Bertelsmann

Company Information & Key Figures

About

Bertelsmann is an international media, services and education company whose divisions encompass broadcasting (RTL Group), book publishing (Penguin Random House), magazine publishing (Gruner + Jahr), music (BMG), service provider (Arvato), education (Bertelsmann Education Group) as well as investment (Bertelsmann Investments) and printing (Bertelsmann Printing Group) operating in fifty countries.

With more than 250 imprints, brands on six continents, 70,000 digital and 15,000 print titles published annually as well as more than 100,000 eBooks available worldwide, Penguin Random House is the world’s largest trade book publisher. The company, which employs 10,615 people globally, was formed on July 1, 2013 by Bertelsmann and Pearson, who own 75% and 25%, respectively. (AR 2017, company information)

Among the best-known imprints are Doubleday, Viking and Alfred A. Knopf (United States), Ebury, Hamish Hamilton and Jonathan Cape (UK), Plaza & Janés and Alfaguara (Spain) and Sudamericana (Argentina), as well as the international imprint Dorling Kindersley.

German language Verlagsgruppe Random House is not part of Penguin Random House from a legal point of view, but is under the same corporate management and is part of the Penguin Random House operating division. (AR 2017)

The Bertelsmann Education Group, which has been consolidated and added to Bertelsmann‘s Annual Report in 2016, comprises Bertelsmann’s education activities. The digital education and service offerings are primarily in the healthcare and technology sectors. Moreover, the education activities include the e-learning providers Relias and Udacity. (AR 2017)

Analysis & Key Developments

Financial

• In 2017 Bertelsmann’s group revenues rose by 1.4% to 17,190mEUR (previous year: 16,950mEUR ), driven by organic growth of 1.7%. The group stated that the achievement was generated in particular by the TV, music, services and education businesses. The operating EBITDA increased by 2.7% from 2,568mEUR in 2016 to 2,636 during 2017. (AR 2017)
• During 2017 revenues at Penguin Random House remained stable at 3,359mEUR (previous year: 3,361mEUR). The company stated further, that negative exchange rate effects were largely offset by portfolio effects. PRH’s operating EBITDA declined by 2.9% from 537mEUR to 521mEUR in 2017, particularly as a result of negative exchange rate effects. Moreover, in October Bertelsmann increased its ownership share in PRH to 75%. (AR 2017)
• The Bertelsmann Education Group recorded overall growth both in revenues and earnings during 2017. Therefore revenues rose from 142mEUR to 189mEUR and the operating EBITDA at Bertelsmann Education Group increased to 3mEUR (previous year: -17mEUR), primarily due to the organic growth of the e-learning provider Relias. (AR 2017)

Internal organization

Change in management

• In November 2016 John Makinson announced his retirement as chairman of PRH. His successor, starting with 2017, is Philip Hoffman, who since 2013 served on the company’s board of directors. (PW 15.11.2016) 
• In April 2018, PRH named Madeline McIntosh, previously president of the Penguin Publishing Group, CEO of Penguin Random House US, a newly created position. (PW 05.04.2018)
• Furthermore, PRH announced in April 2018 that Allison Dobson, formerly senior vice president of strategy and finance at Penguin Publishing Group, succeeds Madeline McIntosh as president of Penguin Publishing Group. (PW 05.04.2018)

Acquisitions and growth initiatives in publishing

• To expand its author and brand-based merchandising PRH acquired the New York-based company Out of Print in June 2017. The company is specialized in creating and selling licensed illustrated literary-themed products.
• In July 2017, PRH completed the acquisition of Spanish language Ediciones B from Spain’s Grupo Zeta media group. (AR 2017)
• In October 2017, Bertelsmann increased its shareholding in Penguin Random House to a strategic three- quarters majority by acquiring another 22 percent from co-shareholder Pearson, thereby strengthening its governance rights. Pearson remains a co-shareholder of Penguin Random House with a share of 25 percent. (AR 2017)
• Also in October 2017, PRH acquired Seattle-based Sasquatch Books for an undisclosed price. (PW 04.10.2017)
• Furthermore, Ebury, PRH UK’s non-fiction publisher, launched the new imprint Pop Press in October 2017. The new imprint publishes around 20 titles a year focused on gift books. (PR PRH UK Oct. 2017)
• Moreover, Random House relaunched ONE WORLD to revitalize and expand the historic publishing program—originally established in 1991 as the first multicultural imprint at a major publishing house. (PR 19.03.2018)
• In November 2017, PRH Grupo Editorial launched its new religious imprint for Spanish-language books, which features titles on self-help, relationships, and a Christian-based lifestyle named Origen. (PR 19.03.2018; PW 03.11.2017)
• In January 2018, PRH Australia launched Penguin
  Life, an imprint focused on personal development and
  healthy living, which publishes six books a year. (PR
  19.03.2018)
• In February 2018, PRH India announced the launch of its new digital imprint Penguin Petit,  which will offer a broad range of interests, from fiction, nonfiction, children’s literature, mythology to self-help, history and current affairs, and will be available in an e-book format. (PR 20.02.2018)
• Besides, Penguin Young Readers announced in February 2018, the launch of Kokila, a new imprint, which will release its first list of books in the summer of 2019. (PR 08.02.2018)

International

Revenues of PRH by region in 2017 include 7.4% Germany, 0.5% France, 11.6% United Kindom 8.3% from other European countries, 55.3% USA and 16.9% from other countries. (AR 2017) Besides, RH Germany contributed only 292mEUR to the company’s revenues, that’s less than 300mEUR for the first time since 2008. (BR 29.03.2018)

Digital

„While print book revenues remained broadly stable overall, and e-book sales declined moderately, Penguin Random House again recorded strong growth in digital audiobooks.“ (AR 2017)

Bestseller

In 2017 the PRH authors were honored with numerous major international literary awards. Kazuo Ishiguro, who is published by Penguin Random House, won the Nobel Prize in Literature. The publishing group’s authors also received four Pulitzer Prizes, two Man Booker Awards, and a US National Book Award.“ (AR 2017)

US

In the United States, PRH placed 461 titles on the “New York Times” bestseller lists in 2017. In addition to R.J. Palacio’s Wonder, the year’s major successes, the main bestsellers included Origin by Dan Brown, Camino Island and The Rooster Bar by John Grisham and Into the Water by Paula Hawkins. In addition, almost ten million copies of children’s book classics by Dr. Seuss were sold. (AR 2017)

UK

In 2017, Penguin Random House UK publishers recorded growth and achieved 43% of all top 10 titles on the “Sunday Times” bestseller lists. Top sellers included 5 Ingredients by Jamie Oliver, Origin by Dan Brown, as well as Diary of a Wimpy Kid: The Getaway by Jeff Kinney. (AR 2017)

Germany

Die Geschichte der Bienen (The History o Bees) by Maja Lunde was the bestselling book in Germany in 2017. Moreover, the publishing group had 401 titles on the “Spiegel” bestseller lists. (AR 2017, BR 04.01.2018)

Spain/Latin America

During 2017 PRH enhanced its position as the largest publisher in Latin America and its market position in Spain. Its bestselling titles over the year wer Una Columna de Fuego (A Column of Fire) Ken Follett and Más allá del invierno (In the Midst of Winter) by Isabel Allende. (AR 2017)