Bertelsmann reports highest nine-month revenues in company's history

Bertelsmann, parent company of Penguin Random House (PRH), has reported the highest nine-month revenues in its history.

The company recorded €14.4bn (£12.5bn) in revenue for the period from January to September, a 10% increase on last year’s €13.1bn (£11.4bn). Organic growth was 5%, largely down to RTL Group, with its film production subsidiary Fremantle, alongside the music company BMG, and Arvato’s services businesses.

Bertelsmann also confirmed a full-year revenue forecast of €20bn (£17.4bn) for the first time in the company’s history. In September the company set high long-term targets for its revenues and earnings in the years ahead, intending to achieve revenues of €24bn (£20.9bn) four years from now. As part of this strategy, Bertelsmann is investing a total of between €5bn (£4.4bn) and €7bn (£6.1bn) in the growth of its businesses by 2025.

No financial details were given of PRH’s performance in the first nine months of this year, but the report revealed the two biggest-selling books in the first nine months of 2022 were Atomic Habits (Cornerstone) by James Clear and Where the Crawdads Sing by Delia Owens (published by Putnam, an imprint of PRH in the US). 

New bestsellers in the third quarter included Dreamland by Nicholas Sparks (published by Random House in the US), The Bullet That Missed (Viking) by Richard Osman and Carrie Soto Is Back by Taylor Jenkins Reid (Hutchinson Heinemann). This month, PRH publishes Surrender (Hutchinson Heinemann) by Bono and The Light We Carry (Viking) by Michelle Obama.

For the first half of 2022 PRH’s global revenues rose 1% to €1.9bn (£1.7bn) from €1.8bn (£1.6bn) the year before. Operating EBITDA declined 21%, however, from €324m (£283m) to €257m (£224m). UK figures were not broken out. 

Bertelsmann chairman and c.e.o. Thomas Rabe said: “The months from January to September 2022 have been gratifying for Bertelsmann overall. The group’s highest-ever nine-month revenues make us confident that our full-year revenues will exceed the €20bn mark for the first time in our history. This shows that we are on the right track with the implementation of our Boost strategy.”

Earlier this week the US Department of Justice blocked the planned $2.2bn (£1.9bn) merger of Penguin Random House and Simon & Schuster.

Rabe said he believed the court decision had been based on "incorrect assumptions", and will be filing a motion with the Court of Appeals.

The ruling was announced on 31st October by federal judge Florence Pan, who ruled in favour of the US Department of Justice. It followed a three-week trial in August. The $2.2bn deal was originally announced in 2020, and was put on trial, lasting three contentious weeks in August.

Rabe said: "We do not share the court’s assessment any more than we previously shared the Department of Justice’s position. Both are based on incorrect basic assumptions, including an inaccurate definition of the market. A merger would be good for competition. We remain convinced that Bertelsmann and Penguin Random House would be the best creative home for Simon & Schuster — with a wide variety of publishers that could operate independently under one umbrella. We will be filing a motion to appeal with the DC Court of Appeals.”