Bertelsmann’s primary objective is continuous growth of the company’s value through a sustained increase in profitability with efficient capital investment at the same time (see the “Value-Oriented Management System” section).

Bertelsmann aims to achieve a faster-growing, more digital, more international and more diversified Group portfolio. Businesses in which Bertelsmann invests should have longterm stable growth, global reach, stable and protectable business models, high market-entry barriers and scalability. The education business is being gradually developed into the third earnings pillar alongside the media and service businesses. Group strategy comprises four strategic priorities – strengthening the core businesses, driving the digital transformation forward, developing growth platforms and expanding into growth regions. In the financial year 2016, Bertelsmann continued to make significant progress in line with these strategic priorities.

As part of strengthening the core businesses, the Ad Alliance was formed as a cooperation in advertising marketing between Mediengruppe RTL Deutschland and Gruner + Jahr. In 2016, RTL Group launched new TV channels. Gruner + Jahr founded Deutsche Medien-Manufaktur in conjunction with Landwirtschaftsverlag and also focused on the core markets of Germany and France through the disposals of the publishing group News in Austria and G+J Spain. A new management structure was implemented at Bertelsmann Printing Group. Bertelsmann continued to roll out the Group-wide earnings improvement program.

The Group also pushed forward with the digital transformation at RTL Group, through the takeover of the online video marketer Smartclip among other things. Gruner + Jahr expanded its digital businesses primarily through the acquisition of the French digital video provider Groupe Cerise, the takeover of the demand-side platform provider LiquidM and the increase in its stake in (and thus complete takeover of) the marketing services provider trnd. Arvato generated growth through services for companies in the IT/high-tech sector and with e-commerce services.

The growth platforms were strengthened through the acquisition of a majority share in the ARC Music publishing catalog and signing contracts with many new artists at BMG – including Pink Floyd founding member and songwriter Roger Waters. BMG also entered the Australian market and took over the Australian music publisher Alberts. Arvato created the conditions for the further expansion of its SCM services by developing a new logistics center in the Eastern Ruhr region and also commissioning a distribution center in Gennep, Netherlands. In addition, Arvato posted further sales successes in the Financial Solutions division. The education business was further reinforced by, among other things, the continued organic and acquisitive expansion of the activities of Relias Learning. For example, Relias Learning expanded internationally and took over the US companies CMT, AHC Media and Swank Healthcare, among others. The e-learning provider Udacity also continued to expand its business internationally and is now also operating in Brazil, China, India and Germany with its Nanodegree offerings.

As part of expanding its presence in growth regions, the BAI fund made further new and follow-up investments in China and made a positive contribution to Group profit through gains from disposals of investments. In India, Bertelsmann strengthened its activities in strategically relevant business areas by acquiring stakes in the e-commerce services provider KartRocket, the social fashion network Roposo, the budget hotel marketplace Treebo and the Fintech company Lendingkart. BBI in cooperation with its strategic partner Bozano Investimentos took stakes in the university education provider Medcel and the NRE Education Group.

Bertelsmann will push ahead with its transformation into a faster-growing, more digital, more international and more diversified Group in 2017 in line with the four strategic priorities. Compliance with and achievement of the strategic development priorities are continuously examined by the Executive Board at the divisional level through regular meetings of the Strategy and Business Committee and as part of the annual Strategic Planning Dialogue between the Executive Board and the Supervisory Board. In addition, relevant markets and the competitive environment are analyzed on an ongoing basis in order to draw conclusions concerning the further development of the Group’s strategy. The Executive Board is also supported by the Group Management Committee (GMC) on issues of corporate strategy and development. This Committee is composed of executives representing key businesses, countries, regions and select Group-wide functions.

The Group’s content-based and entrepreneurial creativity will remain very important for the implementation of its strategy. Bertelsmann will therefore continue to invest significantly in the creative core of its businesses. In addition, Bertelsmann needs to have qualified employees at all levels of the Group to ensure its strategic and financial success. Innovation competence is also very important for Bertelsmann and is a key strategic component (see the “Innovations” section).