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| Fifty Shades of Grey publisher Random House posts record profits | Fifty Shades of Grey publisher Random House posts record profits |
| (6 months later) | |
| EL James's Fifty Shades trilogy sold more than 70m copies in 2012, driving Random House to record annual revenues and profits. | EL James's Fifty Shades trilogy sold more than 70m copies in 2012, driving Random House to record annual revenues and profits. |
| The publisher's operating profit leapt 75% year on year to €325m (£275.7m) in 2012. Revenues at the Bertelsmann-owned company, which is awaiting final clearance on a merger with Pearson's Penguin, grew 22.5% year-on-year to €2.1bn. | The publisher's operating profit leapt 75% year on year to €325m (£275.7m) in 2012. Revenues at the Bertelsmann-owned company, which is awaiting final clearance on a merger with Pearson's Penguin, grew 22.5% year-on-year to €2.1bn. |
| James' Fifty Shades of Grey and sequels Fifty Shades Darker and Fifty Shades Freed became the book publishing phenomenon of 2012, shifting more than 70m copies between March and December. | James' Fifty Shades of Grey and sequels Fifty Shades Darker and Fifty Shades Freed became the book publishing phenomenon of 2012, shifting more than 70m copies between March and December. |
| About 50% of revenues from the trilogy were from ebooks, compared to Random House's global average of about 20% from digital sales. Fifty Shades accounted for almost one in 10 of the 750m books Random House sold globally in print or online across the year. | About 50% of revenues from the trilogy were from ebooks, compared to Random House's global average of about 20% from digital sales. Fifty Shades accounted for almost one in 10 of the 750m books Random House sold globally in print or online across the year. |
| The runaway success of Fifty Shades helped Bertelsmann maintain overall group profit levels, despite tough advertising conditions for its TV, magazine and music publishing businesses. | The runaway success of Fifty Shades helped Bertelsmann maintain overall group profit levels, despite tough advertising conditions for its TV, magazine and music publishing businesses. |
| "In 2012 our profits and sales hit an absolute record level, a historic all-time high," said the Random House chairman and chief executive, Markus Dohle. "Our success has shown again one thing very clearly, that the core of our business in the 21st century, in a digital age, remains the same. It is so important to continually invest in content and creativity and to market that well." | "In 2012 our profits and sales hit an absolute record level, a historic all-time high," said the Random House chairman and chief executive, Markus Dohle. "Our success has shown again one thing very clearly, that the core of our business in the 21st century, in a digital age, remains the same. It is so important to continually invest in content and creativity and to market that well." |
| The Bertelsmann chief executive, Thomas Rabe, also hailed the success of Fifty Shades, adding that Random House had 33 books top the New York Times 2012 bestseller list, including John Grisham's The Racketeer and Rod Stewart's autobiography. | The Bertelsmann chief executive, Thomas Rabe, also hailed the success of Fifty Shades, adding that Random House had 33 books top the New York Times 2012 bestseller list, including John Grisham's The Racketeer and Rod Stewart's autobiography. |
| "Clearly Fifty Shades was the main driver but it was not the only one," Rabe said, speaking in Berlin on Tuesday morning as the company unveiled its 2012 results. "In the middle of May we have Dan Brown's Inferno coming." | "Clearly Fifty Shades was the main driver but it was not the only one," Rabe said, speaking in Berlin on Tuesday morning as the company unveiled its 2012 results. "In the middle of May we have Dan Brown's Inferno coming." |
| Overall Bertelsmann nudged group profit up slightly to €619m in 2012, as total group revenues rose 4.5% year on year to €16.1bn. | Overall Bertelsmann nudged group profit up slightly to €619m in 2012, as total group revenues rose 4.5% year on year to €16.1bn. |
| Rabe said he expected revenues to hit €17bn this year and €18bn in 2014, as the benefits of moves such as the merger with Penguin fuel Bertelsmann's bottom line. | Rabe said he expected revenues to hit €17bn this year and €18bn in 2014, as the benefits of moves such as the merger with Penguin fuel Bertelsmann's bottom line. |
| Senior executives are quietly confident of gaining European competition regulator approval for the Random House/Penguin deal from Brussels in the next month. Clearance is also yet to be given in China. | Senior executives are quietly confident of gaining European competition regulator approval for the Random House/Penguin deal from Brussels in the next month. Clearance is also yet to be given in China. |
| "Bertelsmann is back on a growth trajectory after years of declines and portfolio adjustments," Rabe said. "We will maintain this accelerated pace, particularly in the expansion of our growth platforms, such as television production, financial services, rights management and education." | "Bertelsmann is back on a growth trajectory after years of declines and portfolio adjustments," Rabe said. "We will maintain this accelerated pace, particularly in the expansion of our growth platforms, such as television production, financial services, rights management and education." |
| Bertelsmann is also the majority shareholder in pan-European broadcaster RTL, the parent company of London-based The X Factor co-producer FremantleMedia, and owns music publisher BMG and magazine business Gruner + Jahr. | Bertelsmann is also the majority shareholder in pan-European broadcaster RTL, the parent company of London-based The X Factor co-producer FremantleMedia, and owns music publisher BMG and magazine business Gruner + Jahr. |
| Rabe is seeking to raise funds for acquisitions through the sale of a 17% stake in RTL starting next month. He said Bertelsmann could go on a buying spree, spending as much as €3bn over the next three years. | Rabe is seeking to raise funds for acquisitions through the sale of a 17% stake in RTL starting next month. He said Bertelsmann could go on a buying spree, spending as much as €3bn over the next three years. |
| "We are not looking at the big acquisitions of several billion euros, that is not in the strategic profile of Bertelsmann," he said. "We are looking at medium-sized platforms of €500m to €700m, and we are looking at options out there." | "We are not looking at the big acquisitions of several billion euros, that is not in the strategic profile of Bertelsmann," he said. "We are looking at medium-sized platforms of €500m to €700m, and we are looking at options out there." |
| Rabe identified areas including TV production and BMG, of which Bertelsmann took full control from partner KKR earlier this month, as two divisions that will have money for acquisitions. | Rabe identified areas including TV production and BMG, of which Bertelsmann took full control from partner KKR earlier this month, as two divisions that will have money for acquisitions. |
| RTL had a mixed year with revenues up 3.2% to €6bn, thanks primarily to its flagship German business. Operating profits, however, were down 5% to €1.1bn. RTL, which owned UK broadcaster Channel 5 before selling it to Richard Desmond in 2010, saw declining TV ad revenues in almost all its other European markets. | RTL had a mixed year with revenues up 3.2% to €6bn, thanks primarily to its flagship German business. Operating profits, however, were down 5% to €1.1bn. RTL, which owned UK broadcaster Channel 5 before selling it to Richard Desmond in 2010, saw declining TV ad revenues in almost all its other European markets. |
| Bertelsmann remains heavily dependent on its TV division. It accounted for 63% of the parent company's roughly flat total operating profits of €1.74bn last year. | Bertelsmann remains heavily dependent on its TV division. It accounted for 63% of the parent company's roughly flat total operating profits of €1.74bn last year. |
| FremantleMedia, which makes shows including The Price is Right and The Apprentice, fuelled the revenue boost, particularly with the performance of American Idol in the US. Operating profit at Fremantle "declined slightly" last year, according to Bertelsmann. | FremantleMedia, which makes shows including The Price is Right and The Apprentice, fuelled the revenue boost, particularly with the performance of American Idol in the US. Operating profit at Fremantle "declined slightly" last year, according to Bertelsmann. |
| RTL notched up more than 2.4bn online video views with 300m on mobile devices in 2012. There were about 4.5bn views of FremantleMedia content, such as The X Factor clips, on YouTube. | RTL notched up more than 2.4bn online video views with 300m on mobile devices in 2012. There were about 4.5bn views of FremantleMedia content, such as The X Factor clips, on YouTube. |
| Gruner + Jahr continued to struggle with revenues down 3% year on year to €2.2bn and operating profit down almost 28% to €168m. | Gruner + Jahr continued to struggle with revenues down 3% year on year to €2.2bn and operating profit down almost 28% to €168m. |
| The corporate investments division, which includes BMG, reported revenues of €471m, down from €507m in 2011, with an operating loss of €38m. | The corporate investments division, which includes BMG, reported revenues of €471m, down from €507m in 2011, with an operating loss of €38m. |
| Bertelsmann derives around 80% of its revenues from the European region, and Rabe said he was targeting other growth regions such as China, India and Brazil. RTL recently launched a TV channel in India, its first outside Europe. | Bertelsmann derives around 80% of its revenues from the European region, and Rabe said he was targeting other growth regions such as China, India and Brazil. RTL recently launched a TV channel in India, its first outside Europe. |
| Bertelsmann's net debt fell by almost a third €1.2bn. The company took a €405m charge relating to its declining magazine business and its other media operations in the ailing markets of southern Europe. | Bertelsmann's net debt fell by almost a third €1.2bn. The company took a €405m charge relating to its declining magazine business and its other media operations in the ailing markets of southern Europe. |
| The company employees 104,000 staff, with just over 20% outside Europe. | The company employees 104,000 staff, with just over 20% outside Europe. |
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