Improved performances throughout Random House's global operations helped increase operating profits 22% in 2004, to 140 million euros ($188 million). Total revenue rose by less than 1%, to 1.79 billion euros ($2.4 billion), as the weak dollar limited gains. The boost in profits lifted RH's operating margin to 7.8% in 2004, compared to 6.4% in 2003. Competitors Penguin and Harper Collins had margins of 6.9% and 12.4%, respectively, in their fiscal years.
In his letter to employees, Random House chairman Peter Olson said that in addition to solid gains in the U.S., Random had record years in the U.K. and Canada, with operating results in Germany also improving. Olson noted that Random conducts about 70% of its business in dollars, a weaker currency than the euro, hurting overall gains.
Olson did not have much to say about prospects for 2005, only noting that Random is "off to a very good start." Early successes in the year include French Women Don't Get Fat, now up to 700,000 copies in print; Girls in Pants, with more than 400,000 copies; and the trade paper edition of Dreams from My Father by Barack Obama.
Bertelsmann also reported that sales in its direct group, home to its book and music clubs, fell to 2.2 billion euros in 2004 from 2.3 billion euros, although earnings improved. Results at Bookspan "showed positive development," Bertelsmann reported, with improved profitability. Bookspan is losing Seth Radwell, president of the marketing and editorial group, who joins Scholastic April 18 to run e-Scholastic, the publisher's online information and e-commerce division. Bookspan will not replace Radwell, but has divided his duties among three executives.
