Strong Dollar Lifts Penguin Random House

Bertelsmann reported results for the first half of 2015 from Germany on Monday morning, with the strong dollar powering topline gains at Penguin Random House. Sales of €1.697 billion were up 236 million euros compared to a year, and EBITDA of €207 million was €48 million higher than a year ago, both "mainly due to exchange rate effects." (These totals include the separate Random House Germany, which was "near-stable" in the period. For all of 2014, RHG had sales of €279 million.) This reporting period also includes the incorporation of Santillana's trade publishing lines (where were acquired on July 1, 2014), where "an excellent performance in Latin America and double-digit growth in e-book sales more than offset the ongoing challenges in the Spanish book market." But the currency exchange impact is significant. As we told you earlier in the year, Penguin Random House is the biggest winner among the large trade publisher when the dollar rises against the euro and you can see that -- as indicated in March -- with flat sales Penguin Random House US could contribute on the order of 350 million euros more this year than in 2015 on dollar currency exchange alone. As Bertelsmann indicates in their full half-year report, the average exchange rate for the current results has the euro worth 1.152 dollars, compared to a rate of 1.3707 a year ago. (Inverted, that means every dollar buys .868 euros, compared to .73 euros a year ago.) Put another way, the dollar was worth 19 percent more converted into euros, while Penguin Random House sales overall rose 16 percent. If PRH US sales were $1 billion for the first six months, for example, that would contributed €138 million more this year than it would have a year ago. With more than 4.5 million copies sold, Paula Hawkins's debut novel The Girl on the Train was the company's top-selling title so far in 2015, moving over 4.5 million units , and EL James's Grey sold over 3.5 million copies in the first two weeks on sale. Bertelsmann indicates that the total employee count fell at Penguin Random House, from 12,812 people as of July 1, 2014 down to 12,381 this year. (That employee count had grown last year by almost 1,000 people, in part due to the Santillana acquisition.) Spokesperson Stuart Applebaum tells us that reduction is due to "a variety of integration-related initiatives worldwide, including our fulfillment center consolidations in the US." Companywide, Bertelsmann reported first half sales of €8.040 million, up €194 million on the topline, but with an "organic decline in revenues" of half of one percent after taking currency exchange and acquisitions. Release Full report