Random House CEO Dohle Addresses Performance in Letter
The privately held Bertelsmann AG, which owns Random House, announced its corporate and divisional half-year results Thursday, reportedly earning 284 million euros (US$546.3 million) from January to June, compared to a loss of 51 million euros (US$74.9 million) a year earlier.
In a letter dated August 28, Markus Dohle, who took over as chairman and CEO of Random House on June 1, addressed his colleagues regarding Random House’s performance. He reported decreased operating revenue and profits from the previous year, due in part to the weak U.S. dollar and British pound, and increased freight and paper costs. He also noted that e-book revenue in the U.S. for the first six months of 2008 is double the company’s e-book revenue for all of 2008.
Here is the full text of Dohle’s letter:
Dear Random House Colleagues,
Bertelsmann’s announcement today of the operating results for the first six months of our 2008 fiscal year is the right moment for my first worldwide letter as Random House CEO. I’d like you to have a better understanding of how we are performing globally by giving you some of the facts behind our mid-year numbers. I want you to have a sense of what we have to accomplish together before the fiscal year ends. I also want you to know how much I truly value your efforts in these difficult economic times.
Even with promising semi-annual results from some of our companies, I am sorry to report that our operating revenue and profits for this period fell worldwide from the prior year.
There are several reasons for this decline: We were hit hard by the weak U.S. dollar and the British pound, the currencies which account for 80 percent of our sales revenue, against the euro, the currency for Bertelsmann’s fiscal-year reporting. In North America, we also faced higher publishing and operational costs for freight and paper. There is also no avoiding the reality that in this declining worldwide economy, consumer spending overall is decreasing.