Prosiebensat.1 Media Se · XETR:PSM
Prosiebensat.1 Media — FY2018 Earnings Presentation
45 slides from Prosiebensat.1 Media's earnings presentation, Mar 7, 2019
Slide 1: FY 2018 Results Presentation
MARCH 7, 2019 FY 2018 RESULTS PRESENTATION
Slide 2: Agenda
FY 2018 MAX CONZE – CEO AGENDA FINANCIAL UPDATE DR. JAN KEMPER – CFO STRATEGIC OUTLOOK 2019 MAX CONZE – CEO 2
Slide 3: Focus for Today
FOCUS FOR TODAY 1 Wrap-up of FY 2018: Update on financials and dividend 2 First glimpse on Q1 2019: Continuation of positive trend on Group level 3 Update on our strategy communicated at CMD 2018 − We are in the midst of transformation with clear focus on execution − Too early for a dedicated report
Slide 4: FY 2018 – Max Conze, CEO
MARCH 7, 2019 FY 2018 MAX CONZE – CEO
Slide 5: Group Financials for FY 2018
GROUP FINANCIALS FOR FY 2018 [in EUR m] [in EUR m] [in EUR m] -2% -4% -2% EXTERNAL REVENUES ADJUSTED EBITDA ADJUSTED NET INCOME +1% 25% portfolio/ adjusted currency EBITDA adjusted margin 4,078 4,009 1,050 550 541 1,013 FY FY FY FY FY FY 2017 2018 2017 2018 2017 2018 5
Slide 6: Improvement of Portfolio/Currency Adjusted Revenue Growth in H2 2018
IMPROVEMENT OF PORTFOLIO/CURRENCY ADJUSTED REVENUE GROWTH ON GROUP LEVEL IN H2 2018 External revenue growth GROUP ENTERTAINMENT CONTENT PRODUCTION & COMMERCE GLOBAL SALES 21% 23% 18% 13% 12% 3% 0% 0% 0% -1% -4% -12% -10% -11% -5% -7% H1 H2 H1 H2 H1 H2 H1 H2 Reported Portfolio/currency adjusted 6
Slide 7: 2018 Dividend Proposal
2018 DIVIDEND PROPOSAL ADJUSTED EBITDA DIVIDEND EUR 1,013m EUR 1.19 PER SHARE (-4% VS. PY) (VS. PY EUR 1.93) ADJUSTED NET INCOME EUR 541m EUR 269m TOTAL DIVIDEND PAYMENT (-2% VS. PY) (VS. PY EUR 442m) PAY-OUT RATIO: ~50% 7
Slide 8: Financial Update
MARCH 7, 2019 FINANCIAL UPDATE DR. JAN KEMPER – CFO & Executive Board Member Commerce
Slide 9: Group Financials
+1% GROUP FINANCIALS portfolio/ currency adj. revenue growth in FY 2018 COMMENTS External revenues and adjusted EBITDA [in EUR m] • Slight portfolio/currency adj. revenue growth supported by Commerce and Q4 2018 Q4 2017 YoY FY 2018 FY 2017 YoY CP&GS segment which more than compensated lower advertis
Slide 10: Entertainment: Segment Performance Affected by Advertising and Deconsolidations
-3% ENTERTAINMENT: SEGMENT PERFORMANCE portfolio/ currency adj. AFFECTED BY ADVERTISING BUSINESS AND revenue growth in FY 2018 DECONSOLIDATIONS External revenues and adjusted EBITDA COMMENTS [in EUR m] • Stable TV advertising revenues January Q4 2018 Q4 2017 YoY FY 2018 FY 2017 YoY to October 2018 f
Slide 11: Operational KPIs Entertainment
OPERATIONAL KPIS ENTERTAINMENT VIEWING AUDIENCE/ ADVERTISING TIME MARKET SHARE SHARE OTHER Total video TV core advertising Audience share2) HD subscribers viewtime1) revenue share3) +0.8% +1% -0% +8% pts 1,078bn pts min 27.8% 94% 9.5m vs. 1,083bn min in FY 2017 vs. 27.0% in FY 2017 vs. 93% in FY 201
Slide 12: Outcome of U.S. Content Review
OUTCOME OF U.S. CONTENT REVIEW: SUBLICENSING AGREEMENT WITH 7TV JOINT VENTURE AND RECOGNITION OF PROVISION SUBLICENSING AGREEMENT WITH 7TV JOINT VENTURE NO FURTHER USE ▪ Program rights not suitable for exploitation on linear TV anymore, 7TV to offer ▪ No further use of selected U.S. content niche U.
Slide 13: Content Production & Global Sales: Strong Segment Performance in Q4
+5% CONTENT PRODUCTION & GLOBAL SALES: portfolio/ currency adj. STRONG SEGMENT PERFORMANCE IN Q4 revenue growth in FY 2018 External revenues and adjusted EBITDA COMMENTS [in EUR m] Q4 2018 Q4 2017 YoY FY 2018 FY 2017 YoY • Strong recovery of Red Arrow Studios’ content production business in H2 2018
Slide 14: Operational KPIs Content Production & Global Sales
OPERATIONAL KPIS CONTENT PRODUCTION & GLOBAL SALES # of # of hours Returning shows1) Titles in catalogue productions1) produced1) -11% -12% -4% +10% 215 1.0k 105 4.4k vs. 242 in FY 2017 vs. 1.2k in FY 2017 vs. 109 in FY 2017 vs. 4.0k in FY 2017 Monthly # of YouTube Monthly minutes # of web channels2
Slide 15: Commerce: Strong Growth Across All Four Key Verticals
+16% COMMERCE: STRONG GROWTH ACROSS ALL portfolio/ currency adj. FOUR KEY VERTICALS revenue growth in FY 2018 External revenues and adjusted EBITDA COMMENTS [in EUR m] Q4 2018 Q4 2017 YoY FY 2018 FY 2017 YoY • Strong and balanced portfolio/currency adj. revenue growth of +16% in FY 2018 Ext. revenue
Slide 16: Operational and Financial KPIs Commerce
OPERATIONAL AND FINANCIAL KPIS COMMERCE CONSUMER MATCHMAKING2) EXPERIENCE & BEAUTY & ADVICE GIFT VOUCHERS3) LIFESTYLE # of transactions1) # of registrations # of orders # of transactions4) +2% +38% +49% +28% 3.5m 2.6m 1.3m 3.0m vs. 3.4m in 2017 vs. 1.9m in 2017 vs. 0.9m in 2017 vs. 2.4m in 2017 Ext.
Slide 17: Increase in Net Debt Driven by M&A, Dividend and Share Buyback
INCREASE IN NET DEBT DRIVEN BY M&A, DIVIDEND AND SHARE BUYBACK Netfinancial Net financial debtdebt [inEUR [in EURm]m] 2.1x 1.6x 2.1x 1.6x 531 2,163 1,632 12/31/2017 Change 12/31/2018 LEVERAGE RATIO Leverage ratio: Net financial debt/LTM adjusted EBITDA; LTM adjusted EBITDA amounts to EUR 1,013m (pre
Slide 18: Update on Share Buyback Program
UPDATE ON SHARE BUYBACK PROGRAM • On November 7, 2018, the Executive Board and Supervisory Board of P7S1 resolved on a program for the buyback of own shares by the Company with a total volume of up to EUR 250m and an overall period of 12 to 24 months SHARE • On that basis, the Executive Board of P7S
Slide 19: Strategic Outlook 2019
MARCH 7, 2019 STRATEGIC OUTLOOK 2019 MAX CONZE – CEO
Slide 20: Overall Positive Group Revenue Performance in Q1 2019
OVERALL POSITIVE GROUP REVENUE PERFORMANCE IN Q1 2019 Portfolio/currency adj. external revenues Q4 2018 Q1 2019E Comment on Q1 2019 YoY YoY GROUP CONTINUATION OF POSITIVE TREND ENTERTAINMENT BELOW PRIOR YEAR Audience share/video views1) TV core advertising revenues2) Below prior year with late Easte
Slide 21: Can We Grow Against a Declining TV Market?
CAN WE GROW AGAINST A DECLINING TV MARKET? VIEWING TIME ADVERTISING MARKET MARKET VIEW [average minutes per day]1),2) [in EUR m]2) DEVELOPMENT FY 2018 YoY TOTAL VIDEO +2% +4% TV TV -2% -3% to -4% ONLINE VIDEO ONLINE VIDEO3) +34% +48% ENTERTAINMENT SEGMENT EXT. REVENUE4) SHARE IMPACT FY 2018 [illustr
Slide 22: Our Vision: Create a Consumer-Centric Entertainment and Commerce Champion
OUR VISION: CREATE A CONSUMER-CENTRIC ENTERTAINMENT AND COMMERCE CHAMPION ENTER- TAINMENT COMMERCE & CONTENT CONSUMERS CONSUMER-LED & OBSESSED NEED CONSUMERS CONTENT-LED LOVE DIGITAL FIRST TOTAL REACH GROWTH-DRIVEN PASSIONATE CREATORS 22
Slide 23: Recap CMD: Strategic Priorities Across Our Three Pillars
RECAP CMD: STRATEGIC PRIORITIES ACROSS OUR THREE PILLARS ENTERTAINMENT RED ARROW STUDIOS1) NUCOM GROUP2) FOCUSED PORTFOLIO 1 LOCAL CONTENT 5 INTERNAL CONTENT FEED 6 SERVING CONSUMER NEEDS 2 DIGITAL ATTACK SYNERGISTIC FOOTPRINT MARKET LEADERS 3 TOTAL REACH SCALE OF STUDIO71 4 SMART REACH TOTAL MONETI
Slide 24: Local Content
1 LOCAL CONTENT INCREASE IN MARKET SHARE & VIDEO VIEWS SUPPORTS OUR TRACK FACTUAL SHOW/REALITY COMEDY FICTION SPORTS • Galileo and taff with • Format brand TVOG • Formats with top face • New co-production with • U21 EURO qualifier highest market shares successfully expanded, Luke Mockridge (Dt. 7TV:
Slide 25: Digital Attack: 7TV Joint Streaming Platform Launch
2 DIGITAL ATTACK 7TV – PREPARATION OF JOINT STREAMING PLATFORM LAUNCH STRONG MANAGEMENT TEAM INCLUDING DEDICATED CONTENT LEAD IN 2019 UP TO EUR 100M INVEST1) TO CREATE THE LEADING GERMAN ENTERTAINMENT HUB USER INCREASE BY 27%2) YOY STAFF OF 200 PREPARING FOR RELAUNCH IN SUMMER 2019 – WITH ENTIRE P7S
Slide 26: Total Reach: New Sales Metric
3 TOTAL REACH BUILD NEW SALES METRIC TO COMMERCIALIZE TOTAL REACH RECAP: OBJECTIVE METRICS MONETIZATION # OF MINUTES ✓ BUILD MARKETABLE H2 Total video viewtime: no. of minutes TOTAL VIDEO AD PRODUCTS 2019 OWN APPS & viewed across all platforms based on Total Video and Total .de WEBSITES Reach metric
Slide 27: Smart Reach: Next Level of Targetable Offerings
PILOT 4 SMART REACH of smart ad portfolio with LAUNCHING NEXT LEVEL OF OUR TARGETABLE OFFERINGS NuCom assets launched RECAP: OBJECTIVE COMMERCIAL LAUNCH OF NEW AD PRODUCTS Smart Reach ADDRESSABLE TV SPOT CROSS-DEVICE BRIDGE = Addressing individual P7S1 MEDIA audiences based on data insights ID Age S
Slide 28: Roll-out of Our Tech Platforms
4 TECH PLATFORMS ROLL-OUT OF OUR TECH PLATFORMS WITH 2019/20 AS KEY YEARS Advertising offerings SOM SOM Video KPI-driven Retail Video Influencer ‘Applications’ AddTV Digital audience solutions media content marketing reach marketplace Technology platforms AdServer ADITION ‘Infrastructure’ Demand Sid
Slide 29: Internal Content Feed – RAS for Entertainment
5 INTERNAL CONTENT FEED – RAS1) FOR ENTERTAINMENT GROW RED ARROW STUDIOS’ GRID SHARE… …BY PRODUCING CONTENT FOR ENTERTAINMENT UPCOMING IN Q2 UPCOMING IN Q2 2023+ SUPERHERO GERMANY >30% 2019 UPCOMING IN Q2 ~20% TOP CHEF GERMANY FY 20182) 16% MEIN BESTER STREICH On track to achieve >30% Red Arrow Stud
Slide 30: Focused Portfolio – NuCom Group Growth Trajectory
6 FOCUSED PORTFOLIO – NUCOM GROUP STRONG GROWTH TRAJECTORY TO ~EUR 2BN TARGET REVENUE2) [in EUR BN] ~2.0 ESTABLISHED NUCOM & SIGNED DEAL WITH GA ACQUIRED MAJORITY IN AROUNDHOME • Carve-out 10 focus companies and foundation of NuCom Holding ▪ NuCom took over GA‘s • Minority investment of GA in NuCom
Slide 31: NuCom Group M&A Deals to Strengthen Core Verticals
6 FOCUSED PORTFOLIO – NUCOM GROUP M&A DEALS TO STRENGTHEN TWO OF OUR CORE VERTICALS >250M 140M >200M 85M EUR PRO-FORMA EUR PRO-FORMA USD EUR COMBINED COMBINED ENTERPRISE ENTERPRISE REVENUES of REVENUES3) VALUE4) VALUE2) VERTICAL1) NUCOM GROUP INCREASED SHARE TO EHARMONY INTEGRATION WITH PARSHIP ELIT
Slide 32: One Company – Set-up for Future Growth
7 ONE COMPANY – SET-UP FOR FUTURE GROWTH ProSiebenSat.1 Media SE • Clear & efficient holding structure established • Sharpened Executive Committee to 3 members RAINER MAX CONRAD • Increased independency & BEAUJEAN1) CONZE ALBERT operative decision-making power for each segment Entertainment Red Arro
Slide 33: Operationalization of Our Strategic Transformation Ongoing
OPERATIONALIZATION OF OUR STRATEGIC TRANSFORMATION ONGOING Streamlined our organization with lean executive team and dedicated segment heads Strengthening our tech foundation with new Chief Technology Officer (CTO) starting in June 2019 Established a dedicated Chief HR Officer (CHRO) in January 2019
Slide 34: Recap: Our Group Growth Ambitions
RECAP: OUR GROUP GROWTH AMBITIONS FY 2018 AMBITION IN ~5+ YEARS INCL. BOLT-ON M&A REVENUES ADJ. EBITDA REVENUES ADJ. EBITDA [EUR] [EUR] [EUR] [EUR] 4BN 1BN 6BN 1.5BN NON-ADVERTISING DIGITAL SMART ADVERTISING SHARE NON-ADVERTISING DIGITAL SMART ADVERTISING SHARE OF REVENUE SHARE REVENUE SHARE OF ENTE
Slide 35: Outlook FY 2019
OUTLOOK FY 2019 FY 2019 OUTLOOK COMMENTS GROUP REVENUES mid single-digit Group revenue growth to be mainly driven by increase (%) non-advertising business Weaker advertising About flat development, provided TV advertising market could ENTERTAINMENT market/revenues come in stable to slightly declinin
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Slide 37: FY 2018 Appendix
MARCH 7, 2019 FY 2018 APPENDIX
Slide 38: Group P&L
GROUP P&L [in EUR m] Q4 2018 Q4 2017 Δ FY 2018 FY 2017 Δ Revenues 1,323 1,324 0% 4,009 4,078 -2% Adjusted EBITDA 379 390 -3% 1,013 1,050 -4% Reconciling items -358 -8 ~ -443 34 ~ EBITDA 20 382 -95% 570 1,084 -47% Depreciation, amortization and -65 -49 +33% -222 -263 -16% impairments Thereof PPA -14
Slide 39: Financial Policy Framework
FINANCIAL POLICY FRAMEWORK ALIGNED WITH INVESTMENT REQUIREMENTS AND TO DRIVE EPS GROWTH FRAMEWORK UNTIL FRAMEWORK FOR FY 2018 FY 2017 AND BEYOND pay-out ratio of 80-90% pay-out ratio of 50% Dividend of adjusted net income of adjusted net income New investments limited residual amount of meaningful s
Slide 40: Overview Operational KPIs
OVERVIEW OPERATIONAL KPIS Entertainment Content Production & Global Sales Commerce FY FY FY FY FY FY YoY YoY YoY 2018 2017 2018 2017 2018 2017 1,078bn 1,083bn RAS Consumer Advice Total video viewtime1) -0% 215 242 -11% 3.5m 3.4m +2% min min # of productions1) # of transactions1) Total daily TV consu
Slide 41: Consumer Advice: Leading Online Price Comparison Portals
CONSUMER ADVICE: LEADING ONLINE PRICE COMPARISON PORTALS AND MARKET PLACE TO SAVE CONSUMERS’ MONEY CONSUMER ADVICE CONSUMER NEED BUSINESS MODEL Subscription Online price comparison portal for energy, telco, insurance and financial services Cost per order / lead SAVINGS Cost per click Online price co
Slide 42: Matchmaking: Market Leader in Online Matchmaking in GSA
MATCHMAKING: MARKET LEADER IN ONLINE MATCHMAKING IN GSA WITH STRONG INT’L PRESENCE AFTER EHARMONY ACQUISITION MATCHMAKING CONSUMER NEED BUSINESS MODEL Subscription Leading online matchmaking portal Cost per order / lead in Germany, Austria and Switzerland LOVE Cost per click 1) Online matchmaking po
Slide 43: Experience & Gift Vouchers
EXPERIENCE & GIFT VOUCHERS: COMBINING THE LEADING MARKET PLACES FOR EXPERIENCES AND GIFT VOUCHERS IN GSA EXPERIENCE & CONSUMER NEED BUSINESS MODEL GIFT VOUCHERS1) Subscription Expert market place for leisure Cost per order / lead experiences and short trips in GSA EXPERIENCES Cost per click EUR Lead
Slide 44: Beauty & Lifestyle
BEAUTY & LIFESTYLE: LEADING ONLINE AND OMNICHANNEL PLAYERS IN THE BEAUTY & LIFESTYLE SEGMENT BEAUTY & CONSUMER NEED BUSINESS MODEL LIFESTYLE Subscription Leading online beauty pure play e-commerce player in Germany Cost per order / lead One of the leading e-commerce WELL-BEING players for sensual pr
Slide 45: 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 mana