The leading European Entertainment network
JPM, London, June 2014
1 Agenda
1 22 3
Quarter 1 2014 Business Group highlights segments Strategy
2 1 2 3 5
RTL Group with a good start into 2014 : Q1 highlights
€ 1,313 million 112% Revenue Cash conversion rate 14.8% EBITA Margin € 194 million € 92 million Reported EBITA continuing operations Net profit
3 Agenda
1 2 3
Quarter 1 2014 Business Group highlights Segments Strategy
4 1 2 3 5 Mediengruppe RTL Deutschland Stabilising audience share
FAMILY OF CHANNELS BY CHANNEL 14 – 59 (in %) 14 – 59 (in %)
-1.0 +0.1 +0.1 -0.3 0.1 -0.8
13.7 32.4 32.6 31.5 31.3 9.6 30.6 8.5 8.5 8.2 30.3 30.1 6.8 RTL
27.4 26.9 26.0 25.8 25.2 25.2 25.5 RTL Sat 1 Pro 7 ZDF ARD Vox P7S1
-0.2 -0.1 -0.1 +0.7 +/-0 +0.6
5.5 5.2 1.6 0.7 1.0 1.4
2009 2010 2011 2012 2013 Q1 YTD May RTL II Kabel 1 Super RTL Disney N-TV RTL Nitro
Source: AGF in cooperation with GfK X Percentage point deviation vs. YTD May 2013 Note: MG RTL De including RTL II and Super RTL
5 1 2 3 5 Groupe M6 Audience share performance
FAMILY OF CHANNELS BY CHANNEL Housewives <50, all day (in %) Housewives <50 all day (in %)
-0.1 -1.0 +/-0 -0.1 34.1 33.3 33.0 32.6 32.2 32.0 32.1 Groupe 24.2 TF1 15.6 9.9 4.4
21.5 21.2 20.5 20.4 21.0 20.9 20.5 Groupe M6 TF1 France 2 France 3 M6 -0.5 +0.9 -0.1 +0.1 +0.5
4.3 3.7 3.0 3.7 1.2
2009 2010 2011 2012 2013 Q1 YTD May W9 D8 TMC NT1 6ter
Source: Médiamétrie X Percentage point deviation vs. YTD May 2013 Groupe M6: M6, W9 and 6ter; TF1 Group: TF1, TMC, NT1 and HD1
6 1 2 3 5 RTL Nederland Strong audience share development
FAMILY OF CHANNELS BY CHANNEL 20 – 49, Primetime (in %) 20 – 49, Primetime (in %)
35.2 +0.5 +1.5 +1.1 -2.8 +0.5 33.5 33.6 19.7 32.9 33.0 32.3 RTL 16.4 31.7 9.4 29.1 5.6 5.5 27.3 26.8 28.3 25.3 25.3 25.2 RTL 4 Ned 1 SBS 6 Ned 3 RTL 5 26.8 24.0 Pubcast. 22.8 -0.5 +/-0 -0.2 -0.5 +0.3 20.6 20.0 20.0 19.9 6.0 5.6 5.2 SBS 3.3 2.8
2009 2010 2011 2012 2013 Q1 YTD May Veronica RTL 7 Net 5 Ned 2 RTL 8
Source: SKO X Percentage point deviation vs. YTD May 2013
7 1 2 3 5 FremantleMedia Higher revenue and stable EBITA
KEY FINANCIALS REVENUE BRIDGE 2013 – 2014 (in € million) (in € million) REVENUE EBITA
313 301 (7) 29 (22) 12 313 3.3% ROS 2.9% 301
FX European North Asia, LatAM impact production America & Other & Licensing 10 9
2013 2014 2013 2014 2013 2014
8 Agenda
1 22 3
Quarter 1 2014 Business Group highlights segments Strategy
9 1 2 3
RTL Group’s three strategic pillars
BEST IN BROADCAST BEST IN CONTENT BEST IN DIGITAL
¢ #1 or #2 in 8 European countries ¢ Leading global TV entertainment ¢ Leading European media company ¢ Leading broadcaster: content producer in online video 54 TV channels and 27 radio stations ¢ 8,500 hours of programming ; ¢ Strong online sales houses Distribution into 200+ territories with multi-screen expertise
10 1 2 3
Enhanced broadcast portfolio….
BROADCAST ° Newly launched channels growing above expectations Strengthen family ✔ of channels ° Retransmission fees have become significant profit contributors in Germany, Grow ✔ France, Netherlands, Belgium and Hungary non-ad business ¢ #1 or #2 in 8 European countries ¢ Leading broadcaster: ° RTL CBS Asia Entertainment Network first Expand into high 55 TV channels and 27 radio stations✔ channels in South East Asia growth markets
11 1 2 3
…with growth potential in core market…
TV’S AD SHARE IN MEDIA MIX 2013 45% In % of total ad spend 38%
+1pp 30% Growth 27% 25% potential 23%
GER NED UK FRA ESP USA
Print ad share 40% 31% 20% 23% 22% 22%
Print ad share -3pp -6pp -4pp -4pp -2pp -4pp development
Source: Screen Digest 2013; development versus 2012 as previously reported
12 1 2 3
…while HD provides an additional revenue opportunity
MG RTL DEUTSCHLAND HD SUBSCRIBERS HD POTENTIAL IN GERMANY In million In million households
+3.5m +3.9m 36.7 Analogue TV 8.3 4.6 4.2 Digital TV 2.8 24.2 HD TECHNICAL POTENTIAL
0.7 HD Subs 4.2 2011 2012 2013 Q1 2014 2013 Source: according to platform operators; AGF in cooperation with GfK, TV Scope 5.0, December
13 1 2 3
Growing family of channels to counter fragmentation
Successful launches 2012 - 2013 Launches in 2014 Germany PAY GER ✔
FR ✔ ° Launched 8 May 2014 ° Premium documentary channel
Croatia FTA NL ✔
HU ✔ ° Launched 11 January 2014 ° Kids : viewers aged 4 to 14, 20.6%*
*Cumulated result for Q1 2014, 07.00-20.00 hrs
14 1 2 3
With geographic expansion into Asia
Partnership Malaysia ✔
#1 in Europe #1 in the US Singapore ✔
Philippines ✔
Thailand ✔ Launched in September 2013 Launched in March 2014
Family entertainment targeting Male-skewed entertainment basic pay-TV around action, sports and reality Indonesia ✔
15 1 2 3 Broadcast Priorities for 2014 and beyond
1 Invest in top content
2 Grow new channels
3 Expand footprint in high growth markets
4 Grow second revenue stream
16 1 2 3
RTL Group’s three strategic pillars
BEST IN BROADCAST BEST IN CONTENT BEST IN DIGITAL
¢ #1 or #2 in 8 European countries ¢ Leading global TV entertainment ¢ Leading European media company in online video ¢ Leading broadcaster: content producer 54 TV channels and 27 radio stations ¢ 8,500 hours of programming ; ¢ Strong online sales houses Distribution into 200+ territories with multi-screen expertise
17 1 2 3
Create market-leading content
CONTENT CONTENT° Resizing of resources concluded ° Initiatives to drive format development in place Maintain ✔ leading position
° Acquisitions to strengthen drama production and local entertainment Rebalance ✔ portfolio ¢ #1 global TV entertainment content producer ° Growth of online revenues by 62% YoY Deepen ✔ ¢ 8,500 hours° ofInvestments programming to strengthen; online digital exploitation Distribution intoproduction 200+ territories and distribution
18 1 2 3
Acquisitions strengthen scripted and local entertainment
Miso Film 495 Productions Acquisition of 51% stake in November 2013 Acquisition of 75% stake in March 2014
¢ Danish independent production ¢ US production company company focused on high end focused on reality series prime-time TV series and films ¢ Acquisition expands ¢ Acquisition strengthens FremantleMedia’s share of FremantleMedia’s drama the valuable US cable market business and Nordic footprint ¢ Hit formats mainly target ¢ Recently won its first young female viewers commission from US cable channel A&E ¢ Complements Original Production’s male-skewed programming
19 1 2 3 Content Priorities for 2014 and beyond
1 Maintain core business
2 Diversify portfolio
3 Grow and develop the network
4 Build a scalable digital business
20 1 2 3
RTL Group’s three strategic pillars
BEST IN BROADCAST BEST IN CONTENT BEST IN DIGITAL
¢ #1 or #2 in 8 European countries ¢ Leading global TV entertainment ¢ Leading European media company ¢ Leading broadcaster: content producer in online video 54 TV channels and 27 radio stations ¢ 8,500+ hours of programming; ¢ Strong online sales houses Distribution into 200+ territories with multi-screen expertise
21 1 2 3
Driving digital transformation
DIGITAL DIGITAL ° Increase of total online revenues +26% YoY * € 236m ° Online video advertising revenues +31% YoY Online revenues in 2013 Grow online ad ✔ and non-ad business ° Europe’s #1 media company in online video Expand ✔ ° Generating 2.2bn monthly video views ** non-linear services ¢ Leading European media company ° Cornerstone investment inin the online #3 MCN video on YouTube*** Enter multi-channel ✔ ¢ Strong online sales houses network business ° Investments in fashion and comedywith multi-screen verticals expertise
* 2012 non-audited/reviewed; **Monthly average video views in Q4/2013; includes BroadbandTV; excl. Divimove, Style Haul and Atresmedia; ***Comscore YouTube partner ranking (excluding music services)
22 1 2 3
Online video is at the heart of RTL Group’s digital strategy
Strategic focus Strong growth Top 10 global player*
VIDEO VIEWS RTL GROUP # COMPANY Catch-up Full year (in billion) 1 Google / YouTube VOD 1 TV services 2 Facebook +143% +216% +335% 3 AOL (including Adap.TV) 4 VEVO 30.0 5 DAILYMOTION Web New content 2 originals production 21.8 6 RTL Group (restated)** 16.8 7 Maker Studios 6.9 8 Hulu 9 Microsoft Sites And distribution MCN 3 at global scale 2012 2013 Proforma 2014e 10 Yahoo Sites 2013
* ComScore Video Metrix, based on monthly average video views in Q4 2013; excluding Asia and Russia, ad networks and ad exchanges RTL Group figures are internal figures, restated and grouped, incl. BroadbandTV and Videostrip (Videostrip scope entry in 2013); excl. Divimove, Style Haul and Atresmedia; ** average of Q4/2013
23 1 2 3
Other players increasing their presence in the MCN space
o Disney - acquired Maker Studios for USD 500m plus USD 450m earn-out (Mar ‘14) Recent investments o ProSiebenSat.1 - acquired 20% stake in Collective Digital Studio (Mar’ 14) by major media o Endemol - announced USD 40m investment in a new multi-channel network (Nov ‘13) companies o Fox - USD 70m investment for 5% of Vice (Aug ‘13 )
o AwesomenessTV - acquired by DreamWorks (May ’13) - acquired Big Frame for USD 15m (Apr ‘14) First signs of market o Fullscreen - backed by Comcast, WPP and Chernin, acquired ScrewAttack (Mar ‘14) consolidation o Maker - acquired Blip for USD 10m (Sep ‘13)
o Break Media and Alloy Digital formed 50:50 partnership – Defy Media (Oct ’13)
24 1 2 3
RTL Group is already a leading MCN player with BroadbandTV…
18 THOUSAND+ 200 MILLION+ #3 MCN Channels Channel subscribers On YouTube worldwide
VIDEO VIEWS OF BROADBANDTV In billion 1 +150% 2 11.0 3 4.4 4
2012 2013 5
Full-year view, RTL Group investment in June 2013 Ranking by unique viewers, excl. music services; Comscore January 2014
25 1 2 3
…with an ambition to become a leading global player
1 2 3 Strengthen monetisation Acquire scale and technology Develop quality of content and develop strategically capabilities in “horizontal” and depth in key verticals important value-chain MCNs components ✔ ✔ o Ad sales and brand integration capability
o Off-YouTube distribution ✔ VICE FOOD JV ✔ On-going o E-commerce and other ✔ ancillary business lines o Production capability ✔
26 1 2 3
TV broadcasters focus on premium online video…
IN-STREAM INVENTORY PYRAMID
CPM Sell-out ratio People and campaign driven estimates US Ø estimates o Advertisers value premium inventory for HIGH $25-35 75-100% branding PREMIUM o Price premium is paid for quality environment and guaranteed placements
MID-PREMIUM $10-25 50-75% o Sold in packages / campaigns (on CPM
Price basis) Automated and impression based
LOW-PREMIUM $5-10 10-30% o Mostly short form o Individual impression buying (e.g. via auction/real time bidding $0-5 <10% REMNANT o Targeted and data driven
* Source: RTL Group Volume of inventory o Performance based (cost per view)
27 1 2 3
…in an online video market that is growing fast
US video ad revenue in 2013* (net) Est. total market growth (net)
36% 35% HIGH PREMIUM Hulu 13% Rest MID-PREMIUM 33% US France
Price $4bn 55% 27% LOW-PREMIUM 25% Youtube
* Estimates based on SNL and REMNANT eMarketer figures Germany Netherlands Volume of inventory
28 1 2 3
New form of online ad sales : programmatic
TRADITIONAL NEW - programmatic
TRADITIONAL DIRECT SALES PROGRAMMATIC SALES • Pre-negotiated prices • Buying of individual impressions • Package sales • Pricing via auction model (RTB)
• Manual booking • Traded and delivered in real-time
Guaranteed placement, pre-negotiated deal Not-guaranteed, decided in real-time
LEVEL OF AUTOMATION
29 1 2 3
Programmatic is increasing, but from a small base
Global programmatic share of online video advertising market In-Stream and in page video In USD billion CAGR 24.8 +24% 2014 - 18 20.4 +10% 16.9 9.4
Online 13.5 CAGR 34% 8.9 video (14-18) 10.526% 8.4 (In USD bn) 18% 15.4 7.5 +39% GERMANY 0.4 40% 6.4 11.5 5.4 FRANCE 0.4 44% Traditional video 8.6 6.0 UK 1.1 45% Programmatic video 2.7 4.1 USA 6.9 33% 2013 2014 2015 2016 2017 2018 Source: RTL Group
30 1 2 3
Non-premium inventory sold programmatically (USA)
ComScore top video ad properties by ad videos served in Q4 2013 US only, average per month, in million
+650% +97% +112% +43% +316% +140% Q4 2013 -7% +23% +154% -16% YoY % Low CPM High CPM 4,111 Low sell-out High sell-out 3,599 3,048 2,581 2,383 2,197 1,408 566 517 492
AOL / Google / Liverail BrightRoll Spot TubeMogul Hulu ESPN ABC CBS Adap.TV YouTube Xchange Aggregator Broadcaster
31 1 2 3
Non-linear/OTT will be automated first, others to follow
ADOPTION OF PROGRAMMATIC
OTT DISTRIBUTION MANAGED PLATFORM Web native, Web native, Broadcast Broadcast Linear Linear non - VOD originals short-form long-form VOD Web TV TV professional
Non-linear Non-linear Non-linear Non-linear Linear • IPTV • IPTV Platform V PC V PC • PC • PC • PC • Cable & SAT (IP • Cable & SAT V Mobile V Mobile • Mobile • Mobile • Mobile enabled, hybrid) (IP enabled, • (SmartTV) • (SmartTV) • Smart TV • Smart TV • Smart TV hybrid)
Direct Direct Sales Ad networks Ad networks Direct (incl. cross- Direct (incl. cross- Direct and exchanges Youtube AdX channel platform) platform)
Adoption Today Today 1-2 years 3-5 years 3-5 years 2 years 5+ years in US Not yet Sources: Forrester/RTL Group In theory possible possible 32 1 2 3 Digital Priorities for 2014 and beyond
1 Grow online business
2 Expand non-linear services
3 Develop multi-channel network business
4 Strengthen online advertising sales capabilities
33 Disclaimer This presentation is not an offer or solicitation of an offer to buy or sell securities. It is furnished to you solely for your information and use at this meeting. It contains summary information only and does not purport to be comprehensive or complete, and it is not intended to be (and should not be used as) the sole basis of any analysis or other evaluation. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein. By accepting this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of RTL Group S.A. (the "Company”) and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business. This presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes,” “expects,” “predicts,” “intends,” “projects,” “plans,” “estimates,” “aims,” “foresees,” “anticipates,” “targets,” “will,” “would,” “could” and similar expressions. The forward-looking statements contained in this presentation, including assumptions, opinions and views of the Company or cited from third-party sources, are solely opinions and forecasts which are uncertain and subject to risks and uncertainty because they relate to events and depend upon future circumstances that may or may not occur, many of which are beyond the Company’s control. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or any of its subsidiaries (together with the Company, the “Group”) or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in general economic conditions, in particular economic conditions in core markets of the members of the Group, changes in the markets in which the Group operates, changes affecting interest rate levels, changes affecting currency exchange rates, changes in competition levels, changes in laws and regulations, the potential impact of legal proceedings and actions, the Group’s ability to achieve operational synergies from past or future acquisitions and the materialization of risks relating to past divestments. The Company does not guarantee that the assumptions underlying the forward-looking statements in this presentation are free from errors and it does not accept any responsibility for the future accuracy of the opinions expressed in this presentation. The Company does not assume any obligation to update any information or statements in this presentation to reflect subsequent events. The forward-looking statements in this presentation are made only as of the date hereof. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients thereof shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This presentation is for information purposes only, and does not constitute a prospectus or an offer to sell, exchange or transfer any securities or a solicitation of an offer to purchase, exchange or transfer any securities in or into the United States or in any other jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or pursuant to an available exemption from the registration requirements of the U.S. Securities Act of 1933, as amended.
34 The leading European Entertainment network
JPM, London, June 2014
35