Prosiebensat.1 Media Se · XETR:PSM
Prosiebensat.1 Media — Shareholder Meeting (June 2003)
39 slides from Prosiebensat.1 Media's shareholder meeting presentation, Jun 16, 2003
Slide 1: 2003 Annual General Meeting
2003 Annual General Meeting Munich, June 16, 2003
Slide 2: The ProSiebenSat.1 Group: Special challenges in 2002/2003
The ProSiebenSat.1 Group: Special challenges in 2002/2003 § Crisis in the advertising market has intensified drastically § Insolvency of Kirch Group, principal shareholder and most important programming supplier § Unexpected weaknesses in stations’ performance 2
Slide 3: The TV advertising market in 2002: Second down year in a row
The TV advertising market in 2002: Second down year in a row Net advertising spending (ZAW figures) Change from previous year in percent 12 8 4 9,1 6,3 6,8 0 1998 1999 2000 2001 2002 -4 -5,1 -11,5 -8 -12 Source: ZAW 3
Slide 4: Projected developments: Economy to weaken further in 2003
Projected developments: Economy to weaken further in 2003 Projected GDP growth in Germany in percent Federal government: 1.5%, institute consensus: 1.4% 1,5 Council of Economic Experts / “Five Wise Men” 1.0% Economic research institutes: less than 1% 1 Federal government: 1.0%, Ifo 0.9%, RWI 0.5% Fe
Slide 5: Projection: TV advertising market will contract further in 2003
Projection: TV advertising market will contract further in 2003 Net advertising spending Change from previous year in percent 10 5 9,1 6,3 6,8 0 1998 1999 2000 2001 2002 2003* -5,1 -5 -5 to -10,0 -10 -11,5 -15 Source: ZAW,* own estimates 5
Slide 6: Impact of the KirchMedia insolvency
Impact of the KirchMedia insolvency § Interference with business operations § Impact on stock price § Employee uncertainty § Tie-up of management resources 6
Slide 7: ProSiebenSat.1 Group station performance improves since summer 2002
ProSiebenSat.1 Group station performance improves since summer 2002 Share of 14-49 audience, indexed Index: August 2002 = 100 115 115 113 113 111 111 111 110 110 109 109 109 109 108 108 107 107 107 107 107 106 106 105 105 104 102 100 100 100 100 95 Aug 02 Sep 02 Oct 02 Nov 02 Dec 02 Jan 03 Feb 03 Ma
Slide 8: Fiscal 2002: What did we accomplish?
Fiscal 2002: What did we accomplish? 1. Proved profitability 2. Systematic, ongoing cost management 3. Long-term safeguards for programming supply 4. Organization’s efficiency enhanced 5. Revenue offensive: Sales organization restructured 6. Non-TV revenues up 7. Maintained lead in advertising marke
Slide 9: Fiscal 2002: Revenues and earnings
Fiscal 2002: Revenues and earnings 2002 2001 Change EUR m EUR m EUR m in percent Group Revenues 1,895 2,015 -120 -6 EBITDA 134 225 -91 -40 EBIT 73 154 -81 -53 Net pre-tax profit 21 106 -85 -80 Net income for the year 15 68 -53 -78 9
Slide 10: New, networked advertising concepts more and more important
New, networked advertising concepts more and more important Gross revenues for integrated advertising campaigns / new forms of advertising ProSieben Sat.1 Group in EUR m 200 +44% 150 +25% 100 180 125 50 100 0 2001 2002 2003 projections Source: SevenOne Media 10
Slide 11: The ProSiebenSat.1 Group: Steady increase in non-TV income
The ProSiebenSat.1 Group: Steady increase in non-TV income Total non-TV revenues in EUR m 120 +60% 26 +34% 80 7 +40% 94 40 68 56 40 0 1999 2000 2001 2002 ProSiebenSat.1 Euvía Media Basis: Multimedia and merchandising revenues, proportional revenues of Euvía Media (unconsolidated) 11
Slide 12: TV advertising market in 2002: ProSiebenSat.1 Group maintains its lead
TV advertising market in 2002: ProSiebenSat.1 Group maintains its lead 2002 net advertising market shares in percent 50 40 30 45,0 42,9 20 10 2,9 1,0 3,5 4,7 0 ProSiebenSat.1 RTL Group ARD ZDF n-tv Others Group Source: ZAW, RTL Group: RTL, Vox, Super RTL, RTL 2 12
Slide 13: Fiscal 2002: Personnel expenses and staff size
Fiscal 2002: Personnel expenses and staff size 2002 2001 Change in percent Group Personnel expenses (in EUR m) 216 2o9 7 3 Employees* 3.072 3.029 43 1 Employees, adjusted** 2.903 3.029 -126 -4 * Full-time equivalent positions as of Dec. 31, 2002 ; **without SevenOne Intermedia 13
Slide 14: Fiscal 2002: Net financial debt
Fiscal 2002: Net financial debt 2002 2001 Change in EUR m in EUR m in EUR m in percent Group Net financial debt 754 897 -143 -16 Liabilities 1,056 1,272 -216 -17 of which: - Bank debt 156 477 -321 -67 - Bonds 666 528 138 26 14
Slide 15: Fiscal 2002: Television
Fiscal 2002: Television 2002 2001 Change in EUR m in EUR m in EUR m in percent Television Revenues 1,837 1,961 -124 -6 Operating profit 62 137 -75 -55 15
Slide 16: Fiscal 2002: Television segment
Fiscal 2002: Television segment 2002 2001 Change in EUR m in EUR m in EUR m in percent Sat.1 Revenues 777 831 -54 -6 Net pre-tax profit / loss -98 -77 -21 -27 ProSieben Revenues 778 860 -82 -10 Net pre-tax profit / loss 206 262 -56 -21 Kabel 1 Revenues 196 215 -19 -9 Net pre-tax profit / loss 12 34
Slide 17: Fiscal 2002: Key figures for business areas
Fiscal 2002: Key figures for business areas 2002 2001 Change in EUR m in EUR m in EUR m in percent Merchandising Revenues 73 66 7 11 Operating profit / loss 17 15 2 13 Services Revenues 154 172 -18 -10 Operating profit / loss -3 8 -11 -138 17
Slide 18: Fiscal 2002: Dividend proposal
Fiscal 2002: Dividend proposal The Executive Board and the Supervisory Board propose to use the balance sheet profit of EUR 2,472,950.39 as follows: § Distribution of a dividend of EUR 0.02 per bearer preferred share: EUR 1,944,864.00 § Balance to be carried forward to the new accounting period: EUR
Slide 19: TV advertising market suffers from adverse consumer climate and war in Iraq
TV advertising market suffers from adverse consumer climate and war in Iraq Reduction in TV advertising investment, Q1 2003 vs. Q1 2002 in EUR m Food 60,9 Beverage 21,3 Financial 19 Audio & video 16,4 Toiletries 14,9 Tourism 14,6 Office, IT, telecom 14,5 Transportation 12 Pharmaceuticals 9,1 0 10 20
Slide 20: The ProSiebenSat.1 Group: Key figures for Q1 2003
The ProSiebenSat.1 Group: Key figures for Q1 2003 Q1 2003 Q1 2002 Change in EUR m in EUR m in EUR m in percent Group Revenues 411.3 489.3 -78.0 -15.9 EBITDA -4.0 43.4 -47.4 -109.2 EBIT -13.5 29.7 -43.2 -145.5 Net pre-tax profit / loss -30.8 8.5 -39.3 -462.4 Net profit / loss on period -32.8 5.7 -38.
Slide 21: Selected key financial figures for Q1 2003
The ProSiebenSat.1 Group: Selected key financial figures for Q1 2003 Q1 2003 Q1 2002 Change in EUR m in EUR m in EUR m in percent Group Programming expenses 316.9 347.3 -30.4 -8.8 Personnel expenses 53.6 55.1 -1.5 -2.7 Other operating expenses 56.2 59.1 -2.9 -4.9 Employees* (number) 3,023 3,047 -24.
Slide 22: Selected key financial figures for Q1 2003
The ProSiebenSat.1 Group: Selected key financial figures for Q1 2003 Q1 2003 Q1 2002 Change in EUR m in EUR m in EUR m in percent Group Net financial debt 907.5 1,022.5 -115.0 -11.2 Liabilities 1,241.7 1,229.5 12.2 1.0 of which: - Bank debt 330.0 510.2 -180.2 -35.3 - Bonds 665.9 527.8 138.1 26.2 22
Slide 23: Stations' earnings for Q1 2003
The ProSiebenSat.1 Group: Stations’ earnings for Q1 2003 Q1 2003 Q1 2002 Change in EUR m in EUR m in EUR m in percent Sat.1 Revenues 177.1 195.9 -18.8 -9.6 Pre-tax profit / loss -13.1 -40.8 27.7 67.9 ProSieben Revenues 155.2 208.4 -53.2 -25.5 Pre-tax profit / loss 15.1 68.7 -53.6 -78.0 Kabel 1 Reven
Slide 24: N24 neck-and-neck with n-tv
N24 neck-and-neck with n-tv 2003 audience shares in receiving households, by month (viewers age 14-49) in percent 1,2 1,2 1,1 1,1 1,0 1 0,8 0,6 0,6 0,6 0,6 0,6 0,5 0,5 0,5 0,4 0,4 0,2 0 Dez 02 Jan 03 Feb 03 Mrz 03 Apr 03 Mai 03 n-tv N24 Source: AGF/GfK-Fernsehforschung, 3 a.m. - 3 a.m., all of Germa
Slide 25: ProSiebenSat.1 Media AG: Price performance since 2002
ProSiebenSat.1 Media AG: Price performance since 2002 Price performance of European media stocks January 2002 – May 2003 in EUR 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 01/02 01/02 01/02 02/02 02/02 03/02 03/02 04/02 04/02 05/02 05/02 06/02 06/02 07/02 07/02 07/02 08/02 08/02 09/02 09/02 10/02 10/02 11/02
Slide 26: Projected key figures for alternative plan by KirchMedia and banks
Projected key figures for alternative plan by KirchMedia and banks § Capital increase of up to EUR 300 million § KirchMedia plans participation of up to EUR 150 million § “Firm underwriting” from banks for up to EUR 150 million Ø Each bank could acquire around 3 percent of ProSiebenSat.1 Media AG 26
Slide 27: Advantages of the alternative plan for the ProSiebenSat.1 Group
Advantages of the alternative plan for the ProSiebenSat.1 Group § Concentration on business operations § Lasting improvement of financing situation Ø Prerequisite for return to Investment Grade Ø Increases Group’s maneuverability in competition Ø Financing for new growth 27
Slide 28: Advantages of volume agreement on KirchMedia library
Advantages of volume agreement on KirchMedia library § Long-term access to Europe’s largest programming library safeguarded, at significantly less financial risk § Optimized use of programming in schedules § Agreement on revenue model (guaranteed acceptance of a certain volume on revenue-sharing bas
Slide 29: Resignation of eight Supervisory Board members
ProSiebenSat.1 Media AG: Resignation of eight Supervisory Board members § Wolfgang van Betteray (Chairman) § Wolfgang Hartmann (Vice-Chairman) § Norbert Deigner § Fred Kogel § Alfred H. Lehner § Prof. Dr. Hans-Joachim Mertens § Hans Reischl § Gisela Schmitt 29
Slide 30: Nominations for the Supervisory Board
ProSiebenSat.1 Media AG: Nominations for the Supervisory Board § Wolfgang van Betteray, tax advisor, Düsseldorf § Dr. Gerhard Gribkowsky, member of the Executive Board of Bayerische Landesbank, Munich § Wolfgang Hartmann, Member of the Board of Managing Directors of Commerzbank AG, Kelkheim § Dr. ju
Slide 31: Control and profit-and-loss transfer agreements
ProSiebenSat.1 Media AG: Control and profit-and-loss transfer agreements § TELEDIREKT Vermarktungsgesellschaft für Fernsehempfang mbH, Unterföhring § SevenPictures Film GmbH, Unterföhring § MediaGruppe München Werbeforschung und –vermarktung Verwaltungsgesellschaft mbH, Unterföhring 31
Slide 32: Analysis: Reasons behind Sat.1 weaknesses
Analysis: Reasons behind Sat.1 weaknesses Time periods’ loss of share and gross revenues in percent 39 51 43 20 29 18 Percentage of loss of share 2002 vs. Percentage of gross revenues 2002 2001 8-11 pm 5-8 pm Rest Source: AGF/GfK-Fernsehforschung/Nielsen Media Research 32 Basis: 14-49 audience share
Slide 33: Sat.1: Optimizing prime access and weekend programming
Sat.1: Optimizing prime access and weekend programming Task Status Projects Prime access M-F 6:00-6:30 p.m. Crime documentary ü Lenssen & Partner (15.6% share average, + 144 % from predecessor) 6:50-7:30 p.m. Magazine in progress Under revision: Blitz (look and content) 7:30-8:15 p.m. Show in progre
Slide 34: Analysis: Reasons behind ProSieben weaknesses
Analysis: Reasons behind ProSieben weaknesses Time periods’ loss of share and gross revenues in percent 33 25 21 9 6 13 53 39 Percentage of loss of share 2002 vs. 2001 Percentage of gross revenues 2002 8-11 p.m. 5-8 p.m. 1-5 p.m. Rest Source: AGF/GfK-Fernsehforschung/Nielsen Media Research 34 Basis:
Slide 35: ProSieben: Optimization of afternoon and some series slots
ProSieben: Optimization of afternoon and some series slots Task Status Projects Afternoon 2:00 p.m. Talk show ü Arabella: Continuing integration of docu-soap “Abschlussklasse 2003” 3:00 p.m. Servicetainment in progress Under revision: Die Jugendberaterin: integration of docu-soap elements 4:00 p.m.
Slide 36: ProSiebenSat.1 Group strategy
ProSiebenSat.1 Group strategy § Lasting improvement of stations’ performance § Marketing offensive to continue § Push for integrated marketing strategies § Further expansion of non-TV activities § Further enhancement of organization’s efficiency § Systematic cost management continues 36
Slide 37: Total expenses to be reduced more than EUR 200 million in 2003
The ProSiebenSat.1 Group: Total expenses to be reduced more than EUR 200 million in 2003 Total expenses in EUR m Start of advertising crisis 2500 at least EUR –200 m 2000 1500 2057 approx. 1000 1926 1909 1902 1700 500 0 2000 2001 projections 2001 2002 2003 projections Basis: Programming expenses, pe
Slide 38: Sharp cost cuts planned in every segment
The ProSiebenSat.1 Group: Sharp cost cuts planned in every segment Programming expenses Personnel expenses Other operating expenses 1500 300 at least –10% 250 approx. –3% at least –10% 200 1000 200 150 1378 circa circa 216 246 100 circa circa 500 1225 210 100 220 50 0 0 0 2002 2003 projections 2002
Slide 39: Low visibility makes it harder to set goals
The ProSiebenSat.1 Group: Low visibility makes it harder to set goals § Group’s share among the 14-to-49 audience: 29.5 percent for 2003 as a whole § N24 and Sat.1: Significant improvement in earnings § Group EBITDA in triple-digit millions even if TV advertising revenues drop as much as 10 percent
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