Penguin Random House is the world’s leading trade book publisher, comprised of nearly 250 imprints and brands on five continents, with more than 15,000 new titles and 800 million print, audio and e-books sold annually. The company employs 12,500 people globally and was formed on July 1, 2013 by Bertelsmann and Pearson, who own 53 percent and 47 percent, respectively.

PRH is owned by Bertelsmann, an international media company that operates in fifty countries in broadcasting (RTL Group), magazine publishing (Gruner + Jahr), services (Arvato), and printing (Be Printers).

PRH’s best known imprints are Doubleday, Viking and Alfred A. Knopf in the US; Ebury, Hamish Hamilton and Jonathan Cape in the UK; Plaza & Janés and Alfaguara in Spain; Sudamericana in Argentina); and the international imprint Dorling Kindersley.

The German-language publisher Verlagsgruppe Random House is not part of PRH from a legal point of view, but is under the same corporate management and is part of the Penguin Random House operating division.

Analysis & Key Developments

Financial

Bertelsmann posted a strong operating performance in 2015 with revenue and earnings growth as well as a significantly increased Group profit. Group revenues from continuing operations rose 2.8% to 17.1 billion EUR, from 16.7 billion EUR in 2014, due to positive exchange rate effects. Operating EBITDA increased by 111 million EUR to 2.49 billion EUR. Earnings improved in particular in the US book publishing business, the German television business, the service businesses in the Customer Relationship Management and Supply Chain Management segments, the music business BMG and the online education provider Relias Learning.

PRH also increased both its revenue and operating profit in the financial year 2015. Revenues increased 11.8% to 3.7 billion EUR, up from 3.3 billion EUR in 2014. Markets were stable across its territories, due to positive exchange rate effects. Operating EBITDA rose sharply by 23.2% to 557 million EUR, against 452 million EUR in 2014. In addition to exchange rates, this is attributable to savings from the largely completed integration of Penguin and Random House and a strong bestseller lineup.

Internal Organization

Divestment

In 2015 the company divested two operations. PRH sold its Author Solutions division to an affiliate of Najafi Companies in December and sold its stake in the Australian online book retailer Bookworld to Booktopia. "Bookworld and Booktopia share the same commitment to delivering a first class online experience for Australian readers, and together will have the economies of scale and the brands to strengthen and grow an important channel," said Gabrielle Coyne, CEO of PRH Australia.

Change in Management

Don Weisberg, President of Penguin Young Readers Group US, left PRH In November to become president of Macmillan Publishers U.S. PRH announced that Jen Loja, senior v.p and associate publisher for the division, would succeed in December.

Consolidation

PRH introduced its new imprint in Germany in June 2015. The new unit publishes both fiction and nonfiction, original trade and mass-market paperback editions, and paperback reprints of books that were originally published in hardcover by Random House’s various German imprints. The imprint is headed by Thomas Rathnow, publisher and managing director of Random House Germany.

The Penguin Podcast relaunched in July with a series of programs about the objects that inspire authors. The podcast is hosted by actor Richard E Grant.

Penguin General launched Penguin Life, a new self-help and healthy living imprint, in January. Venetia Butterfield was named Publishing Director. The imprint will publish 10 titles during 2016 and aims to publish 20 books per year by 2018 across the UK and Commonwealth as well as other markets.

Also in January, PRH merged its Berkley imprint into the unified Putnam and Dutton group. The new unit is headed by Ivan Held, previously named president of the merged Putnam and Dutton imprint, Despite a cut in mass market titles, Berkley pledges to remain committed to the format. Madeline McIntosh, president of the Penguin Publishing Group, said that Berkley is “refin[ing] the size of the list in order to ensure optimum results per title.”

International

Revenues of 3.43 billion EUR are generated internationally.

Revenues by region in 2015 include 56.8% from the US, 11.2% from the UK, 7.5% from Germany, 0.3% from France, 7.8% from other European countries, and 16.4% from the rest of the world.

Digital

PRH remains the world market leader in e-books. The company provides more than 110,000 titles in English, German and Spanish. During 2015 PRH sold over 16 million e-books globally. Compared to 2014, sales slipped slightly by 0.4%. Penguin continued to expand its digital business in all markets, while e-book sales were affected by new retail sales terms in the United States.

Bestsellers

Among the year’s top performers was Paula Hawkins’s debut novel The Girl on the Train, which sold more than seven million copies in the English- and German-speaking world across all Penguin Random House formats including print, e-book and audiobook. Grey, the new E.L. James novel in the Fifty Shades series, sold 8.5 million copies in English, German and Spanish. Exceptional bestsellers in children’s and young adult books included Dr. Seuss titles, which collectively sold 10.8 million copies, and Diary of a Wimpy Kid: Old School by Jeff Kinney, which sold 1.2 million copies.

US

In the United States, 584 Penguin Random House titles were placed on the New York Times bestseller lists in 2015, with 79 at number one. Top-selling books in 2014 were Rogue Lawyer by John Grisham, The Life-Changing Magic of Tidying Up by Marie Kondo and Between the World and Me by Ta-Nehisi Coates. Children’s and YA titles such as Paper Towns by John Green and new novels by James Dashner and Rick Yancey also performed well.

UK

Domestic imprints had 211 titles on the Sunday Times bestseller lists in 2015, with 31 at number one. Top sellers included Grey by E.L: James, Girl on the Train by Paula Hawkins, Harper Lee’s Go Set a Watchman and To Kill a Mockingbord, and Jeff Kinney’s Diary of a Wimpy Kid: Old School.

Germany

Die Betrogene by Charlotte Link and Altes Land by Dörte Hansen were the bestselling titles in Germany.

Spain/Latin America

Penguin Random House Grupo Editorial showed a slight recovery during 2015, despite the highly volatile Spanish market, while performance was strong in Latin America. Top-selling books in 2015 included Hombres buenos by Arturo Pérez-Reverte, El amante japonés by Isabel Allende and El mundo azul by Albert Espinosa. PRH made significant progress through the successful integration of Santillana’s publishing operations, which were acquired in 2014.

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