Bertelsmann’s Five-Year Plan

With a clutch of EMI and maybe Universal labels due to come on to the market if the two majors are to get regulatory clearance for their merger, Bertelsmann has seen an opportunity to launch its five-year plan.

Having just gone through changes in its legal form, in apparent readiness for an IPO that would still leave the Mohn family in control, the German company is making just the sort of bullish noises that will likely make a good impression and ready the market.

 
The statement that followed the company’s recent international management meeting didn’t make mention of any impending public offering, but it did say “Bertelsmann will be reshaped into a faster growing, more international, and digitally leading company.”
 
The new plan was presented to 500 of Bertelsmann’s execs at Company HQ in Gütersloh and included a promise to strengthen core businesses, prepare for expansion in digital markets, establish and build growth platforms, and to expand operations in emerging nations and the U.S.
 
The statement said the funds needed for putting this strategy into practice will come from operations and a mix of debt and equity, the clearest indication that Bertelsmann may be looking for investors.
 
“At this point Bertelsmann is growing too slowly. We want to accelerate the pace, advance the transformation to digital more aggressively, and devote more attention to the faster-growing regions,” said chairman and chief exec Thomas Rabe. 
 
Rabe has been reportedly interested in EMI’s Parlophone label, one of the most likely disposals Universal will need to make, although in January he told Financial Times that acquiring EMI in its entirety “would have been nice.”
 
“We are making a lot of adjustments and are laying the foundation for the revenue and profits that Bertelsmann will generate 10 years from now,” was Rabe’s view on the Gütersloh summit.