Mission statement RTL Group’s aim is to offer popular high quality entertainment and information to all our audiences by encouraging and supporting the imagination, talent and professionalism of the people who work for us. key values These are the principles and qualities that guide RTL Group: Quality: we seek excellence in everything we do. Creativity: we provide stimulating workplaces where creative talent can flourish. Focused management: we manage our businesses actively on behalf of our shareholders, while respecting the cultural needs of the communities we serve. Productivity: we seek out ways to work more efficiently as a Group. table of contents III. Directors’ report, II. RTL Group’s businesses Auditors’ report and markets in 2002 and Consolidated I. RTL Group in 2002 (review of operations) financial statements Key figures 2 Commercial television 12 57 Shareholding structure 3 Content 30 Chairman’s statement 4 Radio 38 CEO’s review 5 New Media 48 Corporate organisation 8 Supporting our communities 50 Highlights 10 Corporate governance 51 Group management 52 key figures 1999 and 2000 based on pro forma figures 2000 based on unaudited pro forma figures 2001-2002 Share price performance 2002 Revenue breakdown Adjusted earnings per share* Revenue by activity - € million € € million 2 901 – RTL GROUP * 20 – – BBG EUR MEDIA INDEX 1.91 0.90 1.61 4 044 4 054 4 362 00 01 02 00 01 02 1 386 0 – 230 119 75 - 349 Shareholders’ equity Market capitalisation € € TV Content Radio New Others million billion -20 – media Elimination 2002 Consolidated EBITA per segment 7 254 4 585 4 402 13.5 6.8 4.4 -40 – € million 00 01 02 00 01 02 331 Dividend per share -60 – € 89 -80 46 -13 -29 0.85 0.50 0.70 02/01 01/02 12/02 TV Content Radio New Others 00** 01 02 media * Brussels stock exchange, as most traded place. *Net result adjusted for amortisation and impairment of goodwill and gain or loss from sale of subsidiaries, joint ventures and other investments, net of tax. **Excluding an extraordinary dividend of EUR 0.45 Key figures / Shareholding structure 3 Shareholding structure 31 december 2002 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII WAZ 20% 80% Public Bertelsmann BWTV 9.6%* 53.1%* 37.3%* RTL Group IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII * excluding 0.76% of RTL Group’s shares held collectively as treasury stock by RTL Group and CLT-UFA 1997, 1993 and 1997, these three channels typify the 2002 we demonstrated, in many ways, that the RTL Group patient and supportive way in which we develop our assets. businesses can work productively together, and we are We invest for the longer term, using our strong balance continuing to identify opportunities for further collaboration. sheet to fund start-up losses. We tap the rich resource of broadcasting and programme-making expertise within our Our business is in excellent shape for which much credit Group to help our assets through the early years as they should go to Didier Bellens, who has guided the company the From strive for credibility and critical mass. This is not a ‘quick since its creation in 2000, and who announced his departure Chairman fix’ that delivers instant profits, but it is a strategy for in February 2003. He leaves behind an excellent legacy. building solid, cash-generative businesses capable of However, Didier’s successor, Gerhard Zeiler, brings with him sustained profits growth over many years. a depth of knowledge of the industry in which we work, and In 2002 we reaffirmed and consolidated our position as because of his position at the head of our most important We look back on 2002 with considerable satisfaction. Europe’s leading commercial broadcaster, and the subsidiary, an excellent understanding of RTL Group. I am Our operating companies delivered a robust and confident international success of the Idols format confirmed confident that under him our company’s progress will be performance against the background of continuing weakness FremantleMedia’s status as a world class content provider. maintained. in advertising markets. We owe a great debt of gratitude to the many people, at all We were particularly pleased with the progress made by levels, throughout our Group who have worked so hard, and some of the younger businesses in our portfolio. RTL Klub in with such professionalism and loyalty, during a period of Hungary, Vox in Germany and Five in the UK all delivered considerable economic uncertainty. We are also indebted to Juan Abelló impressive uplifts in audience share. Founded respectively in our shareholders whose support is so important to us. In Chairman Message from the Chairman / CEO’S review 5 CEO S review’ operations and costs, consolidated several of our operating The power of our people companies into fewer locations to reduce property costs, In 2002 the quality of our people shone through. Across and cut back on our new media operations. But only with Europe, our management teams, our creative talents, our 2002 was another testing year for media businesses in great care have we managed programme budgets, and in advertising sales teams, and our support staff came Europe, yet we rose to the challenge and emerged in better some markets such as the UK we have actually raised our together more effectively than ever before to build powerful shape than several of our competitors. Advertising revenue investment in programmes and programme schedules. positions in our markets. across our television and radio businesses rose and our We performed well in our core television markets, Germany financial result for the year showed a considerable The diversified nature of our portfolio has protected us and France. Our powerful family of television channels in year-on-year improvement. This was a highly satisfactory from the worst consequences of the downturn. Although the Germany retained its market leadership with RTL Television performance in such a challenging environment. It could not advertising market in Germany had a tough year in 2002, on top for the tenth successive year and increased its lead have been achieved without clarity of management and the this was partly offset by both the outstanding performance over its rivals. Vox delivered a double-digit increase in wholehearted support of our people, whose talent and of our own German operations and the stronger situation in revenue. In France M6 had another successful year, commitment were demonstrated time and time again. other markets such as the UK, France and Hungary. Radio confirming its position as the number two commercial revenue has proved more resilient than television – in channel. The strategy that we developed at the time of the merger France our radio family delivered an excellent result. We improved our position in several of our newer markets. with Pearson Television in 2000 has served us well. We were Moreover, we are generating increasing results from In the UK, Five left behind its early downmarket image as it right to focus on the ‘three pillars’ of commercial television, businesses that are not directly dependent on the celebrated its fifth birthday. More importantly, it continued content and radio; and our decision to exit from the German advertising markets. Our content business, FremantleMedia, to win over viewers and advertisers, and is fast pay-TV business has been vindicated by subsequent events. has had spectacular and continuing success with Idols. And approaching breakeven. We were sorry to lose Five’s We were quick to recognise the downturn in advertising at we have seized the opportunity to develop licensing and talented CEO Dawn Airey during the year, and we thank her the outset early in 2001, and we took prompt action to equip merchandising operations. These are cash-generative for the immense contribution she has made to Five’s ourselves for a harsher climate. businesses that can be developed with low levels of capital development. We have appointed another accomplished During 2002 we continued to bring down costs at all levels investment by leveraging our strong media brands and television professional, Jane Lighting, to lead Five into its in our Group. We have streamlined our headquarter promotional airtime. next phase of growth. RTL Klub’s success story continued. It has pushed up its Strong relationships family. The OMC connects the operating units to the share of audiences and television advertising on the back of Idols exemplifies the enormous commercial power our Group headquarters team and is proving to be a highly effective astute programming tailored to the needs of Hungarian can generate when we work together across national borders forum for decision-making and a powerful enabler for sharing viewers. Since launch in 1997, the channel has rapidly in common cause, sharing programme ideas, broadcasting entrepreneurial and creative expertise. improved its position and is now the leader in its target group. experience and marketing know-how. We made progress in the Netherlands where we have There were many examples of productive synergy and In addition, one of our most respected creative executives, reorganised our HMG television family and reduced costs. cooperative effort during the year. To name just two, RTL Hans Mahr, has taken up the newly-created role of Executive Television in Germany lent its knowledge and technical skill Coordinator of Group Synergies. His brief is to identify Harnessing our creative talents to RTL Klub in Hungary to ensure that its coverage of opportunities of mutual interest to RTL Group companies and FremantleMedia’s accomplishments demonstrate the Formula 1 motor racing got off to the best possible start. And to facilitate their development. strength and depth of our creative businesses. Our content Club RTL in Belgium renewed its partnership with M6 to division broke records for quality and quantity in 2002, broadcast its popular Loft Story and Popstars programming.