INTERIM REPORT FIRST HALF-YEAR OF 2013 THE LEADING EUROPEAN ENTERTAINMENT NETWORK HIGHLIGHTS JANUARY TO JUNE 2013 A successful public offering In the first half of 2013, Bertelsmann reduced its shareholding in RTL Group via a public offering. The transaction priced at €55.50 per share and raised €1.3 billion for the selling shareholder. This makes the public offering the largest IPO in Europe in 2013 year-to-date and the largest global media IPO since July 2004. Following the transaction, RTL Group’s shares have been listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. Since 24 June 2013, RTL Group has been included in the German SDAX index. Following the public offering, Bertelsmann now holds 76.4 per cent of RTL Group’s ordinary shares and the free float increased significantly to 22.8 per cent. The remaining shares are treasury shares. Compared to the initial price at the public offering in April 2013, RTL Group’s share price was up 13.8 per cent by the end of June, clearly outperforming the DAX index in the same period (see below). Elmar Heggen, Anke Schäferkordt and Guillaume de Posch at the Frankfurt Stock Exchange (from left to right) Share price performance since first day of trading in Frankfurt/Main – +13.8% RTL Group vs DAX (30 April to 30 June 2013) 55.5 € +1.1% RTL Group (Frankfurt) DAX (rebased) Digital expansion In June 2013, RTL Group acquired a 51 per cent majority stake in Broadband TV, Youtube’s fifth largest Multi-Channel Network (MCN). Broadband TV man- ages more than 8,500 channels and generates around 800 million video views per month. With this strategic partnership, RTL Group has become the number 4 player on Youtube (excluding music video services) and strength- ened its position in North-America – the biggest and most innovative media market in the world. Together with the management team of Broadband TV (pictured left: CEO Shahrzad Rafati) RTL Group has defined an ambitious growth plan for the company. RTL GROUP INTERIM REPORT 2013 2 CONTENTS 2 Highlights 3 Contents 4 Interim management report 7 Financial review 8 Review by segments 10 Mediengruppe RTL Deutschland 13 Groupe M6 15 FremantleMedia 17 RTL Nederland 19 RTL Belgium 20 RTL Radio (France) 21 Other segments 25 Condensed consolidated interim financial information 25 Condensed consolidated interim income statement 26 Condensed consolidated interim statement of comprehensive income 27 Condensed consolidated interim statement of financial position 28 Condensed consolidated interim statement of changes in equity 29 Condensed consolidated interim cash flow statement 30 Notes to the condensed consolidated interim financial information 43 Management Responsibility Statement 44 Report on review of the condensed consolidated interim financial information 45 RTL Group – Best-in-class European entertainment company 46 Financial calendar RTL GROUP INTERIM REPORT 2013 3 INTERIM MANAGEMENT REPORT RTL Group reports significantly higher EBITA and net profit for the first half of 2013 RTL Group delivers on its strategic growth plan, stepping up its investments in broadcast, content and digital Based on its strong cash flows, RTL Group will pay out an extraordinary interim dividend of €2.50 per share in September 2013 Luxembourg, 22 August 2013 − RTL Group, the leading European entertainment network, announces its interim results to 30 June 2013. H1/2013 H1/2012 Per cent € m € m change Revenue 2,779 2,815 (1.3) Underlying revenue1 2,780 2,815 (1.2) Reported EBITA2 552 506 +9.1 Reported EBITA margin (%) 19.9 18.0 Reported EBITA 552 506 +9.1 Reversal of/(loss on) impairment of investment in associates 72 (10) Amortisation and impairment of fair value adjustments on acquisitions of (5) (5) subsidiaries and joint ventures Gain/(loss) from sale of subsidiaries, other investments and re-measurement to 1 (1) fair value of pre-existing interest in acquiree Net financial income/(expense) 5 (11) Income tax expense (158) (147) Profit for the period from continuing operations 467 332 Loss for the period from discontinued operations – (1) Profit for the period 467 331 +41.1 Attributable to: Non-controlling interests 49 57 RTL Group shareholders 418 274 +52.6 Basic EPS continuing operations (in €) 2.72 1.80 Basic EPS discontinued operations (in €) – (0.01) Reported EPS (in €) 2.72 1.79 +52.0 1 Adjusted for scope changes and at constant exchange rates 2 EBITA (continuing operations) represents earnings before interest and taxes excluding impairment of goodwill and of disposal group, and amortisation and impairment of fair value adjustments on acquisitions of subsidiaries and joint ventures, reversal of/(loss on) impairment of investment in associates, re-measurement of earn-out arrangements and gain or loss from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing interest in acquiree RTL GROUP INTERIM REPORT 2013 4 INTERIM MANAGEMENT REPORT RTL Group continues to create value ■ TV advertising market conditions remained mainly reflecting higher operating profit and a challenging in the first half of 2013: only the reversal of a 2012 impairment, totalling €72 German net TV advertising market was esti- million, on RTL Group’s shareholding in the mated to be stable year-on-year, while all of Spanish broadcasting company Atresmedia RTL Group’s other core markets decreased. (formerly Grupo Antena 3) Accordingly, reported Group revenue was slightly down 1.3 per cent to €2,779 million ■ Net cash from operating activities of €581 mil- lion, resulting in an operating cash conversion ■ RTL Group’s EBITA increased significantly by of 120 per cent; RTL Group had net financial 9.1 per cent to €552 million; the second best debt of €224 million as of 30 June 2013 first-half EBITA in the Group’s history ■ On 21 August 2013, RTL Group’s Board of ■ Reported EBITA margin also increased signifi- Directors authorised the distribution of an cantly, reaching 19.9 per cent, compared to extraordinary interim dividend of €2.50 per 18.0 per cent in the first half of 2012 share, to be paid in September 2013. This decision is a reflection of the Group’s strong ■ Net profit attributable to RTL Group share- cash flows and its target net debt to full-year holders was up 52.6 per cent to €418 million, EBITDA ratio of 0.5 to 1.0 times All major profit centres of RTL Group achieved either higher or stable EBITA, despite the tough economic environment ■ EBITA of Mediengruppe RTL Deutschland ■ FremantleMedia reported a higher EBITA of €47 increased by 9.3 per cent to €306 million – million (H1/2012: €40 million), mainly driven by the best ever first-half operating profit for RTL increased contributions from FremantleMedia Group’s largest profit centre; the German RTL North America and FremantleMedia Asia family of channels achieved a combined audi- Pacific; the results also demonstrated the ence share of 31.2 per cent among viewers benefits of previous restructuring on costs aged 14 to 59, and increased its market lead- ership to 6.7 percentage points over its main ■ RTL Nederland’s EBITA was stable at €38 mil- commercial competitor lion, despite an estimated 5.6 per cent decline of the Dutch TV advertising market; the unit ■ Groupe M6 outperformed in tough market also reported a stable combined prime time conditions: while the French TV advertising audience share of 32.4 per cent in the com- market was estimated to be down 6.0 per mercial target group, maintaining a clear lead cent in the first half of the year, Groupe M6’s of 12.1 percentage points over its main com- EBITA was slightly up to €127 million and the mercial competitor company continued to gain TV advertising market share ■ RTL Belgium and the RTL radio family in France remained clear market leaders and generated stable profit contributions RTL Group is delivering on its strategy “broadcast – content – digital” to generate future growth Broadcast RTL Group invests significantly in strengthen- ■ RTL Group will form a venture with the num- ing its existing broadcasting businesses and ber one US network CBS for the launch of two expanding into new growth markets thematic pay channels in South East Asia ■ RTL Television secured the highly attractive ■ RTL Hrvatska has been awarded a license for rights to broadcast the qualifying matches of a new kids and family channel to be named the German national team for the European RTL Kockica; the free-to-air channel is sched- Football Championship 2016 and Football uled for launch in autumn 2013 World Cup 2018 RTL GROUP INTERIM REPORT 2013 5 INTERIM MANAGEMENT REPORT Content In the first half of 2013 FremantleMedia conclud- ■ Global sales of finished content, format sales ed its strategic realignment to create a clearer in non-production territories, and acquisition focus for its future as a stronger and more unified and development of new programmes for company, which is scaling up investment in the the international market are now handled by creative pipeline and format development across the newly created division FremantleMedia all genres International ■ Licensing, sponsorship, digital and other com- mercial ancillary activities are now embed- ded into FremantleMedia’s local production operations Digital RTL Group continues to grow its digital pres- ■ Mediengruppe RTL Deutschland continued ence, both organically and through targeted to expand its digital distribution with exten- investment in high-growth areas sive new content agreements to broadcast its linear TV channels via the online platforms ■ In June 2013, RTL Group acquired a 51 Zattoo and Magine per cent majority stake in Broadband TV, Youtube’s fifth largest Multi-Channel Network ■ RTL Group is extending its strong and rapidly (MCN). Broadband TV manages more than growing presence across all digital platforms.