Analyst Meeting
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ANALYST MEETING 18/02/2010 DISCLAIMER All forward-looking statements are TF1 management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. ON SE RETROUVE SUR 2 TABLE OF CONTENT INTRODUCTION GROUP ACTIVITY IN 2009 2009 ACCOUNTS 2010 OUTLOOK QUESTIONS / ANSWERS ON SE RETROUVE SUR 3 RATINGS: DISRUPTED COMPETITIVE CONTEXT TV equiped receving 18 channels or more 4 years and + +54% in 1 year +30% in 1 year +13% in 1 year 85!% 86!% 88!% 78!% 82!% 70!% 74!% 60!% 65!% 51!% 55!% 39!% 45!% EndJAN 2006 07 APR 07 JUL 07 OCT 07 EndJAN 2007 08 APR 08 JUL 08 OCT 08 EndJAN 2008 09 APR 09 JUL 09 OCT 09 EndJAN 200910 Audience share of the DTT channels 15.2 11.1 (Ind 4 years and over) 5.9 2.7 2006 2007 2008 2009 INCREASED COMPETITION SOURCE: Médiamétrie – MMW INTRODUCTION 4 ADVERTISING: SUPPLY EXCEEDING DEMAND SUPPLY DEMAND BROADER OFFER (MEDIA, AD FIERCER MEDIA INVESTMENT SLOTS, ETC.) + COMPETITION DOWN Economic crisis cyclical contraction in demand Pressure on prices Short-term decisions only Search for low-cost solutions IMPACT ON ALL MEDIA INTRODUCTION 5 ADVERTISING SPEND HEAVILY AFFECTED BY CRISIS Billion ESTIMATED FALL IN FRENCH COMMUNICATION MARKET IN 2009 -3Euros (ALL MEDIA AND EXCL. MEDIA) UNPRECEDENTED CRISIS IN FRANCE GLOBAL CRISIS (Evolution in all media investments) (Evolution in all media investments in the US) 4% 3% -13% OF US ADVERTISING INVESTMENTS -5% -5% st Golfe Internet 1 Gaz Crisis War Sapin Law Bubble -15% 1974 1991 1993 2001 2009 Source: Forecast FRANCE PUB sept 2009 for the net French investments / Forecast ZenithOptimedia dec 2009 for the US investments INTRODUCTION 6 2009: A YEAR OF CHALLENGES FOR TF1 FIERCER COMPETITION POOR HEALTH OF MARKETS, END OF ADVERTISING ON ESPECIALLY «FOOD» FRANCE TÉLÉVISIONS NEW REGULATIONS CHANGE IN PROGRAMME (SMA) START TIMES ON FRANCE FRAGMENTATION OF TÉLÉVISIONS TV AUDIENCES TF1 HELD UP WELL IN 2009 DESPITE THE CIRCUMSTANCES INTRODUCTION 7 TABLE OF CONTENT INTRODUCTION GROUP ACTIVITY IN 2009 2009 ACCOUNTS 2010 OUTLOOK QUESTIONS / ANSWERS ON SE RETROUVE SUR 8 2009: A YEAR OF INITIATIVES Rigorous methods ALL-NEW CONTEXT REORGANISATION News reorganisation Rationalised diversifications Optimised subsidiaires and sites RENEWAL ‣ Competitive REPOSITIONNING ‣ Regulatory ‣ Economic RETURNS RESIST AND HOLD OUR COURSE 2009 GROUP ACTIVITY 9 RIGOROUS METHODS AND PROCEDURES REORGANISATION MANAGEMENT ‣ Implementation of SAP software (Sigma Project) ‣ Reduced operating costs ‣ Guidelines for each department PURCHASING ‣ Contracts systematically revised downward HUMAN RESSOURCES ‣ Departing employees not replaced ‣ Tighter organization charts ‣ Senior executive salary freeze in 2009 ‣ New policy of variable remuneration PROGRAMMING ‣ Favourable renegotiation of major contracts ‣ Rigorous monitoring of costs MORE EFFICIENT COORDINATION 2009 GROUP ACTIVITY 10 NEWS UNIT REORGANISATION TARGET: Strengthen TF1 – LCI – Web synergies Continue quality – preserving costs reduction Le PNS2 (Process News & Sports 2): a major benefic A tool which will allow us to: ‣ Centralize material acquisition, production and management ‣ Increase overall productivity through integrated methods and planning ‣ Operational in H1 2010 Tighter management: ‣ Catherine Nayl, Eric Revel and Pascal Emond ‣ Joint editorial and support functions ‣ Creation of a Corporate Department: grouping support services REFORM HAS ALREADY PRODUCED RESULTS 2009 GROUP ACTIVITY 11 RATIONALISED DIVERSIFICATIONS REORGANISATION Necessary sales ‣ France 24 ‣ Survinvitation.com ‣ Téléshopping Turquie ‣ Top Ticket.S (Pilipili) Major partnerships ‣ TF1 Vidéo et Sony Pictures Home Entertainment ‣ TF1 International et UGC ‣ TF1 and Samsung ‣ TF1 and La Française des Jeux SUBSIDIARIES REFOCUSED ON CORE BUSINESS 2009 GROUP ACTIVITY 12 OPTIMISED SUBSIDIARIES AND SITES REORGANISATION Grouping TF1 Publicité, e-TF1, TF1 Entreprises, TF1 Vidéo, TF1 Droits Audiovisuels and TF1 Films Production at the same ATRIUM site Creation of TF1 Production on DELTA through the integration of 6 subsidiaries Rationalization of head office studios: Studiomax project "3.5 million investments "2.3 million of savings BOULOGNE GROUPING: A CROSS-FUNCTIONAL ASSET 2009 GROUP ACTIVITY 13 PROJET STUDIO MAX: SITUATION IN 2009 REORGANISATION CONTROL ROOM LCI PRODUCTION LCI CONTROL ROOM CONTROL ROOM 3 CONTROL ROOM 1 TECHNICAL AREA TF1 NEWS PRODUCTION 2009 GROUP ACTIVITY 14 PROJET STUDIO MAX: SITUATION IN 2010 REORGANISATION LCI PRODUCTIVITY INTERNAL PRODUCTION EXPANDED CONTROL ROOM 2 SYNERGY TF1 / LCI LCI CONTROL ROOM CONTROL ROOM 1 LCI PRODUCTION TECHNICAL AREAS STUDIO FLASH TF1 NEWS PRODUCTION 2009 GROUP ACTIVITY 15 2009: A YEAR OF INITIATIVES ALL-NEW CONTEXT REORGANISATION RENEWAL New programs in all genres Successful changes in news programming Thematic channels moving forward Dynamic internal production ‣ Competitive REPOSITIONNING All types of entertainment ‣ Regulatory ‣ Economic RETURNS RESIST AND HOLD OUR COURSE 2009 GROUP ACTIVITY 16 NEW PROGRAMS RENEWAL ENTERTAINMENT AND MAGAZINES: In access In Prime & Second Time 2009 GROUP ACTIVITY 17 NEW PROGRAMS RENEWAL TV DRAMAS: US SERIES: NEWS: ZOOM SUR NEW SHOWS IN ALL KIND OF GENRES 2009 GROUP ACTIVITY 18 STILL LEADER ON NEWS RENEWAL Audience share on 4 years and + (Monday to Sunday) 47.1 45.9 45.8 19.3 19.0 6.4m 18.3 8.2 1pm 2.6m 7.3 6.5 0.9m Sept-Dec 08 Jan-June 09 Sept-Dec 09 Sept-Dec 08 Jan-June 09 Sept-Dec 09 Sept-Dec 08 Jan-June 09 Sept-Dec 09 32.9 31.3 31.0 21.8 20.8 20.6 7.4m 10.8 12.5 11.4 8pm 4.9m 2.5m Sept-Dec 08 Jan-June 09 Sept-Dec 09 Sept-Dec 08 Jan-June 09 Sept-Dec 09 Sept-Dec 08 Jan-June 09 Sept-Dec 09 SOURCE: Médiamétrie - Médiamat 2009 GROUP ACTIVITY 19 UNRIVALED AUDIENCE SHARES RENEWAL Audience share (in %) Year 2008 Year 2009 27.2 26.1 4 years and + 17.5 16.7 15.2 13.3 12.6 12.7 11.8 11.0 10.8 11.1 3.3 3.1 2.6 2.4 1.5 1.3 F2 F3 C+ F5 Arte M6 DTT Ch. Pay-TV 30.9 29.8 Women <50 17.5 17.2 16.5 13.1 12.8 12.3 12.3 11.6 7.9 6.7 3.1 2.6 2.2 1.9 0.9 0.8 F2 F3 C+ F5 Arte M6 DTT Ch. Pay-TV SOURCE: Médiamétrie - Médiamat 2009 GROUP ACTIVITY 20 A HIGHER PERFORMANCE ON OUR 7PM-1AM STRATEGIC SLOT RENEWAL TF1 audience share 4 years and + Women <50 25-49 years old +3.2pts 33.0% +2.8pts +2.2pts 30.9% 29.8% Whole day 28.3% 28.1% 26.1% 7pm - 1am +9.4pts +12.5pts +12.6pts +13.7pts +13.1pts +13.6pts vs challenger vs challenger vs challenger A UNIQUE EXPOSURE FOR ADVERTISERS ON TF1 SOURCE: Médiamétrie - Médiamat 2009 GROUP ACTIVITY 21 2009: GREAT PERFORMANCE RENEWAL 96 out of top 100 audiences 26.1% 29.8% of audience share on individuals of audience share on women <50 6.2 67/23/5 million TV viewers on prime-time 67 Prime-time with more than 8 million TV viewers 23 Prime-time with more than 9 million TV viewers 93% 5 Prime-time with more than 10 million TV viewers evenings leader on individuals * * Leadership on TF1 prime-time slots 2009 GROUP ACTIVITY 22 SOURCE: Médiamétrie - Médiamat THEMATIC CHANNELS MOVING FORWARD RENEWAL Revised editorial positioning ‣ Odyssée: lifestyle and well-being ‣ Histoire: from debates to major commemorations ‣ Ushuaïa TV: sustainable development and environmental protection ‣ TV Breiz: TV series and well-known characters A visible dynamism on screen ‣ New look for Odyssée ‣ Histoire: new logo and new baseline (The past of the present) ‣ All-new documentary shows and series, new faces CHANNELS CLOSELY RESPONDING TO VIEWERS DEMAND 2009 GROUP ACTIVITY 23 DYNAMIC INTERNAL PRODUCTION RENEWAL Renewed offer: ‣ In all genres: magazines, entertainment, drama/comedy ‣ new faces ‣ leading brands More hours of programming ‣ for TF1 ‣ for TMC FOSTERING BENCHMARK & CREATIVITY 2009 GROUP ACTIVITY 24 SUCCESSFUL CO-PRODUCTION RENEWAL 20 co-produced movies 7 with more than one million admissions Arthur, Coco and LOL, stars of box-office EDITORIAL LINE FOCUSED ON POPULAR COMEDY 2009 GROUP ACTIVITY 25 TF1 ENTREPRISES PERFORMING STRONGLY RENEWAL Music: ‣ N°1 during 30 weeks between September 2008 and September 2009, ‣ Mozart (500,000 albums), J. Hallyday (430,000), Seal (345,000), Calogero (315,000), F. Pagny (212,000), M. Lavoine (270,000), Black Eyed Peas (190,000) Licences: ‣ Strong development in licenses Barbapapa in France and in Europe, ‣ New rights: Babar ‣ High-potential brand: Kitty 2009 GROUP ACTIVITY 26 TF1 ENTREPRISES PERFORMING STRONGLY RENEWAL Games/Dujardin: ‣ Success of the game «La Roue de la Fortune» (233,000 boxes sold), ‣ Acquisition of the game «Le cochon qui rit» ‣ Strong growth on the «1 000 Bornes» (+76% with 433,000 boxes sold in 2009) ‣ «1000 bornes, Cars», Disney award ALL TYPES OF ENTERTAINMENT 2009 GROUP ACTIVITY 27 MOZART, THE ROCK OPERA: MUSICAL EVENT OF THE YEAR RENEWAL A NEW DIVERSIFICATION!BUSINESS MODEL!BUILT AROUND A 360° STRATEGY SHOW SOUNDTRACK From 22/09/09 to 03/01/10 at the Palais des Sports in Paris. Album released on 27/04/2009 Touring the in France from 03/02/10. ‣TF1 Entreprises / Warner co-venture ‣Co-production, 10% TF1 Entreprises ‣Diamond award (500,000 sales) ‣253,000 tickets sold in Paris ‣France’s second best-selling album in 2009 ‣Already 315,000 tickets sold in the provinces ‣17 weeks in the Top 5 (of which ten in the top 3) ‣Return to Paris already scheduled for fourth-quarter 2010 since release ‣Almost 250 performances overall in 2009/2010 VIDEO MERCHANDISING Release scheduled for 2010 ‣Managed by TF1 Entreprises ‣Published by TF1 Vidéo ‣Distributed in theatres, shops and on the web ‣Starting base: 350,000 DVDs & 40,000 Blu