The Bookseller.com

2nd December 2008

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Random House sales slip in first half

04.09.07 Philip Jones

Random House registered a slight year-on-year decline in its first-half revenues and earnings, according to parent Bertelsmann. The group blamed the decline on the "cost of investing in future growth", and came despite a strong performance in the UK bestseller charts.

Sales reached €832m in the six months to end-June 2007, down from €859m a year earlier. Operating earnings before interest (EBIT) were €44m, against €48m in 2006.

Bertelsmann said: "In a global book market with a slow-growth trajectory. The decline is due to the cost of investing in future growth, especially for new publishing businesses in the UK, as well as the unfavorable US exchange rates." It added: "Random House outperformed the market in Germany and the UK. Random House UK Group titles accounted for 30% of the Sunday Times bestseller lists. In the US, Random House placed more than 100 titles on the New York Times bestseller lists."

In his regular letter to staff, Random House Group chief executive Peter Olson said: "The company is having a strongly profitable 2007. In the Bertelsmann half-year press  release, however, you'll read about a small decrease in Random House worldwide  earnings over the same period last year, which is attributable to our investments in  overseas growth and the decline in value of the dollar against the euro." He added: "The potential ongoing impact of the jittery national economy on our book buyers will have us working smarter for every sale. This is just the kind of challenge the Random House publishing and sales  teams long have turned into winning opportunities."

Overall, Bertelsmann said revenues grew by 1.3% (adjusted), to €9bn. Operating EBIT grew by 1.9% compared with the first six months of 2006, to €714m.

Bertelsmann chairman & c.e.o. Gunter Thielen said: “Bertelsmann had a gratifying first half. Most of our businesses are on plan after six months. We can safely say that Bertelsmann is on track.”

Philip Jones Random House Bertelsmann