RTL Group’s German and French businesses drive record Q3 results

RTL Group’s German and French businesses drive record Q3 results

  • Q3/2017: revenue up 1.5 percent; EBITDA up 17.4 percent
  • Mediengruppe RTL Deutschland and Groupe M6 with strong double-digit EBITDA growth in Q3/2017
  • January to September 2017: revenue up 2.8 percent to €4,350 million; adjusted EBITDA1 up 3.4 percent reported EBITDA slightly down
  • Full-year EBITDA outlook lifted
  • Combination of SpotX and Smartclip into one integrated ad-tech company

Q3/2017: RTL Group clearly outperforms German and French TV advertising markets

  • In the third quarter of 2017, reported Group revenue was up 1.5 percent to €1,372 million (Q3/2016: €1,352 million), mostly due to higher revenue from Mediengruppe RTL Deutschland and Groupe M6
  • EBITDA was up strongly by 17.4 percent to €263 million (Q3/2016: €224 million), driven by the strong performances in Germany and France: Mediengruppe RTL Deutschland’s EBITDA was up 23.9 percent, while Groupe M6 increased its EBITDA by 36.5 percent
  • Net profit attributable to RTL Group shareholders increased by 11.8 percent to €114 million (Q3/2016: €102 million)

January to September 2017: total video strategy fuels revenue growth

  • Reported Group revenue increased by 2.8 percent to €4,350 million (January to September 2016: €4,230 million), reaching a new record level. This was driven by higher revenue from Mediengruppe RTL Deutschland, Groupe M6 and RTL Group’s rapidly growing digital businesses
  • RTL Group’s digital revenue2 continued to show very dynamic growth, up 30.2 percent to €560 million (January to September 2016: €430 million). This was mainly driven by organic growth at BroadbandTV and StyleHaul, the sale of American Gods to streaming service Amazon Prime Video and the first-time full consolidation of Smartclip and Divimov
  • RTL Group’s revenue is well diversified with 47.7 percent from TV advertising, 18.7 percent from content, 12.9 percent from digital activities, 5.4 percent from platform revenue, 4.0 percent from radio advertising and 11.3 percent other revenue
  • Reported EBITDA was down 1.6 percent to €889 million for the first nine months of 2017 (January to September 2016: €903 million), mainly due to the positive one-off effect at Groupe M6 amounting to €43 million in 2016. Adjusted for this one-off effect, EBITDA was up 3.4 percent
  • Reported EBITDA margin was at 20.4 percent (January to September 2016: 21.3 percent; adjusted for the one-off effect: 20.3 percent
  • Accordingly, net profit attributable to RTL Group shareholders was slightly down year-on-year to €434 million (January to September 2016: €443 million)
  • Net cash from operating activities was €387 million, leading to a decreased operating cash conversion of 76 percent (January to September 2016: 93 percent)
  • Following the payment of an interim dividend of €154 million on 7 September 2017, RTL Group had net financial debt of €1,097 million as of 30 September 2017 (30 June 2017: €1,000 million; 31 December 2016: €576 million)

Outlook

RTL Group lifts its EBITDA outlook for 2017 and confirms its revenue outlook for the full year 2017 (most recently communicated on 30 August 2017), assuming there will not be major changes in the economic climate across RTL Group’s markets:

  • RTL Group continues to expect its total revenue for the fiscal year 2017 to grow moderately (+2.5 percent to +5.0 percent), driven by the Group’s digital businesses and Mediengruppe RTL Deutschland
  • At the same time, RTL Group’s reported EBITDA for the full year 2017 is now expected to be slightly up (+1.0 percent to +2.5 percent) based on the strong Q3 performance and the planned sale of RTL Group’s buildings in Rue Bayard, Paris, that will positively impact the Group’s EBITDA in Q4/2017 (previously: broadly stable)

“Strong core business drives record results”

Joint statement from Guillaume de Posch and Bert Habets, Co-Chief Executive Officers of RTL Group:

“In the third quarter, RTL Group once again demonstrated the healthy state of its core business. As indicated at the end of August, our families of channels in Germany and France continued to outperform their respective TV advertising market significantly. This drove RTL Group’s best ever third quarter revenue and operating profit.

We act from a position of strength and will keep up this momentum in the fourth quarter, heading for another set of strong full-year results. We continue to invest in exclusive programming to ensure that our channels and on-demand services have the most attractive proposition for both viewers and advertisers.

As we announced end of August, we are accelerating the execution of our Total Video strategy. This includes an ambitious growth plan for our ad-tech businesses with the main goal to create a global and independent monetisation platform for broadcasters, video-on-demand services and publishers. We are very happy to report that over recent months SpotX and Smartclip have made significant progress in expanding their collaboration. We have now decided to combine both companies into one integrated ad-tech company by the end of 2018. We will roll out the platform across our operations and scale it up with further acquisitions and partnerships.”

Segments: Mediengruppe RTL Deutschland clearly outperforming German advertising market

  • During the first nine months of 2017, Mediengruppe RTL Deutschland’s EBITDA increased by 4.8 percent to €500 million (January to September 2016: €477 million). This improvement was mainly driven by higher TV and digital advertising and platform revenue. In Q3/2017, Mediengruppe RTL Deutschland’s EBITDA was up 23.9 percent, also profiting from higher advertising and platform revenue
  • Groupe M6’s EBITDA was down by 4.4 percent €258 million (January to September 2016: €270 million), mainly due to the positive one-off effect from the gradual phase-out of the M6 Mobile contract in 2016. Adjusted for this one-off effect, EBITDA was up 13.7 percent. In Q3/2017, Groupe M6’s EBITDA was up by 36.5 percent thanks to the combined effect of the solid performance of the television division and the positive balance from the transfer of Girondins de Bordeaux players at the end of the season
  • FremantleMedia’s EBITDA was down 1.6 percent to €60 million (January to September 2016: €61 million), mainly due to start-up losses from digital operations. Revenue, however, was up by 2.2 percent to €983 million in the first nine months of 2017 (January to September 2016: €962 million)
  • RTL Nederland’s EBITDA was down to €46 million (January to September 2016: €60 million), mainly due to lower TV advertising revenue

Reach more with Total Video

More ad tech

  • On 2 October 2017, RTL Group closed the transaction to take full ownership of SpotX and acquired the remaining 36.4 percent shareholding for a total amount of USD 139.2 million, subject to a cash/debt adjustment, of which USD 7.7 million have been contributed to SpotX. Following this step, RTL Group pursues an ambitious growth plan for its ad-tech businesses with the main goal to create a global and independent monetisation platform for broadcasters, video-on-demand services and publishers
  • To accelerate the execution of this plan, RTL Group has decided to combine SpotX and Smartclip into one integrated ad-tech company by the end of 2018, to roll out the platform across the Group’s operations and to scale it up with further acquisitions and partnerships
  • The combined entity will focus on ad-server development, addressable TV, bringing dynamic ad-insertion capabilities in-house and close collaboration with the Group’s minority shareholdings, VideoAmp and Clypd – positioning the company as an innovation leader among independent ad-tech platforms

More cross-media

  • Following the approvals of the French media regulator CSA (“Conseil supérieur de l’audiovisuel”) and the completion of the employee consultations, RTL Group and Groupe M6 closed the regrouping of the Group’s French radio operations into Groupe M6 on 2 October 2017. The purchase agreement provides for a price of €199.8 million, as announced in May 2017. RTL Group’s voting rights in Groupe M6 will be aligned to its economic shareholding of 48.26 percent in Groupe M6 with effect as of 1 January 2018
  • As already announced in February 2016, Groupe M6’s radio business is currently relocating from Rue Bayard, Paris, to Neuilly-sur-Seine and will finalise the relocation in the first quarter of 2018. RTL Group has signed a binding agreement to sell its buildings in Rue Bayard for €113.9 million and will receive 85 percent of the proceeds in 2017. Consequently, RTL Group expects a substantial positive EBITDA impact from this transaction in Q4/2017
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  • On 13 November 2017 at 20:15, Vox will premiere the third and final season of their signature series Club der roten Bänder. As of 10 November, the first two episodes of the audience favourite will be available exclusively on TV Now ahead of the TV broadcast
  • FremantleMedia continued to invest in the creative pipeline and acquired 75 percent stake in Easy Tiger Productions, an Australian TV production company focused on prime-time scripted drama series. In October, the company also acquired a 25 percent stake in the fast-growing independent UK production company, Label 1

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