Bertelsmann Plans Cost-Cutting Moves
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German media giant Bertelsmann plans to launch a cost-cutting drive intended to boost earnings ahead of a possible stock exchange listing.
The plans also include possible takeovers of other companies and sales of under-performing divisions, Bertelsmann spokesman Oliver Herrgesell said.
The aim is to boost returns on sales to 10% from a current level of 6%, making the company more appealing to possible investors. Privately owned Bertelsmann has said it could have an initial public offering in three to four years.
The overhaul plans were detailed in an internal memo distributed by Bertelsmann Chief Executive Thomas Middelhoff, and they come as many Bertelsmann divisions struggle with sagging balance sheets.
The head of Bertelsmann’s music arm said last week his division wouldn’t post a profit this year and would see no sales growth.
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