PROSIEBENSAT.1 MEDIA SE Quarterly Statement forthe First Quarter of 2024
SHAPING THEFUTURE
OFENTERTAINMENT
CONTENT
3 | CONSOLIDATED INCOME | ||
STATEMENT | 17 | ||
5 | CONSOLIDATED STATEMENT | ||
OF COMPREHENSIVE INCOME 17 | |||
CONSOLIDATED STATEMENT | |||
OF FINANCIAL POSITION | 18 | ||
9 | CONSOLIDATED CASH FLOW | ||
COMPANY OUTLOOK | 14 | STATEMENT | 20 |
FINANCIAL CALENDAR | 21 | ||
EDITORIAL INFORMATION | 22 |
- The Group had a good start to the year, as expected: Entertainment revenues developed positively as expected despite the continuing challenging economic situation. At the same time, the Group continued its revenue growth in the Commerce & Ventures business. Overall, Group revenues increased by 6% to EUR 867 million in the first quarter of 2024, adjusted EBITDA grew by 35% to EUR 72 million.
- Positive trends in the TV advertising market, strong quarter of Joyn: The positive trend in advertising revenues is continuing, with the Group recording a clear increase in TV advertising revenues in the first quarter of 2024. At the same time, the Group is continuing its revenue momentum in digital & smart advertising revenues in the German-speakingregion. Joyn in particular is growing significantly.
- Commerce & Ventures segment again with strong revenue and earnings growth, Dating & Video below previous year: The Group recorded very dynamic and profitable growth in the Commerce & Ventures segment, which more than compensated for the decline in revenues in the Dating & Video segment. The most important growth drivers in the Commerce & Ventures portfolio once again were the online comparison portal Verivox and the online beauty provider flaconi.
- Adjusted EBITDA up 35% year-on-year despite higher programming expenses: At EUR 72 million, adjusted EBITDA was significantly above the previous year (previous year: EUR 53 million). In addition to revenue growth, this is due to the Group's cost program implemented in the previous year.
- Full-yearoutlook for revenues, adjusted EBITDA and all other most important financial performance indicators confirmed: ProSiebenSat.1 continues to aim to increase Group revenues to around EUR 3.95 billion in 2024 with a variance of plus/minus EUR 150 million (previous year: EUR 3.85 billion). At the same time, ProSiebenSat.1 Group continues to expect an adjusted EBITDA of EUR 575 million (previous year: EUR 578 million) with a variance of plus/minus EUR 50 million - and thus on the midpoint of previous year's level.
KEY FIGURES OF PROSIEBENSAT.1 GROUP
in EUR m
Q1 2024 | Q1 2023 | |
Revenues | 867 | 816 |
Adjusted EBITDA1 | 72 | 53 |
Adjusted net income2 | 8 | ‒15 |
Adjusted operating free cash flow3 | 38 | ‒24 |
Audience share (in %)4 | 20.1 | 21.0 |
Quarterly Statement for the First Quarter of 2024
At a Glance
003
03/31/2024 | 12/31/2023 | 03/31/2023 | |
Employees5 | 6,994 | 7,188 | 7,385 |
Programming assets | 819 | 864 | 1,114 |
Cash and cash equivalents | 567 | 573 | 436 |
Net financial debt | 1,553 | 1,546 | 1,682 |
Leverage ratio6 | 2.6 | 2.7 | 2.7 |
1 EBITDA before reconciling items.
2 Net income attributable to shareholders of ProSiebenSat.1 Media SE before the amortization and impairments from purchase price allocations, adjusted for the reconciling items. These include valuation effects recognized in other financial result, valuation effects of put option liabilities, valuation effects from interest rate hedging transactions as well as other material one-time items. Moreover, the tax effects resulting from such adjustments are also adjusted. See Annual Report 2023, chapter "Planning and Management".
3 For a definition of the adjusted operating free cash flow, please refer to the Annual Report 2023, chapter "Planning and Management".
4 ProSiebenSat.1 Group; AGF in cooperation with GfK; market standard: TV; VIDEOSCOPE 1.4; Target group: 20-59 years. In the analysis of audience shares at Group level, ProSiebenSat.1 uses the advertising-relevant target group of viewers aged 20 to 59 since 2024; previously, the focus was on the 14- to 49-year-old target group.
5 Full-time equivalent positions.
6 Ratio net financial debt to adjusted EBITDA in the last twelve months.
- INFORMATION
Due to rounding, it is possible that certain figures do not exactly add up to the totals shown and that percentage figures given do not exactly reflect the absolute figures to which they relate.
Quarterly Statement for the First Quarter of 2024
At a Glance
004
SIGNIFICANT EVENTS
Personnel Changes on the Executive Board
On March 18, 2024, the Supervisory Board of ProSiebenSat.1 Media SE appointed Markus Breitenecker to the Group Executive Board as of April 1, 2024. Together with CEO Bert Habets (Group CEO), he is responsible for managing the Entertainment segment as Chief Operating Officer (COO). His focus is on the areas of streaming and digital platforms. He is also responsible for country activities in Switzerland and Austria. The Group is thus also strengthening its clear strategic focus on the Entertainment sector on the Executive Board.
The Austrian media manager Markus Breitenecker previously headed the ProSiebenSat.1 Group's business in Austria as CEO. In his many years with the Group, he has developed both ProSiebenSat.1 PULS4 into the largest private television group and Joyn into the largest streamer in Austria.
Christine Scheffler left the Executive Board by mutual agreement with the Supervisory Board on March 31, 2024, after more than five years with the Company, including four years as a member of the Executive Board, due to differences of opinion regarding the next steps in the Company's transformation. The Executive Board of ProSiebenSat.1 Media SE has thus consisted of Bert Habets (Group CEO), Martin Mildner (Group CFO) and Markus Breitenecker (COO) since April 1, 2024.
Significant Events after the Reporting Period
Annual General Meeting for the Financial Year 2023
The Annual General Meeting of ProSiebenSat.1 Media SE for the financial year 2023 took place on April 30, 2024. The shareholders of ProSiebenSat.1 Media SE agreed that a dividend of EUR 0.05 per share will be distributed to the holders entitled to dividends for financial year 2023. The dividend was paid out on May 6, 2024.
The motion by MFE-MEDIAFOREUROPE N.V. ("MFE") to prepare and examine the spin-off the parts of the Company not belonging to the Entertainment segment did not receive the required qualified majority of 75% of the votes cast. With their decision, the shareholders followed the recommendation of the Executive Board and Supervisory Board and thus confirmed the Company's strategy. In addition to focusing on the core Entertainment business, this strategy includes the value-maximizing sale of individual investments in the digital portfolio.
In addition, elections for the Supervisory Board were held at the Annual General Meeting. Klára Brachtlová had already been appointed to the Supervisory Board by court last year as a representative of the minority shareholder PPF IM LTD ("PPF") and has now been confirmed in office. In addition, Christoph Mainusch, who was proposed by PPF, as well as Leopoldo Attolico and Simone Scettri, who both had been proposed by MFE, were elected to the Supervisory Board. Prof. Dr. Rolf Nonnenmacher, Marjorie Kaplan and Ketan Mehta are no longer members of the new Supervisory Board.
- www.prosiebensat1.com/en/about-prosiebensat1/who-we-are/supervisory-board
The Annual General Meeting voted in favour of MFE's request of cancelling the Authorized Capital 2021. This required a simple majority of the votes cast. However, the creation of new Authorized Capital 2024 did not receive the necessary majority due to the requirement of a qualified majority of
Quarterly Statement for the First Quarter of 2024
Current Information on the First Quarter of 2024
005
75% of the votes cast. In addition, a resolution was approved to amend the Articles of Incorporation with regard to transactions requiring approval, which required a simple majority of the votes cast.
- Annual Report 2023, chapter "Takeover-Related Disclosures"
The proposal by the Executive Board and Supervisory Board for a measure under company law regarding Joyn did not receive the required qualified majority of 75% of the votes cast: Among other things, this intragroup reorganization would have made it possible to utilize existing tax loss carryforwards amounting to around EUR 480 million.
Attendance at the Annual General Meeting was 63.5% of the share capital, which corresponds to 5.5 percentage points more than last year. The Annual General Meeting took place virtually.
Information on the Matter of German Payment Services Supervision Act
ProSiebenSat.1 Group reported as part of the Annual Report for financial year 2023, published on March 7, 2024, in detail on the business activities of Jochen Schweizer GmbH and mydays GmbH with regard to the German Payment Services Supervision Act ("Zahlungsdiensteaufsichtsgesetz" - "ZAG") and the related processes. The internal investigation initiated by the Executive Board and Supervisory Board was concluded on February 29, 2024, and the Executive Board and Supervisory Board provided detailed information on the results and conclusions at the Annual General Meeting of ProSiebenSat.1 Media SE. For a comprehensive presentation of the matter, we refer to the ProSiebenSat.1 website and the Annual Report.
- www.prosiebensat1.com/en/annual-general-meeting→ Annual Report 2023, chapter "Significant Events"
- Annual Report 2023, chapter "Risk Report"
Notes on Debt Financing Instruments
ProSiebenSat.1 Group uses various financing instruments and thus practices active financial management. In this context, in April 2024, the Group extended the majority of the EUR 353 million term loan tranches of the syndicated loan, which previously matured in April 2026, by a further year until April 2027. The remaining part of this term loan tranche of EUR 47 million remains due in April 2026.
→ Annual Report 2023, chapter "Borrowings and Financial Structure"
ECONOMIC DEVELOPMENTS
Global economic development remains subdued at the beginning of 2024. The outlook for the German economy also remains cloudy. Industry and the export sector in particular are suffering from weak foreign and domestic demand, high energy prices, increased financing costs and numerous economic policy uncertainties. At the same time, the construction industry is in a deep recession. Against this backdrop, the experts of the Joint Economic Forecast expect German economic output to stagnate in the first quarter of 2024 compared to the previous quarter. According to the Joint Economic Forecast, real economic growth of 0.1% is expected for 2024. In fall 2023, the estimate was 1.2 percentage points higher.
Hopes for growth rest primarily on private consumption. Consumers were still cautious at the beginning of 2024, as can be seen from the decline in retail sales, among other things. However, against the backdrop of significantly falling inflation rates - according to Destatis, inflation was only 2.2% in March - and rising real incomes, consumers are expected to regain confidence and increase their spending as the year progresses. Government consumption is also likely to expand more strongly again following the significant decline in 2023 due to the discontinuation of pandemic- related expenditure. The experts in the Joint Economic Forecast currently expect private and government consumer spending to increase by 0.9% and 1.4% respectively in real terms in the full- year 2024. As an early-cyclical company, private consumption is particularly relevant for our business development. Our high-margin advertising business in particular correlates closely with private consumption.
Quarterly Statement for the First Quarter of 2024
Current Information on the First Quarter of 2024
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DEVELOPMENT OF RELEVANT MARKET ENVIRONMENTS
ProSiebenSat.1 is the home of popular entertainment and infotainment. The Company is one of the leading entertainment and commerce providers in the German-speaking region. Our clear aim is to become the number one in the entertainment industry in the German-speaking region, with high profitability and very fast-growing digital business models. To achieve this, we are focusing on three strategic priorities: We are investing more in programming content, maximizing our reach, and diversifying our monetization.
Entertainment is the core of ProSiebenSat.1 Group. The aim is to expand our digital business. In doing so, we are placing our streaming platform Joyn at the center of our activities: We want to establish Joyn as the leading freely available entertainment platform for everyone in the German- speaking region. Joyn combines the areas of linear TV, streaming and social media. In this way, we are increasing our overall reach and opening up new monetization opportunities: Through our focus on digital advertising technologies, we are expanding the offering for our advertising customers and can thus increase the share of our digital & smart advertising revenues.
In addition to the objective of offering content across platforms, ProSiebenSat.1 is increasingly focusing on local and live content in its program portfolio. This is an increasingly important competitive advantage: With exclusive programs, we are sharpening our brand profile on TV as well as on Joyn and strengthening our market position against multinational streaming providers.
Our programming strategy is increasingly paying off. For the second time in a row, Joyn posted record figures. The number of monthly video users increased to 6.5 million in the first quarter of 2024 (+42% compared to previous year's quarter) and the total viewing time grew to 9.2 billion minutes (+21% compared to previous year's quarter). One example of this success is the reality show "Big Brother", which achieved the most successful launch of a reality program as Joyn Original in March. Partnerships are also an important way of strengthening Joyn, especially in programmatic advertising time trading and distribution. In this context, ProSiebenSat.1 Group concluded an AdTech cooperation with RTL Deutschland in February and made all of Joyn's free content available directly via Magenta TV through a new distribution agreement with Deutsche Telekom.
The ProSiebenSat.1 stations' audience share in the overall target group of 20- to 59-year-olds in Germany amounted to 20.1% in the first quarter of 2024 (previous year: 21.0%). In prime time, which is particularly relevant for the advertising market, the audience share among 20- to 59-year-olds amounted to 20.1% and was thus slightly above the previous year's level (previous year: 19.9%). ProSiebenSat.1 stands for successful entertainment and focuses on local and live content in prime time on TV. Examples of this are "Germany's Next Topmodel - by Heidi Klum" and "Wer stiehlt mir die Show?" (Stealing the Show). In the first quarter of 2024, the formats achieved average market shares of 15.0% and 14.5% respectively in prime time (20- to 59-year-old viewers) and were thus well above the station average.
- INFORMATION
In view of demographic shifts and structural changes in media usage behavior, ProSiebenSat.1 adjusted the definition of its target group at the beginning of 2024 in order to better reflect TV usage: In the analysis of audience shares at Group level, ProSiebenSat.1 now uses the advertising-relevant target group of viewers aged 20 to 59; previously, the focus was on the 14- to 49-year-old target group.
The advertising market reacts in a very sensitive and early-cyclical way to economic developments. Private consumer spending in particular correlates very closely with companies' investments in advertising. In the first quarter of 2024, investments in TV advertising in Germany increased and, according to Nielsen Media Research, were up 12.2% year-on-year at EUR 3.73 billion gross (previous
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Current Information on the First Quarter of 2024
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year: EUR 3.33 billion). In this competitive environment, ProSiebenSat.1 Group's TV advertising
revenues increased by 11.5% to EUR 1.24 billion gross (previous year: EUR 1.11 billion). This resulted in a
market share of 33.2% (previous year: 33.4%).
- INFORMATION
The data from Nielsen Media Research are important indicators for assessing the development of the advertising market. However, they are gathered on a gross revenue basis, meaning that neither discounts and own advertising nor agency commission are taken into account. In addition, the figures include TV spots from media-for-revenue and media-for- equity deals. The advertising revenues of major US digital corporations such as Google LLC ("Google") also are not reflected in the Nielsen figures, which therefore do not represent the entire gross advertising market. This also results in differences from the development of the TV advertising market on a net basis.
In the Commerce & Ventures segment, ProSiebenSat.1 Group bundles its investments in e-commerce companies. Following the principle of "reach meets idea", the Group invests advertising time primarily in digital consumer brands and participates in the growth of the companies in the form of media-for-revenue and media-for-equity deals. ProSiebenSat.1 Group thus monetizes its reach through both advertising and media synergies.
A large part of the Commerce portfolio is dependent on macroeconomic developments. This relates firstly to the financial strength of the growth companies and the investment opportunities that arise. Secondly, private consumption is relevant for the business development of the Commerce portals, which focus strongly on consumers' willingness to spend. This was again made clear at the beginning of 2024, albeit with varying intensity and impact depending on the sector.
The Group will continue to use its reach to invest in minority interests in order to create value. At the same time, ProSiebenSat.1 pursues active portfolio management: We continually review which portfolio companies we can take to the next level of development with our expertise and the investment currency of reach. Conversely, if a business no longer benefits to a high degree from synergies within the Group and especially from our reach, it is part of the overall strategy to sell these well-developed commerce brands to a more suitable owner in order to monetize the investment.
In the Dating & Video segment, we have a broad range of offerings in the online dating and social entertainment market with the platforms of ParshipMeet Group. ParshipMeet Group is very diversified in terms of its offerings for different target groups as well as its revenue sources and geographical presence. After ProSiebenSat.1 Group built ParshipMeet Group into a leading global online dating provider, starting in 2012 with a media-for-revenue investment, the Group is now focusing on strengthening the operating performance of the Dating & Video business. The aim remains to maximize the value of ParshipMeet Group in the medium- to long-term and to realize it at the appropriate time.
ParshipMeet Group consists of eight consumer brands and is present on three continents. The Group generates around two thirds of its revenues outside the German-speaking region. As a result, the factors influencing business development are extremely diverse. This includes macroeconomic developments in various countries as well as legal changes.
Quarterly Statement for the First Quarter of 2024
Current Information on the First Quarter of 2024
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Group revenues grew as expected in the first quarter of 2024: At EUR 867 million, they were 6% or EUR 51 million above the previous year's quarter. The Entertainment segment was a key growth driver, with TV advertising revenues increasing in the first quarter and the significant revenue growth in digital & smart advertising revenues in the German-speaking region continuing. Revenues also continued to grow dynamically in the Commerce & Ventures segment. Adjusted for currency effects and portfolio changes, the Group's revenues increased by 7% or EUR 56 million.
EXTERNAL REVENUES BY SEGMENT
in EUR m
Q1 2024 | Q1 2023 | Absolute change | Change in % | |
Entertainment | 554 | 527 | 27 | 5.0 |
Commerce & Ventures | 206 | 172 | 35 | 20.1 |
Dating & Video | 107 | 117 | ‒10 | ‒8.6 |
Revenues | 867 | 816 | 51 | 6.3 |
External revenues in the Entertainment segment amounted to EUR 554 million in the first quarter of 2024 and were thus 5% or EUR 27 million above the previous year's figure. Adjusted for currency effects and portfolio changes, the growth amounted to 5% or EUR 26 million. The Group recorded a clear increase in TV advertising revenues in the first quarter of 2024, having nearly reached the previous year's level already at the end of the year. At the same time, the revenue momentum in digital & smart advertising revenues in the German-speaking region continued - mainly driven by Joyn: For the second time in a row, the streaming platform posted record figures with a 42% increase in monthly video users compared to the first quarter of 2023; AVoD revenues (Advertising Video on Demand) in Germany increased by 50% compared to the previous year's period. This shows that ProSiebenSat.1 Group is increasingly monetizing its digital reach. Overall, revenues in the German-speaking region from digital & smart advertising increased by 9%, while total advertising revenues grew by 5%.
In the Commerce & Ventures segment, external revenues grew by 20% or EUR 35 million to EUR 206 million. Adjusted for currency effects and portfolio changes, the increase in the first quarter of 2024 amounted to 23% or EUR 39 million. The most important growth drivers were once again the Beauty & Lifestyle business with flaconi and the online comparison portal Verivox (Consumer Advice). Both companies recorded significant double-digit revenue growth: Verivox grew dynamically in a healthy market environment following the easing on the energy markets, flaconi also developed very positively despite continued consumer restraint.
External revenues in the Dating & Video segment amounted to EUR 107 million, a decline of 9% or EUR 10 million. Adjusted for currency effects, the decline amounted to 8% or EUR 9 million. Revenues in the Dating unit fell by 12% or EUR 8 million, which is attributable to the challenging competitive environment, among others. In addition, stricter regulations regarding fair consumer contracts came into force in Germany in 2022, which particularly affect the subscription models of the Parship and ElitePartner platforms and had not yet had a full impact in the previous year's quarter. Revenues in the Video unit declined by 4% or EUR 2 million in an also highly competitive environment.
Quarterly Statement for the First Quarter of 2024
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Financial Information on the Business Performance in the First Quarter of 2024
EXTERNAL REVENUES
in EUR m
Entertainment | Commerce & Ventures | Dating & Video | Total Group | ||||||
Q1 2024 | Q1 2023 | Q1 2024 | Q1 2023 | Q1 2024 | Q1 2023 | Q1 2024 | Q1 2023 | ||
Advertising revenues | 451 | 432 | 28 | 27 | - | - | 480 | 459 | |
DACH1 | 393 | 376 | 28 | 27 | - | - | 421 | 403 | |
Rest of the world | 59 | 56 | - | - | - | - | 59 | 56 | |
Distribution | 50 | 46 | - | - | - | - | 50 | 46 | |
Content | 27 | 28 | - | - | - | - | 27 | 28 | |
Digital Platform & | |||||||||
Commerce | - | - | 177 | 144 | - | - | 177 | 144 | |
Consumer Advice | - | - | 76 | 58 | - | - | 76 | 58 | |
Experiences | - | - | 3 | 5 | - | - | 3 | 5 | |
Beauty & Lifestyle | - | - | 98 | 81 | - | - | 98 | 81 | |
Dating & Video | - | - | - | - | 107 | 117 | 107 | 117 | |
Dating | - | - | - | - | 57 | 65 | 57 | 65 | |
Video | - | - | - | - | 50 | 53 | 50 | 53 | |
Other revenues | 25 | 21 | 1 | 1 | - | - | 26 | 22 | |
Total | 554 | 527 | 206 | 172 | 107 | 117 | 867 | 816 | |
1 DACH = German-speaking region (Germany, Austria, Switzerland).
Adjusted EBITDA increased by 35% to EUR 72 million in the first quarter of 2024 (previous year: EUR 53 million) despite higher programming expenses for local content. This very positive earnings performance reflects both revenue growth and the Group's consistent cost management. Last year, the Group took targeted cost measures to make the organization leaner and more efficient. The cost program was implemented at the end of October 2023, meaning that the resulting savings effects will fully materialize in the course of 2024 and were cleary visible for the first time in the first quarter. Adjusted for currency effects and portfolio changes, adjusted EBITDA grew by 30%.
- Company Outlook
ADJUSTED EBITDA BY SEGMENT
in EUR m
Q1 2024 | Q1 2023 | Absolute change | Change in % | |
Entertainment | 45 | 31 | 14 | 46.9 |
Commerce & Ventures | 17 | 4 | 13 | ~ |
Dating & Video | 17 | 21 | ‒5 | ‒21.3 |
Reconciliation (Holding & other) | ‒7 | ‒3 | ‒4 | ~ |
Total adjusted EBITDA | 72 | 53 | 19 | 35.0 |
The adjusted EBITDA of the Entertainment segment improved by 47% or EUR 14 million to EUR 45 million despite the announced increase in programming expenses. At EUR 242 million, programming expenses in the first quarter were 8% or EUR 18 million higher than in the previous year's quarter (previous year: EUR 224 million). With the clear focus on exclusive local content, ProSiebenSat.1 aims to strengthen its market share in linear TV and the growth of Joyn. However, the higher programming expenses were more than offset by the positive revenue development of the high-margin advertising business and lower costs due to the efficiency program implemented in the previous year.
In the Commerce & Ventures segment, adjusted EBITDA grew to EUR 17 million (previous year: EUR 4 million). This represents a four-fold increase, which is primarily attributable to the revenue performance of Verivox and flaconi. The disposal of Regiondo GmbH ("Regiondo") also had an effect. Regiondo was part of the experience and leisure business of Jochen Schweizer mydays (Experiences) and made a negative contribution to earnings in the previous year. The entity was sold effective as of June 30, 2023.
Quarterly Statement for the First Quarter of 2024
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Financial Information on the Business Performance in the First Quarter of 2024
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ProSiebenSat.1 Media SE published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 16:27:08 UTC.
