RTL Group Reports Strong Revenue Growth And Record Profit
RTL Group has published its financials for the first six months of 2021. Total revenues increased by 13.7 percent to €3.0 billion compared to the same period last year. Adjusted EBITA increased by 87 percent to € 483 million. The number of streaming subscribers increased, and clear progress was made in building national cross-media champions.
RTL Group’s consolidated revenue for the first half of 2021 was up 13.7 percent to €3.014 billion. Group revenue was up 21.5 percent organically compared to the first half of 2020, and up 2.1 percent organically compared to the first half of 2019. In the second quarter of 2021, RTL Group grew its consolidated revenues by 35.8 percent to €1,610 million, while TV advertising revenues increased by 65.0 percent. In the first six months of the year, adjusted EBITA increased by 87 percent to €483 million; the adjusted EBITA margin rose by 6.3 percentage points to 16.0 percent; adjusted EBITA before streaming start-up losses was on a par with 2019. In the first half of 2021, the Group achieved a record consolidated net income of €929 million thanks to strong operating performance and capital gains.
The number of paying subscribers to the Group’s streaming services in Germany and the Netherlands rose by 72 percent to over three million. Streaming revenues grew by 34 percent to €107 million. Significant consolidation steps in Germany, France, the Netherlands and Belgium to build national cross-media champions will create significant value for RTL Group shareholders. RTL Group aims to further expand its global production business Fremantle organically and through acquisitions, targeting total annual revenues of three billion euros by 2025. The outlook for the full year 2021 has been raised to around €6.5 billion for Group revenues (previous outlook: €6.2 billion), for adjusted EBITA to €1,050 million (previous outlook: €975 million) and for “adjusted EBITA before start-up losses of streaming services” to around €1,200 million (previous outlook: €1,125 million).
H1/2021: Strong rise in financial KPIs
Total revenues increased by 13.7 percent to €3,014 million in H1 2021 (H1/2020: €2,652 million), mainly due to strong growth in TV advertising revenues in Q2 2021, at Fremantle and in the streaming business. The Group’s consolidated revenues increased organically by 21.5 percent compared to the first half of 2020 and by 2.1 percent compared to the first half of 2019. In the first half of 2021, RTL Group’s families of channels in France, the Netherlands, Hungary and Croatia gained net TV advertising market share. Groupe M6 and RTL Nederland recorded higher audience shares, while RTL Deutschland’s market share declined slightly.
In the second quarter, total revenues increased by 35.8 percent to €1,610 million (Q2/2020: €1,186 million), with TV advertising revenues rising by 65.0 percent to €726 million. Streaming revenues from TV Now and Videoland increased by 33.8 percent to €107 million (H1/2020: €80 million). Platform revenues grew by 3.4 percent to €213 million (H1/2020: €206 million). Adjusted EBITA increased by 87.2 percent to 483 million euros (H1/2020: 258 million euros). Adjusted EBITA margin was 16.0 percent, 6.3 percentage points above the prior-year figure (H1/2020: 9.7 percent). Adjusted EBITA before start-up losses of streaming services” was on a level with 2019.
Group net profit increased strongly to €929 million (H1/2020: €156 million) thanks to a strong operating performance and capital gains. Cash flow from operating activities amounted to €214 million (H1/2020: €336 million), and the operating cash conversion rate was 82 percent (H1/2020: 164 percent). As of June 30, 2021, RTL Group had cash and cash equivalents of €173 million (December 31, 2020: cash and cash equivalents of €236 million).
‘Significant value for RTL Group’s shareholders’
“In the first half of 2021, RTL Group performed strongly. Adjusted EBITA and Group profit were up significantly, driven by the recovery of TV advertising markets and the growth of our content production and streaming businesses. This, combined with active portfolio management, led to a record Group profit of €929 million. Following RTL Group’s strong performance in the first six months, we have raised our outlook for the full year 2021 and now expect an Adjusted EBITA of around €1,050 million including streaming start-up losses and €1,200 million before streaming start-up losses. Over the past months, we have made significant progress in the execution of our national champions strategy. Major moves in Germany, France, the Netherlands and Belgium will create significant value for RTL Group’s shareholders and put us in a strong position to compete with the global tech platforms.
In addition, we will accelerate the expansion of our content production business, Fremantle – both organically and via M&A – targeting €3 billion revenue by 2025. Fremantle will continue to focus on scripted, non-scripted and increasingly on factual shows and documentaries. With all these changes, the time has come to reposition our core RTL brand with a new identity and a clear set of principles. We will strengthen RTL as Europe’s leading entertainment brand that stands for positive entertainment and independent journalism, as well as inspiration, energy and attitude. We will rebrand TV Now to RTL+ in Germany in autumn 2021 and will start the international roll-out in 2022.”
Strengthening the core – Creating national media champions
Combination of RTL Deutschland and Gruner + Jahr (G+J): RTL Group announced that RTL Deutschland has agreed with Bertelsmann to fully acquire Gruner + Jahr’s (G+J) German publishing assets and brands for €230 million on a cash-free and debt-free basis6 to create Germany’s first cross-media champion. G+J will contribute popular and trusted media brands such as “Stern,” “Brigitte,” “Geo,” “Capital,” “Schöner Wohnen,” “Eltern” and “Art” as well as journalistic experience to RTL Deutschland. The transaction is expected to close on January 1, 2022.
In March 2021, RTL Deutschland announced a binding agreement with its former joint-venture partner, The Walt Disney Company, to acquire the outstanding 50 percent shareholding in Super RTL. The transaction was approved by the German and Austrian competition authorities and closed on July 1, 2021. RTL Group’s shareholding in Super RTL is now 100 percent.
In May 2021, Groupe TF1, Groupe M6, Groupe Bouygues and RTL Group announced that they had signed agreements to enter into exclusive negotiations to merge the activities of Groupe TF1 and Groupe M6 and create a major French media group. The merger project was unanimously approved by the Boards of the four groups concerned. In July 2021, Groupe Bouygues and RTL Group signed agreements relating to the merger following the favorable opinions of the French employee representative bodies. The completion of the transaction remains subject to condition precedents, in particular the authorizations of the competent authorities and the general meetings of the shareholders of Groupe TF1 and Groupe M6. The transaction is expected to close by the end of 2022.
In June 2021, RTL Group and Talpa Network announced that they had signed agreements to merge their broadcasting and other media businesses in the Netherlands. In the growing competition with global tech platforms, the merger will allow the combined group to step up investments in local content, technology and data, offering Dutch audiences the broadest spectrum of high-quality entertainment and reliable information programs. The transaction is subject to approval from the competition authorities and the respective works councils and is expected to close in the first half of 2022.
Also in June 2021, RTL Group announced that it had signed a definitive agreement for the sale of RTL Belgium to the Belgian media companies DPG Media and Groupe Rossel. The transaction – with preliminary total cash proceeds of €250 million – is subject to regulatory approvals and is expected to close in the fourth quarter of 2021.
Boosting growth businesses
On June 30, 2021, RTL Group counted 3.045 million paying subscribers for its streaming services TV Now in Germany and Videoland in the Netherlands, up 72.1 percent year-on-year (June 30, 2020: 1.769 million). The number of paying subscribers for TV Now increased 118.9 percent year-on-year to 2.029 million (June 30, 2020: 0.927 million). The strategic partnership with Deutsche Telekom to bundle TV Now Premium within Magenta TV contributed significantly to this growth. The paying subscriber base for Videoland grew 20.7 percent year on year to 1.016 million (June 30, 2020: 0.842 million).
In March 2021, RTL Deutschland and Sky Deutschland announced an agreement for closer collaboration in the areas of streaming and content. TV Now Premium has been available for an additional premium on the Sky Q platform since June 2021. As part of the agreement, Sky is exclusively sub-licensing Formula One free-to-air rights to RTL Deutschland for the 2021 and 2022 seasons.
In June 2021, RTL Nederland and T-Mobile in the Netherlands announced that Videoland will become part of T-Mobile’s new “Unlimited & Entertainment” proposition. With the new offer, customers gain access to both Videoland Plus and Netflix Standard as well as unlimited 5G data, calling and SMS in the T-Mobile network in the Netherlands with an attractive price advantage.
In July 2021, Groupe M6 announced it would strengthen its advertising-funded streaming service 6play, offering more original content, various international films and formats, and spin-offs from linear reality shows on Groupe M6 channels. The streaming service will also include themed channels as well as live sports on the new channel Le Live by 6play.
Fremantle, RTL Group’s global content business, is targeting full-year revenues of €3 billion by 2025. To achieve this goal and keep up with the increasing demand for content, RTL Group will significantly invest in Fremantle – both organically and via acquisitions – in all territories across scripted and non-scripted as well as factual shows and documentaries. In 2021, Fremantle already announced three acquisitions and step-ups: In April 2021, Fremantle increased its stake in Abot Hameiri, taking full ownership of one of the leading entertainment producers in Israel. The company is behind shows such as “Power Couple,” “Find Me Somebody To Love,” “Hear Me Love Me See Me,” and the hit drama “Shtisel.” Abot Hameiri is also the Israeli producer for global formats such as “Got Talent,” “Survivor,” and “The X Factor.” In May 2021, Fremantle also stepped up its shareholding in Eureka from 25 percent to 51 percent. Eureka is a production company for entertainment content in the US and Australia and creates original shows such as “Holey Moley” for ABC, “Dating Around” for Netflix and “Pick, Flip & Drive” for Facebook. In July 2021, Fremantle announced it would acquire twelve production labels of Nent Studios in Norway, Sweden, Finland and Denmark that operate across non-scripted, scripted and factual. Content created by some of the labels includes formats that travel the world, such as “The Farm,” which has aired in 50 territories. The transaction is expected to close in the fourth quarter of 2021, subject to competition authority approvals.
As part of Fremantle’s growth plan, a new global factual division was established in May 2021 to significantly grow the company’s high-end documentary business. Fremantle has already announced the production of a number of premium documentaries including “Kingdom of Dreams,” a story set in the world of fashion, produced in collaboration with the production company Misfits Entertainment for Sky. Fremantle also has several high-end documentary acquisitions on its 2021 slate, including the water-scarcity documentary “Day Zero.” In Germany, UFA announced the launch of UFA Documentary, its new production unit, in April 2021. Recent documentaries include “Expedition Arktis,” “Der Große Fake – Die Wirecard-Story,” “Hannelore Kohl – Die erste Frau,” and “Angela Merkel – Frau Bundeskanzlerin.”
Outlook
RTL Group has raised its outlook for the full fiscal year 2021. This outlook assumes that the economic recovery from Covid 19 will continue in 2021, with vaccination programs progressing and no new lockdown measures being put in place. RTL Group expects its revenue to increase to approximately €6.5 billion (previous guidance: €6.2 billion). This includes, among others, the scope effects of the deconsolidation of BroadbandTV (as of 28 October 2020) and SpotX (as of 30 April 2021) and of the full consolidation of Eureka (as of 17 May 2021) and Super RTL (as of 1 July 2021). RTL Group expects its Adjusted EBITA for 2021 to grow to approximately €1,050 million (previous guidance: €975 million). This includes streaming start-up losses of approximately €150 million (unchanged guidance). RTL Group’s dividend policy remains unchanged: The group plans to pay out at least 80 percent of the adjusted full-year net result, including cash capital gains.
Contact
Oliver Fahlbusch
RTL Group, Executive Vice President Communications & Investor Relations, Chairman Corporate Responsibility
