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Bertelsmann, parent company of Penguin Random House (PRH), has reported a revenue increase of 1.9% to €14.6bn (£12.7bn) in the first nine months of the year, up from €14.4bn (£12.5bn) in the same period in 2022.
Organic growth was 0.8%, largely down to PRH, BMG, the Arvato Group’s services businesses and the Bertelsmann Education Group. Bertelsmann said the “significant increase in revenues from these businesses more than compensated for the lower revenues in the TV business, which were partly due to weaker TV advertising markets”.
No financial details were given of PRH’s performance in the first nine months of this year, but the report revealed the biggest-selling book in the first nine months of 2023 was Spare by Prince Harry (Bantam). Other major successes included Lessons in Chemistry by Bonnie Garmus (Doubleday), Peter Attia’s Outlive (Vermillion) and Atomic Habits by James Clear (Cornerstone). New bestsellers in the third quarter include picture books by Matthew McConaughey and Amanda Gorman.
For the first half of 2023 PRH’s global revenues rose 9% to €2.1bn (£1.8bn) from €1.9bn (£1.6bn) the year before. Operating EBITDA (earnings before interest, taxes, depreciation and amortisation) increased slightly, from €257m (£221m) to €258m (£222m).
However, last week PRH UK said it was proposing to remove 38 roles across several divisions and departments as the publisher faces “longer-term challenges" around growing profits “in the face of increasing cost pressures”.
The roles, which represent 1.84% of PRH UK’s headcount, will be at risk of redundancy. PRH would not elaborate on which departments were affected other than to confirm they are across several different divisions and departments, and that the roles affected are separate from the cuts at the third-party distribution services operation at Grantham.
Speaking about today’s results, Bertelsmann chairman and c.e.o. Thomas Rabe said: “Despite an overall social situation that continues to be challenging, a circumstance that is particularly felt in our TV advertising business, we have achieved a new revenue record. The group’s broad positioning and our Boost strategy are increasingly showing their effect. Our Boost investments alone amounted to €1.1bn in the 2023 financial year to date.”
Bertelsmann said it will invest five to seven billion euros by 2026 to take its businesses “to an even higher revenue and earnings level”.
Rolf Hellermann, chief financial officer, added: “Overall, we expect a positive business performance for the full year 2023. On a like-for-like basis, we continue to expect a moderate increase in group revenues and a stable operating result overall. Due to the absence of Majorel’s contribution to the group’s revenues and operating result as of November, following the sale of our shareholding, we expect revenues to remain stable year-on-year, and operating EBITDA to decline slightly.”