As if that weren’t enough, the 57-year-old is also Chairman of the Supervisory Board at Adidas. Kasper Rorsted will have to vacate his position as CEO of the sporting goods manufacturer next year, as was recently announced.
Rabe is looking in Herzogenaurach for a new Dax boss, in Cologne for a successor for himself – and in Gütersloh, at the headquarters of the family company Bertelsmann, he also has to manage the second largest European media group.
At least that’s what he’s doing with success, viewed as a whole: Despite geopolitical uncertainties and an imminent recession, Bertelsmann has achieved record results. In the first half of the year, internal sales rose by 3.8 percent to 9.3 billion euros, as the group announced on Wednesday. Earnings before interest, taxes, depreciation and amortization (Ebitda) amounted to 1.43 billion euros – and was thus higher than ever.
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Rabe even raised the forecast for the year as a whole. The group wants to exceed the threshold of 20 billion euros in sales for the first time, Rabe said in an interview with the Handelsblatt. The fact that the manager announced this so offensively surprised even corporate communications: no figures were given in the official letter. In 2021, the company already achieved record sales of 18.7 billion euros.
>> Read more: Record profit despite the crisis: RTL parent company Bertelsmann is growing
But not everything is running smoothly at Bertelsmann. The largest business unit, the RTL Group, recently cut its outlook and expects less profit and sales. The reason for this is the advertising slump as a result of the economic slowdown, high inflation and the Ukraine war. The company, which is listed in the MDax, is dependent on advertising, but companies are only reluctant to advertise because of the uncertain situation.
In addition, RTL is in a time of upheaval. The Cologne TV broadcaster and the Hamburg publisher Gruner + Jahr (G+J) have been combined under one brand since the beginning of the year. Bertelsmann is pursuing the strategy of “creating national media champions,” as Rabe likes to say, in order to be able to compete against the global tech platforms.
Important streaming project at RTL stalls
That is why the expansion of the streaming platform RTL plus, formerly TV Now, plays a central role in Rabe’s work. In addition to films and series, RTL also wants to offer content such as podcasts, audio books, music, e-books as well as online magazines and digital magazine articles, for example from “Stern” or “Geo” from G+J, in its app – a truly unique idea.
In the past twelve months, RTL plus has seen significant user growth of 69 percent to 3.4 million paying subscribers. However, the streaming platform for Bertelsmann is still a subsidy business, it should not be profitable until 2026. This year alone, Rabe expects start-up losses of 250 million euros. This is one reason why the consolidated result of 492 million euros is 64 percent lower than in the first half of 2021.
But Rabe’s important project falters. When it was presented in late autumn, RTL wanted to launch its app in summer 2022. So far there is only a music portfolio. “It actually took longer than expected, so we don’t have to beat around the bush,” Rabe admits to the Handelsblatt.
He is no longer able to name an exact point in time: “We will go into the market with further expansion if it meets the legitimate expectations of the customers.” The main reason for delays is the technology: “It is not easy, the different types of media to bundle and personalize in one app.”
Raven is his boss’s boss
The fact that Rabe has now made himself head of RTL Germany and from now on spends most of the week in Cologne is likely to be related to these problems. Apparently, the former co-boss Schäfer, a hiking friend of Rabe’s, didn’t crack down hard enough.
“I believe that with my management and crisis experience from the past 22 years, I can make a contribution to positioning RTL Deutschland even better and promoting integration with Gruner + Jahr,” said Rabe. That is his “way of working”. During his career, he had repeatedly taken on additional tasks when the situation required it – for example at the Bertelsmann service provider Arvato.
>> Read more: RTL boss Schäfer has to go – Bertelsmann CEO Rabe now has a triple role
The fact that a single manager is both operationally responsible and his own controller twice is a special case worldwide – and should be viewed critically by corporate governance experts. Rabe said that one should “not over-dramatize things”. He has a supervisory board at RTL Group to which he reports, and also at Bertelsmann.
Rabe wants to do the job for a year at most. He is currently defining a precise requirement profile for the new co-boss.
Services grow, printing business shrinks
Bertelsmann also has poor key figures for its shrinking printing business. Halfway through the year, there is an operating EBITDA of 15 million euros – 42 percent less than in the same period last year. Rabe explains this with “rising energy costs that we cannot easily pass on to our customers”. However, Bertelsmann is so broadly positioned that fluctuations in earnings can be easily compensated for.
The growth driver was again the service business, which increased sales by eight percent to 2.6 billion euros and profits by as much as 20 percent. The music company BMG, the fourth largest in the world, has also grown significantly.
Rabe, who holds a doctorate in economics, managed to make Bertelsmann much more international, digital and fast-growing during his time. First of all, the manager has increased investments. In the first half of the year alone, the family business spent over one billion euros – almost twice as much as in the same period last year. By 2025, it should be a total of five to seven billion euros as part of his future strategy entitled “Boost”.
The family company presents record results.
(Photo: dpa)
The future program is named after Rabe’s Adidas running shoes, which he wears on his early-morning jogs. Rabe, who is also Adidas’ chief controller, expressly does not want to talk about the sporting goods manufacturer in an interview with the Handelsblatt. Adidas wants to separate from Rorsted because the important China business is not running.
Rabe now has to start looking for a successor. Criticism is growing louder in Herzogenaurach that the supervisory board has failed to set up an internal successor. One thing is clear: Rabe himself is out of the question for this job – neither for time nor for legal reasons.
More: That’s behind Rorsted’s end at Adidas