
BALANCE SHEET 2016
The Restructuring
Is Paying Off
Happy about the very good
figures:
Immanuel Hermreck, Markus
Dohle, Bernd Hirsch, Thomas
Rabe, Anke Schäferkordt, and
Fernando Carro (from left to
right), prior to the announcement
of the 2016 business figures at
Bertelsmann’s offices in Berlin.
06 INSIDE BERTELSMANN / MAY 2017
→ Strongest organic revenue growth in four years
→ Operating EBITDA reaches a record level of €2.57 billion
→ Group profit of €1.14 billion, which is the highest level since 2006
→ The revenue share of growth businesses increased to 30 percent
→ Digital revenues increase to 44 percent of total revenue
→ Revenues from outside of Europe increased to 28 percent
INSIDE BERTELSMANN / MAY 2017 07
BALANCE SHEET 2016 Record Operating Results and over €1 Billion in Profit As part of the Annual Press Conference that took place at the end of March in Berlin, the Bertelsmann Executive Board presented the 2016 business figures. They reflect Bertelsmann’s success as it becomes a faster-growing, more digital, more international and more diversified company. 08 INSIDE BERTELSMANN / MAY 2017
T
he transformation of Bertelsmann the revenue share of digital activities to
is paying off. In the financial year more than 50 percent.
2016, the company achieved its Bertelsmann has also increased its
strongest organic revenue growth international presence in recent years.
in four years, as well as record operating In 2016, the Group generated 28 percent
results and profits that once again ex- of its revenue outside of Europe (2011:
ceeded €1 billion. Despite the negative ex- 20 percent). This means that in absolute
change rate effects and portfolio effects, terms, Bertelsmann’s revenues from out-
reported revenues last year remained side of Europe have increased by more
almost completely stable at €17.0 bil- than 50 percent since 2011. Alongside
lion (previous year: €17.1 billion). The Brazil, India and China, countries where
Operating EBITDA rose to a record level Bertelsmann has business activities in
of €2.57 billion (previous year: €2.49 bil- the areas of media, service and education,
lion), although start-up losses arose for the Group’s strategic activities are partic-
digital businesses and new businesses. ularly focused on the U.S. In the future,
Despite the higher tax expenditure, group Bertelsmann is aiming to generate around
profit yet again exceeded the previous 30 percent of its revenue in the U.S.
year’s figure, reaching €1.14 billion (previ-
ous year: €1.11 billion).
The business figures reflect the way
“Bertelsmann has
that Bertelsmann is successfully be-
coming a faster-growing, more digital, never before been
more international and more diversified
company. Since 2012, the company has as profitable as it
is today.”
invested more than €4 billion in growth
businesses and digital businesses and the
revenue contribution made by fast-grow-
ing businesses has increased to 30 THOMAS RABE
percent (from 20 percent in 2011). Bertels-
mann aims to increase this contribution The strategic progress made since the
to 40 percent in the coming years. The beginning of 2016 is also evidenced by
revenue share of structurally declining the diversified Group structure, which
businesses, however, has decreased from consists of eight corporate divisions.
16 percent to around 4 percent in the last Bertelsmann announced the first ever total
five years. annual figures for these divisions at the
Annual Press Conference on March 28.
INCREASE IN DIGITAL “Bertelsmann has changed signifi-
REVENUES cantly in recent years,” said Thomas
The revenue share of digital activities, Rabe, Bertelsmann Chairman and CEO.
which Bertelsmann is labeling as one “Our business figures for 2016 show once
entity for the time being, has also been again that the restructuring is paying off.
Faster-growing, more digital, more constantly growing since 2011. Back then, Bertelsmann has never before been as
international and more diversified: digital activities generated 30 percent profitable as it is today. We are now grow-
At the press conference, the members of the (€4.6 billion) of the company’s revenue. ing noticeably faster, and we are more
Bertelsmann Executive Board (pictured with In 2016, this figure had already reached digital, more international, and more di-
Karin Schlautmann, Executive Vice President 44 percent, representing €7.4 billion. The versified. We are continuing to develop in
Corporate Communications of Bertelsmann, share of digital revenue rose across the this way. To do this, we will invest many
center) outlined the Group’s strategic progress. board within this category, including in billions of euros in our growth businesses
the areas of digital advertising, products, and digital businesses between now and
sales and customers. Some specific ex- 2020. We will be expanding our interna-
amples include the RTL Group, which is tional business operations and alongside
now one of the world’s leading providers our activities in Brazil, India and China, we
of online videos; Penguin Random House, will be particularly focusing on the U.S.”
which has a larger e-book portfolio than Despite the negative exchange rate
any other publishing group in the world; effects and portfolio effects, Bertelsmann’s
and Arvato, which provides services for revenues in 2016 remained almost com-
major high-tech corporations. The busi- pletely stable at €17.0 billion (previous
ness models of companies such as BMG year: €17.1 billion). The organic growth
and the Bertelsmann Education Group are rate was 0.9 percent and promising devel-
also tailored for the digital age. In the com- opments in the organic growth rate were
ing years, Bertelsmann aims to increase seen at the RTL Group (3.2 percent), →
INSIDE BERTELSMANN / MAY 2017 09
BALANCE SHEET 2016
Group strategy: target portfolio –
Arvato (3.9 percent), BMG (12.8 percent), Faster-growing
Higher growth
and the Bertelsmann Education Group
(15.9 percent).
Share of Group revenues in %
Bertelsmann’s operating EBITDA rose
by 3.3 percent (€83 million) to the record Group (in € bn)
level of €2.57 billion (previous year: 15.3 17.0 ~20.0
€2.49 billion), despite the start-up losses
20% In
incurred by digital businesses and new Growth businesses
30% b
businesses. At Bertelsmann Education ~40%
Group and RTL Group alone, these losses
totaled €-71 million. The companies
contributing to the increase in earnings
included RTL Group, BMG, Arvato, and the
Stable businesses 64%
online training provider Relias Learning. At
15.1 percent (previous year: 14.5 percent), 66%
the EBITDA margin once again exceeded the ~60%
record level achieved in the previous year.
Group profit was at its highest level in
Structurally
10 years, despite the higher tax expendi- declining businesses 16%
ture. It exceeded the previous year’s fig- 4%
ures by 2.6 percent, reaching €1.14 billion 2011 2016 ~2020
(previous year: €1.11 billion). This positive
development is due to the increase in op- 1 March 28, 2017 · Annual Press Conference
erating earnings and the lower costs from
special items in comparison to 2015. Group strategy: target portfolio –
More digital
More digital
STRONG CORE BUSINESSES
Thomas Rabe emphasized that Bertelsmann Share of Group revenues in %
had made significant advances with all
four strategic priorities in 2016: strength- Group (in € bn)
15.3 17.0 ~20.0
ening the core, digital transformation,
Advertising, products, 13%
expansion of growth platforms, and ex- D
pansion in growth regions. Digital sales, customers 30% 25% (
The core businesses were strengthened Distribution 17% 44% A
>50%
in many ways. For example, the RTL Group
family of channels expanded even more 19% P
and Mediengruppe RTL Deutschland S
secured the rights to broadcast 28 of the
C
German national team’s football fix-
tures. The creative triumphs of Penguin Other 70% D
Random House included numerous 56% GGroup
More strategy: target portfolio –
international
More international
“We are
growing notice-
Share of Group revenues in %
Group (in € bn)
ably faster, and
15.3 17.0 ~20.0
Other countries 6% 7% ~10% • Increased focus on countries with
U.S. 14%
21%
~30%
we are more
higher growth potential
• Revenues outside of Europe increased
digital, more
by more than 50% since 2011
• Expansion of US activities via organic
international
growth and acquisitions along all
three pillars
and more
Europe 80%
72% Media Services Education
~60%
diversified.”
THOMAS RABE
2011 2016 ~2020
Konzernstrategie: Zielportfolio –
3 March 28, 2017 · Annual Press Conference
Diversifizierter
More diversified
2011 2016
Medien
Media Dienstleistungen
Services Bildung
Education
4 28. März 2017 · Bilanzpressekonferenz
subsidiary was the Israeli company Abot tics network and made various successful Bertelsmann also increased its business
Hameiri, which specializes in entertain- sales. The Arvato Financial Solutions activities in growth regions last year.
ment, scripted reality and drama. The business unit reported positive business Among other activities, BMG expanded
group also enjoyed international success performance. In the education sector, its partnership with Alibaba Music,
with various productions, including Bertelsmann strengthened its subsidi- the music division of the well-known
“Deutschland 83” and “The Young Pope.” ary Relias Learning. The online training Chinese e-commerce platform. The Ber-
Among other deals, BMG acquired a ma- provider acquired six companies and ex- telsmann Asia Investments fund (BAI) in-
jority shareholding in the ARC Music label panded into other European countries as vested in 27 new start-ups, and the gains
and concluded one of the most high-pro- well as into China. The e-learning provider it made from sales of investments made a
file deals in the music industry by signing Udacity also expanded into other coun- positive contribution to the Group profit
Pink Floyd legend Roger Walters. Arvato tries. It is now offering its Nanodegree pro- figure. Bertelsmann also made invest-
SCM Solutions expanded its global logis- grams in Germany, Brazil, China and India. ments in numerous start-ups in →
INSIDE BERTELSMANN / MAY 2017 11BALANCE SHEET 2016 Karin Schlautmann, Executive Vice President Corporate Communications of Bertelsmann, chaired the Annual Press Conference in Berlin. Right: In the winter garden at the Bertelsmann offices, a 2.5-meter-tall sculpture uses blue LEDs to depict a Bertelsmann “B.” The walls behind the pillar pick up the main design feature of the event and of the new annual report – a blue wave. Thomas Rabe being interviewed after the conference by N-TV reporter Isabelle Körner. 12 INSIDE BERTELSMANN / MAY 2017
(previous year: €1.3 billion). The Group
acquired various companies, including
Smartclip and Groupe Cerise, as well as a
range of businesses in the TV production,
Journalists follow music and education sectors.
the progress of
the Annual Press MAJOR INVESTMENTS
Conference at the Investments were also made in music
Bertelsmann offices. catalogs and packages of film rights.
Furthermore, Bertelsmann invested in 43
new start-ups last year. Through its four
investment funds alone, the company
India and Brazil, including in the Indian ings. This gives us the freedom to con- has invested more than €500 billion
FinTech company Lendingkart and the tinue pursuing strategic transformation in young enterprises all over the world
Brazilian company NRE Education Group. with great energy.” since 2012.
Bertelsmann CFO Bernd Hirsch said, As in the previous year, continuing At the end of the fiscal year, the Group
“Last year, we strengthened the compa- business expansion meant that the vol- had a total of 116,434 employees world-
ny’s sturdy financial position even more. ume of investment was high in 2016. wide. In 2016, 1,225 people completed
Bertelsmann has a strong operating cash Including the assumed financial debts, vocational training at Bertelsmann compa-
flow, a high equity ratio and stable rat- Bertelsmann invested €1.2 billion last year nies in Germany.
Group strategy: Financial performance – Significant growth in revenue
Group strategy: financial performance –
and profit, despite divestments
Significant revenue and operating EBITDA growth despite divestments
in € bn
~20.0
+3.0
17.0
Revenues
15.3
Sold +3.5
businesses1) 1.8
~3.0
+0.4
2.6
Operating +0.4
EBITDA 2.2
2011 2016 ~2020
1) Including effects from IFRS 11 changes
5 March 28, 2017 · Annual Press Conference
INSIDE BERTELSMANN / MAY 2017 13BALANCE SHEET 2016
“Very Positive Developments”
In an interview with Bertelsmann Chairman and CEO Thomas Rabe,
he provides a positive summary of the strategy process that began in 2012 –
and sets out the next strategic goals for the future.
F
aster-growing, more digital, more regional expansion of our businesses. In The RTL Group is one of the biggest play-
international and more diversi- keeping with this, we have further devel- ers in the online video market. Arvato
fied – that is what Bertelsmann oped our businesses, withdrawn from provides services for the world’s most
is aiming for. It sounds very structurally declining businesses, and important high-tech corporations – and
ambitious, why have four goals at the established new businesses. For example, BMG and our education providers are
same time? since 2011, we have invested more than reaping the benefits of digitizing their
Thomas Rabe: These four aspects do belong €4 billion in the area of digital and growth business models. These factors and others
together but the order in which they ap- businesses alone. are reflected in our portfolio, with digital
pear is not random. Five years ago, when businesses now generating 44 percent of
we formulated our strategy, all of the How would you summarize the develop- Bertelsmann’s revenue. In 2011 this figure
Group’s committees were quick to agree ments to date? was just 30 percent.
that growth needed to be the highest prior- In recent years, there have been some
ity. Growth is the foundation. It enables us very positive developments at Bertels- What are the signs that Bertelsmann is
to invest in our businesses and in develop- mann. Despite carrying out an extensive becoming more international?
ing our employees. restructuring process, we have been able The fact that in recent years, there has been
to increase our operating earnings by an a significant increase in the proportion
How do the other goals fit in with this average of around €100 million each year of our revenue that come from outside
plan? since 2012. The most recent figure is a of Europe. In 2011, it was 20 percent and
They make a direct contribution. Take record high of €2.6 billion. At the same by 2016, this figure had already reached
digitization, for example. It is probably time, we have made significant strategic 28 percent. A particularly important factor
the most important megatrend of our progress. These achievements include the in this was the expansion of our business
times and the growth rates of our digital integration of Penguin Random House, the activities in the U.S., which is the world’s
businesses are therefore very high. It is a full acquisition of BMG and Gruner + Jahr, largest and most innovative media market.
similar story with internationalization. and the formation of our education busi- In the medium term, we want to be gen-
Many market segments in China, India nesses – to name but a few. erating 30 percent of our revenue in the
and South America are growing much U.S. However, we have also increased our
faster than they are in Germany and Eu- To what extent have these developments presence in our strategic growth regions of
rope, for example. Expanding our pres- really made Bertelsmann a faster-grow- China, India and Brazil.
ence in these regions will therefore result ing, more digital, more international and
in faster growth. more diversified company? And where are you up to with diversifi-
We are already a lot closer to our target cation?
And what about the fourth point, the one portfolio. Over the last five years, our The Bertelsmann portfolio has never
about becoming more diversified? growth profile has improved significantly. before been as broad as it is today. It has
This is partly about growth as well – we In 2011, our fast-growing businesses only eight divisions, which are built around
want to expand the business areas that are made up 20 percent of our total revenue. the three pillars of media, services and
growing quickly. But it is also partly about By 2016, this figure had already increased education.
reducing our reliance on single sources to 30 percent. Moving forward, we want
of revenue. to increase this share to 40 percent. In the The intention is that Bertelsmann’s port-
last five years, we have also been scaling folio will continue to develop over the
You were talking about the 2012 strategy back our structurally declining businesses. coming years. What effects will this have
process just now. What has Bertelsmann They now contribute less than five percent on the business growth?
done over the last five years in order to of Bertelsmann’s total revenue, down from In the medium term, we are aiming for
meet its goals? 16 percent in 2011. revenues of €20 billion and an operat-
For us, the four strategic priorities were ing EBITDA of €3 billion. If we continue
and still are as follows: strengthening And how are the other categories looking? with the successful implementation of
our core businesses, the digital trans- Our digital revenues are also growing our strategy, I am confident that we can
formation of this core, establishing and vigorously and many of our divisions are achieve this within the next three to
expanding growth platforms, and the market leaders in their respective sectors. five years.
14 INSIDE BERTELSMANN / MAY 2017“We are
already
a lot closer
to our
target
portfolio.”
THOMAS RABE
INSIDE BERTELSMANN / MAY 2017 15EMPLOYEE SURVEY 2016
Trust and Confidence
Have Increased
Chief Human Resources Officer Immanuel Hermreck talks about the
Group level results of the Employee Survey 2016
I
mmanuel Hermreck has successfully ment. Our aim is to keep improving and
supervised a number of Bertelsmann making Bertelsmann better.
Employee Surveys, sharpening their
profile, and advancing their interna- What, specifically, are the main findings
tionalization. He says about the 2016 of the survey?
project: “We are very happy with the One essential result is that employee
results. We have significantly improved confidence and trust have increased since
in key categories.” In an interview with 2013. Our colleagues take a positive view of
INSIDE, he discusses those categories, and their future and that of the company. We
where he still sees room for improvement. are seeing significant improvements in the
areas of identification and engagement,
Mr. Hermreck, as a Chief HR Officer, as well as direction and goals. Employees
how would you rate the results of the feel well-informed about the company’s
Employee Survey 2016? strategy, course and plans. Likewise, the
Immanuel Hermreck: I’m very satisfied with employees’ perceived job security has
the results – and we all can be happy with increased significantly in comparison to
them, starting with the 89 percent par- the last survey. In addition, there were
ticipation across all eight corporate divi- positive results for issues that are import-
sions. Only few companies achieve such ant to the employees, such as employer
a high participation rate for such surveys. desirability, corporate training/develop-
This shows the tremendous interest ment, and health.
our employees have in helping to shape
Bertelsmann. I was also very happy Is there a result that you were particu-
about the results themselves. Employee larly happy about?
satisfaction is higher than it was in 2013 Besides the general uptrend and the high
– especially with regard to the topics we participation rate, I am delighted that
focused on improving following the last we identified the right areas of potential
survey. This underlines the fact that we
are on the right track. Of course, the pres-
improvement after the 2013 survey – and
that the measures we took are having an “We are on the
right track.”
ent survey also revealed areas where we effect. We can also be proud of the fact
need to improve. But that is precisely the that the evaluations of the supervisors
aim of such a survey, which serves as a have improved further from their al-
strategic tool for organizational develop- ready-high past levels. Leadership → IMMANUEL HERMRECK
16 INSIDE BERTELSMANN / MAY 2017Chief Human Resources
Officer Immanuel Hermreck
is in charge of Bertelsmann’s
worldwide Employee Survey.
INSIDE BERTELSMANN / MAY 2017 17EMPLOYEE SURVEY 2016
is an extremely important subject at Which means what exactly? So what happens now?
Bertelsmann, and our executives take The goal should be to have our employees At Group level, we have now identified
their responsibility very seriously. This is participate in the company’s success. This the topics we need to work on. At every
a fantastic affirmation of the fact that we is part of Bertelsmann’s identity. We want company and team, it is up to the execu-
nurture our executives along their devel- to analyze how we can be even more effec- tives to closely examine their own results,
opment path and thus help them achieve tive in this area. discuss them with their teams, and then
peak performance with their teams. take appropriate actions. To this end, we
What were the differences in the Employee offer our managers a wide range of support
... and what results does Bertelsmann Survey results among the various com- options for working with the results, such
still need to improve on? pany divisions? as coaching and digital tutorials. Beyond
There are two issues that we need to take Like the high participation rate, the positive this, I recommend that the companies
a closer look at: On the one hand, in- trend in the results on key issues extended take advantage of the other dialog formats,
volving employees in change processes, across all divisions. That, too, is one of the such as the “January Talks,” to monitor the
which in this day are part of the ongoing gratifying results of the Employee Survey progress of the measures and the satisfac-
development of our businesses. On the 2016. It is also especially nice to see that the tion with their teams on a regular basis.
other hand, the question of appropriate employees feel well-informed and look to We will track these measures in a separate
remuneration and participation in the the future with confidence, even in those reporting process.
economic success of the company. divisions that are in the midst of the trans-
formation process.
Important Facts
Countries: 47 The five questions showing the greatest change
Languages: 15 in comparison to 2013*
Companies: 384
Positive change
Online participation: 63%
(+ 18 %age points) 1. My company offers me job security. +9
2. My company is committed to social and cultural activities. +8
Results reports: 13,535
(+ 2,027) 3. I am satisfied with the programs and services provided by my company
to promote my health. +7
4. I feel well informed about the opportunities to move within the division or Group. +6
5. I am familiar with my company‘s strategy so that I could explain it to
a new colleague. +5
Participation rates
Bertelsmann worldwide: 89%
RTL Group: 84%
Negative change
Penguin Random House: 92% 1. I benefit appropriately from the company‘s financial success. -8
Gruner + Jahr: 84% 2. Employees in my team are well prepared for new assignments. -1
BMG: 92% 3. I am able to maintain a healthy work-life balance. -1
Arvato: 90% 4. I have the resources I need to do a good job. -1
Bertelsmann 5. In my team, we stick to the agreements we have made. -1
Printing Group: 83%
Bertelsmann * Comparison of results for the same questions in the Employee Survey 2016 and 2013,
Education Group: 90% with deviations shown in percentage points
18 INSIDE BERTELSMANN / MAY 2017More information on BENET:
“We have Special Supplement to INSIDE May 2017
www.benet.bertelsmann.com
significantly News / Hot Topics /
improved Employee Survey
2016
in key
categories.” More detailed information
in the special supplement to
IMMANUEL HERMRECK Employee Survey 2016
the Employee Survey 2016
The Results in this issue
What Happens after
the Employee Survey?
Group Executive Board, Supervisory Board and Group Supervisors present the results to their teams at team
Works Council are informed about Group results (March) meetings and jointly analyze strengths and potential
↓ for improvement (May)
↓
The results are made available as online reports and Together with their supervisors, the teams derive action
printouts (March) plans, which they then agree with their management
↓ teams (May)
Executives receive their results reports (March) ↓
↓ Teams start to implement their action plans (May)
Executives read and interpret their own results reports ↓
and plan the follow-up process with the team (April) Executives document the follow-up process in online
↓ reporting (June)
Executives receive a wide range of support on People- ↓
net, through their local HR department, and from Ber-
telsmann University (April) The teams use the next “January Talk” or “Team Talk” to
track the progress of the action plan (January 2018)
↓
INSIDE BERTELSMANN / MAY 2017 19Since 1894, Tower Bridge
has linked the London
boroughs of Tower Hamlets
and Southwark across the
River Thames. Britain will
soon need new business
bridges across the English
Channel to Europe.
20 INSIDE BERTELSMANN / MAY 2017BERTELSMANN IN BRITAIN • FOCUS
Bertelsmann –
a Bridge to the
British Bertelsmann has been active in the United Kingdom
for 50 years. The country is one of our most important
commercial and creative markets. Nor is this expected to
change after Brexit. As Supervisory Board member Ian Hudson says:
“Relations between Bertelsmann and the British are older than our
membership in the EU. They were solid before the accession, and they
will remain so after the exit.” He believes that Britain will continue to
need bridges to Europe – and that Bertelsmann can be such a bridge.
To mark half a century of Bertelsmann in the UK, but also against
the backdrop of Brexit and its consequences, INSIDE takes a look
across the English Channel and introduces you to our company’s
history and present, its businesses and its protagonists in Britain.
INSIDE BERTELSMANN / MAY 2017 21BERTELSMANN IN BRITAIN • FOREWORD
The Future Belongs to Europe
an important source of artistic creativity and cultural diversity.
But it is also my personal belief, as a European through and
through. I went to the European School in Brussels. Speaking
four languages was as much a matter of course there as having
schoolmates from all over the world. I worked in Brussels at the
EU Commission and later in Luxembourg, another city with a
pronounced European identity. And today I lead the world’s most
international media, services and education company. I feel that
being able to move around this world largely without barriers,
doing business and meeting people from a wide range of different
backgrounds, is the greatest privilege.
Because of my personal background, the Brexit vote came as a
shock to me – but also because in view of European history I am
firmly convinced that the future belongs to a united Europe. It is
by no means obsolete. Neither politically nor economically, nei-
ther socially nor culturally. Which is why it is clear that we must
be constructive about the British leaving the EU – to ensure that it
doesn’t result in them
turning their backs on
“We need the Europe.
Politically, we need
softest possible
agreements that keep
Britain closely
Brexit.”
connected with the
rest of Europe. We need
open market access
THOMAS RABE and cooperation on se-
curity issues. In short,
we need the “softest”
possible Brexit. Even if Bertelsmann itself is not as directly af-
fected by trade barriers as traditional import-export companies,
Thomas Rabe in the long term, protectionism is detrimental to any national
Chairman & CEO of Bertelsmann – and a European economy. I currently represent and advocate this position in
through and through many conversations – with our CEOs in Britain; the Penguin
Random House writer and politician Nick Clegg, whom I will
welcome at my residence shortly; with the British Ambassador,
Sir Sebastian Wood, whom I visited in Berlin in March; and with
many good friends in the UK and the rest of the world.
I
Bertelsmann will continue to build bridges to the British.
n 1967, Bertelsmann first ventured across the English Channel Britain remains our fourth-largest market; its people valued part-
and took up its activities in Britain with Mohndruck’s British ners for our company; the media metropolis of London, and the
branch, Mohn-Gordon Ltd. Some five years later the country industrial city of Liverpool, our home.
entered the European Economic Community, which later
became the EU – and unfortunately the UK will now be leaving
again. Perhaps the United Kingdom never came to care deeply Yours,
about a united Europe over the decades. Nevertheless, Britain has Thomas Rabe
always been and will always remain an integral part of Europe,
even after Brexit.
This is Bertelsmann’s position, as an international company
that generates revenues of €1.7 billion in Britain alone, employs
5,500 people there, and deeply appreciates the United Kingdom as
22 INSIDE BERTELSMANN / MAY 2017BERTELSMANN IN BRITAIN • FACTS
Impressive facts
Strong content
Bertelsmann is a strong player
in the content business in Great
Britain: roughly three-quarters
Great Britain is an equally promising and challenging
of its British revenues come
(media) market – where practically all our divisions
from this segment – only in
are represented. Together, Bertelsmann companies
the United States is the share
employ around 5,500 colleagues there.
attributable to Bertelsmann‘s
creative businesses higher.
Prinovis UK printed
155,000 tons
of paper in 2016.
Prinovis UK produces a Penguin Random
weekly volume of around House UK
2.5 million copies just of
“Weekend,” the supplement encompasses more
of the “Daily Mail.” than 50 imprints.
Fremantle Media UK produced around
360 hours
DK in London employs more
than 500 employees from
around the world, who speak
22 different native languages. of TV programming for the UK market in 2016.
BMG‘s marketing plan for an artist covers
Robotics software used by
Arvato UK (“Robotics Process 18 months – compared to the few
Automation”) takes months that are often the standard at other
42 seconds
music companies.
to process a tax debit, instead 80 percent of the BMG portfolio
of the usual five minutes. consists of works by established artists;
20 percent comes from new talent.
INSIDE BERTELSMANN / MAY 2017 23BERTELSMANN IN BRITAIN • CHRONICLE
Bertelsmann‘s Big Birthday
in Britain
Britain is not only one of Bertelsmann‘s most important markets worldwide, but also one
of its oldest. In 1967, Bertelsmann took its initial steps/plunge across the English Channel,
only five years after the company had established its first branch in a non-German-
speaking country, in Spain. At the time, Britain was not even a member of the European
Economic Community. Today, the country has decided to exit from its successor organization,
the EU. INSIDE looks back on the milestone of Bertelsmann’s 50th anniversary in the UK.
Songs of the female soul trio The Three Degrees
were among the hits of Ariola Eurodisc Ltd., founded
in Great Britain in 1977.
The Leisure Circle
in Southampton
(picture from 1980,
bottom), right:
catalog of “The
Leisure Circle”
Reinhard Mohn (from 1981).
→
1967 1972 1977 1977
Bertelsmann first goes to Britain. A joint venture with Thomson A year par excellence for Bertelsmann in Because music in Britain was just
On August 1, Reinhard Mohn Publication Ltd. results in Britain: Bertelsmann enters the British as culturally and commercially
founds Mohn-Gordon Ltd., a Bertelsmann Thomson Fachverlag. club business with the founding of the crucial back then as now, that
small Mohndruck sales office in Bertelsmann own two-thirds of the Leisure Circle. In 1988, the Leisure same year – 1977 – Bertelsmann
London, Here, too, a Bertelsmann shares. Circle is merged into the book club founds its own label, Ariola UK,
success story begins in print. group, Book Club Associates (BCA), in which goes on to become BMG
which Bertelsmann holds 50 percent of Records UK.
the shares. In 2008, Bertelsmann sells
its British club business.
With the majority acquisition of the
American publishing house Bantam
Books, the latter’s British subsidiary
Transworld Publishers becomes part of
Bertelsmann, giving it a footprint in UK
trade publishing. Nearly 40 years later,
this will culminate in the combination
of Random House and Penguin merging.
But more about that later!
24 INSIDE BERTELSMANN / MAY 2017The TV talent show “Pop Idol” (picture at top) was
launched in Great Britain in 2001. Many spin-offs
followed around the world. Bottom picture: Finalists
and judges from “The X Factor,” a casting show that
began airing in Great Britain in 2004.
“The Street Lawyer” by best-
selling author John Grisham was
published in Great Britain in
1998 by Century.
BMG headquarters In 1997, the launch of UK’s new
in London (picture TV broadcaster Channel 5 was
from 1992). advertised with the Spice Girls.
→
1986 1997 1998 2000
In the course of following a resolute With the founding of CLT-UFA, Once again, a major transaction RTL Group is born from the merger
strategy of international expansion, Bertelsmann acquires shares in the in the U.S. has ramifications for of CLT-UFA and the British company
G+J now turns its attention to British TV broadcaster, Channel 5. the UK business: In New York, Pearson TV. Pearson contributes a
Britain as well. A new publisher This marks the start of Bertelsmann’s Bertelsmann completes the successful TV production company –
is founded in London; its first TV activities in the UK, which will acquisition of Random House – Fremantle Media – to Europe’s
magazine, “Prima,” launches in this later come to concentrate on the TV in the UK, Random House and its largest television group, and from
first year, with a sold circulation of production business. British publishers become part of this moment on, Bertelsmann is
730,000 copies. Bertelsmann. active in the production business
Sonopress opens a first fulfillment of one of the world’s most creative
center in Birmingham. TV markets, creating exceptional
formats originated in Britain such as
“Britain’s Got Talent,” “Pop Idol,” and
“The X Factor.”
INSIDE BERTELSMANN / MAY 2017 25BERTELSMANN IN BRITAIN • CHRONICLE
Millions of people
throughout the world
read the books – and
saw the film version –
of the “Fifty Shades”
trilogy by E L James.
BMG also represented
songs of superstar
David Bowie, who died
in early 2016.
Arvato employees serving
members of the public. The Arvato
headquarters in Slough,
west of London.
→
2005 2006 2008 2010 2012
The Council of East Riding Prinovis celebrates the Arvato takes over all The new BMG, founded in Following Chesterfield Borough
(Yorkshire) entrusts its opening of Europe’s most distribution activities for the 2008, goes on a shopping spree Council, Slough Borough
municipal services to state-of-the-art gravure record label Universal Music in what is arguably the world’s Council also commissions
Arvato in a public-private printing plant in Liverpool. UK, becoming the biggest most innovative music market. Arvato to handle various
partnership. Three of the world‘s largest logistics and fulfillment In July, BMG takes over the municipal services such as the
rotary presses are housed service provider in the renowned independent music collection of local taxes and
at the 60,000 square meter entertainment sector. publisher Stage Three Music, the payment of wages, salaries
(nearly 650,000 square and in November, Chrysalis, an and pensions. The following
feet) site. icon among music publishers, year, the Derbyshire Dales
with artists like Billy Idol, David District Council follows suit.
Bowie and Jethro Tull. BMG UK
Random House publishes the
is based in Paddington, London.
“Fifty Shades” trilogy by the
previously unknown British
author E L James – and
turns her novels into three of
the bestselling books of the
century, on both sides of the
Atlantic.
26 INSIDE BERTELSMANN / MAY 2017Entrance to the office
building of Penguin
Random House in London.
“The Girl on the Train” by British
author Paula Hawkins was
published by Penguin Random
House and became a huge
success in the most important
book markets of the world.
The Prinovis
gravure printing
shop in Liverpool.
2013 2014 2015 2016
On July 1, the world‘s largest trade book publisher is StyleHaul, RTL Group’s It is her first book – and At the beginning of the year, Prinovis
created: Penguin Random House. Its heart beats in U.S. multichannel network, becomes the bestselling Liverpool becomes part of the new
New York, and on the banks of the Thames. Penguin, goes to Britain and opens book of the year: “The Girl on Bertelsmann Printing Group.
after all, is part of Britain’s publishing and cultural a branch in London. The Train” by Paula Hawkins.
Relias Learning, the leading
heritage. The publishers of the two groups unite to Penguin Random House
U.S. provider of online learning in
form Penguin Random House UK, an unparalleled turns the British writer’s
healthcare, ”crosses the pond“ and
publishing group currently with 50 imprints. work into the bestselling
launches Relias UK, the Bertelsmann
adult fiction debut of the
Arvato pools large parts of its CRM business at Education Group’s first business in
past 10 years.
the new headquarters in Slough, west of London. Europe.
Its customers include BMW, Renault, Zara and the
Ministry of Transport. Following the acquisition
of Gothia, its sister business Arvato Financial
Solutions also grows in the UK. In the following year,
Arvato takes over the medical technology company
Stok, a specialist in the logistical supply of hospitals.
INSIDE BERTELSMANN / MAY 2017 2728 INSIDE BERTELSMANN / MAY 2017
BERTELSMANN IN BRITAIN • GUEST ARTICLE
Global Britain
or Little Britain?
Baroness Gail Rebuck on Bertelsmann,
Britain and Brexit
Whether as a publisher, a creative, an entre- in January 2017 the British Prime Minister
preneur or a member of the House of Lords – Theresa May finally set out her plans for
what Gail Rebuck says carries weight in Britain. a full “clean,” hard Brexit for the UK but
In 1982 she cofounded a publishing house. In couched in the rhetoric of wanting us to
1998 she took the helm of the Random House be partners, allies and friends of our Euro-
Group UK. In the summer of 2014, Baroness pean neighbours.
Gail Rebuck was appointed to the House of The impact of Brexit on the creative
Lords – where at the beginning of this year, industries was subsequently debated in
she gave a speech about the implications of the House of Lords. In anticipation of our
Brexit for Britain’s creative industry. In her departure from the EU, Thomas Rabe also
guest article for INSIDE, she writes about this, convened a special Brexit Country Coordi-
Bertelsmann, and Brexit. nation meeting in the UK on 14 December
2016, listening to all the CEOs’ concerns
O
and reaffirming Bertelsmann’s support for
n Monday 13 March 2017, as I this important market, the fourth largest
hand in this piece, Britain has in the Group, with excellent growth and
just passed the Brexit Bill, paving profits.
the way for the Government to The pound has weakened and is pre-
trigger Article 50 on the 29th March and dicted to fall further, aiding exports but
begin our withdrawal negotiations from causing counterbalancing issues for all
the European Union. companies. All the Bertelsmann divisions
The divorce proceedings have begun in the UK, in line with the rest of the crea-
with both sides claiming potential finan- tive industries, struggled to match oppor-
cial rebates, the EU number in excess of tunities to the challenges going forward,
Gail Rebuck, Board
£50 billion, and as there will be many despite the current UK economic perfor-
Member Penguin Random
twists and turns by the time this article is mance being strong and defying the pre-
House and member of the
published, I will confine myself to what dictions of those against leaving the EU.
British House of Lords
has happened to date and the implica- That said, warning signs on the economy
tions for our businesses in the UK. Back are beginning to emerge. →
INSIDE BERTELSMANN / MAY 2017 29BERTELSMANN IN BRITAIN • GUEST ARTICLE
We also heard from Nick Clegg, the former Europe, and the need for a “meaningful”
Deputy Prime Minister of the UK at the vote on the negotiated exit deal and, in
meeting – a committed European who particular, the ability of the Commons to
speaks five languages fluently and has a vote on action to be taken if there was no
Dutch mother and Spanish wife – and al- acceptable deal after two years.
though his message was equally challeng- These amendments were reversed in
ing, it was delivered with an eloquence, the Commons so the Lords, mindful of the
“I’m worried the
sense of history and intellectual intensity sovereignty of the Commons, allowed the
that lifted our spirits before the holidays. Bill to pass into law unamended. What will
Theresa May has ruled out Britain’s follow, apart from negotiations, will be the
membership in the EU’s single market
and the Customs Union and wants to seek
Great Repeal Bill, which will convert EU
requirements into British law where there
next generation
out new ambitious free trade agreements
and was one of the first leaders to have an
are concerns that amendments may creep
in without scrutiny, the announcement
won’t have
audience with President Trump to discuss
these issues. She will remove the UK from
that Scotland may seek to initiate another
independence referendum possibly as the same
the European Court of Justice and take
back control of UK borders with a new
early as spring 2019 and, of course, the
spectre of a UK election before the set opportunities
we‘ve had.”
immigration policy. In addition, the Prime 2020 date should Theresa May wish to
Minister said she would cease to contrib- consolidate her mandate – although this
ute large sums to the EU budget but simply has been denied by the government.
pay towards specific programmes if that Outside this big picture, the particular GAIL REBUCK
could be negotiated. challenge for the creative industries in the
UK is that they consist of over a quarter of
NO CHERRY-PICKING a million businesses and despite their £87
The instant European response was billion contribution a year to the economy,
scathing towards cherry-picking and growing twice as fast as other sectors, with
an assumption that an à la carte Europe one of the largest export quotas, they lack 2. THE REGULATORY FRAMEWORK
might be available to the UK, partially in the lobbying might of banking, financial – copyright protection, trademarks, terri-
response to Theresa May’s sting in the tail services, pharmaceuticals, construction toriality and the single digital market, in
that if the only offer on the table – at the and the car industries that have all been particular, anti-piracy. With no seat at the
end of the two-year negotiating period given specific reassurances on special table and no influence, the UK creative
post-Article 50 was unacceptable – the UK trade deals and access to global talent. industries worry about the direction of
would turn itself into a deregulated, low The Prime Minister focused on science future legislation. There was also concern
tax haven, a “Singapore” on the shores of and innovation in her speech but failed about any increases in taxation burden,
Europe – a vision that enrages many of the to mention STEAM, putting the Arts and an issue that Bertelsmann agreed to keep
48 percent who voted to remain in the EU Design alongside Science, Technology, under regular review through the Brexit
as this vision of the future was not on the Engineering and Math. negotiations.
ballot paper. Finally, the Prime Minister This position has subsequently been
noted that any agreement would be voted reviewed, thank goodness, with the crea- 3. TRADING RELATIONSHIPS AND
on by both Houses of Parliament and that tive industries cited as a sector worthy of COINVESTMENTS
there would ideally be a phased approach early review in the recent Industrial Strat- The fear of actual tariffs or “non-tariff”
to implementation through a “long lasting egy Green Paper, which will form the basis barriers – with extra paperwork, delays
transitional deal” to avoid a disruptive of the new UK post-Brexit. The first stage and costs. There was also concern about
“cliff edge” for business. The business of the review into the creative industries is future European creative collaborations.
community broadly welcomed the clarity to be led by Sir Peter Bazalgette, outgoing
of the speech. Chair of the Arts Council and Chair of ITV, 4. EU FUNDING AND ACCESS TO GRANTS,
Extensive debate followed the pub- as well as a recently published author. such as “Creative Europe,” where the UK
lication of the Article 50 Bill in both the Key concerns across the creative in- takes out £3 billion more than we put in,
House of Commons and the House of dustries relate closely to the Bertelsmann the second largest recipient after Germany.
Lords where the debates, over several reported divisional issues:
days, included hearing from distinguished The other and final issue is the UK’S
historians, former Chancellors and front 1. ACCESS TO TALENT AND SKILLS HIGHER EDUCATION SECTOR, currently
benchers from all parties, EU Commis- We have been told EU nationals already going through a massive process of reform
sioners, senior civil servants and business working here will be able to stay (provid- and liberalisation, which in itself is prob-
leaders. There were two significant amend- ing there is reciprocity for UK nationals ably a good thing but current legislation
ments that were passed back to the Com- abroad) but there is no detail on post- risks diluting the excellence of our leading
mons – the agreement to give certainty to Brexit new intakes. A significant percent- institutions by taking away their intellec-
the three million EU nationals currently age of our workforce is from the EU, from tual and research autonomy. EU research
living and working in the UK, not as a quid 7 to 30 percent, depending on the industry grants may be impossible to access and EU
pro quo for the British nationals living in so this is an issue of huge importance. students too may find their fees doubling,
30 INSIDE BERTELSMANN / MAY 2017The British Parliament meets in the “Houses of Parliament,” which consist of the House of Commons
and the House of Lords.
thus forcing them to make other choices Modern European Mind were more stim-
and depriving UK universities of their ulating than any of the mind-expanding
highest achievers and a tremendous re- drugs prevalent in the early 1970s. Reading
source to the workforce. his friend Lukács’s literary criticism on
Another talking point for our creative the power of writers, through their imag
industries is the sense of the UK not be- ination, to grasp the more vital forces at
coming Global Britain but Little Britain, a work in society, to penetrate the surface of
country in which our universities, writers, life and intuit the future led to my career in
musicians, actors, producers, directors publishing and my passion for books, which
and designers will no longer draw from has been more of a vocation than a job.
the rich and diversified European cultural
heritage, which is where innovation and WANTED: VISION
great new ideas are born. I hope I am wrong but I worry that the
One of the first to act on the Brexit next generation will not have those same
vote was German national Martin Roth, a opportunities to experience a blend of
former Director of the Dresden State Art European influences and how this may,
Collection, who resigned as Director of over time, affect the rich intellectual life
the Victoria and Albert Museum, having and unrivalled record of innovation we
regenerated one of our most prestigious currently enjoy.
institutions to Museum of the Year. He is That said, from a professional stand-
returning to Stuttgart to lead the Institute point, the Industrial Strategy Bill does give
for International Relations to focus on the each creative industry the opportunity
new nationalism emerging across Europe. to put its Brexit concerns forward, but I
For me, personally, I fear the rise of would counsel that these should be bal-
populism not only in the UK, but also in the anced by a strong and visionary narrative
U.S. and across Europe and the trashing of on opportunities for investment, growth
the values I have always tried to live by. and development. The UK Government
I was the first in my family to go to is searching for a vision from each of us,
university, my grandparents having fled and we should rise to that challenge as
persecution in Latvia. At the University passionate advocates for our cultural busi-
of Sussex, after a French education at the nesses and begin to imagine and articulate
Lycée Français in London, I read Intellec- a roadmap for British creativity, innova-
tual History. I discovered that Hungarian tion and growth. Our future path is set,
Professor István Mészáros’s lectures on the and we now have to make it work.
INSIDE BERTELSMANN / MAY 2017 31In the background are St. Paul’s and the financial center of London; ahead is the future of DK and Bertelsmann in the United Kingdom: Ian Hudson on the balcony of 80 Strand, where his publishing firm DK is based. 32 INSIDE BERTELSMANN / MAY 2017
BERTELSMANN IN BRITAIN • DK
The British
Connection
Ian Hudson is the first and, so far, only member of
the Bertelsmann Supervisory Board. He heads the
Bertelsmann Management Representative Committee
(BMRC) and has served as CEO of the DK publishing
company since July 2016, so there were plenty of topics
to discuss in our interview with the “Bertelsmann Brit.”
E
mployee representatives on the
Supervisory Board? Unimaginable
at a British company. Managers
who get involved and provide
input, let alone mediation through a body
like the BMRC? Highly unusual in the
United Kingdom. But not for Ian Hudson.
On the contrary: he is the first and only
British member of the Bertelsmann Super-
visory Board, as a representative of the
Group’s Executives. He is also Chairman of
the BMRC, which, in the spirit of its
founder, Reinhard Mohn, he heads as a
sparring partner for the Executive Board.
He spoke with INSIDE about these two
roles, but also about Bertelsmann and the
UK – a relationship that he himself has
supported and helped shape for almost 20
years. For many years, Hudson bore both
domestic and international responsibili-
ties at Random House, then at Penguin
Random House. Since summer 2016, he
has been CEO of DK – a global publishing
brand headquartered in the UK. →
INSIDE BERTELSMANN / MAY 2017 33You can also read
