Rtl Group S.a. · LUXSE:RTLL
Rtl — Morgan Stanley investor meetings October/November 2013
39 slides from Rtl's conference presentation, October 2013
Slide 1: Morgan Stanley October / November 2013
Morgan Stanley October / November 2013
Slide 2: Agenda
Agenda BROADCAST 2 Broadcast Update ► 1 INTRODUCTION DIGITAL 3 Strategic Strategic Update & Financial Digital Update Financial Update Update CONTENT 4 FremantleMedia 2
Slide 3: RTL Group continues to lead in all its three strategic pillars
RTL Group continues to lead in all its three strategic pillars BROADCAST CONTENT DIGITAL #1 or #2 in 8 European countries #1 global TV entertainment content Leading European media company Leading broadcaster: producer in online video 54 TV channels and 28 radio stations Productions in 62 countries;
Slide 4: We are delivering on our strategic goals…
We are delivering on our strategic goals… BROADCAST CONTENT DIGITAL ENHANCE BROADCAST CREATE MARKET- DRIVE DIGITAL PORTFOLIO LEADING CONTENT TRANSFORMATION Strengthen family ✔ Maintain ✔ Expand ✔ of channels leading position non-linear services Grow ✔ Rebalance ✔ Grow online ad ✔ non-ad business por
Slide 5: … which results in an ability to invest and provide attractive cash returns
… which results in an ability to invest and provide attractive cash returns USE OF FINANCIAL HEADROOM 1.0 Investments to increase long-term shareholder value FINANCIAL HEADROOM Excess cash: extraordinary Net debt pay-outs to shareholders to EBITDA ORDINARY Illustrative view 50-75% pay-out policy DIV
Slide 6: Managing RTL Group with a long-term focus
Managing RTL Group with a long-term focus Adaptable cost structure with tight control High-quality earnings and cash flow profile Efficient capital structure with full financial flexibility Attractive shareholder remuneration 6
Slide 7: Agenda
Agenda BROADCAST 2 Broadcast Update ► 1 INTRODUCTION DIGITAL 3 Strategic Update BROADCAST Digital Update Financial Update CONTENT 4 FremantleMedia 7
Slide 8: Additional non-linear TV offers increase overall viewing time
Additional non-linear TV offers increase overall viewing time OVERALL TV CONSUMPTION RTL GROUP’S CORE MARKETS Daily viewing time in minutes Non-linear as % of total viewing time 2012 Linear +19 minutes Non-linear TV GER ~ 6% 219 10 FRA ~ 4% 209 5 200 NED ~ 5% 2 209 204 198 US ~ 14% 2008 2010 2012 UK
Slide 9: Television beats online in terms of reach and time spent
Television beats online in terms of reach and time spent REACH OF POPULATION In % 100% Example Germany TV TV total private / commercial Online total 50% Facebook YouTube Twitter 0 20h 40h 60h 80h 109h AVERAGE TIME SPENT PER MONTH (IN HOURS) Source: AGF in cooperation with GfK, TV Scope 5.0, April 20
Slide 10: Resisting fragmentation while increasing market share
Resisting fragmentation while increasing market share Audience GERMANY FRANCE THE NETHERLANDS shares in % +1.8 +3.6 +1.6 %pts %pts %pts 31.2 22.4 32.4 29.4 20.8 28.8 2006 H1/2013 2006 H1/2013 2006 H1/2013 14 – 59 years Housewives <50 years 20 – 49 years TV net ad market share in % +0.2 +6.2 +8.4 %pt
Slide 11: German TV ad share in media mix is still underdeveloped…
German TV ad share in media mix is still underdeveloped… GROSS MARKET DEVELOPMENT In %, year-on-year Growth 2011 – 2012 Growth 2012 – 2013 5.7% 3.0% 1.2% 1.4% -4.5% -6.5% PRINT TV TOTAL MARKET Source: Nielsen Media Research, Jan – Aug 2011 vs. 2012 and Jan – Aug 2012 vs. 2013 11
Slide 12: …with still some growth potential compared to other markets
…with still some growth potential compared to other markets TV’S AD SHARE IN MEDIA MIX 2012 In % of total ad spend 44% 38% Growth 33% potential 28% 22 27% 16 22% 11 5 6 GER NED UK FRA ESP USA Print ad share 43% 37% 24% 27% 24% 26% Source: Screen Digest 2012 12
Slide 13: Evolving German TV landscape opens new opportunities…
Evolving German TV landscape opens new opportunities… ANALOGUE VERSUS DIGITAL DISTRIBUTION TV households (in million) Analogue TV 19.2 16.4 16.9 Digital TV 12.8 2.4 1.9 1.3 7.0 1.8 2003 2013 2003 2013 2003 2013 2003 2013 Terrestrial Cable Satellite IPTV Source: AGF in cooperation with GfK, TV Scope
Slide 14: … resulting in additional revenue through subscriptions
… resulting in additional revenue through subscriptions MG RTL DEUTSCHLAND HD SUBSCRIBERS HD POTENTIAL IN GERMANY In million In million households +3.5m 36.5 Analogue TV 9,4 Digital TV 23,4 HD 3.7 TECHNICAL POTENTIAL 2.0 0.2 HD Subs 3,7 2011 2012 2013 H1/2013 Source: according to platform operators;
Slide 15: Geographic expansion into high growth markets
Geographic expansion into high growth markets 1 India 155m TV households #1 83% Pay-TV penetration €6.0bn Pay-TV market 2 South-East Asia* 113m TV households 26% Pay-TV penetration €4.5bn Pay-TV market *Market information for 8 initial launch markets: Indonesia, Philippines, Vietnam, Thailand, Hong
Slide 16: Agenda
Agenda BROADCAST 2 Broadcast Update ► 1 INTRODUCTION DIGITAL 3 Strategic Update DIGITAL Digital Update Financial Update CONTENT 4 FremantleMedia 16
Slide 17: Dynamic growth in “pure” online business
Dynamic growth in “pure” online business “PURE” EXCLUDED FROM ONLINE REVENUE “PURE” ONLINE ONLINE REVENUE Online / Mobile In € million High-volume e-commerce Portfolio Ad and home shopping Non-Ad 108 90 20% Transactional / 54% Mobile Virtual Network Lead Generation 56% Operator (branded) 44% 46% Onl
Slide 18: TV promotion builds leading online offers
Growth Priorities 1 2 3 TV promotion builds leading online offers TV and Drive user engagement video sites Extend business TV brand Leverage brand power extensions TV Promotion Content Increase scale and verticals quality of network New business Non-ad Diversify portfolio ventures in non-ad business
Slide 19: Growth of lead-gen and transactional businesses
Growth Priorities 1 2 3 Growth of lead-gen and transactional businesses Best-in-class online services across the Group ONLINE PHOTO SERVICE GER Online couponing +30% 450,000 orders per month Online photo FRA +32% TV promotion MonAlbumPhoto service TV commercial Online education MOBILE GAMES COMPANY
Slide 20: Strong growth in online video accelerated by recent acquisitions
Growth Priorities 1 2 3 Strong growth in online video … …accelerated by recent acquisitions HALF-YEAR VIDEO VIEWS RTL GROUP In billion, pro forma 9.5 1 VOD 4,7 2 WEBCLIPS +35 + 3 WEB ORIGINALS % 4.8 4,8 3.5 Multi- 4 Channel Networks H1/2012 H1/2013 20
Slide 21: Developing new formats as original web content
Developing new formats as original web content OUR WEB-ORIGINAL BRANDS US channels Exclusive window on BlipTV Prodigy format spin-off for TV Worlds largest style network European channels 2 original channels funded by YouTube and produced #1 European comedy channel by FremantleMedia on YouTube 21
Slide 22: Thousands of ‘channels’ emerging on new platforms …
Thousands of ‘channels’ emerging on new platforms … 1990 2000 2010 FTA networks Cable networks OTT networks 22
Slide 23: … bundled by multi-channel networks (MCNs) …
… bundled by multi-channel networks (MCNs) … CONTENT AGGREGATION DISTRIBUTION DEVICES Studios / production Broadcast Cable / DTH / TV Sets / companies networks DTT STBs Disney ABC ComCast Samsung Warner MTV Sky Philips FremantleMedia RTL Group CanalSat Sony “Channel” Multi-channel OTT PC / CTV / Mob
Slide 24: … who target niche audiences on a global scale
… who target niche audiences on a global scale OTT PLATFORM MULTI-CHANNEL NETWORKS VERTICALS CHANNELS* Entertainment 21m views / 340k subscribers Sports Lifestyle 590m views / 690k subscribers Music Gaming 170m views / 1.1m subscribers * Overall video views and subscribers as of September 2013 24
Slide 25: broadbandTV: sustainable and fast growing business
broadbandTV : sustainable and fast growing business ANNUAL AGGREGATED VIDEO VIEWS GLOBAL REACH 1 billion+ video views per month 8.4bn* 100 million+ 1.3bn channel subscribers 0.5bn 10 thousand+ content creators 2007 2009 2011 2013 TODAY Foundation – Break even – Sustainable – RTL Group – #4 MCN One o
Slide 26: Agenda
Agenda BROADCAST 2 Broadcast Update ► 1 INTRODUCTION DIGITAL 3 Strategic Update CONTENT Digital Update Financial Update CONTENT 4 Production, Distribution & Digital FremantleMedia 26
Slide 27: Leader in multiplatform entertainment production and rights exploitation
Leader in multiplatform entertainment production and rights exploitation 1 Production 2 Exploitation 3 Distribution 27
Slide 28: Long-running top brands that travel …
Long-running top brands that travel … Territories Years ENTERTAINMENT 54 54 7 36 46 35 12 56 37 24 9 5 FACTUAL ENTERTAINMENT 29 120* 12 8 SCRIPTED KIDS 11* 8* 28 2 *Incl. tape sales; Source: FremantleMedia Note: territories = maximum number of territories 28
Slide 29: Optimised resource base
Optimised resource base DRIVE GLOBAL CONTENT & MANAGE OVERHEADS AND CENTRAL MAXIMISE LOCAL PRESENCE STRATEGY FUNCTIONS Global Development Holistic territorial strategy Global teams for key areas Leaner overheads Properly tooled up and plugged into the Craft global strategy Shared central functions n
Slide 30: Our strategy is to continue to nurture shows on air
Our strategy is to continue to nurture shows on air PRODUCTION EXCELLENCE CREATIVE REFRESHMENT COMMERCIAL EXPLOITATION The judges In-store activation campaigns Simon’s return as a judge Popular comedian David Walliams ITV primetime vs. season average Reach out more to new talent Share individuals 4+
Slide 31: … and further engage audiences by creating sophisticated digital extensions …
… and further engage audiences by creating sophisticated digital extensions … DURING BROADCAST ENGAGE WITH AUDIENCE REACH NEW AUDIENCES Social media Gaming Ranking by global monthly unique users (in m) +34% +81% 66 YTD YTD 50 63.1m 15.1m 93m app downloads 44 fans followers 2m current daily active us
Slide 32: Grow and develop the FremantleMedia network
Grow and develop the FremantleMedia network Get more scale SCANDINAVIA in mature markets UK USA ASIA TURKEY SPAIN Grow in emerging markets LATIN AMERICA MIDDLE EAST Enter new markets 32
Slide 33: FremantleMedia: priorities for 2014 and beyond
FremantleMedia : priorities for 2014 and beyond Nurture shows on air 1 Maintain Develop new formats and brands core business Digital extensions Increase drama capabilities 2 Diversify Expand local businesses & portfolio portfolio Develop web original content and brands Get scale in mature markets 3
Slide 34: Agenda
Agenda BROADCAST 2 Broadcast Update ► 1 INTRODUCTION DIGITAL 3 Strategic Update WRAP-UP Digital Update Financial Update CONTENT 4 Production, Distribution & Digital FremantleMedia 34
Slide 35: RTL Group will continue to strengthen its leading market positions
RTL Group will continue to strengthen its leading market positions Broadcast Leading family of channels Content Global brands, growth in digital Digital Worldwide online video presence 35
Slide 36: Morgan Stanley October / November 2013
Morgan Stanley October / November 2013
Slide 37: Constant expansion of family of channels
Constant expansion of family of channels Launched To come GERMANY FRANCE GERMANY FTA FTA PAY Launched in April 2012 Launched in December 2012 Launch planned in H1/2014 0.8% audience share 0.8% audience share High-quality documentary channel HUNGARY THE NETHERLANDS CROATIA PAY PAY FTA Launched in Oct
Slide 38: We are #1 European media company in online video
We are #1 European media company in online video RTL GROUP MONTHLY VIDEO VIEWS COMSCORE VIDEO RANKING* In billion, average H1/2013 # COMPANY MONTHLY VIEWS (BILLION) REGION 1 Google / YouTube 69.8 USA 2 Facebook 4.5 USA 3 VEVO 3.4 USA 4 AOL (post Adap.TV merger) 3.1 USA 3x 5 Hulu 2.2 USA 1.6 6 Dailym
Slide 39: RTL Group has become a leading MCN player
RTL Group has become a leading MCN player WORLDWIDE LEADING MULTI-CHANNEL NETWORKS Based on monthly video views Production focus / gaming; 1 Investors incl. Google Production focus; 2 Investors incl. Time Warner Tech-driven; 3 Investors incl. Comcast and WPP Tech-driven; 4 Strategic partner RTL Grou
RTL Group — Morgan Stanley investor meetings October/November 2013 on 6ix