Annual Report 2010 // Key Figures at a Glance
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// fascinating people Annual Report 2010 // Key fiGureS at a Glance ProSiebenSat.1 Group: Key figures for 2010 EUR m Q4 2010 Q4 2009 Q4 20089) Q4 20078) Q4 2006 Revenue 954.1 880.4 876.8 989.3 657.2 Total costs 654.5 651.8 915.8 772.3 471.6 Recurring costs1) 599.9 576.2 621.6 695.1 460.3 Consumption of programming assets 311.2 290.1 327.5 395.6 264.2 Recurring EBITDA2) 358.6 307.2 279.3 296.9 200.8 Recurring EBITDA margin (in %) 37.6 34.9 31.9 30.0 30.6 EBITDA 338.9 293.0 251.7 281.1 200.2 Non-recurring items3) -19.7 -14.2 -27.6 -15.8 -0.6 EBIT 304.2 239.2 3.5 222.1 189.4 Financial result -65.1 -67.3 -133.3 -79.6 -11.0 Profit/loss before income taxes 239.0 171.9 -128.0 142.5 178.4 Consolidated net profit/loss (after non-controlling interests)4) 181.5 113.4 -170.0 39.5 113.4 Underlying net income5) 194.3 137.1 78.2 75.3 114.4 Investments in programming assets 279.6 267.8 329.3 366.9 261.1 EUR m 2010 2009 20089) 20078) 2006 Revenue 3,000.0 2,760.8 3,054.2 2,710.4 2,104.6 Total costs 2,341.7 2,310.7 2,851.0 2,341.9 1,672.4 Recurring costs1) 2,105.2 2,077.5 2,413.1 2,063.1 1,629.7 Consumption of programming assets 1,077.7 1,068.6 1,247.1 1,145.8 946.0 Recurring EBITDA2) 905.9 696.5 674.5 662.9 487.0 Recurring EBITDA margin (in %) 30.2 25.2 22.1 24.5 23.1 EBITDA 807.6 623.0 618.3 522.3 484.3 Non-recurring items3) -98.3 -73.5 -56.2 -140.6 -2.7 EBIT 669.6 475.1 263.5 385.3 444.3 Financial result -240.5 -242.47) -334.9 -135.5 -57.6 Profit/loss before income taxes 429.0 233.17) -68.4 249.8 386.7 Consolidated net profit/loss (after non-controlling interests)4) 312.7 146.67) -129.1 89.4 240.7 Underlying net income5) 357.2 186.87) 170.4 272.8 244.8 Investments in programming assets 1,233.5 1,227.2 1,397.0 1,176.7 955.0 EUR m 12/31/2010 12/31/2009 12/31/20089) 12/31/20078) 12/31/2006 Programming assets 1,654.6 1,526.5 1,380.0 1,317.7 1,056.3 Equity 1,025.9 607.07) 506.77) 1,090.17) 1,240.5 Equity ratio (in %) 16.2 9.87) 8.57) 18.27) 64.2 Cash and cash equivalents 740.7 737.4 632.9 250.8 63.5 Net financial debt 3,021.0 3,294.6 3,406.7 3,328.4 121.8 Employees6) 4,749 4,814 5,450 4,852 2,976 1) Total costs excl. D&A and non-recurring expenses. 2) EBITDA before non-recurring (exceptional) items. 3) Non-recurring expenses netted against non-recurring in- come. 4) Consolidated net profit attributable to shareholders of ProSiebenSat.1 Media AG. 5) Consolidated profit for the period, before the effects of purchase price allocations and non-cash currency valuation effects. The 2008 figure is also adjusted for impairment of EUR 180.0 million for SBS goodwill. 6) Full-time equivalent positions as of reporting date. 7) After changes in accounting policies according to IAS 8 and corresponding adjustment of previous-year figures. 8) Consolidation of SBS Broadcasting Group in July 2007. 9) CMore deconsolidated in November 2008. // A SUCCESSFUL YEAR FOR PROSIEBENSAT.1 // revenue EUR billion The ProSiebenSat.1 Group increased 3.0 consolidated revenues by 8.7% against 2009. // recurring EBITDA % New record for recurring EBITDA at+30.1 EUR 905.9 million. // net proFit For the year doubled % The ProSiebenSat.1 Group generates a high net profit +113.3 for the year of EUR 312.7 million. // Free cash Flow EUR million As one of the most important indicators for the 282.2 Group’s profitability and financial strength, free cash flow increased by 72.5%. // share price as oF december 31, 2010 % The price of the ProSiebenSat.1 share, which is listed in the MDAX,+179.2 nearly tripled to EUR 22.50 to the end of the year. 3 // PROSIEBENSAT.1 IN BRIEF fascinating people No medium is more popular than television. Our shows, magazines, series and feature films bring people together. Because we reach millions of people at the same time. Strong brands such as SAT.1 and ProSieben are the key pillars of our success. They are the basis of all our activities – extending well beyond television. Already today, we entertain a mass audience via the Internet, mobile phone or our music activities. We want to fascinate people with our content. The TV year of 2010 showed we were successful in doing so. Lena won the hearts of Europe, winning the Eurovision Song Contest for Germany. Danni Lowinski managed to make it to the USA and the most success- ful feature film in German television was broadcast on ProSieben. Just turn the pages to experience how fascinating television can be. 4 5 // Events million What a television moment! After almost 30 years, on May 29, 2010 Lena takes the victory for germany in the Eurovision Song 69Contest. With the song “Satellite” and her spontaneity, she generated enthusiasm across Europe. Stefan Raab and the ARD found Lena in the Tv show “Unser Star für Oslo”. And provided 69 million viewers in 44 countries with a common moment of fascination. 6 7 // stars million We bring Hollywood5.67 into the living room. On March 14, 5.67 million ProSieben viewers moved to the underworld to release Johnny Depp alias Captain Jack Sparrow from the world of the dead. “Pirates of the Caribbean: At World’s End” was the most successful feature film on german television in 2010. The success will continue in 2011 across all stations, with a large range of stars and new fascinating Hollywood blockbusters. 8 // Public Value million Every day we fascinate millions of viewers with our programs. We leverage our public impact to help people. Every year on “Red Nose10 Day” Tv stars such as Sonya Kraus request donations for selected projects to help children. Since the start in 2003, almost EUR 10 million has been collected in this way. Alongside a range of regular initiatives, we also have a commitment to people who get into difficulties. In 2010, the SAT.1 “ran” team collected EUR 500,000 for victims of the Haiti earthquake. Together with partners, it is now building a football school for 120 children and young people. 9 10 // Content // reports from the ExecutivE board and supervisory board // group management report 15 Letter from the CEO 43 Business Operations and Business Conditions 43 ProSiebenSat.1 - The Company 18 Members of the Executive Board 43 Business Activities and Markets 20 Highlights 2010 44 Range of Services and Processes 45 Organization and Group Structure 22 report of the supervisory Board 46 // Group Structure and Locations 26 Proposed allocation of Profits 48 Intragroup Management System 53 Legal Environment Management Declaration and 26 54 Economic and Industry Environment Corporate Governance report 58 // TV Highlights 2010 26 Management Declaration 32 Corporate Governance Report 60 Business Performance in 2010 34 Compensation Report 60 Major Events and Key Features of the Business 62 Explanatory Notes on Reporting 63 Group Earnings 65 Group Financial Position and Performance 72 segment reporting 72 Free TV German-speaking Segment 73 Free TV International Segment 74 Diversification Segment 75 Employees Cross-references Websites 79 the Prosiebensat.1 share 11 ontent C // group management report // Consolidated financial statementS 82 Non-Financial Performance Indicators 113 Income statement 82 Strong Brands 113 statement of Comprehensive Income 84 Long-standing Supplier Relationships 84 Solid Customer Relationships 114 statement of Financial Position 85 Sustainability as a Factor for Success 115 Cash flow statement 87 Research and Development 116 statement of Changes in Equity 89 Events after the reporting Period 117 Notes 89 risk report 117 Basis of Preparation 89 Risk Management 136 Notes to the Income Statement 91 External Risks 142 Notes to the Statement of Financial Position 92 Sales Risks 157 Additional Notes 92 Content Risks 93 Technology Risks 94 Organizational Risks 95 Financial Risks 98 Compliance Risks responsibility of the Executive Board 101 Outlook 185 101 Opportunity Report 186 auditor´s report 103 Future Economic Environment Financial Calendar 105 Company Outlook 187 109 // Programming Outlook for 2011 188 Editorial Information 12 // ADVERTISING Euro billion Television makes winners out of brands. This10.9 is why for years manufacturers have invested the lion’s share of their advertising budgets in TV spots. In 2010 alone, roughly EUR 10.9 billion was spent in Germany on television advertising. The reason for this is quite simple. TV spots are fascinating. Because they are emotional and tell a story. Television is at the heart of any successful campaign. Combined with other digital media its impact is unbeatable. We make brands shine for an audience of millions. Television is the Champions League of advertising. 13 // RepoRts fRom the executive BoaRd and supeRvisoRy BoaRd d R y Boa R viso R upe s xecutive and e om the R ts f R Repo 14 // REports fRom ThE Executive Board and SUpervisoRy Board the executive Board and supervisory Board of prosiebensat.1 media aG are committed to the principles of good corporate governance.