RTL-Group: Record revenue, EBITDA, EBITA - Bertelsmann SE & Co. KGaA

Information about the international media enterprise and it's corporate divisions RTL Group, Penguin Random House, Gruner + Jahr, Arvato; detailed information for journalists in the Bertelsmann SE & Co. KGaA's Press Center as well as everything about Corporate Responsibility activities at Bertelsmann.

News | RTL Group | Luxembourg, 03/09/2017

RTL-Group: Record revenue, EBITDA, EBITA

Today, RTL Group announced its audited results for the year ended 31 December 2016. Group revenue increased 3.4 per cent to €6,237 million (2015: €6,029 million), mainly driven by growing revenue at Mediengruppe RTL Deutschland and dynamic growth in digital revenue; underlying/organic revenue  growth rate was 3.0 per cent. Platform revenue  was up 13.3 per cent to €281 million (2015: €248 million). RTL Group’s revenue is well diversified with 52.1 per cent from broadcast advertising (TV and radio), 21.2 per cent from content, 10.7 per cent from digital activities, 4.5 per cent from platform revenue and 11.5 per cent from other revenue.

The EBITA also reached a new record level, up 3.3 per cent to €1,205 million (2015: €1,167 million). The increase is mainly due to higher EBITA contribution from Germany and a positive one-off effect at Groupe M6 from the settlement of the M6 Mobile contract, amounting to €42 million.

The EBITA margin was stable at 19.3 per cent (2015: 19.4 per cent).

The EBITDA  was up by 3.8 per cent to €1,411 million (2015: €1,360 million), with an EBITDA margin of 22.6 per cent (2015: 22.6 per cent).

Net profit attributable to RTL Group shareholders decreased to €720 million (2015: €789 million), mainly due to higher tax charges. Net cash from operating activities was €1,106 million, resulting in a higher operating cash conversion  of 97 per cent (2015: 87 per cent). Net financial debt6 was €576 million at the end of 2016 (2015: net financial debt of €671 million).

In the fourth quarter of 2016, Group revenue was up 6.3 per cent at €2,007 million (Q4/2015: €1,888 million), while EBITA was stable at €449 million (Q4/2015: €451 million). This reflects a one-off charge at RTL Radio (France) following accounting misstatements over a number of previous years and a decrease at RTL Nederland, partly balanced by higher EBITA contributions from Mediengruppe RTL Deutschland, Groupe M6 and FremantleMedia. Adjusted for the one-off charge at RTL Radio (France), fourth quarter EBITA was up 2.0 per cent year on year.

RTL Group’s Board of Directors has proposed a final ordinary dividend of €3.00 per share for the fiscal year 2016. This proposal is a reflection of the Group’s strong cash flows, future investment plans and its target net debt to full-year EBITDA ratio6 of 0.5 to 1.0 times. In addition, RTL Group already paid an interim dividend of €1.00 per share for the fiscal year 2016 in September 2016 (2015: ordinary dividend of €3.00 per share plus interim dividend of €1.00).

Based on the average share price in 2016 (€73.70 ), the total dividends for the fiscal year 2016 (€4.00 per share; 2015: €4.00 per share) represent an attractive dividend yield of 5.4 per cent (2015: 4.9 per cent) and a payment of 85 per cent of the reported EPS (€4.69)

Mediengruppe RTL Deutschland, Groupe M6 and FremantleMedia  with significantly higher profit contributions

Once again, Mediengruppe RTL Deutschland closed the year with record results: EBITA grew by 3.1 per cent to €705 million (2015: €684 million), resulting in an outstanding EBITA margin of 31.8 per cent (2015: 32.0 per cent). Over the past ten years, Mediengruppe RTL Deutschland more than doubled its EBITA (2007: €329 million).

Groupe M6 also reached a record EBITA of €252 million (2015: €205 million), mainly driven by the positive one-off effect from the settlement of the M6 Mobile contract, amounting to €42 million which more than compensated for the impact of the higher programming costs for the Uefa Euro 2016 live broadcasts. In line with previous guidance,

FremantleMedia’s EBITA increased by 6.8 per cent to €110 million (2015: €103 million), reflecting higher profit contributions from content coming through the pipeline as a result of recent acquisitions and investments.

RTL Nederland’s EBITA was down to €85 million (2015: €101 million), due to lower TV advertising revenue, higher programme costs and start-up losses of the SVOD platform, Videoland.

Outlook

Beginning with the fiscal year 2017, RTL Group will report EBITDA as its key performance indicator for operating profit, adapting to more common reporting standards of the media industry (previously: EBITA).

RTL Group expects its total revenue for the fiscal year 2017 to continue to grow moderately (+2.5 per cent to +5.0 per cent), driven by the Group’s digital businesses and Mediengruppe RTL Deutschland. At the same time, RTL Group’s EBITDA for the full year 2017 is expected to be broadly stable (-1.0 per cent to +1.0 per cent), mainly due to the lack of positive one-off effects at the level Groupe M6 recorded in 2016.

Digital revenue is expected to continue to show dynamic double-digit growth and increase its share of RTL Group’s total revenue to at least 15 per cent within the next three to five years.

RTL Group will keep a leverage target of 0.5 and 1.0 times net debt to full-year EBITDA for the fiscal year 2017. RTL Group will continue to focus on cash conversion and expects 2017 levels to be broadly in line with previous years, not below 90 per cent.

The dividend policy remains unchanged: RTL Group plans to pay out between 50 and 75 per cent of the adjusted net result for the fiscal year 2017.

Joint statement from Anke Schäferkordt and Guillaume de Posch, Co-Chief Executive Officers of RTL Group: “2016 was another record year for RTL Group. We continued our growth track, with both revenue and EBITA at an all-time high, and at the same time, our three most important business units – Mediengruppe RTL Deutschland, Groupe M6 and FremantleMedia – reported higher operating profits. Mediengruppe RTL Deutschland generated a record profit for the fifth consecutive year, exceeding the level of €700 million for the first time. Groupe M6 profited from a positive one-off effect financially and from the Uefa Euro 2016 in terms of audience shares. We are a very cash-generative business, giving us all financial means for both – further investments and attractive dividend payments to our shareholders.

While we currently review our options for BroadbandTV, this does not change our overall strategy – broadcast, content, digital – which focuses on two main investment goals. One is to further expand and develop our digital businesses where global scale in content aggregation and advertising technology becomes ever more important. This is paying off: our digital businesses continued to grow dynamically and we already reached our target that 10 per cent of the Group’s total revenue originate from digital.

The other investment goal is to further grow content production. FremantleMedia is making sound progress with its push into high-end drama. Following the premiere of The Young Pope in October 2016, we are looking forward to seeing American Gods going on air in spring. In a ground-breaking deal with Amazon, we were also able to bring this extraordinary series to viewers worldwide – thanks to the close collaboration between the production and distribution business of FremantleMedia. Exclusive content like this is the power engine for everything we do in the total video universe.”

Must-see content drives RTL Group’s broadcast businesses

In December, RTL Group announced that it plans to regroup its French radio operations into Groupe M6. The transaction is, among others, subject to approval by the French media authority CSA (Conseil supérieur de l'Audiovisuel).

M6 broadcast a total of 11 matches, including the final, of the biggest European football competition – Uefa Euro 2016. The final, between Portugal and France, achieved the same audience as the final of the 1998 World Cup between Brazil and France: 20.8 million viewers represented a total audience share of 71.8 per cent. This was a new all-time audience record for M6 since its creation, the most watched programme on French television in 2016 and the fifth largest TV audience ever recorded in France.

In May, RTL Television signed a new exclusive TV broadcasting rights agreement with Uefa to air 28 of the 40 matches that the German national football team is due to play in the period 2018 to 2022. The new deal grants RTL Television exclusive broadcasting rights for all of Germany’s Euro 2020 qualifying games and World Cup 2022 qualifiers. The deal comes on top of the exclusive TV broadcasting rights RTL Television already holds for the period from September 2016 to October 2017 for Germany’s qualifying matches for the World Cup 2018 in Russia.

RTL Plus, the latest addition to Mediengruppe RTL Deutschland’s family of channels, was launched on 4 June 2016 and is the most successful channel launch of the last few years. In December 2016, RTL Plus already recorded an average audience share of 0.9 per cent in the 14 to 59 demographic. 

Content: additional investments in the creative pipeline

In 2016, FremantleMedia made several investments, strengthening capabilities in the scripted, entertainment and factual genres. This included Abot Hameiri (51 per cent), Dr Pluto (25 per cent), Wild Blue Media (25 per cent), and Dancing Ledge (25 per cent).

On 24 August, FremantleMedia announced a deal with Amazon to showcase its ambitious fantasy drama, American Gods, on Amazon Prime Video in 2017. The show will be available on Amazon’s SVOD platform in over 200 territories, shortly after its US premiere on the pay-TV channel Starz in April 2017.

In September, highly acclaimed drama, The Young Pope – produced by FremantleMedia’s Wildside for Sky, HBO and Canal Plus – celebrated its world premiere at the Venice Film Festival. The Young Pope was the best premiere for a new series on Sky in Italy, launched as Canal Plus’ number one new international drama of 2016 in France, and was Sky Atlantic’s number three new drama of the year in the UK.

On 14 October, UFA Fiction, FremantleMedia International and RTL Television announced that the sequel to the nationally and internationally award-winning series Deutschland 83 will premiere exclusively on Amazon Prime Video in Germany in 2018. RTL Television has secured a first-look option for the linear TV rights and expects to air the sequel on German free-to-air television in 2018/19, after Amazon’s first window.

Digital has become a significant pillar of RTL Group’s revenue

RTL Group’s digital revenue  continued to show strong growth, up 31.9 per cent to €670 million (2015: €508 million), mostly due to organic growth. Digital revenue now makes up more than 10 per cent of RTL Group’s total revenue.

All of the three main businesses of the RTL Digital Hub – BroadbandTV, StyleHaul and SpotX – continued to show strong individual revenue growth. Year-on-year, BroadbandTV was up 131 per cent, StyleHaul was up 54 per cent, and SpotX was up 18 per cent.

Mediengruppe RTL Deutschland, Groupe M6 and RTL Nederland reported outstanding online video advertising revenue growth rates. Comparing 2016 with 2015: Mediengruppe RTL Deutschland was up 106 per cent (driven by organic growth and the acquisition of Smartclip), Groupe M6 was up 37 per cent and RTL Nederland was up 61 per cent.

RTL Group’s catch-up TV services, websites and MCNs attracted a total 274 billion online video views in 2016 (2015: 105 billion video views).

In March 2016, Mediengruppe RTL Deutschland announced the acquisition of a 93.75 per cent majority stake in Smartclip, with a call option to acquire the remaining shares. The purchase price was €48 million. Smartclip currently bundles the online video advertising inventory of 750 publishers worldwide, and manages the integration and serving of video advertising to all internet-connected devices. Smartclip complements RTL Group's investments in digital advertising sales, including in particular SpotX. Approval from Germany's Federal Cartel Office was received on 22 April 2016.  

Also in March, Mediengruppe RTL Deutschland bundled their catch-up services of the ‘Now’ family (RTL Now, Vox Now, RTL II Now, RTL Nitro Now, Super RTL Now and N-TV Now) in a new offer called TV Now.