Bertelsmann has achieved its highest first-quarter revenues in 10 years and said it is on track to achieve net profit in excess of one billion euros for the year. Penguin Random House delivered a “strong bestseller performance” in the first quarter of 2018, the company added.
Bertelsmann, which does not offer a financial breakdown for its group's divisions at this stage in the year, said it had "stepped up its growth course" in the first quarter of the year, fueled by the development of its digital and high-growth businesses which now make up a third of group revenues and in spite of the weakness of the US dollar.
Group revenue increased by 1.3% to €3.99bn (previous year: €3.94bn), a 10-year record, with organic growth improved by 2.7%. However, operating EBITDA was down to €473m from €482m the previous year and Bertelsmann’s Group profit was down to €172m (previous year: €198m). The decline in profit was "primarily attributable to negative special items and exchange rate effects", it said. Exchange-rate effects had a negative impact amounting to €145m, having generated around 20% of its revenues in the United States.
Penguin Random House delivered "a strong bestseller performance", the company said. Bertelsmann also noted the acquisition of the US nonfiction imprint Rodale Books in January and the publishing group's announcement that it will be publishing the memoirs of former US First Lady Michelle Obama in 24 languages on 13th November of this year.
Thomas Rabe, chairman and c.e.o. of Bertelsmann, called it "a good start" to 2018 for the international media, services and education company. Especially strong growth was achieved by its music subsidiary BMG (17% organic growth), Arvato (6%) and the Bertelsmann Education Group (21%).
“Bertelsmann is growing faster under its own steam than it has for a long time," he said. "The strategic expansion of our high-growth businesses is becoming increasingly noteworthy. They now account for around a third of our Group revenues. We are increasingly focusing on organic growth and investing heavily in our businesses. In the first few months of 2018, we continued to work to make Bertelsmann a faster-growing, more digital, more international, and more diversified company. We have made a good start to the current year and are confident that we will achieve our full-year targets.”
Net profit is expected to exceed one billion euros, according to Bernd Hirsch, chief financial officer of Bertelsmann. He said: “Given our solid financial position, we are optimistic for the full year. As before, we expect higher revenues and continued high operating profitability in 2018. Our net profit should once again exceed one billion euros."