RTL Group’s growth accelerates
RTL Group announces its results for the nine months ending 30 September 2015. In the third quarter of 2015, reported Group revenue was up 7.5 per cent to €1,353 million (Q3/2014: €1,259 million), driven by growth from RTL Group’s digital revenue with dynamic growth of +86.6 per cent to €125 million, Mediengruppe RTL Deutschland (+6.8 per cent), FremantleMedia (+5.0 per cent) and RTL Nederland (+15.4 per cent).
Reported EBITA was up strongly by 13.8 per cent to €182 million (Q3/2014: €160 million), thanks to the performance of Mediengruppe RTL Deutschland (+8.6 per cent) and RTL Nederland (+38.9 per cent). Net profit attributable to RTL Group shareholders increased by 9.7 per cent to €113 million (Q3/2014: €103 million).
January to September 2015: Mediengruppe RTL Deutschland and digital drive revenue and EBITA
Reported Group revenue in the first nine months of 2015 increased by 4.9 per cent to €4,141 million (January to September 2014: €3,946 million), reaching a new record level. This result was driven by positive exchange rate effects, the strong performance of Mediengruppe RTL Deutschland (+7.2 per cent); and fast growing digital revenue (+91.1 per cent to €344 million) benefitting from organic growth and new acquisitions. Reported EBITA was up 5.8 per cent to €716 million compared to €677 million in the first nine months of 2014. This increase was mainly driven by Mediengruppe RTL Deutschland. EBITA margin at 17.3 per cent (January to September 2014: 17.2 per cent).
EBITDA was up 3.2 per cent to €844 million for the first nine months of 2015 (January to September 2014: €818 million). Net profit attributable to RTL Group shareholders increased by 52.1 per cent to €464 million (January to September 2014: €305 million). Net cash from operating activities was €481 million, leading to an operating cash conversion of 75 per cent. Following the payment of an extraordinary interim dividend of €154 million on 10 September 2015, RTL Group had net financial debt of €1,099 million as of 30 September 2015 (30 June 2015: €1,003 million)
TV advertising markets
TV advertising markets across Europe continued to show signs of improvement over the first nine months of 2015. With the exception of the Netherlands, all European net TV advertising markets in RTL Group’s territories were up or stable year-on-year. During the first nine months of 2015 Mediengruppe RTL Deutschland’s EBITA increased strongly by 9.3 per cent to €457 million (January to September 2014: €418 million). This improvement was mainly driven by higher TV advertising and diversification revenue. Groupe M6’s EBITA was down to €136 million (January to September 2014: €143 million), mainly reflecting lower contribution from the company’s diversification business.
FremantleMedia’s EBITA decreased to €51 million (January to September 2014: €54 million), due to the reduction in American Idol and higher investment in the creative pipeline. RTL Nederland’s EBITA decreased to €52 million (January to September 2014: €62 million), mainly caused by higher investments in TV and digital. RTL Hungary’s EBITA was up to €17 million (January to September 2014: €6 million), driven by one-off effects such as the partial reversal of a stock valuation allowance and the re-claim of the advertising tax paid in 2014.
“A very encouraging basis for another successful full year”
Joint statement from Anke Schäferkordt and Guillaume de Posch, Co-Chief Executive Officers of RTL Group: “During the first nine months of 2015, RTL Group significantly increased revenue, EBITA and net profit, mainly driven by the strong performance of Mediengruppe RTL Deutschland. The third quarter 2015 was particularly positive, with revenue and EBITA for RTL Group at record levels. This is a very encouraging basis for another successful full year, despite the challenging comparatives in the fourth quarter. Looking at our revenue split, digital is now accountable for 8 per cent of RTL Group’s total revenue. For us, TV does not stand for television alone anymore, but for ‘total video’ – and we have built leading market positions across the whole value chain of this total video market. Investments in broadcast, content and digital are transforming our leading European entertainment network into a global force in video production, aggregation and monetisation.”
Digital investments become revenue growth driver
The businesses within RTL Digital Hub continued to show strong revenue growth. Year on year, in the nine months to 30 September 2015: BroadbandTV was up 85 per cent, StyleHaul was up 98 per cent , SpotX was up 62 per cent. These businesses do however require on-going investments in order to strengthen their market leading positions and therewith some will generate start-up losses in the near future. In the first nine months of 2015, RTL Group’s catch-up TV services, websites and multi-channel networks attracted a total of 71.5 billion online video views, up 193 per cent year-on-year (January to September 2014: 24 billion). RTL Group currently generates more than 9.5 billion online video views per month. In November, RTL Group led the most recent funding round for VideoAmp, a US-based platform for cross-screen data optimisation, and holds a 18.9 per cent minority stake on a fully diluted basis once the financing round of VideoAmp has been completed.
Continued investments in creative talent
FremantleMedia is increasing creative diversity within the company – organically and by acquisitions. Over the past months, FremantleMedia made a series of investments, strengthening capabilities in the scripted, entertainment and factual genres: In August, FremantleMedia acquired a 62.5 per cent majority stake in Wildside, an Italian TV and feature film production company, with the opportunity to buy the remaining shareholding in the future. In September, the company invested in Fontaram, now holding a 51 per cent majority stake, with the opportunity to buy the remaining shareholding in the future. In September, FremantleMedia entered into the share capital of Naked Entertainment and now owns a 25 per cent stake, with the opportunity to buy the remaining shareholding in the future. Naked Entertainment is a start-up production company focusing on entertainment and factual entertainment from multi award-winning producer, Simon Andreae.
Also in September, FremantleMedia acquired a 75 per cent stake in Dutch business No Pictures Please, a factual programming company owned by presenter and producer Ewout Genemans, with the opportunity to buy the remaining shareholding in the future. In October, FremantleMedia acquired a 51 per cent stake in French scripted producer Kwaï, with the opportunity to buy the remaining shareholding in the future. The Paris-based fiction company specialises in TV films and series and is headed up by writer and producer Thomas Bourguignon
Outlook
RTL Group raises its revenue outlook given at the half-year results 2015 presentation on 27 August 2015: Assuming there will not be major changes in the economic climate across RTL Group’s markets, the Group now expects its total revenue to be moderately up compared to the full year 2014 (previously: to be slightly up). RTL Group confirms its EBITA outlook given at the half-year results 2015 presentation: The Group still expects full-year reported EBITA to be in line with last year, despite lower contributions from one-off gains in 2015.
