Bertelsmann Ramps Up Toward Eventual IPO6 Jun, 2001 By: Hive News
Frankfurt, Germany-based media giant Bertelsmann plans to launch a cost-cutting drive to boost earnings ahead of a possible stock exchange listing, reported the Associated Press.
In addition to cost-cutting measures, the plans include possible takeovers of other companies and sales of underperforming divisions, Bertelsmann spokesman Oliver Herrgesell told the AP Wednesday.
The company's goal is to boost returns on sales to 10% from a current level of 6%, enhancing the company's appeal to possible investors. Privately-owned Bertelsmann has said it could have an initial public offering in three to four years.
The AP reports that the overhaul plans were detailed in an internal memo distributed by Bertelsmann c.e.o. Thomas Middelhoff, and come as many Bertelsmann divisions struggle with sagging profits.
Last week, a Bertelsmann executive that the music division wouldn't post a profit this year and would see no sales growth.
Bertelsmann also recently folded its money-losing online bookstore into its book club division, pressured by such rivals as Amazon.com. That consolidation will trim costs by eliminating overlapping administrative and marketing operations.