Dusseldorf Many people associate the name Klett with their school days. Along with Cornelsen and Westermann, the family business from Stuttgart is one of the major providers of textbooks. But Klett has long since discovered other sources of income: 30 percent of its sales of 985 million euros make the Klett Group as the operator of day care centers and schools, 20 percent come from the business with distance learning schools.
In these two company segments, the group now wants to expand on another continent: in Africa. The family business has invested in Rising Academies, which runs its own schools in Ghana and Sierra Leone and produces curricula that are used in educational institutions across the continent.
“Africa is interesting for us because the thirst for education is huge there and state systems are hardly able to do justice to it,” says Christian Döttinger, who is responsible for day care centers and schools on the Klett board.
The project is economically interesting for the company because parents in Africa pay school fees. The fees are small in individual cases, explains Döttinger. “With the large number of potential customers, however, economically viable business models are possible.”
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The family business also sees opportunities in the area of universities: A cooperation with an African university is planned in order to give students there access to German universities. Klett wants to earn money with tuition fees.
Dual training system in South Africa
The group is also examining the possibility of offering dual courses of study together with companies in the South African capital of Pretoria and with the support of the German Chamber of Commerce. In 2024 it could be so far. The education researcher Heiner Barz can understand the step taken by the Klett Group: “Abroad there is great interest in German educational opportunities because they enjoy a good reputation.”
Christian Döttinger, Lothar Kleiner, David Klett, Tilo Knoche and Philipp Haussmann (from left) manage the company in the year of its 125th anniversary.
(Photo: Klett Group)
However, the professor of educational science at the University of Düsseldorf fears that private school authorities will not be able to resolve the social divide in Africa. “People from the lower classes can rarely afford such an education.”
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Klett is not the only German company that is increasingly involved on the continent. According to a survey by the German-African Business Association published on Tuesday, 43 percent of members are planning higher investments there in 2023 than in the year that is ending.
The Klett board members traveled to various African countries this year to get a first-hand impression. They also turned down potential deals. In one country, the state wanted to influence the range of education, reports Lothar Kleiner, who is responsible for adult and further education business. “We will not bend.”
Kleiner sees the “first seedlings” in the business in Africa. If the project works well, they want to expand it further. “We are not a financial investor and want to act on a long-term basis,” says Kleiner.
Klett has been in family hands for 125 years
This year, the Klett Group is celebrating its 125th anniversary. Ernst Klett founded the company as a publishing house in 1897. In the meantime, it has become an educational company operating throughout Europe. The Klett Group includes more than 80 companies and over 560 brands, such as Pons or Langenscheidt. In addition to printed and digital school media, the group also publishes the German version of the fantasy series “Lord of the Rings”.
In Germany, the company operates 140 day-care centers and 40 schools. There are also two correspondence schools and six on-campus universities such as the Euro-FH in Hamburg or the International Business School in Cologne.
Sales rose to 985 million euros in 2021 – an increase of 60 percent compared to 2017. During this time, earnings before taxes climbed from almost 26 to a good 40 million euros. Klett benefits from the fact that many citizens spend more money on education and companies increasingly support further training for their employees. During the pandemic, the family business benefited from the fact that distance learning universities were already prepared for online teaching.
In addition, Klett covers needs that state institutions cannot meet. According to the Bertelsmann Foundation, there will be a shortage of almost 384,000 daycare places in the coming year. The day-care centers and schools operated by the family company have special priorities, for example in the areas of languages or natural sciences, according to Klett manager Döttinger.
Experts like the Düsseldorf education researcher Barz have been observing for some time that interest in private schools is growing steadily. About ten percent of the students learn in such institutions. “Private schools have a good image – and often rightly so,” says Barz.
Critics accuse private schools of exacerbating social divisions. Barz objects, however, that the state saves money because it only subsidizes the facilities after a few years and only with 60 percent of the funds from public schools. The private institutions have to cover the rest with school fees.
Crises burden Klett Group
In the anniversary year, however, the Klett management fears weak development due to inflation and rising energy prices. After the outbreak of the war in Ukraine, the number of new enrollments fell, particularly at correspondence schools, reports Klett manager Kleiner. “Many 20 to 40-year-olds study with us, who are often at the beginning of their professional development. Due to the energy price crisis, they now lack the money for privately financed further training.”
In the area of day-care centers and schools, Klett’s results are being impacted by the rise in energy prices. “We cannot increase our income in this area because our scope for fees for schools and day-care centers is usually fixed by the state,” explains Döttinger.
Klett still generates around 50 percent of its sales in its core business. The textbook publisher also offers its teaching materials in digital form. However, teachers and schools often still ask for the printed books – even if this is slowly changing after the pandemic.
As a representative of the fourth Klett generation, Philipp Haussmann is at the head of the publishing house. David Klett is another family member on the board, and there are also three external managers on the board. The head of the supervisory board is Haussmann’s godfather, Michael Klett. He led the company from the mid-1970s to 2009.
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