Full-year revenue dropped 4.9% in 2014, a year marked by Hachette Book Group’s bruising standoff with Amazon over ebook profit margins, which ended in November with a new distribution contract restoring a version of agency ebook pricing to the publisher.
Digital sales shrunk to 30%, down 3% since 2013, when ebooks and digital audiobooks together made up a third of Hachette’s overall revenue.
Hachette Livre, the division of parent company Lagardère that includes the U.S.-based Hachette Book Group, saw profits decline 11.7%, which the company attributes in part to an unfavorable comparison to an “unusually high number of major best-sellers” in 2013.
At Hachette Book Group: HBG revenues were down 4.9% compared to 2013, and HBG’s annual sales accounted for 24% of Hachette Livre’s overall sales last year (versus 25% in 2013). CEO Michael Pietsch said, “Hachette came through a challenging year having achieved many successes — including publishing hundreds of bestsellers, winning several major awards, and acquiring Black Dog & Leventhal at the close of 2014. We’ve had a superb start to the year, with a Caldecott Medal and a Grammy Award, and we’re looking forward to one of the strongest lineups that we’ve ever published coming in 2015.”
HBG had 240 titles (171 print and 69 ebook) titles on the New York Times bestseller list in 2014, including 39 #1 bestsellers. HBG’s digital sales in 2014 (ebooks and downloadable audio) represented 30% of net sales, compared to 33% in 2013. The major releases driving HBG sales for 2014 include THE GOLDFINCH by Donna Tartt, THE TARGET by David Baldacci, THE SILKWORM by Robert Galbraith (J.K. Rowling), THE BEST OF ME and THE LONGEST RIDE by Nicholas Sparks, HOPE TO DIE by James Patterson, UNLUCKY 13 by James Patterson and Maxine Paetro, GRAIN BRAIN by Dr. David Perlmutter MD, THE BURNING ROOM by Michael Connelly, and I AM MALALA by Malala Yousafzai.
At Hachette Livre: Hachette Livre (Lagardère Publishing) delivered profit of €197 million, down 11.7%. The division delivered 52% of Lagardère’s overall EBIT in 2014. Net sales for the full year were €2.004 billion, down 3.0%. 2014 was, as expected, down from 2013 when the publishing division had an unusually high number of major bestsellers. Hachette Livre’s “operating margin remains high at 9.8%,” according to the press release, “but nonetheless receded by one point.” The shift was mainly due to softer sales in General Literature in France and in English speaking countries, although a focus on cost efficiency helped limit its effects. Digital sales growth has slowed, with ebooks accounting for 10.3% of total division sales (vs 10.4% in 2013). In the UK ebooks accounted for 31% of adult trade sales (up from 27% in 2012).
At Lagardère: the company delivered net sales of €7.170 billion, down 1.8%, and operating profit of €342 million, up 4.7% over the prior year.