While the European Commission considers whether Bertelsmann should be allowed to merge its recording business with Sony and examines the effect of it selling its music publishing to Universal, the slightly trimmed German media giant says its 2007 figures are up to expectations.
The Q1 returns, the first the Gütersloh-based company has reported since it let the BMG Music Publishing revenues go, are down by roughly the same amount the company brought in.
Whatever the outcome of the EC’s investigation has on the European market, Bertelsmann is in a position to carry on.
The deal with Universal is based on what’s commonly called "Hell Or High Water" terms, because the buyer bears the financial burden if the monopolies authorities object.
Earnings before interest and tax (EBIT) was euro 198 million. That’s euro 17 million down on the Q1 2006 figure of euro 215 million, but the music publishing division contributed euro 21 million toward that.
So, adjusting the figures for the loss of the BMG Music Publishing revenues, Bertelsmann claims a like-for-like comparison of the figures shows EBIT has actually risen by euro 4 million.
Gross revenues were euro 4.4 billion, which, again allowing for the loss of the publishing income, is 1.7 percent up on last year.
"Overall, we got off to a good start this year and we expect to achieve our financial targets for 2007. We are pleased to have reached out-of-court settlements about Napster with most plaintiffs and claimants," said Bertelsmann chief financial officer Thomas Rabe. The company has paid euro 114 million to reach out-of-court settlements with EMI and Warner Music Group.
At the company’s AGM on May 14th, Dr. Karl-Ludwig Kley was appointed to the supervisory board.
Kley, chairman of the executive board of Merck KGaA and a former chief financial officer at Lufthansa, will take up his position immediately, replacing DAMP Holding AG chief exec Dr. Claus-Michael Dill, who stepped down when his term of office expired.