Bertelsmann reports highest nine-month group sales since 2007

Bertelsmann reports highest nine-month group sales since 2007

Penguin Random House's parent company Bertelsmann has reported its highest nine-month group sales since 2007, with a 2.4% rise in revenue year-on-year to €12.4bn.

The company, which since October 2017 owns a 75% stake in PRH while Pearson has the remaining 25%, reported its operating EBITDA "remained high" also despite a slight dip from €1.64bn in 2017 to €1.62bn. Excluding negative exchange rate effects, it said it was actually up 1% on 2017. Group profit came in slightly lower than last year at €671m (2017: €694m).

In particular sales growth was expedited by the group’s "high-growth businesses", comprising the digital businesses of RTL Group and of Gruner + Jahr, Fremantle, BMG, Arvato’s logistics, its financial services activities and the Bertelsmann Education Group, which recorded a 10% organic increase in revenues to €4.2 bn.

Bertelsmann chairman and c.e.o. Thomas Rabe said the 2018 financial year was "going well" for Bertelsmann. "Our growth profile improved further. For instance, we achieved a 10% increase in revenues from our high-growth businesses under our own steam. This positive business performance is accompanied by major progress in the execution of our strategy in recent months. We are opening a new chapter for our CRM business at Arvato and are entering into a long-term partnership with Saham. The newly formed group will occupy leading market positions in Europe, Africa, and the Middle East, combined with a strong presence in America and Asia. In addition, the acquisition of OnCourse Learning will massively strengthen our educational activities in the U.S," he said.

Bernd Hirsch, chief financial officer of Bertelsmann, confirmed Bertelsmann was on track per its full-year forecast but was being "very selective about investments". For the full year, he said it continues to expect "higher revenues, continued high operating profitability, and Group net profit of above one billion euros". 

Of PRH, for which division Bertelsmann does not offer a financial breakdown at this stage in the year, it remarked particularly on its performance in the US. It said 373 titles made the New York Times bestseller lists in the first nine months of the year, 50 of them at number one. In Germany, meanwhile, Verlagsgruppe Random House acquired the audiobook publisher DAV to expand its audio offering.

In August, according to Bertelsmann's first-half operating results, PRH recorded a decline in sales and earnings for the first six months of 2018; revenues came in at €1.48bn, 3.3% down from just over €1.53bn in the first half of the prior year, while operating EBITDA fell by 17% to €171m in comparison to €206m a year earlier.