Rtl Group Full-Year Results 2020
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12 March 2021 RTL GROUP FULL-YEAR RESULTS 2020 Entertain. Inform. Inform. Engage. Engage. AGENDA / HIGHLIGHTS / GROUP FINANCIALS / OPERATIONS / STRATEGY & OUTLOOK Let‘s Dance (RTL Television) Entertain. Inform. Engage. HIGHLIGHTS The Voice of Holland (RTL 4) Highlights RESILIENCE AND TRANSFORMATION High audience ratings: Outperformance of 1 commercial competitors in GER, FR and NL Boost of streaming services: paying subscribers in 2 GER and NL up 52% to 2.19 million Resilient core business: more than 70% of revenue 3 decrease offset by cost savings on a comparable basis Portfolio management: full acquisitions of RTL Belgium 4 and Super RTL1; disposals of BBTV and SpotX1 5 Industry consolidation 6 Attractive shareholder returns: dividend of €3.00 per share Denn sie wissen nicht, was passiert (RTL Television) 4 Note: 1. Subject to regulatory approvals GROUP FINANCIALS La France a une incroyable Talent (M6) La France a une incroyable Talent (M6) Group Financials KEY FINANCIALS Revenue Adjusted EBITA1 Profit for the year in € million in € million in € million Change -9.5% Margin 17.4% 14.2% 6,651 6,017 1,156 853 864 625 2019 2020 2019 2020 2019 2020 6 Note: 1. For definition, see page 25 Group Financials STRONG REBOUND OF TV ADVERTISING IN Q3 AND Q4 3% TV advertising revenue -6% -2% in %, change yoy -10% -40% Adjusted EBITA broadcasting businesses1 0.27 0.55 0.81 in € billion vs. prior year -0.25 +0.02 -0.24 Q1 Q2 Q3 Q4 Full year 7 Note: 1. Incl. Mediengruppe RTL Deutschland, Groupe M6, RTL Nederland, RTL Belgium, RTL Hungary, RTL Hrvatska Group Financials MORE THAN 70% OF REVENUE DECREASE OFFSET ON A COMPARABLE BASIS In € million Compensation rate: 52% thereof programme costs1 43pp thereof personnel/other costs 9pp 1,156 On a comparable basis2: >70% 853 -634 +331 Adjusted EBITA 2019 Revenue Cost Adjusted EBITA 2020 decrease compensation 2020 vs. 2019 8 Notes: 1. Incl. related cost items, e.g., live programme expense, 2. Excludes streaming revenue and streaming start-up losses and significant effects from provisions in the defined period and the prior year baseline Group Financials ACTIVE CASH MANAGEMENT LEADS TO CONVERSION RATE OF 123% Full year to Full year to In € million December 2020 December 2019 Net cash from operating activities 933 1,055 Add: Income tax paid 248 334 Less: Acquisition of assets, net (176) (190) Equals: Operating free cash flow (FCF) 1,005 1,199 Acquisition/disposal of subsidiaries, net of cash acquired/disposed 110 (133) Acquisition and disposal of other investments and financial assets, proceeds from the (13) 21 sale of investments accounted for using the equity method Transactions with non-controlling interests, treasury shares (63) (42) Net interest paid (25) (23) Income tax paid (248) (334) Dividends paid (4) (538) Cash generated (cash used) 762 150 EBITA 819 1,139 OPERATING CASH CONVERSION RATE (FCF/EBITA) 123% 105% 9 Group Financials DISPOSALS OF NON-CORE ASSETS LEAD TO HIGHER CAPITAL GAINS Full year to Full year to In € million December 2020 December 2019 Adjusted EBITA 853 1,156 Significant special items1 (34) (17) EBITA 819 1,139 Gain/(loss) from sale of subsidiaries, other investments and re-measurement to fair value 171 87 of pre-existing interest in acquiree and earn-out arrangements Impairment of goodwill of subsidiaries, investments accounted for using the equity method, amortisation and impairment of fair value adjustments on acquisitions of (87) (65) subsidiaries Net financial expense (28) (5) Income tax expense (250) (292) Profit for the year 625 864 Profit for the year attributable to RTL GROUP SHAREHOLDERS 492 754 10 Note: 1. In 2020, the special items reflect mainly the impact of a restructuring programme at Mediengruppe RTL Deutschland (€27.4 million) and onerous advertising sales contracts (€9.7 million) as well as reversal of the restructuring provision in Luxembourg (€2.6 million) Group Financials PROPOSAL IN LINE WITH DIVIDEND POLICY Full year to In € million December 2020 Profit for the year attributable to RTL Group shareholders 492 Adjustments 71 Adjusted profit for the year attributable to RTL Group shareholders 563 from ordinary activities 466 from cash capital gains 97 DIVIDEND, in € per share 3.00 from ordinary activities 2.5 from cash capital gains 0.5 Dividend, absolute amount 464 Dividend payout ratio, in %1 83% 11 Notes: 1. Dividend, absolute amount/adjusted profit attributable to RTL Group shareholders, 2. Based on average share price in 2020 (€33.85) OPERATIONS The Masked Singer (RTL 4) Mediengruppe RTL Deutschland 70% OF REVENUE DECREASE OFFSET ON A COMPARABLE BASIS – SIGNIFICANT INVESTMENTS IN STREAMING AND AD-TECH Key financials Family of channels HIGHLIGHTS In € million Audience shares 14 to 59, FY 2020 Revenue 1 Adjusted EBITA 27.5% Strong news ratings for RTL and NTV 10.2% Others 23.7% 6.4% 2,262 2,127 Strategic partnership with 10.9% MARKETMARKET Deutsche Telekom; streaming, ARD-III 7.8% LEADERLEADER addressable TV, content, ad sales 663 467 Das Erste 8.2% 23.9% ZDF 9.0% P7S1 Agreements signed for full FY 2019 FY 2020 acquisition of Super RTL2 13 Notes: 1. Incl. RTL Zwei, Super RTL and pay-TV, 2. Subject to regulatory approvals Groupe M6 REVENUE DECREASE LARGELY OFFSET, HIGHER MARGIN Key financials¹ Family of channels HIGHLIGHTS In € million Audience shares Women < 50 responsible Revenue for purchases, FY 2020 Adjusted EBITA 22.7% News shows with massive audience growth in 2020 14.4% Others 1,456 32.9% Launch of French 1,273 8.3% streaming service (JV) STRONG #2 3.6% 287 France 3 266 32.0% 8.8% Disposals of non-core assets France 2 Groupe TF1 FY 2019 FY 2020 14 Note: 1. Gulli consolidated as of September 2019; in 2020, Bedrock presented in “Other segments”, segments for previous period not restated due to insignificant impact RTL Nederland SIGNIFICANT GAINS IN AUDIENCE SHARE Key financials Family of channels HIGHLIGHTS In € million Audience shares Adults 25 to 54, prime time, Revenue FY 2020 31.7% Adjusted EBITA Main channel RTL 4 with significant audience share gains, driven by The Masked Singer, Lego Masters, Others The Voice of Holland 17.6% 18.7% 496 476 Launch of ad-supported MARKETMARKET price tier LEADERLEADER 13.0% 28.9% Pubcaster 54 58 21.8% Talpa TV Distribution deals extended FY 2019 FY 2020 15 Fremantle CREATIVE SUCCESSES ACROSS ALL GENRES Key financials HIGHLIGHTS In € million Revenue Adjusted EBITA Strict safety protocols implemented – productions gradually resumed after first lockdowns: 1,793 54 dramas delivered 1,537 26 different gameshow formats aired working on the realisation of at least 60 scripted series ideas 142 87 FY 2019 FY 2020 Arctic Drift 16 STRATEGY & OUTLOOK American Gods Season 3 Strategy STRATEGIC FRAMEWORK UNCHANGED CORE GROWTH ALLIANCES+ P O R T F O L I O PARTNERSHIPS TRANSFORMATION CREATIVITY & COMMUNICATIONS & ENTREPRENEURSHIP PEOPLE MARKETING REGULATION ENABLER 18 Strategy DRIVERS FOR LONG-TERM PORTFOLIO TRANSFORMATION LINEAR NON-LINEAR CONTENT ◼ High-quality ad inventory ◼ Subscriber growth ◼ Global demand from TV networks/streamers and ◼ CPMs ◼ Viewing time increase across all genres ◼ Addressable TV ◼ ARPU ◼ Scripted and high-end documentaries ◼ Platform revenue ◼ Distribution partnerships ◼ M&A OPPORTUNITIES ◼ Efficiency ◼ Alliances ◼ Alliances & Partnerships ◼ Consolidation ◼ Viewing time decrease, ◼ Competition with ◼ Production cost increase ? particularly among younger US platforms ◼ Rights retention CHALLENGES demos 19 Strategy HIGHER REACH IN LINEAR AND NON-LINEAR Total viewing time of RTL Deutschland in million hours Linear1 -1% +4% 22,038 21,711 22,484 Non-linear2 +35% +21% 377 231 280 2018 2019 2020 Ninja Warrior (RTL Television) 20 1. AGF in cooperation with GFK, videoSCOPE 1.4, market standard: TV; incl. linear TV channels of Mediengruppe RTL Deutschland (incl. RTL Zwei, Super RTL and pay-TV), 2. Internal measurement; incl. TV Now and other non-linear (e.g., mobile, apps) Strategy GROWTH OPPORTUNITY ADDRESSABLE TV TARGET 2025 Addressable TV revenue RTL Deutschland1 ◼ Combine value of TV and digital advertising: in € million >2002 Linear TV Addressable TV >70% p.a. ▪ Brand safety ▪ Behavioral data ▪ Mass reach + ▪ Real time ▪ Geo data <15 2020 2025 ◼ Attract new advertisers, deliver higher CPMs ◼ Technical reach key driver to grow the German market Market size in Germany for Addressable TV in € million ×10 <50 ~5002 2020 2025 21 Notes: 1. Net advertising revenue of Mediengruppe RTL Deutschland‘s channels (incl. Super RTL), incl. ATV-Video and ATV-Display, 2. Based on the assumption that ATV-Video households will reach ~25% of total TV households Strategy BUILDING NATIONAL STREAMING CHAMPIONS TARGETS 2025¹ Paying subscribers +52% in million UNCHANGED 2.19 1.44 0.90 0.65 5m to 7m paying subscribers 1.29 0.78 2019 2020 > €500m streaming revenue Key figures1 in € million ~ €350m content spend p.a. Revenue2 141 170 break-even adjusted EBITA Content spend 85 117 Streaming start-up losses3 -4 -55 22 Notes: 1. Refers to TV Now and Videoland combined, 2. Streaming revenue includes SVOD, TVOD and in-stream revenue from TV Now and Videoland/RTL XL; prior year restated to reflect in-stream revenue from RTL XL, 3. Total of Adjusted EBITA from TV Now, Videoland/RTL XL, Salto and Bedrock as consolidated on RTL Group level. The Adjusted EBITA of TV Now and Videoland/RTL XL includes synergies with TV channels on business unit level. RTL Group OUTLOOK 2021 The following outlook assumes that the economic recovery continues in 2021, in particular in Q2/2021, as current lockdown measures are gradually eased and vaccination programmes against Covid-19 progress. 2020 2021e Revenue €6,017m ~€6,200m Adjusted EBITA €853m ~€975m Streaming start-up €55m ~€150m losses “Adjusted EBITA before streaming €908m ~€1,125m start-up losses” 23 #RTLRESULTS Entertain. Inform. Engage. DEFINITIONS Alternative performance measure Explanation Adjusted EBITA represents a recurring operating result and excludes significant special items.