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ANNUAL REPORT 2006 Breaking new grounds everyday CONTENTS 2 Message from the Chairman 48 M6 FREE-TO-AIR 80 DIVERSIFICATION of the Management Board AND AUDIOVISUAL 50 Produce RIGHTS 4 Corporate governance 52 Inform 82 Interactions 6 Group structure and 56 Support management 86 Interactivity 58 Entertain 7 Key dates 92 Audiovisual rights 60 Enjoy 8 Shareholders’ notebook 96 Distance selling 62 Dream 12 2006 Key figures 100 Football Club des Girondins 66 Share de Bordeaux 14 Message from the Deputy Chairman – Head of TV channels and 68 DIGITAL CHANNELS 102 CANAL+ FRANCE content 70 Complementary TV offer 16 2006 Highlights 104 FINANCIAL REPORT 72 W9 18 Audiences 107 Management report 74 Paris Première 22 The advertising year 155 Financial accounts 76 Téva 225 Legal information 26 M6, A RESPONSIBLE GROUP 78 M6 Music 78 TF6 28 Economic development responsability 79 Série Club 34 Societal and environmental 79 Fun TV responsability 42 Corporate social responsibility M6 - ANNUAL REPORT 2006 1 MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD A further year of growth In 2006, M6 Group beat the record-breaking The second decision was to step up the deve- profitability levels achieved in 2005. Consolida- lopment of other Group channels, with invest- ted turnover from continuing operations (exclu- ments in the growth of W9, Paris Première and ding TPS) thus increased by 18.8% to € 1,283.4 Téva. The success of W9 recalls that of M6 million, compared to € 1,079.9 million in 2005, when it first appeared: an innovative and diffe- thereby enabling the Group to show a 0.8% rentiated channel, specifically targeting young improvement in profit from operations to € 223.0 audiences. million from € 221.1 million in 2005. Net profit of continuing operations was up by 0.8% to These successful developments enable us, under € 152.3 million from € 151.2 million. Net profit Thomas Valentin’s responsibility, to accelerate – Group share was € 408.5 million, reflecting the rollout of an innovative multi-channel offe- the positive financial impact of the merger of ring that is efficient for our advertising clients. the pay TV operations. M6 Group thus boasted an audience level of In addition to record results, 2006 was a year 13.6% of 4+ year old individuals at the end of of transformation for M6 Group. Within an ever 2006, a 1.7 basis point increase from 10 years increasingly fought over and fragmented market, ago, even though the multi-channel offering has the Group took strategic decisions to retain and considerably developed in France, following in consolidate its status of joint leader of privately- particular the expansion of digital terrestrial tele- owned Free-to-Air TV in France. vision and ADSL. The first decision was to significantly invest in This excellent performance in terms of program- new programmes, sports in particular (Football mes is reflected in the 3.9% growth in adverti- World Cup) and prime time (Prison Break): it sing revenue. The over-performance is the result was a major challenge due to the 17.1% increase of in-depth work instituted by the advertising in programming costs involved (5.8% excluding agency personnel, under Catherine Lenoble’s the World Cup). The challenge was won as authority. Actually, the advertising agency quickly 132 nights attracted more than 4 million adapted to the new state of affairs in the French viewers last year, compared to 90 nights in 2005. advertising market by marketing a TV + Inter- While enhancing the channel’s power, we also net multi-media offering. broadened our audience, especially with 35 year old + individuals. 2 M6 - ANNUAL REPORT 2006 In addition, 2006 will live on as a decisive Apart from distance-selling, other Group inter- allow me to thank them here, in particular RTL year for M6’s position within the French pay net operations, which are more closely related Group and Compagnie Nationale à Portefeuille, TV industry. to our core business experienced spectacular as well as our institutional and private investors. growth and now generate nearly 10% of profit Their confidence, along with the commitment Ten years ago, we took part in the creation of from operations. This success is reflected in of all M6 personnel, is essential to good perfor- TPS to challenge Canal+, then a monopoly. Ten the 767,000 customers of M6 mobile by Orange, mances. years later, we are pleased and proud we contri- the 5.2 million unique visitors attracted to the buted to the growth of this significant market Group’s websites in December, our commu- and pushed for the creation of a pay TV Group, nity website operations, M6 Internet succes- Nicolas de Tavernost Canal+ France, in which we hold a 5.1% share- ses testify to the quality of our fundamentals holding. With the merger of TPS and Canal+, and to our capacity to operate in fast-growing M6 has resolved a strategic matter and is now markets. We have a strong brand and are used in a position to dedicate its resources to its chan- to producing quality content and generating high nel editor business, having contributed for ten audience levels. These are decisive strengths years as a TPS shareholder to significant value to successfully expand in this industry. creation. M6 Group will allocate the necessary resour- Lastly, in 2006, the Group laid the foundations ces for its expansion, with challenges such as of its future development in new internet busi- mobile TV offerings, emerging online video and nesses. Our first e-business investment, the audiovisual programme services and the consu- acquisition of Mistergooddeal, which was fully mers’ growing enthusiasm for quality (“premium”) integrated in the Group in 2006, was directed contents and services. to this end. Today, M6 Group distance selling business is Due to these strong results, the Group is enthu- one of the most profitable in that segment in siastically looking forward to the next few years. France and posts high growth rates. This stra- We are determined to drive home our compe- tegic asset is efficiently combined with our home- titive advantage in TV, our core business, as shopping operations and is in a position to well as in new media and internet services. This become one of the most innovative e-business competitive advantage is to be found in our competitors in France. genes: we are a Group of media entrepreneurs and have been supported by the same share- holders and partners for nearly 20 years. Please M6 - ANNUAL REPORT 2006 3 Members of the management Board CORPORATE (from left to right) : Nicolas de Tavernost, GOVERNANCE Thomas Valentin, Catherine Lenoble and Éric d’Hotelans MANAGEMENT BOARD EXECUTIVE COMMITTEE The Management Board is the colle- Management The Executive Committee is responsible Executive gial decision-making body respon- Board members for the Company’s day-to-day opera- Committee members sible for the management of M6 Nicolas de Tavernost tions, especially for anticipating major Nicolas de Tavernost Group and the running of its opera- Chairman of the operating risks, and meets twice monthly. Thomas Valentin tions. It is appointed for a period of Management Board It has 19 members, including Manage- Éric d’Hotelans five years and has four members, all First appointed: ment Board members, representing the Catherine Lenoble 26 May 2000 natural persons designated by the Group’s main management and opera- Bibiane Godfroid Jérôme Lefébure Term expires: 2010 Supervisory Board, employed by the ting divisions. Head of Director of Finance Group and aged under 65 years. Thomas Valentin M6 Programming and Administration The Management Board meet on a Deputy Chairman – Christopher Baldelli Delphine Cazaux weekly basis. Members of the Board Head of TV channels Chairman of Director of Organisation and content are representative of M6 Group’s various M6 Thématique and Human Resources First appointed: businesses. 26 May 2000 Régis Ravanas Michel Rey Term expires: 2010 Deputy Head of Deputy Head of M6 Programming Administration and Éric d’Hotelans Secretary General Philippe Bony Deputy Chairman – Deputy Head of Nathalie-Camille Head of management M6 Programming Martin operations Director of Legal Affairs First appointed: Lionel Aboudaram 14 November 2003 Deputy Head of Marc Roussel Term expires: 2010 M6 Publicité Director of Logistics and Technical Resources Catherine Lenoble Bernard Majani Michelle Garrigues- Management Board Director of Fredet member – Managing Acquisitions Director of Information Director of M6 Publicité Émilie Pietrini Systems First appointed: Director of 28 January 2001 Communication Karine Blouët Term expires: 2010 Director of Institutional Relations Yann de Kersauson Executive Committee Secretary – In charge of coordination with the Chairman of the Management Board 4 M6 - ANNUAL REPORT 2006 SUPERVISORY BOARD The Supervisory Board exercises control over Audit Committee Supervisory the management of the Company in accor- The Audit Committee reviews the Group’s Board members financial statements and the findings of the dance with the Law and the Company’s Albert Frère Gerhard Zeiler Axel Duroux bylaws. The Supervisory Board meets as Statutory Auditors. It comprises 3 members Chairman of the Member of the Member of the often as required in the interests of the Group, of the Supervisory Board, all with financial Supervisory Board Supervisory Board Supervisory Board at least once quarterly. Its members are or accounting qualifications and meets at Chairman of the Board Chairman of RTL Group Chairman of the of Bruxelles Lambert First appointed: Management Board leading businessmen