No matter what currency you are talking about, Lagardère Publishing Group was the big winner among the five largest trade houses operating in the U.S. in the first half of 2009. The parent company of Hachette Book Group was the only publisher to post an increase in both sales and profits in the six-month period. Previously, Lagardère said the sales gain was led by a surge in the U.S., and the company now notes that the U.S. and Canada accounted for 27% of Lagardère Publishing’s total revenue in the first six months of 2009, or 272 million euros (about $400 million at current exchange rates)—a 58% increase over the first half of 2008, when HBG represented 19% of Lagardère’s 908 million euros in total revenue. Excluding currency fluctuations—and sales into Canada from Lagardere’s other affiliates—HBG’s revenue rose a more modest but still impressive 43%.
The only other publisher among the Big Five to post an increase in worldwide sales was Penguin, but executives there acknowledged that was due mainly to the rapid strengthening of the dollar compared to the pound; excluding currency fluctuations, total revenue was down 6%.
Lagardère’s bottom-line performance was even more impressive than its revenue improvement, as operating profit jumped more than 62%. Earnings at three of the other major houses were hurt by write-offs for restructuring charges. HarperCollins took a total of $33 million in charges in the first half of 2009 (the second half of its fiscal year ended June 30), and that was a major factor in the company reporting a $42 million loss for the six-month period. Simon & Schuster took a much smaller $2.2 million restructuring charge in the period as its first-half profits fell 86%. Operating EBIT (earnings before interest and taxes) at Random House also likely reflects some one-time charges. Parent company Bertelsmann reported a write-down of 474 million euros for special items in the first half of 2009, although no breakdown among operating groups was provided. In its press release, Bertelsmann did note that “an extensive, international cost-saving initiative and the restructuring of the U.S. publishing groups” helped to offset sales declines at Random House.
All publishers expressed hope that the exceptionally strong fall list will give a boost to the entire industry, making this holiday season one of the most important in recent years. One thing in the industry’s favor is that the fourth quarter of 2008 was very soft, making it easier to top sales during that period.
|Simon & Schuster|