Overall Economic Developments

In 2016 global economic expansion was moderate but accelerated slightly toward the end of the year. Real GDP once again increased by 3.1 percent compared to 3.1 percent in 2015. The global economy in 2016 was characterized by stable growth in the developed economies and a slight upturn in the emerging countries.

The economic recovery in the eurozone continued. Real GDP grew by 1.7 percent in 2016 compared to 1.5 percent in the previous year. More favorable financing conditions and sustained employment growth were the key drivers of this positive development.

The German economy proved to be robust, particularly as a result of strong domestic demand. Real GDP grew by 1.9 percent compared to 1.7 percent in the previous year. In France, too, the economic growth continued. Real GDP growth was 1.1 percent in 2016 compared to 1.2 percent in 2015. In the United Kingdom, economic activity slowed, with an increase in real GDP of 2.0 percent compared to a rise of 2.4 percent in the previous year.

In the United States, after a weak first six months, real GDP increased by 1.9 percent in 2016 compared to a rise of 2.4 percent in 2015.

Developments in Relevant Markets

The following analysis focuses on markets and regions that are of a sufficient size and that are strategically important from a Group perspective.

The majority of the European TV advertising markets developed favorably in 2016. The TV advertising markets in Germany, France, Belgium and Croatia showed slight to moderate growth, while the TV advertising market in Spain once again reported significant growth. By contrast, the development of the TV markets in the Netherlands and Hungary showed a slight to moderate decline.

Sales of printed books in the United States and the United Kingdom saw moderate growth, while publishing sales of e-books fell as a result of changes to sales conditions. The German- and Spanish-language book markets showed largely stable development.

The magazine markets in Germany and France in 2016 were characterized by strongly declining print advertising business and moderately declining circulation business, while the digital business posted strong growth.

The global music markets in 2016 reported moderate growth in the publishing and recording rights segments.

The key service markets for Arvato, namely CRM, SCM, Financial Solutions and IT, saw moderate to significant growth.

Overall, the relevant European print markets declined in 2016, while the offset market showed far more stable development than the gravure printing market. The North American book printing market saw a moderate decline over the same period.

The education markets in the United States grew strongly overall in 2016 in the market segments where Bertelsmann is involved – namely, healthcare and technology, online services and university education.