Content Production & Global Sales
Jan Frouman, October 10, 2012
| October 10, 2012 Page 1 Red Arrow cordially welcomes you to today's presentation
Red Arrow Reel
| October 10, 2012 Page 2 Experienced leadership team
Jan Frouman Jens Richter Ralf Schremper Group Managing Director Group Director – Group Director - Finance . Oversees all business activities International Distribution . Responsible for all day-to-day and international operations . Oversees all worldwide program financial activities sales . Focuses on driving Group . Launched Red Arrow in 2010 . Launched Red Arrow International strategy and led growth (formerly SevenOne International) 11 17 in 2004 10 . With ProSiebenSat.1 Group . Previously at ProSiebenSat.1 since 2010, previously at . Previously at Beta Film and Bertelsmann and RTL Group and Saban Capital Group Prisma Sports & Media
Michael Schmidt John Jongerden Group Director – Group Director - Operations Creative Ops. & Business Development . Responsible for production and sales operations across the group . Oversees all content development
. Special focus on operational expansion . Experience in broadcasting, producing, and integration efforts commissioning and development
. Previously at FremantleMedia, Endemol and GRUNDY . Previously at BRAINPOOL, RTL and VIVA 21 22 X Years of industry experience
| October 10, 2012 Page 3 Red Arrow is already a top-tier global production and distribution group
Production & Development Distribution
18 production companies across Sales offices: fiction / non- fiction TV genres . Munich . Los Angeles
. Hong Kong Development partners
Total revenues 2011 EUR 110m*
| October 10, 2012 Page 4 *Revenues entity view (incl. internal and external sales) Outstanding broadcaster relationships across the world’s 1 2 Superior creative talent largest markets 1 Best-in-class sales execution Content line-up securing future track record 33 4 growth and profitability
| October 10, 2012 Page 5 Outstanding broadcaster relationships across the world’s 1 2 Superior creative talent largest markets 1 Best-in-class sales execution Content line-up securing future track record 33 4 growth and profitability
| October 10, 2012 Page 6 Powerful footprint - 18 production assets across 1 nine territories
SE/DK/NO UK (2011-2012) (2010-2012)
IL (2012)
Hong Kong (2012)
USA (2010-2012) BE/NL (2010) D/AU (2004-2010) AUS (2010)
Co-production partnership
| October 10, 2012 Page 7 Targeting the largest addressable markets in the world: 1 USA, Germany and UK - totaling EUR 23bn volume
Global territories for TV content originations (estimated size excl. news and sports rights in EURbn, 2011) 11 Red Arrow production assets across 3 out of 4 largest markets 20% 10% 15% n/ 16.3 a USA ✔
9.6 GERMANY ✔ 3.6 2.6 UK ✔ USA Japan1 Germany UK
% Average market gross margins
| October 10, 2012 Page 8 Source: Red Arrow estimates 1Market not addressable for Red Arrow Red Arrow is an established partner 1 for leading broadcasters
Country Broadcaster Highlights Betty White‘s Off Their Rockers
The Taste
Perez Hilton: All Access
Das geteilte Glück
My Man Can
Old Ass Bastards
Restless
A League Of Their Own
Mr. & Mrs.
| October 10, 2012 Page 9 Impressive performance: start-up to Top 10 in 1 under 3 years
Rank Independent production group1 1 FremantleMedia Red Arrow is: 2 Endemol . established as part of the world’s 3 Shine leading global production groups 4 All3Media . in line with competition, active in both scripted 5 Zodiak and non-scripted content 6 Banijay . geographically positioned in the 7 Eyeworks world’s largest production markets 8 Red Arrow 9 Talpa 10 Tinopolis
| October 10, 2012 Page 10 Based on est. 2011 revenues. Source: Red Arrow analysis and company information. 1Defined as working independently regardless of ownership by a broadcaster group or studio. Outstanding broadcaster relationships across the world’s 1 2 Superior creative talent largest markets 1 Best-in-class sales execution Content line-up securing future track record 33 4 growth and profitability
| October 10, 2012 Page 11 2 Strengthened creative team: recent top-tier additions
Banks Tarver Ken Druckerman Left/Right Left/Right Credits: Credits: . ‘Watch Me Jumpstart’ (award-winning . Critically acclaimed documentary series documentary, MTV) ‘Frontline’ (PBS), ‘Boston 24/7’ (ABC), ‘The Residents’ (Discovery), . ‘True Life’ (MTV, currently in its 13th season) . Feature documentary ‘Ghosts of Attica’ . ‘First Year’, ‘Candidate’, ‘Aftermath of Terror’, and Emmy Award-winning ‘Fight For Your Rights: Take A Stand Against Violence’
Lisa Shiloach Eilon Ratzkovsky July August Productions July August Productions Credits: Credits: . ‘Who’s Still Standing’ (sold to over 30 . Produced some of the most successful films countries incl. NBC) made in Israel: ‘The ‘A’ Word’ (Keshet, sold to Lionsgate . ‘The Frame’ (sold to over 20 countries, incl. Entertainment) US - The CW, Spain and France) ‘Taxi Driver’ (Reshet & YES) . ‘The Million Pound Drop’ (Keshet), ‘1 vs. 100’ ‘The Ran Quadruplets’ (Reshet & YES) (Reshet)
| October 10, 2012 Page 12 2 Strengthened creative team: recent top-tier additions
Danielle Lux Murray Boland CPL Productions CPL Productions Credits: Credits: . Commissioned award-winning shows incl. . ‘A League of Their Own’ (Sky1, season 6 ‘Green Wing’ and ‘So Graham Norton’ for picked up), ‘All Stars Mr. & Mrs.’ (ITV1, Channel 4 series 4 in production) . Won awards for commissions such as ‘Friday . RTS and Montreux award-winning ‘Your Night with Jonathan Ross’ and ‘The Kumars’ Face or Mine’, ‘Infamous Fives’ and ‘Five Go at BBC Dating’ . ‘All Star Mr. & Mrs.’ (ITV), ‘A League of Their Own’ (Sky1)’ Hilary Bevan-Jones Jago Lee & John Farrar Endor Productions NERD Credits: Credits: . ‘Cracker’ (ITV, BAFTA Best Drama Series, . ‘The Big Bid’ (BBC1), adapted by ABC) ‘SuperHuman’ (Channel 4) . ‘State of Play’ (BBC, BAFTA & RTS Best . ‘Second Rise’ (THC), ‘Getting Out Drama Series) Alive’ (Discovery US) . ‘The Girl in the Café’ (HBO, BBC1, Emmy for . ‘Ricky Gervais‘ Life’s Too Short’ Outstanding Made for Television Movie) (BBC2 / HBO), ‘Escape to the Legion’ (Channel 4)
| October 10, 2012 Page 13 Original shows with outstanding on-air success 2 across all genres
Average audience share vs. channel average
+408% +41%
+185% +41%
+92% +35%
+61% +29%
+55% +24%
+44% +24%
| October 10, 2012 Page 14 Source: Group production company reports, ProMefo, ProSiebenSat.1 Format Research Strategic collaboration drives local and 2 global creative success ...
Local development
. Top-tier creative talent (18 production companies, 5 development partners, central development team) . Best practice sharing . Attractive economics
. Hit formats with . Strong collaboration with local multi-season potential pre-sales team
. International . Synchronization with channel viability / appeal needs & major market events (MIPCOM/TV, Realscreen, etc.) . IP asset value International content sales
| October 10, 2012 Page 15 ... resulting in growing track record of in-house 2 format creation with global traction
Formats exported internationally1 Examples:
11 10
1
2010 2011 2012 YTD, August
| October 10, 2012 Page 16 1Source: Red Arrow. Refers to owned or exploited formats that have travelled to 2 or more countries in total and have been picked up in the relevant year. Outstanding broadcaster relationships across the world’s 1 2 Superior creative talent largest markets 1 Best-in-class sales execution Content line-up securing future track record 33 4 growth and profitability
| October 10, 2012 Page 17 Distribution business positioned to monetize across 3 the entire value chain
3rd-party and original content
Complete Sales team 500+ titles 130+ countries value chain
Truly international, Sales of ready- Core markets: Free TV / Pay TV / well-regarded mades and France, Italy, CEE, VoD / DVD, etc. sales team formats US, UK, Australia
Produced by own Established deal Sales offices in and 3rd-party flow in Latin Munich, Los producers (incl. America, Asia- Angeles, Hong Canada, France, Pacific, Middle Kong US, UK) East, Africa
| October 10, 2012 Page 18 Travelling format success achieved with both 3 in-house and 3rd-party properties
45+ 25+ 10+ COUNTRIES COUNTRIES COUNTRIES
40+ 20+ COUNTRIES 10+ COUNTRIES COUNTRIES
25+ 10+ 10+ COUNTRIES COUNTRIES COUNTRIES
| October 10, 2012 Page 19 Red Arrow International is one of the Top 10 3 independent distributors
Rank1 Distribution company Sales offices 1 BBC Worldwide 11 offices 2 FremantleMedia 11 offices 3 ITV Global Entertainment 5 offices 4 Endemol (EWD) c. 8 offices 5 Red Arrow International Munich, Los Angeles, Hong Kong 6 Zodiak Rights 3 offices 7 Shine 4 offices 8 All3Media n/a
| October 10, 2012 Page 20 Based on 2011 gross revenues. Source: Red Arrow analysis and company information 1Cut-off at EUR 50m gross revenues 3 Recent sales successes & broadcaster highlights
| October 10, 2012 Page 21 Outstanding broadcaster relationships across the world’s 1 2 Superior creative talent largest markets 1 Best-in-class sales execution Content line-up securing future track record 33 4 growth and profitability
| October 10, 2012 Page 22 Content portfolio focused on and in line with 4 global demand % Global market pick-up mix by genre
Reality/factual/docu Entertainment shows
v
v 60% 16%
v v
13% 11%
Scripted series TV movies
| October 10, 2012 Page 23 Recent acquisition of leading factual reality producer 4 in all-important US market
Key position in cable market in NYC (balancing Kinetic’s LA presence with more network focus)
Diverse client base of leading US broadcasters (VH1, MTV, Style, Bravo, History, etc.)
300+ hrs of programming produced to date
| October 10, 2012 Page 24 At least 40% of 2015 growth target will be achieved by 4 end of 2012 – well ahead of plan
External revenues, LTM revenue growth [in EURm as % of 2015 target] ~ 40% ~ 60% 100% 114 External revenue CAGR aspiration for 2010 - 2015: >50%
Total revenue CAGR >20% 20 100 growth target Target EBITDA margin 20 2015: >10% 14 Base 2010 Revenue 2010 2011 H1 2012 Gap to go target 2015
| October 10, 2012 Page 25 4 Strategic priorities
1 Continue to accelerate Red Arrow Group’s profitability and growth
2 Grow global presence in key factual reality and entertainment genres
3 Continuously optimize portfolio
4 Drive IP rights portfolio
5 Maintain healthy balance between original and 3rd-party content
| October 10, 2012 Page 26 4 Red Arrow vision
Red Arrow will firmly establish itself as one of the world's largest creators, producers and distributors of global television content and become a significant financial pillar within ProSiebenSat.1's broader media portfolio.
Red Arrow aims to reach this goal and its financial targets via:
a balanced business mix in terms of genres and regions well-established relationships with broadcasters younger assets maturing as planned, driving revenue CAGR goal and improved EBITDA margins our proven and continued growth in international formats highly proactive group collaboration and synergy efforts in both non-scripted and scripted product a broader global profile for RAI with robust pipelines of new group and 3rd party content
| October 10, 2012 Page 27 Disclaimer
This presentation contains "forward looking statements" regarding ProSiebenSat.1 Media AG ("ProSiebenSat.1") or ProSiebenSat.1 Group, including opinions, estimates and projections regarding ProSiebenSat.1's or ProSiebenSat.1 Group's financial position, business strategy, plans and objectives of management and future operations. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of ProSiebenSat.1 or ProSiebenSat.1 Group to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements speak only as of the date of this presentation and are based on numerous assumptions which may or may not prove to be correct.
No representation or warranty, expressed or implied, is made by ProSiebenSat.1 with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning ProSiebenSat.1 or ProSiebenSat.1 Group. ProSiebenSat.1 undertakes no obligation to publicly update or revise any forward looking statements or other information stated herein, whether as a result of new information, future events or otherwise.
| October 10, 2012 Page 28