Profitability on record level. Strong digital growth. Significant investments. week 10 / 5 March 2015

Transcription

1 Profitability on record level. Strong digital growth. Significant investments. week 10 / 5 March 2015

2 week 10 / 5 March 2015 Profitability on record level. Strong digital growth. Significant investments. Cover Visual from the At a glance 2014 brochure s cover Publisher RTL Group 45, Bd Pierre Frieden L-1543 Luxembourg Editor, Design, Production RTL Group Corporate Communications & Marketing Think before you print backstage.rtlgroup.com backstage.rtlgroup.fr backstage.rtlgroup.de

3 QUICK VIEW Strong digital growth in 2014 RTL Group p.4 11 South East Asia plays cards RTL CBS Asia Entertainment HD p.12 Big Picture p.13 SHORT NEWS p.14 PEOPLE p.15 16

4 On 5 March 2015, RTL Group published its full-year results STRONG DIGITAL GROWTH IN 2014 Luxembourg 5 March 2015 RTL Group RTL Group s Executive Committee: Elmar Heggen, CFO of RTL Group, Anke Schäferkordt and Guillaume de Posch, Co-CEOs of RTL Group (from left to right) 4

5 With a strong finish to the year, RTL Group delivers another impressive set of financial results: EBITA and EBITA margin stable on very high level. Key financials Reported Group revenue was stable at 5,808 million (2013: 5,824 million). Higher revenue from Mediengruppe RTL Deutschland and from acquisitions (consolidation of BroadbandTV, SpotXchange and 495 Productions) was offset by lower advertising sales in France, the effect of the disposal of the French e-commerce service Mistergooddeal along with lower revenue from FremantleMedia and UFA Sports. RTL Group s digital revenue 1 continued to show very dynamic growth, up 26.6 per cent to 295 million (2013: 233 million) benefitting from organic growth and new acquisitions. The Group s EBITA was stable at 1,145 million (2013: 1,148 million), primarily driven by a significantly higher profit contribution from Mediengruppe RTL Deutschland. The reported EBITA margin was also stable, at 19.7 per cent. The net profit attributable to RTL Group shareholders decreased to 653 million (2013: 870 million). This was principally due to movements in impairment charges announced at the interim results. In 2014, RTL Group recorded a goodwill impairment on RTL Hungary amounting to 77 million. Conversely, the net profit for 2013 included a significant positive one-off effect of 72 million, resulting from the reversal of an impairment on RTL Group s holding in the Spanish broadcasting company Atresmedia. Based on the average share price in 2014 ( ), the total dividends for the fiscal year 2014 ( 5.50 per share) represent a dividend yield of 6.8 per cent. Outlook The TV advertising markets in 2014 reflected the overall macro-economic situation in Europe. All European net TV advertising markets in RTL Group s territories were up year-on-year, with the exception of France which was stable and Belgium which was down 2.8 per cent. This picture is expected to be similar in 2015 with overall slight growth expected. RTL Group currently expects its total revenue and EBITA 3 for the full year 2015 to be broadly stable. 1 Excluding e-commerce, home shopping and platform revenue for digital TV 2 Frankfurt Stock Exchange 3 Excluding one-offs Another impressive set of financial results in 2014 Next > 5

6 MEDIENGRUPPE RTL DEUTSCHLAND WITH ANOTHER RECORD EBITA; GROUPE M6 WITH SLIGHTLY HIGHER EBITA CONTRIBUTION Mediengruppe RTL Deutschland achieved its best financial result ever: EBITA increased by 5.0 per cent to 650 million (2013: 619 million). This improvement was mainly driven by significantly higher TV advertising revenue in the second half of the year and a growing digital distribution business The French net TV advertising market was estimated to be stable in The EBITA of Groupe M6 was slightly up to 209 million (2013: 207 million), driven by higher profit contributions from the company s diversification activities RTL Nederland s EBITA stable at 103 million mainly driven by higher platform revenue and diversification activities EBITA of RTL Belgium stable at 46 million; RTL Hungary reports an EBITA loss of 1 million (2013: profit of 15 million), mainly due to impairments resulting from the punitive advertising tax which came into effect in August 2014 FremantleMedia s EBITA decreased to 113 million (2013: 136 million). As explained at the Q3 results, this was due to the cancellation of X Factor US, lower revenue from American Idol and increased investments in digital businesses and the content pipeline A year of significant investments Next > 6

7 More co-operation accross the Group. More risk-taking. More thinking outside the box. Backstage talked to Anke Schäferkordt and Guillaume de Posch, Co-CEOs of RTL Group, about RTL Group s performance and investments in 2014 and, above all, about their plans to continue to transform RTL Group into an even stronger global force in broadcast, content, digital. Guillaume de Posch and Anke Schäferkordt, Co-CEOs of RTL Group Let s start with a classic question: how did RTL Group perform in 2014? Anke Schäferkordt: Despite challenging environments in France and Hungary, RTL Group once again delivered a very strong set of financial results. With another record year from our biggest profit contributor, Mediengruppe RTL Deutschland, our EBITA remained at the previous year s record level, and the EBITA margin was again close to 20 per cent. And despite more challenging market conditions than Germany, our TV broadcasters in the Netherlands, France, Belgium and Croatia also delivered higher or stable profits. Guillaume de Posch: In addition, we made significant progress in implementing our strategy across broadcast, content and digital. We successfully launched three new linear TV channels and invested more than 240 million to acquire rapidly growing digital businesses and the US production company 495 Productions. This is the highest investment level for acquisitions since So overall, 2014 was another very successful year for RTL Group, thanks to our highly dedicated staff and management teams. Do you plan to make further acquisitions in 2015 and beyond? Anke Schäferkordt: As demonstrated in 2014, our strong cash flows allow us to combine attractive dividend payments with significant investments. Our first priority has always been to further develop our Group, to make the right investments and achieve profitable growth. Clearly, we won t change our strict investment criteria. But with profit margins at high levels for most of our families of channels, and with mature TV and radio advertising markets in Europe, it s imperative to find the next growth drivers for our Group. A full-year EBITDA of 1.3 billion gives us a comfortable headroom for investments. And this does not include our recurring investments in programming, which is and will remain the heart of our business. Guillaume de Posch: Growing the Group through acquisitions may affect our short-term profitability. From investments in growing companies or start-ups we simply cannot expect the profit margins of 20 to 30 per cent we currently generate with our strong and established families of channels. However, we are ready to accept these longer payback Next > 7

8 phases for new investments especially with investments that further strengthen our digital businesses, as they will be key in making our Group future-proof. Let s have a look at the future of RTL Group s three main pillars broadcast, content and digital. To start with, what are the main challenges in the broadcasting business? Anke Schäferkordt: Above all, fragmentation of audiences and devices in the digital world makes our business more complex. It s getting more challenging to generate mainstream hits meaning blockbuster formats that reach mass audiences. This is why broadcasters and producers around the globe are relentlessly searching for the next big hit. What format has the potential to become the new Idols or Big Brother? Instead of new, real stand-out hits, what we ve seen in recent years is a series of smaller hits formats such as Take Me Out, Shopping Queen, Berlin Tag und Nacht. In a more complex digital world, our broadcasters have successfully tapped into new revenue streams. Yes, they still earn most of their money by selling 30-second commercials. TV advertising will remain indispensable for advertisers to build brands and to connect emotionally with their customers. But we have moved from one revenue stream to many. In some of our countries we now operate digital basic pay channels. We negotiate with platform operators to earn distribution revenues for our HD signals or for our on-demand services. And our platform revenue is growing fast, increasing by almost 19 per cent to 220 million in What more can RTL Group do to respond to this challenge? Guillaume de Posch: First of all, as Anke already pointed out, we always invest in the core of our business programming. The programme grids of our channels are not based on a few, isolated outperformers, but on a diverse slate of own-produced formats and acquired programmes. Nor are our ratings built on expensive output deals or sports rights. In many cases, we have a solid leadership across many time slots and throughout the whole week, based on a variety of genres. Anke Schäferkordt: Therefore, finding the new hits big and small is a joint priority for both our broadcasters and for FremantleMedia. We have a unique combination of a pan-european broadcasting group and a worldwide leader in content production. But we have to leverage our assets more strongly and this includes closer co-operation across the Group. Our broadcasters won t wait and hope that the next big hit will come from the international markets. We constantly ask ourselves what content will help us score with viewers in the future. We strongly believe in having our own exclusive formats that are shown only on our channels. As a consequence, we invest in development, starting our own initiatives. In other words: create, try and buy. We are already relying on this strategy, but we want to pursue it more aggressively. The same is true for FremantleMedia which has a major competitive advantage in being part of RTL Group: with our families of channels, we also have the platforms and the time slots to try out FremantleMedia s new formats. Talking about RTL Group s second pillar, content. What is your view on the current wave of consolidation in the international content production industry and what does it mean for FremantleMedia? Guillaume de Posch: The reasons for this consolidation are defensive and offensive at the same time. On the one hand, the theory is that the bigger you are, the safer you are because you can spread your risks across a larger geography or more content genres. On the other hand, being a larger content provider allows you to be a bigger supplier to new platforms such as Netflix and Amazon. Strengthening the creative pipeline and ultimately improving the profit margin of FremantleMedia requires targeted investments in new talent, genres and geographical areas, as recently demonstrated with the acquisition Next > 8

9 of 495 Productions. This acquisition allows our content arm to expand its share of the valuable US cable market and complements and diversifies the company s existing portfolio of content and clients in the biggest TV market in the world. With FremantleMedia, we have a crown jewel in our portfolio and we are all convinced and committed to be an active player when it comes to further consolidation. In a nutshell: we clearly aim to further scale up our global content arm. RTL Group may have leading market positions in broadcast and content. But what about pillar three, your digital businesses? Anke Schäferkordt: Online video is at the heart of our digital strategy and it s the focus of our investments in this space. RTL Group has beefed up its position in digital and now owns majority stakes in the number 1 multi-channel network for fashion, beauty and lifestyle, StyleHaul; the number 3 global MCN, BroadbandTV; the number 1 European MCN, Divimove; and one of the top five global platforms for programmatic video advertising, SpotXchange. As a result, our total online video views soared from 7 billion to more than 36 billion over the past two years. We have become the leading European media company in online video, currently generating 5.3 billion online video views per month. So with our recent investments, we ve accelerated our digital strategy. Now it will be our joint task to develop our rapidly growing reach in online video into a more significant and profitable third pillar of RTL Group. And we re making progress: in 2014, our digital revenue grew strongly, by almost 27 per cent to 295 million, admittedly from a small base. We are confident that these digital businesses combined with additional investments in the digital space will reach such scale over the next three years that they will become one of the growth drivers of RTL Group s total revenue. Next > Anke Schäferkordt and Guillaume de Posch, Co-CEOs of RTL Group 9

10 MAJOR PROGRESS IN IMPLEMENTING RTL GROUP S DIGITAL GROWTH STRATEGY In September, RTL Group completed the acquisition of a 65 per cent majority stake in the programmatic video advertising platform SpotXchange for a cash out of 104 million. Over 3 billion video ad decisions are now processed through the SpotXchange platform daily. The investment has significantly strengthened RTL Group s global scale across the entire online video advertising market and adds new technology- and data-based competencies In October, RTL Interactive in Germany acquired Econa Shopping (now renamed to Sparwelt) for a cash out of 29 million. Sparwelt.de operates curated advice and recommendation platforms for online shopping such as Sparwelt.de. It is the most significant acquisition in the history of RTL Interactive In December, RTL Group increased its Shareholding in StyleHaul to 94.0 per cent for a cash out of 84 million, further accelerating the Group s rapidly growing presence in the online video space. With 1 billion video views per month, StyleHaul is the leading multi-channel network (MCN) on Youtube for fashion, beauty and lifestyle a highly attractive segment for major advertisers In December, FremantleMedia increased its non-controlling shareholding in Divimove to 51 per cent. Divimove has become Europe s leading MCN with 900 million online video views per month RTL Group has developed massive scale in online video. In 2014, RTL Group s catch-up TV services, websites and multi-channels network (MCNs) attracted a total 36.4 billion online video views, up 117 per cent year-on-year and is among the five global player in online video views Next > 10

11 here you can read the full-year results press release Curious to know more about RTL Group s 2014 success stories? Download the publication At a glance 2014 from here 11

12 SOUTH EAST ASIA PLAYS CARDS RTL CBS Asia Entertainment HD Beginning on 28 February 2015, the same day as the release of the series in the US, RTL CBS Asia Entertainment HD has aired all 13 episodes of the third season of the critically-acclaimed and awardwinning series House of Cards. After the weekend watchathon, the series will air weekly every Wednesday at 21:55. Singapore 27 February 2014 As a TV network, we have taken a bold and unique step to air the complete series the same way as it premieres in the US, says Jonas Engwall, CEO of RTL CBS Asia Entertainment Network. Being first in Asia with the way we are delivering Season three all episodes back-to-back the same day as in the US, localised with subtitles, HD we are confident of giving audiences in the region a fantastic TV viewing experience and we believe this will curb alternative and illegal sources for the series that historically have been used. House of Cards We are extremely happy to be able to bring all 13 episodes of the latest season of House of Cards to audiences in the region at the same day the series is released in the US, adds Jennifer Batty, Executive Vice President Programming, RTL CBS Asia Entertainment Network. This shows our commitment to bring programmes as close to their original release dates as possible. ABOUT HOUSE OF CARDS Developed and produced by Beau Willimon (The Ides of March), House of Cards has earned several accolades including Kevin Spacey s most recent Golden Globe award for Best Actor in a Television Drama, Robin Wright s Golden Globe award for Best Actress in a Television Drama, as well as Emmy Awards for Outstanding Directing for a Drama Series, Outstanding Casting for a Drama Series, and Outstanding Cinematography for a Single-Camera Series. It was also honored as one of the American Film Institute s TV Programmes of the Year for

13 A successful digital preview On Friday 27 February 2015, the preview of the first episode of the series Les Marseillais en Thaïlande attracted more than 500,000 video views on Groupe M6 s catch-up platform 6play. Episode was broadcast following Monday (2 March 2015) on French channel W9.

14 SHORT NEWS 1/1 Cult favourite meets Netflix FremantleMedia Kids & Family Entertainment FremantleMedia Kids & Family Entertainment s animated series Danger Mouse has been added to Netflix line-up and is expected to air on Netflix in North and Latin America, Nordics, Benelux and Japan in spring United Kingdom 3 March 2015 Deutschland 83 moves northwards FremantleMedia International Following the previously announced partnership with SundanceTV that will see Deutschland 83 become the first German-language series to have ever aired on a major US network, FremantleMedia International has announced presales of the inspired cold war drama to SVT (Sweden), NRK (Norway), DR (Denmark), YLE (Finland) and RUV (Iceland). United Kingdom 4 March 2015 Luxembourg uncut RTL Télé Lëtzebuerg On 1 March 2015, RTL Télé Lëtzebuerg aired the first two episodes in a series of documentaries entitled routwäissgro (redwhitegrey) made by a group of writer-directors calling themselves Kollektiv 13. Their project won the call for television concepts issued by Luxembourg s National Support Fund for Audiovisual Productions (FONSPA) and RTL Télé Lëtzebuerg. Luxembourg 2 March 2015 From Cold War to Woodstock N-TV In his documentary series The Sixties, Hollywood legend Tom Hanks sets out in search of clues to the 60s of the last century. From 2 to 6 March 2015, N-TV airs the ten-part series nightly at 22:15. Germany 2 March

15 PEOPLE GEORGIA BROWN FremantleMedia International United Kingdom 25 February 2015 FremantleMedia International (FMI) has hired former Shine International executive, Georgia Brown, as Senior Vice President Scripted, as it seeks to further strengthen its primetime drama and comedy portfolio. Reporting to CEO of FMI, Jens Richter, Georgia Brown will work with the distribution teams at FMI to establish demand for new scripted projects and will work with third party writers and producers to deliver against these opportunities. She will also report to Sarah Doole as part of the Global Drama team, where Georgia will work with the in-house teams at FremantleMedia to develop projects and bring them to the market. Jens Richter says: Georgia is one of the industry s rising stars; she has excellent working relationships with some of the best writing and production talent in the business and a fantastic track record in deal closing. She will be instrumental in helping us become a powerhouse in primetime scripted drama. Sarah Doole adds: I am delighted to be working with Georgia again. She brings with her an infectious energy, industry knowledge and passion for drama and comedy. She also gets FremantleMedia s ambition for scripted and our desire to tell audiences the best stories from around the world. Georgia Brown comments: I have been immensely proud of my time at Shine International, where I have worked with some of the top creative in the industry. It is always difficult to leave such a talented group of people, and I d like to wish the new Endemol Shine Group all the best for the future, but the opportunity to join FremantleMedia at such an exciting time and with their ambitious plans for scripted was something I just could not resist. Georgia Brown, Senior Vice President Scripted at FremantleMedia International Brown joins FremantleMedia from Shine International where she was Senior Vice President of Acquisitions and oversaw projects such as Broadchurch and Code of a Killer and secured a first look deal for Shine International with scripted indie, Ecosse Films. Before Shine, Brown was previously commercial manager, indie drama at BBC Worldwide, the commercial arm of the British public broadcaster. She worked with over 120 independent producers in the UK and internationally to manage rights acquisitions and early investment. She worked on BBC Worldwide-distributed programming including Sherlock, Misfits, Primeval and Mad Dogs. 15

16 PEOPLE LÉON MAACK HAS LEFT US RTL Group Luxembourg 3 March 2015 Léon Maack It is with great sorrow that RTL Group has learned of the passing of Léon Maack, who died on 19 February 2015 at the age of 84. Léon, known as Loll Maack, joined the company on 1 March 1955 as a young engineer at the Junglinster broadcasting station, having been hired by Mathias Felten. Throughout his career as Technical Director, he maintained an innovative approach to CLT facilities in Luxembourg, at locations in Junglinster, Beidweiler, Hosingen, Dudelange and Kirchberg. He was particularly involved in the technical installation of the Marnach broadcasting station in 1956 and that of KB1 in Kirchberg, which opened in Thanks to him, the company was always at the forefront of technological progress. Léon Maack was also a Member of Senior Management from 1989 to He retired on 1 January 1994 after more than 38 years of service with the company. RTL Group would like to express its sincere condolences to his family. 16

17 More about Backstage BACKSTAGE IS AVAILABLE IN THREE LANGUAGES You can read Backstage in your preferred language in English, German or French. DAILY NEWS FROM ACROSS THE GROUP DIRECTLY IN YOUR INBOX In addition to the weekly newsletter we offer to registered users a daily newsletter available in three languages. AT RTL GROUP, WE CARE RTL Group is committed to effectively combine business success with socially responsible actions towards local communities and to protect the environment. Visit the Corporate Responsibility news section on Backstage (CR news) and find out how RTL Group aims to improve the societies in which we operate. backstage.rtlgroup.com backstage.rtlgroup.fr backstage.rtlgroup.de For more information, don t hesitate to contact the editorial team: Backstage@rtlgroup.com