Sales at Lagardère Publishing increased 2.5% in the first six months of 2023 over the comparable period last year, rising to €1.25 billion. Higher costs as well as one-time charges, however, pushed profits down in the period; recurring EBIT (earnings before interest and taxes) fell 16%, dropping to €65 million, from €81 million in the first six months of 2022.
Revenue was up in all of Lagardère’s major markets, with the exception of the U.S., where sales fell 8.6%. Hachette Book Group CEO Michael Pietsch attributed the sales decline to a number of factors, observing that “the ebbing of the pandemic lift that began in the second half of 2022” continued into HBG’s first half of 2023. He said that sales of backlist titles, children’s and Christian books, and certain adult nonfiction segments “faced particular challenges in a down market.”
On the positive side, Pietsch said, sales from bookstore chains and independent bookstores were up, and sales of downloadable audio continued to be strong. Travel book sales grew “significantly,” he added.
The impact on HBG's bottom line was mitigated, Pietsch said, by cost reduction measures HBG began in 2022. Lagardère also said that higher prices and the impact of operational efficiency plans, “particularly in the United States,” helped to offset the impact of one-time charges, which included a one-time charge of €10 million, “mainly in connection with the integration of Workman Publishing.” That integration process including moving Workman employees into HBG’s New York headquarters during the first half of the year.
Across the pond, first half sales rose 7% in France, due in part to a stronger publishing schedule, Lagardère said. In the U.K., revenue increased 7.3%, chiefly due to a good performance by the adult trade segment. Revenue jumped 26.1% in Spain/Latin America, spurred by strong growth in the education segment.
Lagardère said that even with costs pressures, it expects its publishing business to “maintain relatively similar performances to 2022” in 2023. In the U.S., Pietsch said, backlist sales began to improve toward the end of the first half of 2023. He added that the publisher anticipates “a considerably stronger second half.” He said that he expects HBG’s adult fiction segment to continue to do well, and sees more good results from the Moon Travel and Rick Steves travel books, and is counting on a boost from "TikTok-promoted nonfiction and fiction."
In early June, Lagardère reported that its acquisition by French rival Vivendi was heading toward completion, with two conditions still needing to be met—the sale of Vivendi’s Editis book publishing subsidiary and the sale of Gala magazine. The sale of both, including the sale of Editis to the International Media Investments group, are still pending. When both deals are approved, the Vivendi purchase of Lagardère will be finalized.
