ProSiebenSat.1 with good start into 2019
- Revenues increase by 4% to EUR 913 million, with +38% for Red Arrow Studios, +25% for NuCom Group, and +14% for digital and smart advertising business
- Q1 2019 total Entertainment advertising revenues decline by 4%, YTD April -2%
- Adjusted EBITDA decreases as expected by 5% to EUR 190 million; adjusted net income grows by 1% to EUR 94 million
- Best Q1 TV audience share since 2016 at 27.9% (+1.2 ppts), digital viewtime grows by 26%
- Market launch of our streaming platform Joyn announced for June
- Business performance in Q1 in line with the targets provided for the full-year; full-year targets confirmed
Munich, May 9, 2019. ProSiebenSat.1 Group has made a positive start into 2019: In the first quarter of 2019, the Group increased its revenues by 4% to EUR 913 million (previous year: EUR 881 million). This was mainly driven by the strong development in the Content Production & Global Sales and Commerce segments: These segments increased their revenues in the first quarter by 38% and 25% respectively (growth adjusted for portfolio and currency effects of 31% and 14% respectively). This significant double-digit revenue growth more than compensated for the weaker Entertainment business, which was 7% below the previous year quarter (decline adjusted for portfolio and currency effects of 4%). As expected, adjusted EBITDA decreased by 5% in the first quarter to EUR 190 million (previous year: EUR 200 million). As announced, lower advertising revenues and investments in the Entertainment segment affected the Group’s profitability and earnings performance. Adjusted net income increased slightly by 1% to EUR 94 million (previous year: EUR 93 million).
Max Conze, CEO of ProSiebenSat.1 Media SE, comments: “We are making progress in executing our strategy: Q1 Group revenues grew 4% despite a weak advertising market. Thanks to our consistent local content and digital push we are winning with audiences and users. Red Arrow Studios revenues grew +38% and NuCom Group +25%. Digital and smart advertising was up +14% while TV core as well as total Entertainment advertising revenues were down around -4% each. The month of April however was positive for TV core and for total Entertainment advertising revenues leading to a year-to-date April decline of now -2% in total Entertainment advertising revenues. While much remains to be done, we are investing in the future of our business and concentrating on our priorities: Our unique streaming platform Joyn will play a decisive role. We are progressing our technology roadmap especially on smart reach and working on a consistent reach currency. With all this, strategic partnerships in Germany and Europe will also be an important lever.”
In the Entertainment segment, external revenues fell by 7% in the first quarter of 2019. Adjusted for portfolio and currency effects, the decline was 4%. In addition to the deconsolidation of the video-on-demand portal maxdome and the online fitness provider 7NXT, the declining advertising revenues in this period took effect as expected, which primarily reflects the general market development and the later Easter this year. TV core advertising revenues declined by around 4% in the first quarter compared to the previous year. In contrast, the first quarter was positive for the digital and smart advertising business and the distribution business. In the audience market, ProSiebenSat.1 Group’s stations posted the best first quarter since 2016 with a market share of 27.9% (14- to 49-year-olds) while digital viewtime grew by 26%. Especially the shows “Germany’s next Topmodel” (ProSieben) and “The Voice Kids” (SAT.1) were popular with audiences on all platforms. This positive trend continued in April: The audience market share reached a strong level of 28.7%.
In the next month, ProSiebenSat.1 Group will focus on the market launch of our streaming platform with Discovery Communications, which will launch in June under the new brand Joyn. Joyn will offer live streams of over 50 TV channels as well as a comprehensive on-demand offering with original series, shows and exclusive previews. A large content slate will be available seven days before TV broadcast and 30 days after on catch-up.
In the Content Production & Global Sales segment (Red Arrow Studios), the growth of the second half of 2018 continued: In the first quarter of 2019, external revenues increased by double digits again, growing by 38%. Adjusted for portfolio and currency effects, revenues grew by 31%. Both the strong production business of Red Arrow Studios in Germany, the US and UK as well as the global digital studio Studio71 made important contributions to the segment’s revenue increase. In the production sector, mainly the formats “The Weekly” (for FX/Hulu), “Vienna Blood” (for ORF/ZDF) and “Bosch” (for Amazon) made an impact on this quarter’s success.
The Commerce business with NuCom Group also made a dynamic start into the year and increased its external revenues by 25% in the first quarter of 2019. Revenues adjusted for portfolio and currency effects grew by 14%. The four verticals matchmaking, consumer advice, experience & gift vouchers, and beauty & lifestyle all contributed to this with organic growth. The initial consolidations of the US online matchmaking service eharmony and of Aroundhome, an online broker for products and services around the home, also more than offset the deconsolidation of the online travel provider tropo.
Financial Outlook: Full-year targets confirmed
With this development, business performance in the first quarter was in line with the full-year targets for 2019, which the Group presented at the Annual Press Conference in March and which are subject to the macro environment and the development of the TV advertising market. As such, for the full-year, ProSiebenSat.1 continues to target a revenue increase in the mid-single-digit percentage range and an adjusted EBITDA margin between 22% and 25% on Group level, respectively. As already announced, 2019 is characterized as a year of investments for ProSiebenSat.1 in order to set up a future-ready Entertainment business. In accordance with this, the Group expects a pronounced decline in earnings for the second and third quarter, respectively, as planned investments in the Entertainment segment will focus on these two quarters. For the full-year, ProSiebenSat.1 Group expects, as announced, that the decline in Group adjusted EBITDA in fiscal 2019 will be limited to a mid-double-digit million amount compared to the previous year. Overall, the Group sees itself on track to achieving its full-year targets. With advertising visibility remaining low, the Group will support full-year target achievement by continued cost management efforts as well as growth and monetization initiatives in the Entertainment segment.
Further key figures can be found on our Group website at www.ProSiebenSat1.com. The presentation and Quarterly Statement for the first quarter of 2019 will also be available here from 7:30 a.m. on May 9, 2019.
- Corporate & Finance CommunicationStefanie Rupp-MenedetterHead of Group Communications & EventTel. +49 89 9507-2598Stefanie.Rupp@ProSiebenSat1.com
- Corporate & Finance Communication | Content ProductionSusanne BrieuHead of Corporate & Finance CommunicationsTel. +49 89 9507-1137Susanne.Brieu@prosiebensat1.com