August 3, 2017 Q2/H Press Presentation

Transcription

1 August 3, 2017 Q2/H Press Presentation

2 August 3, 2017 At a glance Thomas Ebeling Chief Executive Officer

3 At a glance Double-digit revenue growth in H Revenues 1, % Adjusted EBITDA % Adjusted net income % H vs. H1 2016; in EUR m. 3

4 At a glance We are on track to reach our 2018 targets Ext. segment and Group revenues [in EUR m; FY 2012-Q (LTM); 2018 target] 2, , , , , , Degree of achievement 1) 76% (required pro-rata target: 75%) 78% 77% 64% 75% Target 2018: EUR 4,506m 470 1, Content Production & Global Sales Digital Ventures & Commerce (since 2015) Digital Entertainment (since 2015) 1,926 1,998 2,063 2,152 2,210 2,207 2,301 Broadcasting German-speaking Digital & Adjacent (until 2014) Latest portfolio measures not yet reflected in 2018 CMD targets Q LTM ) As of Q LTM. 4

5 At a glance and already generate 50% of revenues outside TV advertising External revenues [in EUR m] 3,983 Non-TV advertising CAGR: +33% 2,356 23% 50% CMD target achieved: 50% TV advertising CAGR: +2% 77% 50% of Group revenues generated outside of traditional TV advertising business 2012 Q LTM 5

6 At a glance We have built a portfolio of leading businesses in our new segments Broadcasting German-speaking Content Production & Global Sales Digital Entertainment Digital Ventures & Commerce #1 Free TV #1 AdVoD premium video sales Top 10 house Global independent production group Top 3 Global multichannel network (MCN) #1 #2 #1 #2 55% 9% 11% 24% Share of Group revenues Q Since 2010 Since 2012 Since 2014 Note: portfolio selection. Jochen Schweizer acquisition subject to clearance by the responsible cartel authorities, closing envisaged in Q

7 At a glance We are the leading TV Group in Germany -0.3% pts +2.0% pts Q Basis: all German TV households (German-speaking), A 14-49, Mon-Sun, 3-3 h, continued channels only; RTL Mediengruppe since June 2016 incl. RTLplus, w/o RTL II minority. Source: AGF in cooperation with GfK/TV Scope/ProSiebenSat.1 TV Deutschland. 7

8 At a glance We established an international content production powerhouse 19 production companies in 7 countries 73% of total CP&GS revenues coming from US 1) 1) Share of external revenues generated by US production entities, Q LTM. 8

9 At a glance We built a leading global multi-channel network Top3 global MCN 7bn video views per month 1,200 global creators Source: Studio71. 9

10 At a glance We created a leading proprietary AdTech stack in 24 months Demand side platform Exchange/ marketplace Supply side platform Ad server Sales house Publisher Advertiser/agency + mandates Data management platform 10

11 At a glance We built a portfolio of leading digital commerce assets in four years #2 #1 #1 #2 #1 Double-digit revenue growth Single-digit revenue growth 1) Double-digit revenue growth 2) Double-digit revenue growth Double-digit revenue growth Note: selected companies only; ext. revenue growth H vs. H1 2016; in %. Jochen Schweizer acquisition subject to clearance by the responsible cartel authorities, closing envisaged in Q ) Pro forma view for Parship Elite Group. 2) mydays revenue growth. 11

12 At a glance We established powerful national and international partnerships European Media Alliance cooperations US entertainment cooperations German data cooperation Programmatic Sales House (EBX) Studio71 co-investment Joint online video platform Thematic TV windows Log-in partner alliance First partner 12

13 At a glance We continued our portfolio transformation in H Sale of etraveli after more than doubling its enterprise value (EV) 1) Exit of selected SevenVentures Media-for-Equity (M4E) investments 2) Bolt-on acquisition of Jochen Schweizer to create leading experience platform 3) 1) etraveli closing envisaged for early August 2017, deconsolidation envisaged in Q ) M4E: Media-for-Equity. Deal closed in July 2017; exit of selected assets only. 3) Note: leading experience platform in Germany, Switzerland and Austria; Jochen Schweizer acquisition subject to clearance by the responsible cartel authorities, closing envisaged in Q

14 August 3, 2017 Financials Dr. Jan Kemper Chief Financial Officer

15 Financials Q2 2017: strong financial performance driven by non-tv advertising businesses Consolidated revenues Adjusted EBITDA Financial result Adjusted net income [in EUR m; growth in %] [in EUR m; growth in %] [in EUR m; growth in %] [in EUR m; growth in %] % +6% >+100% +9% Q Q Q Q Q Q Q Q Adjusted EBITDA margin: 28% 15

16 Financials H1 2017: first half also with strong financial performance Consolidated revenues Adjusted EBITDA Financial result Adjusted net income [in EUR m; growth in %] [in EUR m; growth in %] [in EUR m; growth in %] [in EUR m; growth in %] 1, % 1,872 +8% +10% +9% H H H H H H H H Adjusted EBITDA margin: 24% 16

17 Financials We confirm our 2017 financial outlook Group revenue growth Adjusted EBITDA at least high single-digit increase (%) above prior year Adjusted net income above prior year Financial leverage 1.5x-2.5x Dividend pay-out ratio 80-90% 1) Note: outlook reflecting all announced portfolio measures (disposal of etraveli and acquisition of Jochen Schweizer). 1) Based on adjusted net income. 17

18 August 3, 2017 Q focus topics Thomas Ebeling Chief Executive Officer

19 1 Portfolio management and M&A Focus topics for today 1 2 Portfolio management and M&A TV performance 3 Distribution update 4 Advertising market 5 AdTech and data initiatives 19

20 1 Portfolio management and M&A We pursue an active portfolio management strategy Where we invest Where we divest High TV responsiveness Significant synergies Not best owner anymore High omnichannel potential Local hero potential Asset-light business model Significant value creation opportunity Jochen Schweizer ParshipElite Group WindStar Medical etraveli sale SevenVentures M4E portfolio exit Online Travel strategic review Note: Jochen Schweizer acquisition subject to clearance by the responsible cartel authorities, closing envisaged in Q4 2017; etraveli closing envisaged for early August 2017, deconsolidation envisaged in Q3 2017; exit of selected assets of SevenVentures M4E portfolio only: deal closed in July

21 1 Portfolio management and M&A We are creating a leading online experience platform Rationale and highlights Leading in emotional experiences + Majority acquisition at EV of EUR 108m with attractive valuation of ~11x EV/EBITDA 2016 Positive market dynamics with high single-digit growth expectations going forward Complementary product portfolio and brand positioning Leading in adrenalin experiences Strong digital capabilities and omni-channel distribution network Cost savings and synergy potentials Note: Jochen Schweizer subject to clearance by the responsible cartel authorities, closing envisaged in Q4 2017; source: P7S1 analysis. 21

22 1 Portfolio management and M&A We more than doubled the enterprise value of etraveli since acquisition etraveli enterprise value development since acquisition [in EUR m] Acquired in November 2015 and significantly increased revenues while expanding to now 50 countries (e.g., USA, China, India) ~2.2x +116% Combined purchasing power of our Travel vertical with suppliers leading to significant profitability increase November 2015 June 2017 Sold to financial investor CVC in June 2017 at more than doubled EV Note: etraveli closing envisaged for early August

23 1 Portfolio management and M&A We successfully sold parts of our SevenVentures M4E portfolio Large part of M4E portfolio sold to leading US private equity fund Lexington Partners for mid double-digit million Euro amount Lexington acquired majority stake in new fund Crosslantic Capital with us as strategic partner with approximately 25% stake IRR of around 30%, doubling our overall media and cash investments Note: deal closed in July

24 2 TV performance Focus topics for today 1 2 Portfolio management and M&A TV performance 3 Distribution update 4 Advertising market 5 AdTech and data initiatives 24

25 2 TV performance TV consumption reflects aging of core target groups Daily TV consumption Target group A Target group A Target group A [Ø daily TV viewing in minutes, rolling last 4 quarters] 3) [Ø daily TV viewing in minutes, rolling last 4 quarters] 3) [Ø daily TV viewing in minutes, rolling last 4 quarters] 3) % % % Q Q Q Q Q Q German population share 1) : 18% German population share 1) : 44% German population share 1) : 72% TV net reach 2) : ~6m TV net reach 2) : ~20m TV net reach 2) : ~37m TV classic TV alternative 3) TV catch-up 1) Source: German Federal Statistical Office ( Statistisches Bundesamt ) ) TV net reach Q LTM. Source: AGF in cooperation with GfK. 3) Source: Viewtime Report, SevenOne Media/forsa TV alternative: linear TV viewing on PC, laptop, tablet or smartphone via online stream, recording or broadcast signal. 25

26 2 TV performance Increasing relevance of target group 50+ for advertisers Growing share of total population 1) [Germany; 2015; 50+ years] High available income per month 2) Available income after fix costs such as rent and groceries [Germany; 2016; years] High daily TV usage 3) Daily TV consumption [Germany; Q1 2017; 50+ years] +4%pts until % 628 EUR +20% vs minutes +160min vs Effectiveness of TV advertising for brand awareness building and advertising recall in target group 50+ comparable to target group ) 1) 50+; source: Statistisches Bundesamt (Destatis). 2) Generali Altersstudie 2017/IfD Allensbach; n= ) Media Activity Guide 2017, SevenOne Media/forsa. 4) SevenOne Media market research. 26

27 2 TV performance TV continues to dominate video viewing despite high PayVoD penetration TV consumption stable despite increasing broadest user universe of other video services TV (incl. catch-up) DVD/Blu-ray Broadest user universe (A 14-49) Video consumption (A 14-49) [in %; usage at least rarely or more often] [Ø daily TV viewing in minutes, rolling last 4 quarters] Free online video (excl. catch-up) PayVoD % PayVoD penetration only translates to ~5% share of daily video consumption Q Q Q Q Q Q Q Q Q Q Q Q Basis: A 14-49; source: Viewtime Report SevenOne Media/forsa;

28 2 TV performance We maintain the leading position in the German TV market Audience share (A 14-49) Share of advertising (SoA) [Q2 2017; in %] % pts 25.1 [Q2 2017; in %] % pts ) Basis: all German TV households (German-speaking), A 14-49, Mon-Sun, 3-3 h, RTL Mediengruppe since June 2016 incl. RTLplus, w/o RTL II minority; source: AGF in cooperation with GfK/TV Scope/ProSiebenSat.1 TV Deutschland. 2) Gross values; source: Nielsen Media Research/SevenOne Media, Sales Steering & Market Insights. 28

29 2 TV performance In line with previous years, H2 with exceedingly strong line up ahead Examples Commissioned Licensed Branded windows House Rules (H2 2017) Schlag den Henssler (Q3 2017) Get the F*ck out of my House (H2 2017) The Martian (Q3 2017) Honig im Kopf (H2 2017) Scripps Networks Warner Bros. 2015, 20th Century Fox Film Co., TSG Entertainment Finance LLC. All rights reserved The Voice of Germany (Q4 2017) Up to 23.3% Duell um die Welt (H2 2017) Up to 15.5% The Great Bake Off (Q4 2017) Up to 17.4% Profiling Paris (H2 2017) Up to 14.5% Navy CIS (Q3 2017) Up to 13.5% Food & Drinks Home & Garden Travel Do it yourself TF1 International CBS Broadcasting, Inc. Basis: all German TV households (German-speaking), A years, Mon-Sun, 3-3h; source: AGF in cooperation with GfK/TV Scope/ProSiebenSat.1 TV Deutschland. 29

30 2 TV performance Red Arrow s share of our grid is growing and ratings are outperforming Push our own your grid strategy Red Arrow share of BCGS s commissioned content spending [Q LTM; in %] 1) Red Arrow ratings outperforming slot averages Ratings Red Arrow formats [H1 2017; A 14-49] 2) +6% pts 16% Kiss Bang Love February-March 2017 Up to 15.4% Hochzeit auf den ersten Blick: Tatsächlich Liebe?! April 2017 Up to 10.3% 10% Knallerkerle April-May 2017 Up to 19.0% 111 Verrückte Viecher February 2017 Up to 11.2% Q LTM Q LTM 1) As % of spendings in EUR; w/o non-fictional license, adjusted for timing effects. 2) Basis: all German TV households (German-speaking), A years; source: AGF in cooperation with GfK/TV Scope/ProSiebenSat.1 TV Deutschland. 30

31 3 Distribution update Focus topics for today 1 2 Portfolio management & M&A TV performance 3 Distribution update 4 Advertising market 5 AdTech & Data initiatives 31

32 3 Distribution update 7.6m HD subscribers in Q2 2017: well on track to reach 2018 target HD FTA subscriber development [in m] m vs. Q % Q Q Q Q Q Q CMD target 2018 HD penetration 1) 4.5% 9.3% 12.4% 14.4% 16.9% 23.2% 19.2% 1) HD penetration based on total TV households in Germany (39.6m); source: Astra TV Monitor; note: HD Free-to-air subscribers Germany shown, paying subscriber figures as reported by platform partners (EoP; subject to subsequent adjustments by platform partners). 32

33 4 Advertising market Focus topics for today 1 2 Portfolio management and M&A TV performance 3 Distribution update 4 Advertising market 5 AdTech and data initiatives 33

34 4 Advertising market H net TV ad market below PY, but positive expectations for H2 1 Total net advertising market decreased slightly in H mainly driven by Print net TV advertising market also negative 2 In our view, deviation of TV advertising revenues from underlying macro environment is non-structural and only temporary due to campaign shifts into H P7S1 German-speaking TV advertising revenues in H below TV advertising market due to seasonal share of advertising shifts by agencies and Parship internalization 4 Back-loaded growth in H expected September to December 2017 decisive for full year net TV advertising market growth 5 Current commitment levels are supporting back-loaded seasonality and low single-digit full-year TV ad market growth 34

35 4 Advertising market Declining total ad market and TV ad market in H Net ad market in H ) Reasons for declining TV ad market Total net ad market [estimate, in EUR bn] Net TV ad market [estimate, in EUR bn] Declining total net advertising market in H even including Google and Facebook, with print as a main driver 9.4 Restrained marketing spending of advertisers due to political uncertainties (e.g., Brexit and elections) 2.1 Decline reflects strong comparable figures in H H H Development further affected by Parship internalization 1) Basis: Jan-Jun 2017, incl. YouTube, Facebook, search; source: Magna Global Forecast (June 2017), 7.1M estimate/sevenone Media, Market Insights. 35

36 4 Advertising market 6 of top 10 industries increased TV budget, 7 of 10 increased TV ad share Gross TV ad spendings of top 10 TV industries, Germany H vs. H in EUR m H vs. H in EUR m in EUR m Δ Share Δ TV in media mix Total % 100.0% +0.1%pts Trade & Shipment % 14.4% -2.4%pts Food % 12.9% +3.1%pts Cosmetics & Toiletries Business Services Motor Vehicles % -0.3% +3.4% 11.5% 11.2% 6.5% +0.8%pts -0.3%pts +3.1%pts Pharmacy % 6.4% +0.8%pts Beverages Telecommunication Finance % -9.6% +7.1% 5.2% 5.2% 3.6% +0.7%pts -2.2%pts +3.8%pts Detergents % 3.3% +3.3%pts Basis: H (Jan-June), H (Jan-June); source: Nielsen Media Research excl. Media & Publishing and Other Advertising. 36

37 4 Advertising market Back-loaded market development expected in H Estimated 2017 German net TV ad market growth Comments Market growth rate estimate 2017 [in %] Ø growth Ø growth Industries with strong performance in July e.g., motor & vehicles, beverages, home and garden FY 2017 outlook further underpinned by positive advertiser commitments Market growth rate estimate 2016 [in %] Ø growth Ø growth Agencies also with confidence in H2 upside H2 growth backed by all industry analysts estimates Decrease of political uncertainty after French election and further improving macros Q1 Q2 H1 H2 FY 2017 TV ad market outlook maintained at +1.5% to +2.5%, with lower end of range perceived more likely Source: SevenOne Media own estimate; status as of July 21,

38 4 Advertising market All German net TV ad market estimates for 2017 positive +2.9% +2.1% +1.5% +1.5% to +2.5% Increased from previously 1.0% 1) P7S1 internal market estimate Source: Warc International Ad Forecast 2017 (November 2016); ZenithOptimedia Advertising Expenditure Forecasts (June 2017); Magna Global (Broadcast TV, June 2017); SevenOne Media own estimate. 1) Source: Magna Global (Broadcast TV, December 2016). 38

39 4 Advertising market Sales outlook German net TV ad market growth of +1.5% to +2.5%, with lower end of range perceived more likely P7S1 TV ad revenue growth relative to overall TV ad market subject to share catch-up effects in decisive months September to December P7S1 performance expected to be in line with main competitor Continued increase of TV share in gross media mix, net share expected stable Scaling of addressable TV as top priority 39

40 5 AdTech and data initiatives Focus topics for today 1 2 Portfolio management and M&A TV performance 3 Distribution update 4 Advertising market 5 AdTech and data initiatives 40

41 5 AdTech and data initiatives Our AdTech & data initiatives are progressing Technology Data sources Products Sales P7S1 TV data Log-in partner alliance New P7S1 Digital Entertainment data Addressable TV SwitchIn Smartstream.TV Int. New P7S1 Commerce data PEP (Zalando coop) European Broadcaster Exchange (EBX) New Value creation levers for P7S1 Influence ecpm 1) on Digital & TV Drive video views/ page impressions Offer direct marketing services Increase conversion rates Reduce customer acquisition costs 1) ecpm: effective Cost-per-Thousand (effective Cost-per-Mille) 41

42 5 AdTech and data initiatives We have a unique position in data Best Usageweighted TV data None Digital Commerce data Best 42

43 5 AdTech and data initiatives New Log-in alliance partnership will strengthen our future ad business Maximum convenience for users to register with one password across all partner sites One login angemeldet bleiben First partner Transparent user privacy management in line with upcoming European eprivacy data regulation Further optimized individualization of advertising offerings and products Initial reach of 45m users across all founding partners 1) Open for further partners based on open log-in standard Note: Initiative based on joint foundation subject to approval of anti-trust authorities. 1) Estimated user base at launch. 43

44 5 AdTech and data initiatives P7S1 already leading the market in addressable TV advertising Addressable TV Example for successful SwitchIn campaigns Deutsche Bahn Sony Paramount 93 campaigns 67 clients H :1 communication and targeting Interaction and online features Adserver connection provided via own AdTech stack WWF Eurowings Columbia Heineken Kia Weight Watchers 34 campaigns 24 clients H

45 5 AdTech and data initiatives We are establishing a programmatic sales house with TF1 and Mediaset European Broadcaster Exchange (EBX) Joint Venture with equal shares Joint Venture to sell pan-european programmatic video advertising campaigns targeting additional advertising budgets Addressing the demand for brand-safe environments and high quality international video campaigns at scale Start of a deeper strategic collaboration to compete with global competitors European Broadcaster Exchange (EBX) Premium video ad inventory by local sales houses Open model to attract other European media companies 45

46 August 3, 2017 Outlook Thomas Ebeling Chief Executive Officer

47 Outlook We confirm our revenue and earnings outlook for 2017 At least high single-digit Group revenue growth German TV ad market to grow +1.5% to +2.5%, with lower end of range perceived more likely P7S1 performance relative to overall TV ad market subject to share catch-up effects in decisive months September to December Digital portfolio with double-digit revenue growth Adjusted EBITDA and adjusted net income above prior year Note: outlook reflecting all announced portfolio measures; Jochen Schweizer acquisition subject to clearance by the responsible cartel authorities, closing envisaged in Q4 2017; etraveli closing envisaged for early August 2017, deconsolidation envisaged in Q

48 48

49 August 3, 2017 Backup

50 Financials Q2/H Group key metrics [in EUR m] Q Q Δ H H Δ Revenues % 1,872 1, % Adjusted EBITDA % % Reconciling items 1) >100% >100% EBITDA % % Depreciation and amortization % % Thereof PPA 1) % % Operating result (EBIT) % % Financial result n/a % Thereof interest result % % Thereof valuation effects 1) n/a % Earnings before tax (EBT) % % Net income 2) % % Adjusted net income 3) % % Net financial debt 4) -2,425-2, % -2,425-2, % Financial leverage 4) 2.3x 2.1x +0.2x 2.3x 2.1x +0.2x 1) Adjusted in adjusted net income. 2) Result for the period attributable to shareholders of ProSiebenSat.1 Media SE. 3) Adjusted for reconciling items. 4) After reclassification of cash and cash equivalents of etraveli AB. 50

51 Disclaimer This presentation contains "forward-looking statements" regarding ProSiebenSat.1 Media SE ("ProSiebenSat.1") or ProSiebenSat.1 Group, including opinions, estimates and projections regarding ProSiebenSat.1's or ProSiebenSat.1 Group's financial position, business strategy, plans and objectives of management and future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of ProSiebenSat.1 or ProSiebenSat.1 Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this presentation and are based on numerous assumptions which may or may not prove to be correct. No representation or warranty, expressed or implied, is made by ProSiebenSat.1 with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning ProSiebenSat.1 or ProSiebenSat.1 Group. ProSiebenSat.1 undertakes no obligation to publicly update or revise any forward-looking statements or other information stated herein, whether as a result of new information, future events or otherwise. 51