Quarterly statement

06.11.2019, Luxembourg, RTL Group

On 6 November 2019, RTL Group published its quarterly statement for the first nine months of 2019: content and digital continue to drive RTL Group’s revenue growth in the first nine months of 2019.

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Thomas Rabe

Thomas Rabe, Chief Executive Officer of RTL Group, says:
“RTL Group continues its growth trajectory with revenue up 3.5 per cent organically in the first nine months of 2019, driven by our content and digital activities. We are on course to achieve all the targets in our outlook statement.

We also made good progress on our strategic priorities and partnerships: at the end of September 2019, RTL Group registered 1.4 million paying subscribers for its streaming services in Germany and the Netherlands – up 50 per cent year on year. As our streaming services are showing rapid growth and exceeding our expectations, we will significantly increase our ambition level and investments. In France, Groupe M6 is building the tech platform for Salto – the joint subscription service with TF1 and France Télévisions to be launched in 2020.

With our European ad-tech business, Smartclip, we are creating an open ad-tech platform, tailored to the needs of European broadcasters and streaming services. Together with the management team of RTL Deutschland, we have started a roadshow to present our solutions to other European broadcasters – creating a great deal of interest.”

Content revenue was up 16 per cent mainly driven by the delivery of new shows and series such as the second season of American Gods

Revenue

 

January to
September 2019

€ million

January to September 2018
€ million

Per cent
change

Total revenue

4,595

4,468

+2.8

Underlying revenue
 

4,531
 

4,377
 

+3.5
 

Broadcast

3,178

3,245

(2)

Content (Fremantle)

1,225

1,054

+16

Digital
(MPNs & SpotX)

337

295

+14

Eliminations

(145)

(126)

Reported Group revenue was up 2.8 per cent to €4,595 million (January to September 2018: €4,468 million), largely thanks to the Group’s global content business, Fremantle, and digital activities. Underlying revenue was €4,531 million (January to September 2018: €4,377 million), resulting in an organic growth rate of 3.5 per cent.

Revenue from RTL Group’s broadcasting operations was down 2 per cent, to €3,178 million (January to September 2018: €3,245 million), mainly due to scope changes (sale of Universum Film and the football club Girondins de Bordeaux) and lower TV advertising revenue in Germany and the Netherlands.

Content revenue, which represents Fremantle, was up 16 per cent to €1,225 million (January to September 2018: €1,054 million), mainly driven by the delivery of new shows and series such as the second season of American Gods. For the full year 2019, RTL Group expects Fremantle’s organic revenue to grow between 10 and 12 per cent on a constant currency basis.

Fremantle continued its push into drama with the first commission in Norway for Exit on NRK and the production launches of Deutschland 89

Digital revenue generated by RTL Group’s MPN activities and SpotX was up 14 per cent to €337 million (January to September 2018: €295 million), thanks to growth at both BroadbandTV and SpotX. VOD revenue, generated by RTL Group’s broadcasting operations, was up 24 per cent to €183 million (January to September 2018: €147 million).

As a result, RTL Group’s total digital revenue was up 14 per cent to €755 million (January to September 2018: €660 million).

Net debt

As of 30 September 2019, RTL Group had a net debt position of €878 million (31 December 2018: net debt of €470 million).

Net TV advertising market growth rates and RTL Group audience shares in main target groups

RTL Group estimates that the net TV advertising markets were down in Germany and France and slightly up in the Netherlands. In Germany, RTL Group’s family of channels outperformed the TV advertising market. A summary of RTL Group’s key markets is shown below, including estimates of net TV advertising market growth rates and RTL Group’s audience shares in the main target groups.

 

 

January to September 2019 net TV advertising market growth rate
(in per cent)

January to September 2019 RTL Group audience share in main target group
(in per cent)

January to September 2018 RTL Group audience share in main target group
(in per cent)
 

Germany

(3) to (4)

28.2

27.4

France

(0.5)

22.9

21.5

Netherlands

+1

29.3

30.4

 

Operational highlights

  • VOD: At the end of September 2019, RTL Group registered 1.4 million paying subscribers for its streaming services (the pay services TV Now in Germany and Videoland in the Netherlands), up 50 per cent year on year. The viewing times of TV Now in Germany and Videoland in the Netherlands also increased year on year, by 27 per cent and 59 per cent respectively.
     
  • Content: Fremantle had a successful first nine months of 2019, with the second seasons of American Gods and American Idol and the game show Ask Me Anything on RTL 4 in the Netherlands. Fremantle also continued its push into drama with the first commission in Norway for Exit on NRK, the commission of Ku’damm 63 and the production launches of Deutschland 89 and the second seasons of The New Pope and My Brilliant Friend.
     
  • Broadcast: The German family of channels increased its audience share in the main target group of viewers aged 14 to 59, by 0.8 percentage points year on year. This was largely driven by the performance of the main channel RTL Television, which increased its audience share for the first time since 2011.
     
  • Broadcast: On 2 September 2019, Groupe M6 completed the acquisition of France’s leading free-to-air digital channel for children, Gulli, and five pay-TV channels from Lagardère.

Groupe M6 completed the acquisition of France’s leading free-to-air digital channel for children, Gulli

  • Ad-tech: In September 2019, the first addressable TV advertising campaign was booked through the demand-side platform d-force, the joint venture of Mediengruppe RTL Deutschland and ProsiebenSat1.
     
  • Ad sales: In October 2019, RTL Nederland announced to build an integrated advertising sales network for the Dutch market – Ad Alliance – following the German example. The Dutch Ad Alliance will sell advertising for RTL Nederland, BrandDeli, Adfactor and Triade Media and will also be open for new partners.
     
  • Digital: Within the scope of the strategic review of its ad-tech businesses, RTL Group has sold its 33.9 per cent shareholding in Clypd to AT&T’s advertising company, Xandr, effective 18 October 2019.


Outlook

RTL Group confirms its outlook for the full-year 2019:

  • RTL Group continues to expect its total revenue for the fiscal year 2019 to grow moderately (+2.5% to +5.0%) excluding foreign exchange rate effects
     
  • RTL Group continues to expect its EBITA before restructuring costs to decrease moderately (-2.5% to -5.0%), reflecting higher investments into programming and VOD services.


Figures presented in this quarterly statement are not audited.

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