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“All our divisions are profitable, and our finances are in order. We now return to concentrating on growth."
—-Gunter Thielen

BERTIE EARNINGS UP,
PROFITS DOWN

Music Profit Slightly Down, Expectations
Slightly Up
Bertelsmann announced its 2003 earnings today, reporting that BMG’s revenues stayed level with 2002, thanks to a stronger second half-year. EBITA was $134 million (€110 million), compared to $152 million (€125 million) in 2002. Revenue at BMG was reported as $3.29 billion (€2.7 billion), though revenues from Zomba, which Bertie acquired in 2002, were fully included for the first time this year.

In a press conference, Chief Executive Gunter Thielen said: “All our divisions are profitable, and our finances are in order. We now return to concentrating on growth."

Bertelsmann Chief Financial Officer Siegfried Luther said: “We have seen BMG catching up tremendously in the last quarter after we still had an operating loss in the first six months of the year.”

Second half EBITA at BMG income was pegged at $276 million (€227 million) in the second half-year. The earnings report mentioned the pending merger with Sony, saying the joint venture will be named Sony BMG and headquartered in New York, though it merely noted that the closing of the deal is subject to regulatory approval.

In addition the report said the “integration of Zomba was achieved more rapidly than expected during the period under review. The assimilation of RCA and J Records into the RCA Music Group also went smoothly.”

Humbly, it was noted that BMG’s global music market grew from 11.1 to 11.6 percent in 2003 “due to a string of artistic and commercial triumphs.”

At Bertie, net profit fell to $188 million (€154 million) €928 million in 2002, with revenue down 8.3 percent to $20.5 billion (€16.8 billion) from €18.3 billion. The lower revenue was attributed to a weaker dollar, which shrinks the euro value of foreign earnings, and the sale of its professional publisher, Bertelsmann Springer. Operating earnings—which exclude one-time items such as the AOL Europe share sale, as well as financial items such as interest and taxes—rose 20 percent to $1.36 million €1.12 billion from €936 million.

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