Television Francaise 1 Sa · EURONEXT:TFI
Television Francaise 1 Sa — TF1 Group — FY2019 Earnings Presentation
39 slides from Television Francaise 1 Sa's earnings presentation, Feb 24, 2020
Slide 1: Post FY2019 Results Investor Presentation
POST FY2019 RESULTS INVESTOR PRESENTATION
Slide 2: Moving to Total Video
MOVING TO TOTAL VIDEO 1 OVERVIEW OF TF1 GROUP PROFILE AND FRENCH MEDIA MARKET (P.3) 2 2019: DELIVERING ON OUR OBJECTIVES THANKS TO SMART STRATEGIC MOVES (P.9) 3 2019: FINANCIAL RESULTS IN LINE WITH OUR OBJECTIVES (P.23) 4 2020 AND BEYOND: OPPORTUNITIES FOR A TOTAL VIDEO GROUP (P.32) 5 TF1: A GROUP T
Slide 3: TF1 Group: achieving a more balanced portfolio
TF1 Group : Achieving a more balanced portfolio by boosting the model with content production and digital TV CONTENT PRODUCTION BROADCASTING DIGITAL DRAMA FTA CHANNELS PUBLISHERS THEME CHANNELS BRAND SOLUTIONS AND SERVICES DOCUMENTARIES ANIMATION OTHER BROADCASTING ACTIVITIES ENTERTAINMENT/ TALK SHO
Slide 4: French people watch more than 3 hours of TV a day
French people watch more than 3 hours of TV a day TV Radio Internet* 3:56 3:58 3:49 3:44 3:43 3:42 3:41 3:42 3:36 3:34 3:30 3:47 3:50 3:46 3:37 3:38 3:39 3:32 3:35 3:25 3:22 3:08 1:18 1:59 1:50 4+ W<50 PDM 3:30 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 28 million individuals reached dai
Slide 5: The French TV sector could benefit from more consolidation
The French TV sector could benefit from more consolidation 2 channels (France 4 and France Ô) to be switched off in 2020 2005 2012 2016 2020 Buy-out of Lagardère channels by M6 in Q4 2019 6 19 25 27 25 channels channels channels channels channels France is still underinvested in TV advertising AD TV
Slide 6: French net advertising market
French net advertising market Evolution of TV and digital advertising market (€ billion) Media net ad revenue (€bn) 2017* 2018* Display (excl. search) TV (incl. digital TV since 2017) DIGITAL 4.0 4.6 Search 2.1 2.3 Display 1.2 1.6 2,3 Others 0.7 0.7 1,9 1,1 1,2 TV (incl. digital TV) 3.3 3.4 0,6 0,8
Slide 7: Best audience share in Europe
Best audience share in Europe Largest market share of any private Unrivalled lead in Europe over #2 sector European TV channel (% 2019 audience share of commercial target) ∆ VS CHALLENGER (% 2019 audience share of commercial target) 22.0 % +7.3 PT 14.7 % 22.0 % 15.9 % 15.9 % +3.8 PT 12.1 % 14.4 % 12
Slide 8: Positive impacts of changes in regulation making us confident
Positive impacts of changes in regulation making us confident for the future Audivisual law to come: Capacity to produce french • Forbidden sectors New corporate drama with dependent • Addressable tv Co-production tax rate producers • % Dependent Shares granted (33% 25% in 2022) (26% 30%) produc
Slide 9: A winning, multi-channel strategy
A winning, multi-channel strategy Clear leader among W<50PDM Record high among 25-49 year-olds 32,3% 32.3% 32,6% 32.6% 32,6% 32.6% 29.4% 29,4% 29,3% 29.3% 29.2% 29,2% 10.6% 9.6% 22,1% 22.1% 22,5% 22.5% 22.0% 22,0% 19,8% 19.8% 20,1% 20.1% 19,8% 19.8% 2017 2018 2019 2017 2018 2019 Source: Médiamétrie
Slide 10: A winning, multi-channel strategy: W<50PDM positioning
A winning, multi-channel strategy TF1 group channels particularly well positioned with W<50PDM In % 22,0 22.0 +50% audience share vs M6 14,7 14.7 8.6 8,6 1ST 3RD RECORD DTT DTT channel channel YEAR 4.4 4,4 3.9 3,9 3.7 3,7 3,3 3.3 3,1 3.1 2,7 2.7 2,6 2.6 2,3 2.3 1,9 1.9 1.8 1,8 1,8 1.8 1,7 1.7 1,5 1.
Slide 11: Powerful content and unrivalled choice
Powerful content and unrivalled choice TF1 core channel: all Top 100 audiences among W<50PDM 98 of the Top 100 audiences among 25-49 year-olds FRENCH DRAMA ENTERTAINMENT SPORT US SERIES All of the top 50 audiences 43 of the top 50 audiences Top 3 audiences All of the top 50 audiences Up to 8.5m view
Slide 12: TMC, TFX and TF1 Séries Films: effective complementarity
TMC, TFX and TF1 SÉRIES FILMS : effective complementarity EXCLUSIVE CONTENT FOR TARGET AUDIENCES 12% share of 25-49 year-olds 10% share of 25-49 year-olds 12% share of 25-49 year-olds CONTENT RECYCLING MAXIMISED +500,000 next-day viewers +800,000 viewers for 1 repeat st 3m viewers for the France/Bol
Slide 13: Thanks to MYTF1, the group is moving to Total Video
Thanks to MYTF1, the group is moving to Total Video Catch-up TV, enhanced by our AVOD offer ▪ exclusive content: manga, telenovela, etc ▪ first-run series Fresh, personalised ▪ premieres, catch-up, user experience highlights ▪ available since June 2019 ▪ functionalities to the highest standards in t
Slide 14: MYTF1: France's no.1 catch-up service
MYTF1: France’s no.1 catch-up service FRENCH DRAMA 27 MILLION registered users, including 6.7m 16-24 year-olds 1.8 BILLION video views, +24% year-on-year UP TO 30% extra viewers vs. day after 1st broadcast +1.4 M viewers (+23% extra viewers vs. day after 1st broadcast) FRENCH DRAMA +500 000 viewers
Slide 15: New ways to monetise our channels
New ways to monetise our channels Proven effectiveness of TV advertising invested = ROI of ▪ High ROI ▪ 26 days’ carryover effect Used by pure players ▪ Pure players are spending more: +34% in 2 years Better monetisation driven by data ▪ MYTF1: revenue growth (+8% vs 2018) ▪ More than 30% of invento
Slide 16: Programming costs well monitored
Programming costs well monitored COMPLEMENTARY INITIATIVES … … HELPING TO KEEP COSTS DOWN ▪ Multi-channel strategy ▪ We delivered on our guidance : €985m in 2019 (-€29m vs 2018) ▪ Better recycling of content ▪ Good inventory management: ▪ New acquisitions policy: cherry picking €650m in 2019 (-19% i
Slide 17: Newen: successful international expansion
Newen: successful international expansion International build-up Revenue driven by international operations* 2016 2019 MARCH OCT. SEP. 2019 2019 32% 2018 JUL. 100% 2018 FEB. 68% 2017 2016 ACQUISITION OF International France BY *Based on geographical location of the entity 17
Slide 18: Newen: enhanced diversity of content
Newen: enhanced diversity of content DRAMA DOCUMENTARY/ ANIMATION TV MOVIES ENTERTAINMENT CINEMA MAGAZINE Distributed in 5.2m 50 hours MORE THAN 50 60% audience share 300,000 viewers on average 87 COUNTRIES for delivery in 2020 TV movies produced of individuals aged 4+ box office entries (2x vs 2019
Slide 19: Newen: client base increasing and diversifying
Newen: client base increasing and diversifying FROM 2 MAIN CLIENTS IN 2016 … … TO A LARGE NUMBER OF FRENCH AND INTERNATIONAL CLIENTS IN 2019 PRODUCTION DISTRIBUTION 2016 2019 19
Slide 20: Unify: a year of building up the division
Unify: a year of building up the division Unify division created in February 2019 Locations rationalised from 7 to 4 sites A TRANSITIONAL YEAR THAT DENTED New management team PROFITS BUT… Recruitment drives in France and Germany … THE FUNDAMENTALS ARE THERE Launch of the Unify Advertising one-stop a
Slide 21: Unify: how we are meeting the challenges
Unify: how we are meeting the challenges KEY CHALLENGES WHAT WE ARE DOING ▪ Scaling up our brands (e.g. Marmiton) RELAUNCHING OUR BRANDS ▪ Improving the user experience across all devices (mobile apps, websites, etc) EXPANDING SOCIAL ▪ Refocusing on 3 strong brands in France E-COMMERCE (My Little Bo
Slide 22: Marmiton: the recipe for a successful brand relaunch
Marmiton: the recipe for a successful brand relaunch Relaunch to increase brand appeal ▪ Higher profile on social networks ▪ More videos (+50% year-on-year) 21.4M users Good brand recognition 3M fans ▪ 21.4m monthly users, that’s 1 in 3 French people ▪ In the Top 15 of France’s most powerful digital
Slide 23: FY 2019 consolidated revenue
FY 2019 consolidated revenue (€M) FY 2019 FY 2018 CHG.€M CHG.% BROADCASTING 1,774.2 1,763.7 10.5 0.6% ADVERTISING REVENUE 1,567.4 1,588.2 (20.8) -1.3% OTHER REVENUE 206.8 175.5 31.3 17.8% STUDIOS & ENTERTAINMENT 390.0 408.6 (18.6) -4.6% PRODUCTION / SALE OF AUDIOVISUAL RIGHTS 263.2 253.0 10.2 4.0% R
Slide 24: FY 2019 trends in gross ad spend for TF1 group channels
FY 2019 trends in gross ad spend for TF1 group channels Source: Kantar media, FY 2019 vs FY 2018. Gross advertising spend (excluding sponsorship) for the 5-free-to-air channels. 24
Slide 25: Cost of programmes for the FTA channels
Cost of programmes for the 5 FTA channels (€M) FY 2019 FY 2018 CHG.€M CHG.% DRAMA / TV MOVIES / SERIES / PLAYS -331.8 -348.2 (16.4) -4.7% VARIETY / GAMESHOWS / MAGAZINES -271.4 -238.5 32.9 13.8% FILMS -148.3 -159.0 (10.8) -6.8% NEWS (INCL. LCI) -134.7 -136.7 (1.9) -1.4% SPORTS -87.4 -118.9 (31.4) -2
Slide 26: Current operating profit per segment
Current operating profit per segment (€M) FY 2019 FY 2018 CHG.€M CHG.% BROADCASTING 185.5 151.0 34.5 22.8% MARGIN 10.5% 8.6% - +1.9PT STUDIOS & ENTERTAINMENT 57.9 35.5 22.4 63.1% MARGIN 14.8% 8.7% - +6.1PT DIGITAL (UNIFY) 11.7 12.3 (0.6) -4.9% MARGIN 6.8% 10.6% - -3.8PT CURRENT OPERATING PROFIT 255.
Slide 27: Consolidated income statement
Consolidated income statement (€M) FY 2019 FY 2018 CHG.€M CHG.% CONSOLIDATED REVENUE 2,337.3 2,288.3 49.0 2.1% TOTAL COSTS OF PROGRAMMES (985.5) (1,014.2) (28.8) -2.8% OTHER CHARGES, DEPRECIATION, AMORTIZATION , PROVISION (1,096.7) (1,075.3) 21.5 2.0% CURRENT OPERATING PROFIT 255.1 198.8 56.3 28.3%
Slide 28: Balance sheet
Balance sheet CONSOLIDATED ASSETS (€M) DEC.31 ST 2019 DEC. 31 ST 2018 CHG.€M TOTAL NON-CURRENT ASSETS 1,507.3 1,455.4 51,9 TOTAL CURRENT ASSETS 1,836.8 1,799.9 36.9 TOTAL ASSETS 3,344.1 3,255.3 88.8 CONSOLIDATED LIABILITIES (€M) DEC.31 ST 2019 DEC. 31 ST 2018 CHG.€M TOTAL SHAREHOLDERS' EQUITY 1,564.
Slide 29: Trends in net cash position 2019
Trends in net cash position 2019 (excluding the impact of IFRS 16*) €M 416.6 5.3 -22.1 -32.3 -245.0 -27.5 -132.6 -84.0 -4.7 -126.3 Cash position Operating Decrease Cost of Change in Net capital Acquisitions/ Dividends, shares Others*** Cash position at start of cashflow** in lease net debt operating
Slide 30: Outlook: guidances reiterated
Outlook: guidances reiterated 2020 2021 Double-digit current operating margin Revenue of at least €250 million from the digital division Cost of programmes at €985 million EBITDA margin of at least 15% from the digital division Improvement in the TF1 group’s return on capital employed relative to th
Slide 31: Return to shareholders
Return to shareholders € 105 m* 2016-2019 evolution (€/share) € 0.50** 0.50 0,5 PER SHARE 0.40 0,40 0.35 0,35 0.28 0,28 Representing 68% OF 2019 NET PROFIT (66% IN 2018) 2016 2017 2018 2019 *On the basis of the number of shares making up TF1 capital on 12/31/2019 at 210,242,074 shares **Subject to a
Slide 32: In 2020, TV will be tailored everywhere and on all screens
In 2020, TV will be tailored everywhere and on all screens MÉDIAMAT NOW OUT-OF-HOME AND ON-THE-MOVE MÉDIAMAT UNIFIED AUDIENCE 3hrs 30min +10min +2min 30sec Measures TV viewing Out-of-home Measures online screens at home in the home (Vacations, weekend breaks, holiday homes, at work, etc.) On-the-mov
Slide 33: How segmented TV can create value
How segmented TV can create value TODAY TOMORROW Current regulations force broadcasters to show Segmented TV brings an extra dimension by allowing the same ads to all viewers targeted advertising spots Attract a new type of advertiser by offering maximum effectiveness at a low entry price for SMEs (
Slide 34: Salto: another brick in the wall for our range of video products
Salto: another brick in the wall for our range of video products The biggest shop window for French creative talent ▪ 15,000 hours of content across all genres from day 1 ▪ 20,000 hours by the end of the year ▪ First-run content every month ▪ Recommendation system fronted by celebrities and influenc
Slide 35: Newen: accelerating the business and building alliances
Newen: accelerating the business and building alliances Create and build synergies between Newen group entities (recycling, joint development of formats) & & BAND OF SPIES KAMP WAES Series in 8 EPISODES Series in 8 EPISODES Respond to demand for ever more global content, especially from internet pla
Slide 36: Newen: continuing growth
Newen: continuing growth The order book* International revenue Larger-scale distribution is filling up an even bigger contributor from 2020 >1,500 ▪ Building deeper catalogues: more than 5,000 hours HOURS 1,000 HOURS ▪ Appointment of a Head of Distribution for the Newen Group and TF1 Studio Internat
Slide 37: Unify: rebound expected in 2020
Unify: rebound expected in 2020 from current and future action plans Growth in advertising revenue (direct sales and programmatic) thanks to the Unify Advertising sales house Relaunching our brands International expansion of (especially in Germany) Rollout of business solutions in France and interna
Slide 38: TF1: a Group that cares
TF1: a Group that cares The 3 pillars of our social engagement initiatives: DIVERSITY SOLIDARITY SUSTAINABLE SOCIETY Towards a more Marmiton focuses Newen CSR policy recognised sustainable society: on “ healthy eating ” Foundation by extra- financial our channels engage launched in 2019 ratings agen
Slide 39: Investor relations contacts
Philippe DENERY – CFO IR team pdenery@tf1.fr comfi@tf1.fr Stéphanie LAVAL – Head of Investor Relations TF1 slaval@tf1.fr 1 Quai du Point du Jour 92 656 Boulogne-Billancourt Cedex France Anaïs AMGHAR– Investor Relations https://www.groupe-tf1.fr/en aamghar@tf1.fr 39