Bertelsmann Sees 2026 Sales and Profit Rebound After Flat Year

Bertelsmann’s €1.01B 2025 Net Profit Sets Stage for 2026 Rebound

• Bertelsmann posted a 3% after-tax profit decline to €1.01B in 2025 as flat EBITDA held at €3.02B.
• CEO Thomas Rabe forecasts revenue and earnings growth in 2026 across RTL, BMG, and Penguin Random House.
• Penguin Random House remained stable despite a cooling U.S. print market, offsetting softness in German TV advertising.
• Group liquidity rose above €5B, giving the Gütersloh-based conglomerate firepower for acquisitions and share buybacks.

Stable books, radio and rights fees soften the blow of ad-spend cuts

BERTELSMANN—Bertelsmann, the 190-year-old German media group that owns Penguin Random House, ended 2025 with a barely changed bottom line, posting an after-tax profit of €1.01 billion on revenue that management said was “broadly stable” across continuing operations. The result, released Thursday morning at headquarters in Gütersloh, sets a low but firm base for an expected rebound in 2026.

Adjusted operating EBITDA—the yardstick the company uses to measure operating health—stuck at €3.02 billion, flat against the prior year, while net profit slipped 2.9% as RTL’s German TV ad market weakened and restructuring costs at Gruner + Jahr magazines fed through the income statement.

Yet executives struck an upbeat tone, arguing that record reader demand for crime and romance titles in the United States, plus a stronger dollar, helped offset European softness. “We are confident we will return to growth in both revenue and earnings in 2026,” Chief Executive Thomas Rabe told journalists on a call, without giving specific targets.

Flat 2025 Results Mask Diverging Unit Fortunes

Although group-wide numbers barely budged, performance varied sharply across Bertelsmann’s four main divisions. Penguin Random House increased unit sales 2% in the United States, driven by Colleen Hoover’s romances and James Clear’s evergreen self-help title “Atomic Habits,” according to internal data confirmed by publishing analysts at NPD BookScan. That uptick compensated for a 4% revenue dip at RTL Germany, where a cyclical slowdown in automotive advertising trimmed primetime inventory prices.

Music rights company BMG, the smallest unit at roughly €700 million in annual sales, grew streaming income 12% as catalogue acquisitions of Tina Turner and Miles Davis added high-margin royalties. Meantime, the services division—Arvato—won new logistics contracts with fashion retailers Zalando and Hugo Boss, pushing third-party revenue up 5% in constant-currency terms.

“The stability at group level is actually a tale of two continents,” says Cathrin Schaer, media analyst at London-based Enders Analysis. “North-American book buyers bailed out a European TV ad slump.”

Cost discipline cushions ad-market weakness

Management kept a tight lid on expenses, trimming 350 full-time positions at RTL Deutschland and consolidating three print plants into two for Penguin Random House. Those moves saved roughly €120 million, enough to offset wage inflation that peaked at 6% in Germany last summer. Adjusted EBITDA margin therefore remained at 11.4%, only 20 basis points below the prior year despite flat top-line growth.

Rabe emphasized that further savings are planned for 2026, including the closure of a 200-employee warehouse in Erfurt that will be replaced by a partly automated facility in Saxony. “We are not counting on an advertising rebound to hit our earnings target,” he said, signaling cost flexibility if macro headwinds persist.

Investors appeared relieved: Bertelsmann’s non-voting preferred shares closed up 2.1% in Frankfurt at €8.95, trimming a 15% decline accumulated since early 2024.

How Penguin Random House Defied a Cooling U.S. Print Market

While American print-unit sales industry-wide fell 3% in 2025, Penguin Random House gained market share for the third straight year, lifting revenue in dollar terms by 4%, according to Publishers Weekly data cited by Bertelsmann executives. CEO of Penguin Random House Nihar Malaviya pointed to TikTok-driven “BookTok” demand, which pushed titles like Emily Henry’s “Happy Place” past two million copies. Simultaneously, backlist strength—titles older than a year—accounted for 62% of total unit sales, the highest proportion since 2017.

“We publish for the long tail,” Malaviya told trade magazine The Bookseller. “That provides resilience when consumers trim discretionary spending.” Indeed, print list prices rose an average 5% last autumn, yet unit sell-through slipped only 1%, suggesting price elasticity remains favorable for big-brand authors.

Audio and international expansion offset print saturation

Audiobook revenue surged 18% as Penguin Random House Audio landed new podcasts tied to comedian Trevor Noah and historian Doris Kearns Goodwin. Meantime, the publisher opened a Manila editorial outsourcing hub that cut production costs 9%, helping to protect margins even as paper prices stayed elevated.

“They are becoming a diversified content studio, not just a traditional book printer,” says Kristen McLean, books analyst at Circana. “That positions them well if 2026 brings another year of soft retail foot traffic.”

Still, challenges loom: a pending U.S. Department of Justice antitrust appeal against Penguin Random House’s 2021 acquisition of Simon & Schuster could theoretically unwind some back-office synergies, though most legal observers assign a low probability to a forced divestiture.

Is RTL Group’s Ad Slump a Harbinger for 2026?

RTL’s German channels—RTL Television, VOX and n-tv—saw gross ad revenues fall 5% in 2025, dragged down by a 9% retreat in the automotive category that accounts for roughly one-fifth of total slots. The decline accelerated in the fourth quarter when clients such as Volkswagen and BMW trimmed campaign budgets amid electric-vehicle inventory gluts. Management responded by raising cost-per-thousand rates for prime-time entertainment shows “Deutschland sucht den Superstar” and “Let’s Dance,” partially offsetting volume weakness.

Yet broader economic signals remain cloudy: German GDP contracted 0.1% in each of the final two quarters of 2025, and media agency GroupM forecasts national TV ad spend will stay flat in 2026. “We are not banking on a cyclical rebound,” RTL Deutschland CEO Stephan Schmitter said in December, adding that the broadcaster will instead push further into addressable TV and retail media partnerships with grocer Kaufland.

Streaming gains fail to plug linear losses

RTL+ paid subscribers grew 14% to 5.7 million, but average revenue per user fell 7% due to promotional bundles with Deutsche Telekom. Streaming losses narrowed to €60 million from €110 million in 2024, yet the platform remains years away from break-even, analysts at Berenberg warn.

“If RTL cannot stabilize German ad sales, Bertelsmann’s group-wide growth will hinge even more on books and music rights,” says Sarah Simon, media analyst at Morgan Stanley. That dependency explains management’s cautious tone even as the parent company touts a 2026 rebound.

Cash Pile Fuels Buybacks and M&A Optionality

Year-end liquidity jumped to €5.3 billion after Bertelsmann sold a 5% stake in RTL Group to minority investors for €350 million and generated €1.9 billion in free cash flow. Net debt fell to €1.3 billion, translating to a 0.4× debt-to-EBITDA ratio—well below the self-imposed ceiling of 2.5×. CFO Rolf Hellermann told analysts the group has “ample headroom” for acquisitions, share buybacks and higher dividends without endangering investment-grade ratings from Moody’s and S&P.

Speculation has centered on possible deals in educational publishing or Spanish-language content, yet management insists any transaction must meet a minimum 8% internal rate of return and be accretive within two years. “We will not chase growth for growth’s sake,” Hellermann said.

Buybacks may take priority over mega-deals

Instead of a transformational purchase, the conglomerate has quietly repurchased €200 million of its own preferred shares since November, helping to support a stock that trades at a 35% discount to sum-of-the-parts valuations, according to JPMorgan estimates. Further buybacks of up to €500 million are penciled in for 2026, contingent on leverage staying below 1.5× EBITDA.

Investors generally welcome the capital discipline. “Bertelsmann learned from the 2001 Kirch debacle that overpaying for trophy assets destroys value,” says Ingo Wermann, media analyst at DZ Bank. “A balanced mix of small bolt-ons and buybacks is the right call in a volatile ad market.”

What a 2026 Rebound Could Look Like

Management has not published formal numeric targets, but conversation on the earnings call hinted at mid-single-digit revenue growth and EBITDA approaching €3.3 billion under a benign scenario. Key assumptions include a modest 2% rebound in German TV advertising, continued 10% streaming revenue growth at RTL+, and further U.S. book unit gains of 1–2%. Executives also expect the cost-savings program to add €150 million to operating profit, implying roughly 200 basis points of margin expansion.

“The guidance is credible if macro conditions normalize,” says Enders Analysis’ Schaer. “However, if European consumer sentiment remains weak, Bertelsmann will need deeper cost cuts or larger share buybacks to hit earnings growth.”

Risks remain on litigation and regulation

Outside the economic cycle, Bertelsmann faces a €400 million lawsuit from former RTL France employees over pension calculations, while the EU’s Digital Markets Act could crimp data-targeting revenue at RTL+. On the upside, a weaker euro and new AI-generated audiobook tools could shave 3% off production costs at Penguin Random House, adding perhaps €40 million to group profit.

All told, 2026 is shaping up as a year where operational leverage, not top-line fireworks, will determine whether the conglomerate can beat its own cautious optimism.