Global revenue at Penguin Random House increased 6% in 2021 over 2020, to €4.0 billion, and earnings rose 9.2%, to €755 million, parent company Bertelsmann reported. The U.S. accounted for 56.5% of total revenue (about $2.51 billion at current exchange rates), down from 58.6% in 2020.
Bertelsmann limited its comments on the pending purchase of Simon & Schuster to noting that a decision in the trial with the Department of Justice, which is challenging the acquisition, is expected later this year. In his annual letter, global PRH CEO Markus Dohle, did not mention S&S, but thanked employees for their passion for books, saying that it helped drive record results that led to a profit margin of 18.7%.
Dohle said PRH outperformed the markets in Brazil, Canada, India, South Africa, adding that "our Spanish-language territories, and our global DK business, delivered a standout year through growth in online sales and its rich backlist." He attributed the worldwide financial gains to a rebound in sales at physical bookstores, while noting the continued shift to online sales—which, he said, led to an increase in backlist sales.
In his letter, Dohle wrote that PRH "will mobilize around these developments to realize our 2022 ambitions," to meet the interests of readers while boosting PRH's "organic growth through excellence in content and reach." He added that PRH's mission is "to create the future of books and reading in our society for generations to come," and that to do so, PRH will invest in authors and stories and "double down on addressing consumer needs in publishing’s ever-changing marketplace."
Last year, organic growth rose by 7.3% at PRH, Bertelsmann said, offsetting a decline of 1.8% due to unfavorable currency translations. PRH's distribution business contributed 3.2% of worldwide revenue in 2021, while rights and licensing added 1.5% to revenue. Sales of its own product generated 95.3% of revenue.
In its annual reports, Bertelsmann did touch on some overall publishing achievements in 2021. Penguin Random House US, Bertelsmann said, "enjoyed a successful publishing and business year." The subsidiary's biggest bestseller was Atomic Habits by James Clear, which was published in 2018, while new releases such as The Judge’s List by John Grisham, The 1619 Project created by Nikole Hannah-Jones and the New York Times Magazine, and Go Tell the Bees That I Am Gone by Diana Gabaldon also had high sales.
Bertelsmann noted that, across its entire book group, it continued its investments in distribution and fulfillment logistics in 2021, which enabled PRH "to meet rising demand for its titles despite significant pandemic-related production and delivery bottlenecks." Indeed, Bertelsmann reported that investments made by PRH last year totaled €116 million, up from €75 million in 2020. The company said it also gathered more consumer data "in order to expand its direct-to-consumer marketing."
U.S. Printing Up
Total Bertelsmann revenue was up 8.1%, to €18.7 billion, and recurring EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 3.1%, to €3.2 billion. Bertelsmann called PRH one of its three "revenue pillars."
The only business that had a sales decline in the year was the Bertelsmann Printing Group, where sales fell 3.2%, to €1.3 billion. Boosted by two acquisitions, however, sales in BPG’s letterpress activities in the United States grew overall, accounting for 12.6% of worldwide revenue. The company's book printing sites in Fairfield and Martinsburg, acquired at the end of 2020, were integrated during the year. "In addition," Bertelsmann wrote, "organizational structures were standardized, processes were optimized along integrated value chains and investments in modern production facilities promise to bring a performance boost for major publishing customers in the future."