RTL Group reports record revenue for the fifth consecutive year
Group revenue increased 2.2 per cent to €6,651 million, mainly driven by higher revenue from Fremantle and RTL Group’s digital businesses. Digital revenue was up by 8.9 per cent to €1,073 million. Streaming revenue from TV Now and Videoland was up by 46.7 per cent, to €135 million. Adjusted for one-time effects, EBITA was broadly stable at €1,156 million.
RTL Group announces its audited results for the year ended 31 December 2019. Group revenue increased 2.2 per cent to €6,651 million (2018: €6,505 million), mainly driven by higher revenue from Fremantle and RTL Group’s digital businesses. On an underlying basis, revenue grew by 3.2 per cent.
- Revenue up 3.2 per cent on an underlying basis
- Adjusted EBITA broadly stable at €1.16 billion, despite higher investments
- Profit for the year up 10.1 per cent to €864 million
- Attractive shareholder returns: dividend of €4.00 per share represents 81 per cent of the reported EPS, in line with the new dividend policy
- Mediengruppe RTL Deutschland and Groupe M6 with higher audience and TV advertising market shares; Fremantle with revenue growth of 12.6 per cent
- Paying subscribers for RTL Group’s streaming services TV Now and Videoland up 37 per cent to 1.44 million
- RTL Group to boost its streaming services, targeting 5 to 7 million paying subscribers by 2025
“We are boosting our streaming services and global content businesses.”
Thomas Rabe, Chief Executive Officer of RTL Group, says: “Driven by the strong performances of our three largest business units, RTL Group achieved all financial goals in 2019: revenue grew on an underlying basis by 3.2 per cent, EBITA remained broadly stable despite higher investments, and Group profit was up by 10 per cent. Our strategy builds upon three priorities. Firstly, strengthening our core businesses including consolidation across our broadcasting footprint. Secondly, boosting our streaming services and global content business, Fremantle. And thirdly, fostering alliances and partnerships in the European media industry. Within this framework, we put a particular focus on becoming national streaming champions in the countries where RTL Group has leading families of channels and on building an open European tech platform for streaming services. Over the next five years, we aim to grow the number of paying subscribers for our streaming services TV Now in Germany and Videoland in the Netherlands to between 5 and 7 million, to grow our streaming revenue to at least €500 million and to break even by 2025.”
Strengthening RTL Group’s core
- Mediengruppe RTL Deutschland’s channels increased their combined audience share in the main target group of viewers aged 14 to 59, by 0.6 percentage points to 28.1 per cent. This was largely due to the positive performance of the main channel RTL Television, which increased its audience share for the first time since 2011.
- Mediengruppe RTL Deutschland outperformed the German net TV advertising market, also thanks to the power of the German Ad Alliance.
- Vox Up was the latest addition to the German family of channels. The new free-to-air channel shares the advertising breaks with its sister channel Vox, while broadcasting different programmes and thus offering more net reach for advertisers.
- Groupe M6 completed the acquisition of France’s leading free-to-air digital channel for children, Gulli, and five pay-TV channels from Lagardère. As a result, Groupe M6 gained audience and TV advertising market shares in 2019.
Boosting growth businesses
- At the end of 2019, RTL Group registered 1.44 million paying subscribers for its streaming services (TV Now in Germany and Videoland in the Netherlands), up 37 per cent year on year. The viewing times of TV Now and Videoland also increased over the year, by 31 per cent and 45 per cent respectively.
- RTL Group aims to grow its total number of paying subscribers in Germany and the Netherlands to between 5 and 7 million, to grow streaming revenue to at least €500 million and to break even by 2025.
- With Bedrock, Groupe M6 is building the tech platform for the subscription video-on-demand (SVOD)/streaming service Salto, backed by Groupe TF1, France Télévisions and Groupe M6. The commercial launch of Salto is planned for 2020. The Bedrock tech platform will be used by Videoland in the Netherlands, as well as the RTL services in Belgium, Hungary and Croatia. RTL Group has agreed to become a 50 per cent shareholder of Bedrock, which will be a European platform open to third parties.
- Fremantle’s revenue was up 12.6 per cent to €1,793 million (2018: €1,592 million). Its drama business continued to grow, with the second season of American Gods, the first commission for Norway with Exit, and the second seasons of The New Pope and My Brilliant Friend: The Story of a New Name. As a result, Fremantle’s drama revenue increased by 36.2 per cent to €414 million (2018: €304 million).
- RTL Group has created Europe’s leading digital talent network and content studio with the combination of Divimove and United Screens, recently strengthened by the acquisition of Tube One in Germany.
Fostering alliances and partnerships
- The sales house Ad Alliance is the clear market leader in Germany, reaching 99 per cent of the country’s population. Media Impact (Axel Springer/Funke Mediengruppe) became a new partner of Ad Alliance (for digital inventory) on 1 January 2020.
- RTL Nederland launched an advertising sales network for the Dutch market. The Dutch Ad Alliance integrates the sales activities of RTL Nederland, BrandDeli, Adfactor and Triade Media and will be open to new partners.
- Within the newly launched Bertelsmann Content Alliance, RTL Group companies (Mediengruppe RTL Deutschland, UFA and RTL Radio Deutschland) are working on several content cooperation projects such as a themed month in September 2019 which focused on climate change and environmental protection.
- Mediengruppe RTL Deutschland took over the responsibility for RTL Group’s ad-tech business Smartclip. The objective is to create an open European ad-tech platform, based on technology developed by Smartclip and tailored for the needs of broadcasters and streaming services.
- Mediengruppe RTL Deutschland and ProSiebenSat1 launched the joint venture, d-force. The joint demand-side platform aims to boost addressable TV and online video advertising in Germany. In February 2020, d-force was also rolled-out to Austria.
The following outlook does not reflect the Covid-19 (“Corona”) virus outbreak as it is currently too early to quantify its impact on RTL Group’s results. However, we already see first cancellations of advertising bookings and impacts on productions. Several organisations such as the OECD and IMF have lowered their growth forecasts for 2020 over the past days.
- RTL Group expects its total revenue for the fiscal year 2020 to grow organically by +2 per cent to +3 per cent with TV advertising revenue slightly down and Fremantle’s revenue up organically by +4 per cent to +6 per cent. This guidance excludes foreign exchange rate and scope effects.
- RTL Group expects its Adjusted EBITA before additional streaming start-up losses to be broadly stable. After additional streaming start-up losses, Adjusted EBITA is expected to be down by up to -7 per cent.
- The dividend policy presented in August 2019 remains unchanged: RTL Group plans to pay out at least 80 per cent of the adjusted full-year net result.