29th March 2019

Bonnier Books UK reduces 2018 losses to £3.6m amid transformation programme

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Bonnier Books UK reduces 2018 losses to £3.6m amid transformation programme

Bonnier Books UK has made sizeable progress towards its goal of sustainable profitability as the core business experienced steady growth in 2018, including TCM growth of 52%.

 

  • Bonnier Books UK reduces operating losses by 76% in 2018 to £3.6m
  • Revenues increase 15% on 2017 to £71.5m; operating EBITA improves by more than £11m on 2017
  • The company is on track to deliver profitability in 2019

 

12 months to 31 December 2017 12 months to 31 December 2018
Group net revenue £62.4m £71.5m
Operational loss for year £(15.0)m £(3.6)m
Write down, prior years              £(19.7m) £nil
EBITA (loss) £(34.7)m £(3.6)m

 

Results for the 12 months ended 31 December 2017/2018:

Bonnier Books UK, the UK division of top 15 world publisher Bonnier Books, has reduced its losses to £3.6m in 2018 amid its ongoing transformation programme.

For the financial year to 31 December 2017, Bonnier Books UK underwent a balance sheet restructure resulting in write downs totalling £19.7m. Coupled with underlying operating losses of £15.0m, this gave rise to an EBITA loss of £34.7m for the year.

In 2018 the operating loss was reduced to £3.6m. Revenues were up by 15% to £71.5m and operating EBITA improved by over £11m on the previous year, demonstrating a sharp turnaround in the health of the business.

From 2014-2017, the business’ overheads steadily outgrew its rise in revenues and the company invested considerably in rights. In conjunction with the decision to fully align accounting policies in the UK with the wider Bonnier Books group, the 2017 result was negatively affected.

The write-downs have normalised the operating capital levels of the group and a full recapitalisation during 2017 and 2018 by Swedish parent company, Bonnier Books, has ensured the ongoing strength of the company’s balance sheet.

As part of a strategic decision to secure a long-term sustainable future for the business, the company announced plans in February 2018 to align itself more closely with its sister companies in the Bonnier Books group and increase its focus on traditional publishing, including narrative non-fiction and literary fiction.

At the same time, the company embarked on a change management programme, pursuing a number of operational efficiencies including a staff restructure.

Bonnier Books UK has continued to strengthen its publishing, increasing TCM growth by 52% in 2018 and doubling its number of Sunday Times bestsellers compared to 2017.

“Bonnier Books UK has made sizeable progress towards its goal of sustainable profitability … The latest figures for 2018 are testament to the operating strength of the company, a well-defined strategy for the future and a continually strengthening publishing programme … We remain fully committed to financially supporting the company as it continues to grow its presence, with the clear goal of becoming one of the UK’s top publishers.”

Jim Zetterlund,  Chairman of Bonnier Books UK and COO / CFO of  Bonnier Books

Jim Zetterlund, Chairman, Bonnier Books UK, said: “After a very weak 2017, Bonnier Books UK has made sizeable progress towards its goal of sustainable profitability and looks set to be back in the black by 2019. The latest figures for 2018 are testament to the operating strength of the company, a well-defined strategy for the future and a continually strengthening publishing programme, with standout successes across fiction, non-fiction and children’s. Through its recapitalisation during 2017 and 2018, the business is ideally positioned in the evolving book market to harness growth opportunities. We remain fully committed to financially supporting the company as it continues to grow its presence, with the clear goal of becoming one of the UK’s top publishers.”

During 2018, as part of its continued transformation programme, the company began the process of uniting its two trade divisions – Bonnier Zaffre and Kings Road Publishing – as one trade publisher. Its mass-market publishing division, Igloo Books, will continue to operate separately from Northampton. This will culminate in the trade business relocating under one roof for the first time in 2020.

From the 1st April 2018, the company will begin to rebrand its two trade divisions as one trade publisher, “Bonnier Books UK.”

“Our publishing has continued to reach new heights, by virtue of our wonderful authors, illustrators and brand partners and, of course, my dedicated colleagues.”

Perminder Mann, CEO, Bonnier Books UK

Perminder Mann, CEO, Bonnier Books UK, said: “Against a backdrop of change in 2018, our publishing has continued to reach new heights, by virtue of our wonderful authors, illustrators and brand partners and, of course, my dedicated colleagues – I would like to take this opportunity to say ‘thank you’ to them all for helping Bonnier Books UK to achieve such significant progress. I look forward to continuing to work with them to build on everything we have achieved so far.”

Business Highlights:

  • In 2018, the core business experienced steady growth, including TCM growth of 52%, and doubled its number of Sunday Times bestsellers from 11 to 22.
  • In the trade business, stand out successes included The Tattooist of Auschwitz by Heather Morris, which has sold nearly 3m copies worldwide; nearly a million Wilbur Smith books sold worldwide[1]; threeSunday Timesbestsellers from Lynda LaPlante; My Thoughts Exactly, Lily Allen’s critically-acclaimed memoir and no.1 bestselling audiobook; Gary Barlow’s no.1 bestselling autobiography, A Better Me, and I Let Him Go, the extraordinary book from Denise Fergus, the mother of James Bulger.
  • Fiction remains a key area of growth for the business. The Zaffre imprint recently celebrated three titles in the top 10 hardback fiction chart (Nielsen Bookscan, 12th March 2019) and in 2018, published two of the biggest-selling debut fiction hardbacks. 2019 will also see the launch of a new imprint dedicated to literary and narrative non-fiction.
  • In the mass-market business, stand out successes include the Disney ‘Twisted Tales and Villains’ series of middle-grade novels which have sold more than a million copies, a second successful publishing partnership with Aldi on its ‘Kevin the Carrot’ Christmas campaign and a range of innovative new formats, including the Disney Storybook Collection Advent Calendar.
  • Key trade titles for 2019 include No. 2 Sunday Times bestseller, The Familiars by Stacey Halls; The Beekeeper of Aleppo by Christy Lefteri; Cilka’s Journey– the sequel to The Tattooist of Auschwitz by Heather Morris; a new children’s publishing programme from international bestselling author, Wilbur Smith; a new Gigantosaurus publishing programme from Jonny Duddle to tie in with Disney TV show; the memoir of much-loved comic duo, Bob Mortimer and Paul Whitehouse and Ollie Ollerton’s SAS story, Break Point.
  • Across trade and mass-market, 2019 is set to be a strong year for the Disney and Marvel publishing programmes, with the much-anticipated release of Frozen 2, Toy Story 4 and Captain Marvel and Avengers: End Game.
  • During 2019, the senior leadership team will continue to bring together the company’s two trade divisions to create one London-based trade business, Bonnier Books UK. This will culminate in an office relocation during 2020, with the trade businesses working together under one roof for the first time in its history.

[1] Global sales of Wilbur Smith titles across all formats in 2018 and 2019 (Q1)