PRH global revenues grow 9% in first half of 2023 as Bertelsmann reports record results

Penguin Random House (PRH) has reported 9% revenue growth in the first half of 2023, while parent company Bertelsmann has achieved record results with revenues of €9.7bn (£8.3bn), up 4.5% on 2022.

PRH’s global revenues in the six months from 1st January to 30th June 2023 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). UK figures were not broken out.

In a letter sent to all global employees following the release of the financial update, Nihar Malaviya, c.e.o. of PRH, said he was “pleased to share” the results, however he noted that the increased revenue had not translated into an increase in profits.

He said this “should come as no surprise, as industry inflationary cost pressures and increased costs across our businesses have continued to impact us. We have already taken several steps to offset these pressures in some of our markets around the world and will continue to carefully navigate these industry and structural dynamics,” he said.

Malaviya attributed the increased revenues to “continued stability in book markets around the world, the excellent publishing performance from most of our businesses, and continued small-company acquisitions". He noted: “Book markets in most of our businesses are stable versus 2022 and higher than pre-Covid levels from 2019. This is a positive development for the long-term health of our industry. Despite the macroeconomic uncertainties in most of the countries in which we operate, readers are still gravitating to books to provide them with a unique experience they can’t get from anything else.”

He also acknowledged PRH’s acquisition of several small companies during 2023, “furthering our ambitions to grow in audio, children’s, and data-driven publishing, as well as in local content, among others". He added: “We have increased our revenues due to your ongoing excellence in publishing books that resonate with readers amid a time of internal changes in some of our businesses. Thank you for your resilience, hard work and dedication to our books, authors, booksellers, librarians and readers.”

Looking forward to the rest of the year and beyond, Malaviya said the ambition is to “connect each book with the widest possible audience, guided by our mission to create books for everyone. Content and books are and will remain at the centre of everything that we do in each market in which we operate. As we continue to excel here, we can achieve great commercial success and grow, which is the most effective way of combating this cost environment. Most importantly, we can invest in more authors’ works and bring more voices and stories to readers that drive cultural impact,” he said.

Bertelsmann’s group revenues increased by 4.5% year on year to a record €9.7bn (£8.3bn), compared to €9.3bn (£8bn) in 2022, with organic revenue growth of 2.3%. EBITDA was down from €1.5bn (£1.3bn) in 2022 to €1.35bn (£1.16bn). Group profit amounted to €260m (£223m), compared to €492m (£423m) last year. The update attributes this in part to the realignment of the publishing division at RTL Deutschland and the realignment of the US business at PRH.

Chairman and c.e.o. Thomas Rabe said: “We look back on a good first half of 2023 and are happy with Bertelsmann’s business performance. The group’s transformation, with the establishment of new businesses and, above all, our Boost strategy, is increasingly making itself felt. And so, despite a difficult macroeconomic environment, our company posted record revenues and a high operating result.”