Sales at Penguin Random House rose 7.3% in 2023 over 2022 due to a combination of acquisitions and organic growth, parent company Bertelsmann reported. Worldwide revenue increased to €4.53 billion (about $4.92 billion at current exchange rates), but profits fell by €2 million, to €664 million (about $720 million). The drop in EBITDA (earnings before interest, taxes, depreciation, and amortization) was due to higher costs and the negative impact of exchange rates, Bertelsmann said. As a result, PRH’s operating margin fell to 14.6%, from 15.8% in 2022.
During 2023, PRH made a total of 10 acquisitions across its global publishing business. Those acquisitions included upping its stake in Sourcebooks from 45% to a majority ownership position of 53%, along with the acquisitions of Playaway in February, Callisto Media in May, and Hay House in December. In financial notes, Bertelsmann was particularly upbeat about the prospects for Sourcebooks, explaining that a more thorough analysis of the publisher since PRH had acquired majority control revealed “significantly higher” sales and profit growth potential, which it attributed mainly to bringing Sourcebooks’ content to an international market.
International growth was a theme of both Bertelsmann’s presentation as well as the letter to employees from PRH global CEO Nihar Malaviya, who highlighted the global success of Prince Harry’s memoir Spare, which sold 3 million copies in the U.S. and a total of 6 million worldwide. Malaviya also pointed to other bestsellers from around the world, including El Viento Conoce Mi Nombre by Isabel Allende and Atlas: Die Geschichte von Pa Saltl by Lucinda Riley and Harry Whittaker. (In its press release, Bertelsmann put PRH in its “global content” bucket, which also includes the Fremantle production company and the BMG music subsidiary).
Malaviya acknowledged that 2023 was a difficult year for PRH US, a year which featured an early retirement program, layoffs, and another corporate restructuring. Those actions, Malaviya wrote, “put us on solid footing, and we are now in the best possible position we can be to continue investing in our authors and employees. I am confident about our collective future.”
The U.S. accounted for 58.3% of PRH’s worldwide revenue (€2.63 billion, or about $2.85 billon at current exchange rates) compared to 57% in 2022. In addition to Spare, other million-copy sellers in the year included Lessons in Chemistry, Outlive, and Taylor Swift: A Little Golden Book. In addition, Dr. Seuss books sold more than 9 million copies last year. U.S. revenue befitted a €176 million ($190 million) contribution from Sourcebooks (and earnings of €24 million) as well as sales of €23 million from Callisto.
Among the innovations made by PRH US in the year was the creation of BookBoost, a proprietary platform created with the help of AI technology, which, Berteslmann said, “leverages first-party data, machine learning, AI, and automation to assist with a book advertising campaign’s efficiency and impact.”
Malaviya closed his employee letter by reassuring employees that PRH has “a very clear strategy for creating the best publishing house for the next decade and century.” Emphasizing that “books are at the core of our strategy,” Malaviya added: “I firmly believe that there are many different paths to success in publishing and that together we have created the best environment for various publishing homes and creative visions to thrive.”
