PRH revenues rise as Bertelsmann posts record results

Penguin Random House has shown double digit organic growth in the first half of 2021 while parent company Bertelsmann has achieved record results with revenues of €8.7bn (£7.5bn), “significantly” above prior-year and pre-Covid levels. 

PRH’s global revenues rose in the period from 1st January to 30th June 2021 to €1.8bn (£1.5bn) compared to €1.6bn (£1.3bn) in the same period last year. Operating EBITDA increased in the same period from €209m (£179m) to €324m (£277m). UK figures were not broken out.

The publishing group was singled out as one of Bertelsmann’s top performing subsidiaries. The acquisition of the Simon & Schuster publishing group, agreed in November 2020 for $2.2bn (£1.8bn), received antitrust clearance from the UK Competition & Markets Authority (CMA) in May. The US regulatory review is ongoing.  

“Its Spanish-language book publishing business Penguin Random House Grupo Editorial strengthened its position in the children’s and young adult book sector with publishing acquisitions,” Bertelsmann said. "Barack Obama’s A Promised Land sold 750,000 copies across all formats in North America in the first half of the year, bringing total sales since publication to almost five million copies in North America, and more than eight million copies worldwide.” Other major titles for the company include the upcoming publications of Renegades: Born in the US by Barack Obama and Bruce Springsteen as well as the memoir of Prince Harry, The Duke of Sussex. 

Bertelsman’s operating EBITDA for the six-month period up to 30th June 2021 reached a record €1.4bn (£1.2m). Revenue at the international media, services, and education company are at €8.7bn (£7.5bn), “significantly” above prior-year and pre-Covid levels, the company said, with group profit up by €880m (£754m) to €1.4bn (£1.2m). 

Bertelsmann’s first-half consolidated revenues increased by 10.7% over the previous year from €7.8bn (£6.6m) to €8.7bn (£7.4m). Organic growth was at 16.6% year-on-year, and 7% compared to 2019. 

At €1.4bn (£1.2m), group profit already exceeded the billion Euro threshold after six months of the current financial year, the highest figure since the group’s sale of its AOL Europe shares in 2002. Besides the positive earnings trend, this increase was also due to gains on disposals, the company said. 

In a note to staff, PRH c.e.o. Markus Dohle said of the results: “Our performance was mainly driven by a strong book market in some of our large territories and the recovery from last year’s revenue losses due to the Covid-19 crisis in other regions.  

“Our collaborative spirit has long been a hallmark of the way we work, but over the past year we’ve come to rely on one another even more. We have learned about and shared content, market developments, consumer trends, and data across geographic and organisational boundaries to spur our collective growth in spite of challenges presented by the ongoing global pandemic. The remaining months of 2021 bring new areas to navigate: the development of hybrid work models and the opportunity to meet voracious customers’ demand for books.” 
  
He added of the future direction: “We remain laser focused on continuing to drive growth in an ever-expanding global book market by incorporating our learnings from the marketplace into new behaviors and practices across content and reach areas. We are taking actions to encourage a healthy book ecosystem, including support for booksellers’ financial recovery from the pandemic and using data-informed consumer-marketing research to foster reader engagement. The more we embrace a growth mindset, marked by experimentation and learning, the more we can and will be a voice of optimism for our company and industry.” 

Bertelsmann chairman and c.e.o. Thomas Rabe commented: “The first half of 2021 went very well for Bertelsmann. In particular, our three major revenue mainstays, RTL Group, Penguin Random House, and Arvato, saw significant gains. The Bertelsmann Investments portfolio increased in value and made a high contribution to earnings.  

“We made good progress in executing our strategy: With the planned merger of our French TV subsidiary Groupe M6 with Groupe TF1, and of RTL Nederland with Talpa, as well as with the planned merger of RTL Deutschland and Gruner + Jahr, we have made great strides in creating national media champions.”