Sales at Penguin Random House (PRH) increased by nearly 5% in 2022. However, the increasing costs led to an 11.8% decrease in PRH’s earrings. This further resulted in a drop in the earnings of the American book publisher to €666 million.
High inflation and supply chain challenges added to a 20.7% drop in earnings at PRH by the first half of 2022. When we compare this to 2021, the EBIT (earnings before interest and taxes) of the publisher dropped from €324 million to €257 million in the first half of 2021. Although the company’s revenue increased by 6.2% to €1.92 billion, the situation was unpleasant. This was because parent company Bertelsmann noted that excluding the desired effect of currency exchange, sales dropped from 2021. Despite all this, revenue was noteworthily higher compared to the first months of 2020 ((€1.63 billion) at the beginning of the pandemic.
Bright Spots in 2022
In the first half of 2022, there were several bright spots in the publishing industry. One of them was the strong backlist sales, with Bertelsmann highlighting popular titles such as Where the Crawdads Sing by Delia Owens and Atomic Habits by James Clear. Additionally, Dr. Seuss’s titles sold over 5.7 million copies during the period.
Audiobooks also performed well in the first half of 2022, with Markus Dohle, the global CEO of Penguin Random House, stating that the company’s audio business has become a strong growth pillar of its publishing efforts. This success in audiobooks is likely due to the increasing popularity of audio content among readers who are seeking more convenient ways to consume books while on the go.
In a letter to PRH’s employees, Markus Dohle, PRH’s Global CEO, reported the first six months globally since he joined the publishing house. Also, PRH’s Grupo Editorial has also shown a record performance. Dohle also said that PRH had awesome sales gains and will become more profitable in 2023 when Disney joins them as a distribution client. Dohle attributed these gains to a strong backlist growth and technology-driven transformation of their marketing, sales, and publicity tools.
Dohle isn’t expecting a quick return to profits.
The global increase in the cost, from paper to distribution, isn’t going to be solved anytime soon, according to Dohle. So, they seek a lean, efficient, and productive approach for PRH to rely on. This approach should help the publisher provide maximum value to their authors and their works. In the end, it’s always about books and fulfilling readers’ demands.
The revenue of Bertelsmann print group increased by 11.5% to €696 million. Again, this increase is attributed to the rising prices of paper. Despite a good revenue, profits plunged by 41.4%, to €15 million, all because of higher costs.
Navkiran Dhaliwal is a seasoned content writer with 10+ years of experience. When she's not writing, she can be found cooking up a storm or spending time with her dog, Rain.
