Slide 1: German Equity Forum 2013
GERMAN EQUITY FORUM 2013 Frankfurt November 2013
Slide 2: Agenda
Agenda BROADCAST 2 Broadcast Update 1 INTRODUCTION Financial DIGITAL 3 Financial Update ► & Strategic Digital Update Strategic Update Update CONTENT 4 FremantleMedia 2
Slide 3: Q3 highlights
Q3 highlights REVENUE €4.0 billion REPORTED EBITA continuing operations €714 million EBITA MARGIN CASH CONVERSION NET DEBT NET RESULT 17.6% 110% €451 million €535 million SIGNIFICANT GROWTH IN PROFITABILITY 3
Slide 4: Significant financial headroom to invest and provide attractive cash returns
Significant financial headroom 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 v
Slide 5: 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 5
Slide 6: 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 7: We are on track delivering on our strategic goals
We are on track 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 busi
Slide 8: Agenda
Agenda BROADCAST 2 Broadcast Update 1 INTRODUCTION DIGITAL 3 Financial Update BROADCAST Digital Update Strategic Update CONTENT 4 FremantleMedia 8
Slide 9: 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 10: 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 11: Powerful #1 or #2 TV position in most attractive markets
Powerful #1 or #2 TV position in most attractive markets #1 #2 TV net ad TV net ad Audience share Audience share market share market share 30.7% 44.1% 22.7% 25.8% #1 #1 TV net ad TV net ad Audience share Audience share market share market share 32.3% 49.0% 36.3% 71.5% Luxembourg #1 Spain #2 Hungary
Slide 12: Growth potential: TV ad share underrepresented in Germany
Growth potential: TV ad share especially in Germany underrepresented 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: Growth potential: Retransmission fees
Growth potential: Retransmission fees 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
Slide 14: Growth potential: Geographic expansion into high growth markets
Growth potential: 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, Vietna
Slide 15: Agenda
Agenda BROADCAST 2 Broadcast Update 1 INTRODUCTION DIGITAL 3 Financial Update DIGITAL Digital Update Digital Update Strategic Update CONTENT 4 FremantleMedia 15
Slide 16: Dynamic growth in "pure" online business
Dynamic growth in “pure” online business EXCLUDED FROM “PURE” ONLINE REVENUE “PURE” ONLINE ONLINE REVENUE Online / Mobile In € million High-volume e-commerce Portfolio Ad and home shopping Non-Ad 166 133 25% Transactional / 55% Mobile Virtual Network Lead Generation 53% Operator (branded) 47% 45% On
Slide 17: Thousands of 'channels' emerging on new platforms
Thousands of ‘channels’ emerging on new platforms … 1990 2000 2010 FTA networks Cable networks OTT networks 17
Slide 18: 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
Slide 19: MCNs target niche audiences on a global scale
MCNs 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 19
Slide 20: 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 21: Agenda
Agenda BROADCAST 2 Broadcast Update 1 INTRODUCTION Financial Update CONTENT DIGITAL 3 Digital Update Strategic Update Production, CONTENT Distribution & Digital4 FremantleMedia 21
Slide 22: Long-running top brands that travel the world
Long-running top brands that travel the world 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 22
Slide 23: 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 AUSTRALIA new markets 23
Slide 24: 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 25: Agenda
Agenda BROADCAST 2 Broadcast Update 1 INTRODUCTION DIGITAL 3 Financial Update WRAP-UP Digital Update Strategic Update CONTENT 4 FremantleMedia 25
Slide 26: 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 26
Slide 27: Q&A
Q&A 27
Slide 28: German Equity Forum
GERMAN EQUITY FORUM Frankfurt November 2013
Slide 29: Review of Results 30 September 2013 (1/2)
Review of Results 30 September 2013, continuing operations (1/2) Nine months to Nine months to Per cent In € million September 2013 September 2012 change REVENUE 4,048 4,111 -1.5 REPORTED EBITA 714 671 +6.4 Reported EBITA margin (%) 17.6 16.3 +1.3pp Net result attributable to RTL Group shareholders
Slide 30: Review of Results 30 September 2013 (2/2)
Review of Results 30 September 2013, continuing operations (2/2) Nine months to Nine months to Per cent In € million September 2013 September 2012 change REPORTED EBITA 714 671 +6.4 Impairment of investment in associates and amortisation 65 (18) and impairment of fair value adjustments on acquisitio
Slide 31: Cash Flow Statement as of 30 September 2013
Cash Flow Statement as of 30 September 2013 Nine months to Nine months to In € million September 2013 September 2012 NET CASH FLOW FROM OPERATING ACTIVITIES 694 563 Add: Income tax paid 180 277 Less: Acquisition of assets, net (91) (116) Equals: Reported free cash flow (FCF) 783 724 Acquisition of s
Slide 32: 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 33: Strong growth in online video, accelerated by acquisitions
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 33
Slide 34: 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