RTL Group with record results
RTL Group has announced its audited results for the year ended 31 December 2015. Reported Group revenue increased 3.8 per cent to €6,029 million (2014: €5,808 million), mainly driven by increasing revenue at Mediengruppe RTL Deutschland, growing digital revenue and favourable exchange rate effects. RTL Group’s revenue is well diversified with 53.7 per cent from broadcast advertising (TV and radio), 22.0 per cent from content, 8.4 per cent from digital activities, 4.1 per cent from platform revenue (€248 million) and 11.8 per cent other revenue. Reported EBITA also reached a new record level, up 2.0 per cent to €1,167 million (2014: €1,144 million). The increase is mainly due to a significantly higher EBITA contribution from Germany. Reported EBITA margin was at 19.4 per cent (2014: 19.7 per cent). EBITDA was slightly up by 1.0 per cent to €1,360 million (2014: €1,347 million).
Net profit attributable to RTL Group shareholders increased strongly by 21.0 per cent to €789 million (2014: €652 million). 2014 was impacted by impairment of goodwill of subsidiaries for €88 million. Net cash from operating activities was €983 million, resulting in an operating cash conversion of 87 per cent. Net financial debt was €670 million at the end of 2015 (2014: net financial debt of €599 million).
In the fourth quarter of 2015, reported Group revenue was up 1.4 per cent at €1,888 million (Q4/2014: €1,862 million), while reported EBITA was down by 3.4 per cent to €451 million (Q4/2014: €467 million). This reflects significant positive one-off effects in the fourth quarter of 2014. On an adjusted basis, fourth quarter EBITA was up 4.1 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 2015 (2014: ordinary dividend of €2.50 per share; extraordinary dividend of €1.00 per share). This proposal is a reflection of the Group’s strong cash flows, future investment plans and its target net debt to full-year EBITDA ratio of 0.5 to 1.0 times. In addition, RTL Group already paid an extraordinary interim dividend of €1.00 per share for the fiscal year 2015 in September 2015. Based on the average share price in 2015 (€82.2), the total dividends for the fiscal year 2015 (€4.00 per share; 2014: €5.50 per share) represent a dividend yield of 4.9 per cent (2014: 6.8 per cent).
Mediengruppe RTL Deutschland with another record year
Once again, Mediengruppe RTL Deutschland closed the year with a financial record: EBITA grew significantly by 5.2 per cent to €684 million (2014: €650 million), resulting in a best-in-class EBITA margin of 32.0 per cent (2014: 31.8 per cent). This improvement was mainly driven by higher TV advertising and diversification revenue.
Despite a strong performance in TV, Groupe M6’s EBITA decreased to €205 million (2014: €209 million), mainly due to lower contribution from diversification activities (home-shopping operations, the football club Girondins de Bordeaux and others).
In line with previous guidance, EBITA of FremantleMedia – RTL Group’s content production arm – decreased to €103 million (2014: €113 million), reflecting the reduction in American Idol and increased investment in the creative pipeline.
RTL Nederland’s EBITA was down 1.9 per cent to €101 million (2014: €103 million), reflecting start-up losses in video on demand, and the termination of the Sizz partnership with Vodafone in 2014.
At RTL Hungary, EBITA was up to €21 million (2014: loss of €1 million), driven by one-off effects such as the partial reversal of a stock valuation allowance and the reclaiming of the advertising tax paid in 2014.
“Keys for further growth”
Joint statement from Anke Schäferkordt and Guillaume de Posch, Co-Chief Executive Officers of RTL Group: “Despite a mixed picture in the global economy, 2015 was a record year for RTL Group: for the first time in the history of our Group, revenue exceeded €6 billion, with EBITA also reaching a new all-time high. Our biggest profit centre, Mediengruppe RTL Deutschland, grew significantly and generated another record profit – for the fourth consecutive year.
With our digital investments in North America – BroadbandTV, StyleHaul and SpotX – we’ve reached critical mass in online video within a very short period of time. This is also reflected in our strong set of financial results: with more than half a billion euros in revenue, digital has become a highly dynamic third pillar for RTL Group, in addition to our market-leading broadcasting and content production businesses.
The strong cash flows generated by our families of channels allow us to combine attractive dividend payments with further acquisitions to pursue our two main investments goals. The first is to further expand and develop our digital businesses where global scale in content aggregation and advertising technology becomes ever more important. The second goal is to further grow content production, because we’re certain that producing our own content and owning the rights to it will be one of the keys for further growth.
As part of this strategy, Fremantle Media is making sound progress to increase its creative diversity. As Fremantle Media is already one of the biggest independent production companies, their focus is on partnering with creative talent to develop new projects for Fremantle Media’s unrivalled international network. This trend will continue and see scripted entertainment taking a larger share of Fremantle Media’s total revenue.”
Digital a significant revenue growth driver
RTL Group’s digital revenue continued to show strong growth, up 72.2 per cent to €508 million (2014: €295 million). Performance benefitted from organic growth and new acquisitions. 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 102 per cent, StyleHaul was up 87 per cent, SpotX was up 56 per cent.
RTL Group continued to grow scale in online video in 2015: RTL Group’s catch-up TV services, websites and MCNs attracted a total 105 billion online video views, almost tripled year-on-year (2014: 36.4 billion video views). RTL Group currently generates around 11 billion online video views per month, up 87 per cent year-on-year (comparing January 2016 with January 2015).
In June 2015, RTL Group formed the RTL Digital Hub to drive leadership and growth in the digital video market. The RTL Digital Hub team manages RTL Group’s portfolio of digital acquisitions, provides support for their further international expansion, and scans the market for further investments in the online video space. In April 2015, RTL Group led the most recent financing round for Clypd, a US-based platform for programmatic advertising sales on linear TV, and now holds a 17.4 per cent minority stake in the company (on a fully diluted basis).
In April 2015, BroadbandTV announced the acquisition of YoBoHo, the world’s leading digital-first kids content producer. A few months later BroadbandTV launched the HooplaKidz Network with the vision to build the leading kids and family entertainment digital ecosystem, including a strong distribution network, apps, merchandising, licensing and significant original content. In November 2015, RTL Group led the most recent funding round for VideoAmp, a US-based platform for cross-screen data optimisation, and now holds a 21.5 per cent minority stake (on a fully diluted basis). On 1 March 2016, 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.
Additional investments in the creative pipeline
In 2015, Fremantle Media made a series of eight investments, strengthening capabilities in the scripted, entertainment and factual genres. This included Wildside, Italy’s leading high-end TV and feature film producer, and French scripted producers Fontaram and Kwaï. In June, the US premium cable channel Starz gave the green light to Fremantle Media North America’s adaptation of Neil Gaiman’s acclaimed contemporary fantasy novel American Gods.
In February 2015, Fremantle Media International (FMI) announced an agreement with AMC’s Sundance TV that saw UFA Fiction’s Deutschland 83 become the first German-language series to air on a US channel. The title has now sold to 20 broadcasters and subscription video on demand (SVOD) platforms around the world.
Outlook
The TV advertising markets in 2015 reflected the overall macro-economic situation in Europe. All European net TV advertising markets in RTL Group’s territories were up or stable year-on-year. This picture is expected to be similar in 2016. RTL Group currently expects its total full-year revenue to continue to grow moderately (2.5 per cent to 5.0 per cent), predominantly driven by the Group’s digital businesses. EBITA for the full year 2016 is expected to be broadly stable (-1.0 per cent to +1.0 per cent). Both revenue and EBITA forecasts are based on current stable mark.
