PRH increases revenues and profits 6.2% for 2019, with 'strong' performance in UK

PRH increases revenues and profits 6.2% for 2019, with 'strong' performance in UK

Penguin Random House increased both its revenues and profits in 2019, according to parent company Bertelsmann, which said it would continue to expand the publisher’s businesses including through acquisition.

PRH’s revenues increased 6.2% to €3.64bn (2018: €3.42bn) and operating EBITDA [Earnings Before Interest, Tax, Depreciation and Amortisation] rose 6.2% also, to €561m (2018: €528m).

Bertelsmann reported overall for 2019 that it increased group revenues, with the help of Penguin Random House, to €18bn, while EBITDA surged to a record high of €2.9bn (2018: €2.6bn). Group profits were flat, at €1.1bn, exceeding the €1bn mark for the fifth year running. It was also able to reduce net financial debt by more than a half-billion euros last year, by €570m to €3.4bn.

Thomas Rabe said the “good business performance” was driven by a number of successful measures, such as the expansion of the RTL Group’s streaming services (the goal is to reach five to seven million paying subscribers by 2025) and Arvato’s expansion of its e-commerce activities, while the Bertelsmann Education Group had doubled its earnings, benefiting from “continued high demand for digital educational offerings”.

He said of Penguin Random House the complete acquisition was an “important milestone” that “strengthens our core businesses in the long term”, after Pearson sold its remaining 25% stake in the business in December.

Rabe disclosed further: “We will continue to expand Penguin Random House’s businesses over the next few years, including through acquisitions.” It follows a year of Penguin Random House expanding its presence in South America, with its acquisition in May of the publishing group Ediciones Salamandra, operating in Spain and Latin America, and the purchase of the literature and educational publisher Editora Zahar in Brazil through Companhia das Letras. It also bought Little Tiger Group in the UK last March.

Penguin Random House UK had "a very strong publishing performance", and revenue "grew significantly", Bertelsmann said further in its company report. Particular to the UK business, it said: "The publishers placed 43% of all the titles on the Sunday Times bestseller lists. Their top-selling titles included Veg by Jamie Oliver, Becoming by Michelle Obama and The Testaments by Margaret Atwood. The publishing group increased its market share, strengthened its international sales and expanded its audio business."

The German media group expressed confidence that it stands “well prepared” to weather the coronavirus crisis. “We have taken many measures to protect our employees’ health and wellbeing in this coronavirus crisis,” said Rabe. “Bertelsmann is well prepared financially. We are profitable, have high liquidity, a comfortable equity ratio, and ratings continue unchanged in the investment-grade category. The broad set-up of our businesses makes us less susceptible to economic fluctuations and allows us to continue investing in our future without compromising the substance of our business.”

Rabe added: “In this extraordinary situation, all media are of special societal and systemic relevance. In Germany, we are part of the critical infrastructure which must be maintained and supported, especially now. We provide authoritative information and entertainment to millions of people, who now face unprecedented disruption to their personal and professional lives in connection with curbing the spread of the coronavirus.”