Building Alliances

Bertelsmann is a media, services and education company that operates in about 50 countries around the world. It includes the broadcaster RTL Group, the trade book publisher Penguin Random House, the magazine publisher Gruner + Jahr, the music company BMG, the service provider Arvato, the Bertelsmann Printing Group, the Bertelsmann Education Group and Bertelsmann Investments, an international network of funds. The company has 126,000 employees and generated revenues of €18.0 billion in the 2019 financial year. Bertelsmann stands for creativity and entrepreneurship. This combination promotes first-class media content and innovative service solutions that inspire customers around the world. Bertelsmann aspires to achieve climate neutrality by 2030. www.bertelsmann.com

Founded in 2008, BMG is the world’s fourth-biggest music publisher and the first new global player in the recordings business in decades. Creating competitive advantage with its core values of fairness, transparency and service, BMG offers the traditionally separate music publishing and recording rights under one roof, as well as production music, films and books. BMG’s 19 offices across 12 core music markets represent more than three million songs and recordings, including many of the most renowned and successful catalogs, artists and songwriters in popular music history. With its multiplatform perspective, integrated technology platform and commitment to add value to their careers, BMG aims to be the best partner for artists and songwriters. BMG is wholly owned by Bertelsmann. www.bmg.com Gruner + Jahr is one of Europe’s leading premium magazine publishers. Its products include established brands such as “Stern,” “Geo,” “Brigitte,” “Essen & Trinken” and “Schöner Wohnen” – as well as younger brands including “Chefkoch,” “Barbara,” “Beef” and “11 Freunde.” In total, Gruner + Jahr publishes around 500 print and digital media products across more than 20 countries. It also markets products and licenses such as the “Schöner Wohnen” Collection. Gruner + Jahr’s activities focus primarily on Germany and France. In the latter, its French subsidiary Prisma Media boasts one of the widest audiences of any publishing company. Digital business makes up a quarter of sales, and is exhibiting continued strong growth. Indeed, the company’s digital products lead the rankings in all publishing segments, from news to people to living. G+J also operates the international digital marketing platform AppLike and holds shares in online native advertising market leader Outbrain. Territory, Germany’s largest communications agency for brand content, is a member of the G+J family. Other members include DDV Mediengruppe in Dresden (“Sächsische Zeitung”). G+J also holds a stake in Spiegel-Gruppe (“Spiegel,” “Manager Magazin”). Gruner + Jahr is wholly owned by Bertelsmann. www.guj.com The Bertelsmann Education Group comprises Bertelsmann’s educational activities. With digital education and service offerings focused in the health, technology and teacher education sectors, the group has set out to shape learning in the 21st century. To achieve this, the group seeks long-term partnerships with talented education entrepreneurs who share the same vision, mindset and values. Bertelsmann Education Group provides capital investment and industry and leadership expertise, as well as a broad network of international relationships, to help create outstanding companies of enduring value in education. The Bertelsmann Education Group is wholly owned by Bertelsmann. Bertelsmann Investments (BI), Bertelsmann’s global venture capital arm, encompasses four funds: Bertelsmann Asia Investments (BAI), Bertelsmann India Investments (BII), Bertelsmann Brazil Investments (BBI) and Bertelsmann Digital Media Investments (BDMI, investing in the United States and Europe); as well as fund-of-fund investments in Southeast Asia and Africa, and funds with a focus on new technologies. So far, more than €1 billion has been invested in more than 250 innovative companies and funds through the Bertelsmann Investments division. The Bertelsmann Investments Digital Partners initiative facilitates collaboration between start-ups and all Bertelsmann divisions to drive the digitalization of the businesses. www.bertelsmann-education-group.com www.bertelsmann-investments.com Building Alliances 3

Contents 6 Letter from the CEO 8 Executive Board and Group Management Committee 10 The Four Strategic Priorities 11 The Four Strategic Goals Building Alliances Interview with Thomas Rabe 12 16 Overview 18 Content 26 Advertising 30 Technology Investments 36 Highlights 2019 – Overview 38 Media 48 Services 52 Education 54 56 The Bertelsmann Essentials 58 Culture @ Bertelsmann 62 Corporate Responsibility 64 Climate Neutral by 2030 66 Financial Calendar / Contact / Production Credits Building Alliances 5

Dear Readers, Dear Friends of Bertelsmann, Yet another revenue increase, operating EBITDA at record levels and Group profit of €1.1 billion are indicative of Bertelsmann’s successful business performance in 2019. Group revenues exceeded the €18 billion mark. Besides Penguin Random House, our strategic growth businesses were the main contributors to this, with organic growth of seven percent. The growth businesses’ contribution to Group revenues soared to 36 percent in 2019. Concurrently, Bertelsmann generated more than half its revenues from digital businesses for the first time. Countries outside Europe accounted for 30 percent of Group revenues; the lion’s share was attributable to the United States, as the world’s most important media market. So, in sum, in 2019 Bertelsmann once again became a faster-growing, more digital and more international company. Operating EBITDA reached a new record level of €2.9 billion in the 2019 financial year. And at €1.1 billion, Group profit exceeded the billion-euro mark for the fifth consecutive year. This gratifying business performance results from our strategy, which we continued to make considerable progress on implementing in 2019. Strengthening the core: One of the key topics of 2019 was the establishment and expansion of alliances in the areas of content, advertising and technology. These initiatives create synergies and strengthen our core businesses in global competition. Successful examples are the Ad Alliance, Bertelsmann Tech & Data and the recently founded Bertelsmann Content Alliance. The latter unites all the Group’s German content business – i.e., Mediengruppe RTL Deutschland, including RTL Radio Deutschland, UFA, Verlagsgruppe Random House, Gruner + Jahr and BMG. Meanwhile, RTL Group’s family of channels gained viewer market shares in Germany and France, and further enhanced their position in the TV advertising markets. France’s Groupe M6 expanded its business, among other things by acquiring the children’s channel Gulli. A milestone in the strengthening of our core book business was the announcement of Bertelsmann’s acquisition of full ownership in Penguin Random House, which will be completed in the second quarter of this year. Penguin Random House published the year’s three biggest-selling adult books in the United States, including Michelle Obama’s memoir “Becoming,” which has sold 13 million copies worldwide since November 2018. The world’s biggest trade book publisher expanded its position through acquisitions. At the beginning of 2019, the newly created global CRM company Majorel was launched. The Bertelsmann Printing Group reorganized its global printing business to strengthen collaboration between the printing companies. Digital transformation: RTL Group increased its digital revenues to €1.1 billion. Its streaming services TV Now in Germany and Videoland in the Netherlands registered 1.4 million paying subscribers, up 37 percent from the previous year. Penguin Random House generated growing revenues from audio downloads, the fastest-growing format for our book-publishing group. AppLike, G+J’s app marketing platform, grew both its revenues and its earnings. Founded just five years ago, it now reaches more than 50 million users in 30 countries. Arvato grew with services for customers in the e-commerce, IT and technology sectors. We also further enhanced the digital skills of our employees with a large number of online courses in a wide range of disciplines, and a comprehensive scholarship program for online degrees. Expansion of growth platforms: Fremantle continued its strong performance with TV programs such as “American Gods,” “The New Pope” and “American Idol.” RTL Group consolidated its digital video businesses in Europe and, together with ProSiebenSat.1, founded the ad-booking platform d-force. BMG’s recordings business outperformed the market. The music company expanded its services portfolio to include artist management. Arvato Supply Chain Solutions acquired additional new customers and expanded its international logistics network. Arvato Financial Solutions achieved growth in particular through the expansion of its pay-after- delivery solutions. Finally, the Education Group sponsored 50,000 Udacity online scholarships in the fields of cloud, data and artificial intelligence. Expansion in growth regions: Bertelsmann Investments’ global network of funds comprised about 230 investments at year-end. Around 80 new and follow-up investments were made in 2019. Bertelsmann Brazil Investments supported the IPO of the Brazilian education provider Afya. As you can see, Bertelsmann remains on a growth path – together with its more than 126,000 employees worldwide, whom I would like to sincerely thank for their commitment and dedication. I would also like to thank you, dear readers, for your interest in our progress. Kind regards, Building Alliances 7

Julia Jäkel Chief Executive Officer of Gruner + Jahr Dirk Kemmerer Chief Executive Officer of Bertelsmann Printing Group Kay Krafft Chief Executive Officer of Bertelsmann Education Group Annabelle Yu Long Chief Executive Officer of Bertelsmann China Corporate Center and Managing Partner of Bertelsmann Asia Investments Hartwig Masuch Chief Executive Officer of BMG Madeline McIntosh Chief Executive Officer of Penguin Random House U.S. Shobhna Mohn Executive Vice President Growth Regions Strategy and Bertelsmann Investments Gail Rebuck Board Member Penguin Random House Bernd Reichart Chief Executive Officer of Mediengruppe RTL Deutschland Frank Schirrmeister Chief Executive Officer of Arvato Supply Chain Solutions Karin Schlautmann Executive Vice President Corporate Communications of Bertelsmann Nicolas de Tavernost Chairman of the Executive Board of Groupe M6 Building Alliances 9

The Four Strategic Goals Bertelsmann strives to create a faster-growing, more digital, more international and more diversified Group portfolio. Along with strengthening existing activities, this involves developing new lines of business and regional markets that ensure a broader overall revenue structure. Higher Growth More Digital Share of Group revenues contributed by growth businesses, in percent Digital revenue share in Group revenues, in percent 36 2019 20 2011 ~40 30 Target 2011 51 2019 >50 Target More International More Diversified Share of Group revenues generated outside Europe, in percent Number of business divisions 30 2019 20 2011 ~40 4 Target 2011 8 2019 Building Alliances 11

ad marketer, with more and more partners joining, recently including Springer. In this way, the Ad Alliance reaches almost every household in Germany. Further examples are the netID login alliance, the automated advertising booking platform d-force that is jointly operated with ProSiebenSat.1, Bertelsmann Tech & Data and of course the Bertelsmann Content Alliance. For Bertelsmann, the Content Alliance is a big step – and it has already been immensely successful in its first year. What makes the Bertelsmann Content Alliance so important for you? Prior to its founding in February 2019, Bertelsmann content companies had tended to cooperate on an ad-hoc basis. Today, the Bertelsmann Content Alliance pools collaboration among all the Group’s German content businesses. Where appropriate, it jointly develops content, brands and businesses, and sets its own agenda. It presents artists and creative professionals with a unique range in which Bertelsmann invests €2 billion a year – and that’s in Germany alone. When Mediengruppe RTL, RTL Radio Deutschland, UFA, Verlagsgruppe Random House, Gruner + Jahr and BMG join forces, as in the Bertelsmann Content Alliance, one thing is clear: this is unique in Germany. We can already see this in the Alliance’s first successful projects such as Audio Now and Arctic Drift, whose stories we tell in this Annual Report. Why are you calling for more collaboration in the area of data and technology? Because Bertelsmann wants to become the tech- nologically leading media, services and education company. We will use new technologies to further develop existing businesses and to build new ones. Bertelsmann must pool all its strengths, expertise and resources, and has formulated a Tech Agenda that focuses on three key areas of technology: cloud, data and artificial intelligence. Our newly founded Bertelsmann Technology and Data Advisory Board is in charge of mainstreaming the Tech Agenda and putting it into action. The Board pro- motes transparency, cooperation and exchange, as well as pooling technological expertise, platforms and resources across the Group. In data and technology, specialist skills are a very important factor. How do you plan to ensure they are in place? For one, we are awarding 50,000 scholarships as part of the Udacity Technology Scholarship Program, to enable people to be successful in the digital world – especially our own employees. Second, the Bertelsmann digital campaign is designed to get people to embrace digitalization, with its exciting changes, great opportunities and new possibilities. The response to the campaign and scholarship program has been tremendous. The digital campaign reached more than 30 million people in the fall, and more than 45,000 interested people from 180 countries around the world applied for the first 15,000 scholarships. Building Alliances 13

“ We need to work together across in-house boundaries, as well as cooperate with external partners. We must be open to collaboration and partnership wherever it makes sense. Good precedents exist in the areas of content, advertising, data, technology and management resources.“ Thomas Rabe, at the Management Meeting 2019 Building Alliances 15

Advertising Technology Advertising remains the largest contributor to media revenues – including digital. However, digitalization has fundamentally changed the possibilities, and hence the expectations, of advertisers: they want high reach, and therefore cross-media solutions and offerings from a single source. This is precisely what the Ad Alliance has guaranteed since 2017. Besides the Bertelsmann companies Mediengruppe RTL Deutschland and Gruner + Jahr, the Spiegel Group and Axel Springer are also on board. Together they offer advertising customers integrated concepts to raise attention for their brands or products across all media channels, from print to TV to digital. A similar advertising alliance is being created in the Netherlands involving RTL Nederland; and in Germany, d-force, a successful joint ad-booking platform from the marketers of Mediengruppe RTL Deutschland and ProSiebenSat.1, has already been added. Bertelsmann aims to become the technologically leading media, services and education company in the fields of cloud, data and artificial intelligence. This can only be achieved if strengths, resources and expertise are pooled across the Group on one hand, and if Bertelsmann pursues a clear, coordinated technology agenda on the other. Since 2019, the Technology and Data Advisory Board has been responsible for ensuring both. With the Bertelsmann Collaboration Platform, the company is also creating the necessary basis for sharing IT applications with one another. In addition, there is Gravity, the French data and media alliance in which Groupe M6 and the G+J subsidiary Prisma Media have a stake, as well as the netID login alliance established by Mediengruppe RTL Deutschland, Gruner + Jahr, ProSiebenSat.1 and United Internet. Building Alliances 17

“ This expedition is unique, and so is our content. We’re offering listeners, readers and viewers a great lineup.” Julia Jäkel, CEO of Gruner + Jahr and Chairwoman of the Bertelsmann Content Alliance Board Bertelsmann Content Alliance Boards the “Polarstern“ The preparations took a full decade – and in September 2019, the largest Arctic expedition in human history finally started. Organized by the Alfred Wegener Institute, Helmholtz Center for Polar and Marine Research (AWI), it involves the German icebreaker “Polarstern” drifting for one year through the ice deserts around the North Pole to investigate the Arctic climate system and its effects on the global climate. The Bertelsmann Content Alliance is on board as the expedition’s exclusive German-language media partner. A camera team from UFA Show & Factual accompanied the expedition exclusively throughout the entire year. The resulting high-end documentary, “Arctic Expedition,” (working title) will air on ARD in fall 2020. With increasing darkness, headlamps become even more important for work on the ice. Building Alliances 19

Pole Position in the Booming Podcast Market One year after its founding, the Bertelsmann Content Alliance already commands a key position in the rapidly growing market for podcasts and audiobooks. In May 2019, it founded the Audio Alliance to produce podcasts with all interested Bertelsmann companies and external partners. Within just a few months more than 65 formats were created in Germany, generating millions of views. Audience favorites include the true crime podcast “Stern Crime – Spurensuche” (“Searching for Clues”), in which top investigators talk about their cases; the “Gute Zeiten, schlechte Zeiten” podcast (“Good Times, Bad Times”), which features the stars of the daily series looking back on the episodes of the previous week; and “So bin ich eben!” (“That’s Just the Way I Am!”) by psychologist and bestselling author Stefanie Stahl. The Audio Alliance now collaborates with Bertelsmann companies around the world, and also exclusively with top US producer Wondery. Building Alliances 21 21

“ Do more for less plastic!” Jenke von Wilmsdorff “Let’s Tackle It!” Climate change is one of the most pressing issues of our time – and the Bertelsmann Content Alliance is using its media reach to send out a clear signal. In September 2019, Mediengruppe RTL Deutschland, UFA, RTL Radio, Verlagsgruppe Random House and Gruner + Jahr spotlighted environmental and climate protection for a full month. Readers, users, listeners and viewers were introduced to the topic and shown how everyone can make a meaningful contribution under the heading “Let’s Tackle It!” Gruner + Jahr published several magazines and specials, including the line extension “Brigitte Be Green.“ The Audio Alliance produced a podcast on the topic of plastic-free living for Audio Now. UFA focused on the aspect of green production on its social media channels. Verlagsgruppe Random House launched a website that provides an overview of the many different books published on the subject of sustainability. Mediengruppe RTL initiated a week of action to call for responsible treatment of the environment. At “ntv,” all news, magazines and documentaries covered Sustainability Week. One highlight was the “Jenke Experiment” by extreme reporter Jenke von Wilmsdorff, who this time devoted himself to the topic of avoiding plastic waste. Gruner + Jahr publishes magazines and specials on the topic of climate. A representative study later showed that the collectively organized Climate Week was noticed by nearly half of all Germans age 14 and older, and made three out of four respondents aware that “we must live more consciously in the future.” At the same time, the companies in the Bertelsmann Content Alliance participated in “be green,“ Bertelsmann’s environ- mental management initiative. Presentations on recycling and upcycling, joint waste collection campaigns and work- shops on waste avoidance served to promote environmental awareness among employees. Building Alliances 23

Ku’damm 56: The Musical “Ku’damm 56” tells the story of Caterina Schöllack and her three daughters. The narrative centers on the middle daughter, Monika, who instead of looking for a suitable husband prefers to devote herself to her passion: rock ‘n’ roll. It is a story about revolution and emancipation, and about free love, first love and love late in life. That is how TV audiences know the UFA production about the Galant dance school. The successful ZDF miniseries will now take to the stage – as a musical at the Theater des Westens in Berlin starting December 13, 2020. The libretto for the musical adaptation was penned by the award-winning screenwriter Annette Hess (“Weißensee,” “Wir Kinder vom Bahnhof Zoo”) and the creative producers and songwriters Ulf Leo Sommer and Peter Plate (Sarah Connor, Bibi and Tina, Max Raabe, Rosenstolz). The musical was produced by BMG and UFA. From TV miniseries to musical – yet another example of how the Bertelsmann Content Alliance is expanding creative content across media genres, growing both its reach and its relevance. Building Alliances 25

“Shopping Queen” on AIDA The Vox series “Shopping Queen,” featuring the star designer Guido Maria Kretschmer, is one of Germany’s most popular TV shows. At the beginning of 2019, the Ad Alliance harnessed this popularity to launch a wide-ranging campaign for its advertising partner AIDA Cruises. For the first time, the battle for the best outfit took place on the high seas. The contestants and their judge spent a week on the cruise ship AIDAprima, which was spotlighted in an entertaining and credible way on the show. The “Shopping Queen” special was advertised on Vox and in Gruner + Jahr print titles, including “Guido” magazine. The AIDAnova, the newest cruise ship in the AIDA fleet, was always pictured in the motifs. AIDA Cruises, an Ad Alliance client, was delighted with this “wonderful presentation of the AIDA worlds” and the effective cross-media, high-reach marketing campaign. Building Alliances 27

Into the Jungle with Brand-New Advertising Formats of the Ad Alliance While the show’s candidates competed for the “Jungle Crown,” advertisers – with the help of the Ad Alliance – presented their products in unusual, special advertising formats, some of them brand-new. For example, the confectionery manufacturer Hosta, which made its advertising debut on “Ich bin ein Star – Holt mich hier raus!” (“I’m a Celebrity – Get Me Out of Here!”); the Ad Alliance concept for Hosta included two special advertising formats created especially for the customer: the “Animated-Icon-to-Cut-in” and the “Phone Voting Switch.” The well-known brands Mr. Tom and Nippon were harmoniously embedded into the current show, with slogans such as “I’m a Celebrity – Tear Me Up!” and direct references to the live action. For example, one ad started with the stars familiar from the jungle show flying across the screen as animations. During the telephone voting, too, the campers’ phone numbers were visually adapted to the concept. This creative advertising integration set it off from the TV show, and created an ideal stage for the confectionery manufacturer’s products. Building Alliances 29

The members of the Technology and Data Advisory Board. Building Alliances 31

Artificial intelligence dynamically adjusts the prices of 80 percent of the digital catalog. The platform also supports companies who want to do business with large volumes of data. Book Meets High-Tech At first glance, printed books don’t necessarily have much to do with digital data networks – and yet topics such as the cloud and artificial intelligence are increasingly becoming success factors for publishers as well. For example, books – whether printed books, e-books or audiobooks – can be given optimal placement in online shops by using metadata such as keywords. Efficient data analysis and the use of artificial intelligence are of crucial value for title marketing at Penguin Random House as well. Since 2019, all the Group’s publishers have been able to use the cloud-based “Global Data Hub” platform for even better integration of intelligent data and IT solutions into the publishing business. With these and other initiatives, Penguin Random House has attained the rank and reputation of being the undisputed tech leader in the book industry. Downstream from the creative process on the part of the publishing house’s authors and editors, the books’ pricing in online bookstores, as well as storage, distribution and shipping, are now managed worldwide by sophisticated IT. Building Alliances 33

At the Top of the Supply Chain Data Mountain Arvato Supply Chain Solutions uses the advantages of data analysis and artificial intelligence to increase the efficiency, speed and cost- effectiveness of logistics processes. Two data science teams retroactively analyze all data generated along the value chain – by end customers, clients, suppliers and transport service providers – for possible weak points. It may be noticed, for example, that a product offered online is ordered frequently, but repeatedly returned due to a misleading item description. Such a weakness can be quickly remedied manually – but given the 950 million shipped items and more than 10 million returns that pass through Arvato’s logistics sites each year, the potential of such automated improvements becomes clear. If a customer orders the identical dress in two different sizes, there is a high probability that one of them will be returned. Algorithms recognize such patterns and help subsequently optimize process chains, routes in the warehouse, storage space and personnel requirements. The European netID Foundation’s netID is a neutral login standard that allows Internet users to conveniently log in to various websites using one central account. The netID account lets them easily and securely manage their personal information and consents in one central place. Transparency and data protection are always focus. The European netID Foundation was established by Mediengruppe RTL Deutschland, ProSiebenSat.1 and United Internet. Today, many other partners, including Gruner + Jahr, “Süddeutsche Zeitung” and the DPD parcel delivery service, use netID. the main netID As an independent body, the European Foundation supports Internet offers across all industries in implementing the new European data protection legislation, and thus offers a European login alternative to international offers. Building Alliances 35

Services Education Investments Building Alliances 37 37

Bertelsmann Acquires Full Ownership of Penguin Random House Nearly 185 years after the printer Carl Bertelsmann printed his first book in Gütersloh, today's global corporation Bertelsmann marked a milestone in the expansion of its book business. At the end of 2019, the company announced the acquisition of the last 25 percent of Penguin Random House from the Pearson Group – a step that makes Bertelsmann the sole owner of by far the world’s largest trade publishing group. When Verlagsgruppe Random House in Germany, which was previously managed separately, joins the Group after the transaction is completed, Penguin Random House will unite more than 320 editorially independent publishers, a unique diversity of renowned authors, and global marketing power under its roof. >600M books, e-books and audiobooks sold per year >15,000 new releases worldwide per year Building Alliances 39

Prince Charming: Nicolas Puschmann. Creative Lab for Original Productions Exclusive content – fully owned and controlled – is a key currency in the broadcast- ing and streaming business, strengthening the brand and attracting viewers. There were many advantages to RTL Group setting up another creative unit, and in July the Format Creation Group (FC Group) launched in Hilversum, to develop innovative concepts and non-scripted formats exclusively for the Group’s various broadcasters and streaming services. An international team of outstanding creative professionals is dedicated mainly to developing new factual-entertainment formats and reality shows geared to the requirements of domestic markets. Building Alliances 41

Olga Tokarczuk received the Nobel Prize in Literature; Saša Stanišic ́ was honored with the German Book Prize. Multiple Awards for Penguin Random House Authors 2019 was an extremely successful year for Penguin Random House authors, with three of them winning Nobel Prizes; Polish bestselling author Olga Tokarczuk was retroactively awarded the 2018 Nobel Prize in Literature, and Abhijit Banerjee and Esther Duflo won the Nobel Prize in Economic Sciences. The UK Booker Prize was shared by two Penguin Random House authors: Margaret Atwood for her novel “The Testaments,” and Bernardine Evaristo for “Girl, Woman, Other.” And Verlagsgruppe Random House author Saša Stanišić accepted the German Book Prize for his outstanding novel “Herkunft” (“Origins”) at the opening of the Frankfurt Book Fair. Building Alliances 43

“Wohllebens Welt“ – A Guide through Nature Gruner + Jahr is already represented in the personality magazine segment with strong brands such as “Barbara” and “Guido.” In April, it added a magazine to the popular-science suite “Geo” that not only has a well-known figurehead, but also caters to a primal longing shared by many people. In “Wohllebens Welt” (“Wohlleben’s World”), the forest ranger and bestselling author Peter Wohlleben (“The Hidden Life of Trees”) takes his readers out into nature and guides them knowledgeably through the animal and plant kingdoms. Complex biological relationships are explained in a clear and exciting way, even for non-experts. In an increasingly fast-paced world, the magazine is intended to encourage people to experience nature again while also raising awareness of the need to protect the natural world. Real Crime and Exciting Time Travel for Podcast Lovers Gruner + Jahr was right on trend with its broad range of podcasts. Last year, its creative think tank launched a total of 20 new formats that entice listeners with a colorful mix of topics ranging from comedy and lifestyle to crime and medicine. Especially popular among podcast fans are true-crime formats such as the “Stern Crime” podcast “Spurensuche” (“Searching for Clues”), in which investigators talk about the challenges of their most exciting criminal cases. Meanwhile, the “Geo Epoche” podcast “Verbrechen der Vergangenheit“ (“Crimes of the Past”) offers exciting journeys through time, with topics including Ötzi the Iceman and former drug lord Pablo Escobar. Building Alliances 45

Important Artists and Songwriters Expand Their Contracts BMG stands for a strongly artist-oriented approach that attracts a lot of stars and newcomers. The company signed numerous new contracts with artists and songwriters from all over the world during the financial year, and also extended and expanded others. Award-winning country star Jason Aldean renewed his contract to be represented worldwide by BMG. Rock legends Keith Richards and Mick Jagger extended their publishing contracts with BMG. German rapper Kontra K, British singer Kamille and folk band Mighty Oaks will henceforth be represented by BMG in both recordings and publishing. New contracts were also signed by Rufus Wainwright, Natalie Imbruglia, KSI, Zac Brown Band, Seeed and Cage The Elephant, among others. Cage The Elephant, Kontra K and Jason Aldean (top to bottom). New Focus on Artist Management BMG continued to add new service options in 2019, and will from now on also offer artist management in addition to its services in music publishing and recordings, production music, music-related films and books. For this new service, the company partnered with US company Shelter Music Group. BMG is continuously developing its structures, processes and network in order to be the best partner for artists and songwriters – adding value to their careers and offering them better deal terms, while at the same time maintaining its core values of fairness, transparency and service. Building Alliances 47

cinfoni Ensures Secure Data Transfer As part of their strategic partnership, Arvato Financial Solutions and Swiss Post want to jointly develop a platform for sharing regulatory data in compliance with a new industry standard. The rationale behind the new suite of solutions, known as cinfoni (Customer Information Network Intelligence) will include, among other things, the EU Commission’s tightened regulations to prevent money laundering and terrorist financing. These have engendered immense additional work and expense for banks and companies alike. cinfoni will provide a solution that automates the highly complex handling of strictly regulated data, considerably reducing the workload for banks and companies. Majorel CEO Thomas Mackenbrock and Oliver Carlsen, Majorel CEO Germany and Eastern Europe. Majorel on Track for Success The newly forged Majorel group of companies, a merger of Arvato CRM Solutions and Morocco’s Saham Group, had an exciting and successful first year. In September, just a few months after the transaction was completed, Majorel’s new name, mission and brand identity were presented, and the business was already running at full speed worldwide. The top priorities for the service provider with 48,000 employees in 29 countries: deliver first-class, increasingly digital CRM services for companies in key industries, and expand its customer portfolio. The company grew internationally, especially outside the European Union, with new sites in Morocco, Armenia and Togo. Globally, Majorel occupies leading market positions in Europe, Africa and the Middle East, combined with a strong presence in America and Asia. Building Alliances 49

DeutschlandCard App Surpasses the Three-Million Mark The multipartner rewards program DeutschlandCard is among Germany’s highest-reach marketing platforms – in digital as well. In the 2019 financial year, the app for the program, which is part of the Bertelsmann Printing Group, exceeded three million downloads for the first time. The app was actively used about one million times per month. Besides the integrated e-coupons, the program’s marketing promotions are particularly popular. The cross-partner campaign “Dreh durch vor Freude” (“Spinning for Joy”) was also played heavily on the program’s digital channels, and was additionally boosted with gamification elements such as a microgame in the DeutschlandCard app. For participating companies, DeutschlandCard is an important tool for analyzing consumer needs and incorporating them into effective, targeted communications. Building Alliances 51

Relias Continues Expanding its Extensive Course Library Relias, the US-based continuing education specialist, struck a chord with its broadly diversified range of health- care training and education. To keep up with the demand for specialized healthcare providers, Relias has continued to grow its course library – the largest in the US healthcare sector – since its 2018 acquisition of OnCourse Learning. Additions such as suicide prevention, maternal mortality reduction, wound care and documentation of nursing activities have helped Relias’ 11,000 client organizations and more than five million users worldwide develop highly reliable care teams to reduce variations in care and deliver better clinical and financial outcomes. In doing so, Relias continues to advocate for the highest quality and safety standards across the entire continuum of care. A Digital Information System to Simplify Students’ Lives Alliant International University, which specializes in psychology and education, expanded its online campus in 2019, showing continuous growth in its number of online students. The Education Group subsidiary also introduced a new Student Information System that allows people to manage their entire academic careers online. Students from across the country can now efficiently organize and view all deadlines, courses, exam results, room allocations and online exercises centrally. Andy Vaughn (left), President of Alliant International University, speaking with students. Building Alliances 53

Education Provider Impresses BBI and the Stock Exchange Bertelsmann Brazil Investments (BBI) celebrated the successful IPO of a prominent investment in 2019: the Brazilian continuing education company Afya Education successfully debuted on the New York Nasdaq in July amid a shower of confetti. The educational provider specializes in medical education and training programs, and is the largest of its kind in Brazil with around 36,000 students. Bertelsmann Investments holds an indirect stake in the up- and-coming company via a fund investment with its partner Crescera Investimentos. BBI, in cooperation with co-shareholders and the Afya management, has thus successfully entered an attractive and dynamic market. With a large advertisement at its building in New York’s Times Square, Nasdaq welcomes the newcomer Afya. Bertelsmann Asia Investments Score Record Returns In 2019, Bertelsmann Asia Investments (BAI) generated more than €200 million in proceeds from the sale of former holdings, a BAI record. Most of this sum came from the sale of shares in the live-streaming and short-video platform Bigo. The platform, in which BAI first invested in 2015, rapidly developed into one of the most successful video platforms in Southeast Asia, India and the Middle East with the apps Bigo Live, Likee and IMO. BAI’s shares in the Chinese bike-sharing service provider Hellobike and the social network Momo were also successfully sold. Building Alliances 55

Creativity Creativity is vital to us. We celebrate and nurture creativity: encouraging the critical and imaginative thinking that challenges convention and unlocks opportunity. Our minds are open and curious and we encourage and develop the passionate pursuit of fragile ideas. We know that experimentation is part of the creative process and that innovation best serves our customers and markets. Diversity is crucial. We actively seek out different viewpoints and encourage communication and collaboration. & to get Entrepreneurial freedom provides us with the vision and courage to take risks, the decisiveness and perseverance things done, and to be accountable for our actions. Because we act responsibly, we can be proud of our entrepreneurial achievements. We never lose sight of our customers. Mutual respect and trust between every colleague and partner is crucial. Collaborating makes us all stronger. We invest in our people, empower them and provide fair working conditions. We're mindful of the impact we have on society and environment, and we seek to make a positive difference. Entrepreneurship Building Alliances 57

Film heritage meets world cultural heritage: UFA Film Nights stylishly screened legendary silent films on Berlin’s Museum Island. Film UFA Film Nights: A Journey Back in Time to the Roaring 1920s A clear night sky, a film orchestra or DJ, and a masterpiece of the silent film era projected against an architecturally attractive backdrop – UFA Film Nights have gained a loyal following with this concept. In 2019, a thousand film fans once again flocked to Berlin’s Museum Island on three consecutive evenings to embark on a journey back in time. Bertelsmann and UFA kicked off the Film Nights by presenting Richard Oswald’s “Eine tolle Nacht” (“A Crazy Night”; 1926/27), a mad ramble through the wild Berlin of the 1920s, followed by Fritz Lang’s visionary “Frau im Mond” (“Woman in the Moon”; 1929) and Ernst Lubitsch’s revolutionary epic “Madame Dubarry” (1919). Celebrity DJ Jeff Mills provided a musical highlight. Later in the year, UFA Film Nights also drew large crowds in Brussels. Building Alliances 59

“Konfettinacht, 2007.” The picture by Berlin photographer Carolin Saage was one of the highlights of the exhibition at C/O Berlin. Art “No Photos on the Dance Floor!“ At the “No Photos on the Dance Floor!” exhibition in the fall of 2019, the C/O Berlin gallery presented spectacular photos, videos and sounds from 30 years of Berlin club culture. These exhibits documented how, since the fall of the Berlin Wall, young creatives, techno fans and night owls from East and West have flocked to the clubs to live it up and celebrate “far from the daily routine and common sense.” Bertelsmann supported the show, which quickly turned out to be a crowd-puller. The Group’s support was natural considering its music subsidiary BMG represents well-known artists from the Berlin scene. Prestel, an art book from Munich owned by publisher Bertelsmann, published the book accompanying the exhibition. Literature „Konfettinacht, 2007“ – das Bild der Berliner Fotografin Carolin Saage gehört zu den Highlights der Ausstellung im C/O Berlin Literary Speed-Dating on the Blue Sofa The Blue Sofa – one of Germany’s most successful literary formats, and hosted by Bertelsmann, ZDF, Deutschlandfunk Kultur and 3sat – was all but ubiquitous in 2019. At the Leipzig and Frankfurt Book Fairs and accompanying reading festivals, stars and newcomers of the literary scene met every half hour to talk about their new books on the iconic blue piece of furniture. The discussions were sometimes profound, sometimes exciting, mostly personal and always revealing. And once again everyone was there, from Nobel Literature Laureate Olga Tokarczuk to former German President Joachim Gauck; from crime-thriller star Sebastian Fitzek like Thomas Gottschalk and the YouTube stars “Die Lochis.” The Blue Sofa also made an appearance at the Goethe-Institut’s cultural symposium in Weimar in June, as well as twice at the Gütersloh Theater with Dörte Hansen and Elke Heidenreich as guests. It also served as the venue for an “Architecture Summit” in the new James Simon Gallery on Berlin’s Museum Island in November. to audience-favorites-turned-authors Building Alliances 61 More than 170 authors took a seat on the Blue Sofa in 2019 – 95 of them at the Leipzig Book Fair alone.

Highlights 2019 Bertelsmann Publishes “Action Plan: Inclusion” Bertelsmann published “Action Plan: Inclusion” in 2019. It will provide the basis for minimizing barriers and maximizing accessibility for all employees with disabilities at Bertelsmann’s German companies by 2024, so they can contribute their full potential to the company’s success. Record Result for “RTL-Spendenmarathon” Mediengruppe RTL Deutschland’s telethon “RTL- Spenden marathon 2019” raised €11,491,418 – the highest sum since the charity show began. The funds will be used, for example, to equip children’s palliative care centers and hospitals in Germany, and to set up centers to guard against child labor in Bangladesh. Mediengruppe RTL Deutschland carries the costs of the charity format, so that all the funds raised can be used in full for the domestic and international children’s relief projects. Wolfram Kons, presenter of the “RTL-Spendenmarathon.” Children’s Book Portal for Teachers Penguin Random House Education has launched a new book portal, PRHElementaryEd.com, where teachers can now find more than 20,000 children’s books. The website provides title summaries as well as text excerpts and teaching materials to help educators facilitate their lesson planning – all to promote literacy and the joy of reading among schoolchildren. It is one of the first projects launched in the United States based on consultation with the PRH Elementary Education Teacher Advisory Board. Building Alliances 63

Highlights 2019 Waste less! Your contribution to less trash. Countering Plastic with Cardboard The Bertelsmann subsidiary Topac has offered sustainable alternatives to plastic packaging in food retailing since 2019. Its new cardboard-based concept reduces the plastic content of packaging by up to 70 percent. In this way, the company makes a contribution to reducing plastic waste in retail. “be green Day” Campaign Sets New Record This year, employees from 26 countries – more than ever before – sent out a signal for the protection of the environment and climate by taking part in the Group-wide “be green Day” campaign. At 88, the number of sites where employees took part in the campaign also exceeded that of 2017. From Norway to Chile and Canada to New Zealand, numerous creative activities were organized around the slogan “Waste less! Your contribution to less trash.” Activities ranging from workshops on upcycling to “plogging” groups to collective tree-planting served to demonstrate the employees’ commitment to the topic. Sven Deutschmann (left) and Christian Knehans (right) inspect the production tools for food packaging together with a customer. Building Alliances 65

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