INVESTOR RELATIONS PRESENTATION SEPTEMBER 2019 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY BUSINESS & RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL STRATEGY SHARE 2019 MEDIA WORLD UPDATE RTL Group at a glance A LEADER ACROSS BROADCAST, CONTENT AND DIGITAL
Leading commercial Leading global Leading European media broadcaster in Europe content business company in online video
27.2% #1
• • national streaming 35.3% #1 27.5% #1 Creating around 12,700 hours Extensive portfolio of of programming broadcast champions • Distributed 200+ territories • Strong online sales houses with multi-screen expertise 21.4% #2 28.6% #1 Long-form VOD offers
No. 1 on YouTube
28.4% #2 27.1% #2 Top 5 in programmatic advertising sales X% 2018 audience share in target group # Broadcaster position in country
3 RTL Group at a glance MISSION STATEMENT
We are innovators who shape the media world across broadcast, content and digital. We build inspiring environments where creative and pioneering spirits can thrive. We create and share stories that entertain, inform, and engage audiences around the world. We embrace independence and diversity in our people, our content and our businesses. We have a proud past, a vibrant present and an exciting future.
4 RTL Group at a glance EUROPE’S LEADING FREE-TO-AIR BROADCASTER…
FY 2018 revenue In € billion
6.5
4.0
3.61
3.4
2.3
1.92
0 1 2 3 4 5 6 7
Source: published full-year results 1 Converted at an exchange rate of £1.00 to €1.13098 5 2 Converted at an exchange rate of SEK 10.2582 to €1.00 RTL Group at a glance …WITH WIDE REACH AND STRONG CONTENT PRODUCTION…
With operations in over 30 countries, creating 12,700 hours of TV programming a year
Producing number one prime-time shows for major broadcasters in almost every major TV market in the world
Distributing more than 20,000 hours of content in over 200 territories
Over 400 titles on air or in production at any one time
6 RTL Group at a glance …AND ONE OF THE GLOBAL LEADERS IN ONLINE VIDEO
#1 #1 #1 IN NORTH IN EUROPE IN THE AMERICA NORDICS
Unmatched global reach Europe’s leading digital studio and home Unique direct sales team and consistent growth for digital content creators for branded content #1 digital video network globally #1 digital video network in Europe #1 digital video network in the Nordics
7 RTL Group at a glance OUR SHAREHOLDING STRUCTURE
Bertelsmann
24.1%1 75.1%1
Publicly traded on the Frankfurt/Main and Luxembourg stock exchanges LISTED ON MDAX SINCE 2013
As of 31 December 2018 8 1 Excluding 0.8% which is held collectively as treasury stock by RTL Group and one of its subsidiaries RTL Group at a glance CORPORATE GOVERNANCE (1/2)
BOARD OF 1 Chairman of the RESPONSIBILITIES Martin Taylor Board of Directors DIRECTORS • Approval of RTL Group’s James Singh1 Vice-Chairman of the annual budget Board of Directors
• Oversight of significant acquisitions and disposals Executive Directors Non-Executive Directors • Management of the Group’s financial statements Guillaume de Posch Thomas Götz • Review, with expert help if requested, Thomas Rabe Immanuel Hermreck Bernd Hirsch that any transaction between RTL Group CEO RTL Group or any of its subsidiaries on the one hand Elmar Heggen Bernd Kundrun Jean-Louis Schiltz1 and any of the shareholders or any of COO and Deputy CEO RTL Group their respective subsidiaries on the other hand is at arm’s length terms Rolf Schmidt-Holtz Lauren Zalaznick1
9 1 Independent Director RTL Group at a glance CORPORATE GOVERNANCE (2/2)
NOMINATION & COMPENSATION AUDIT COMMITTEE COMMITTEE Chairman of the Nomination Chairman of the Audit Committee 1 and Compensation Committee 1 Martin Taylor James Singh Vice-Chairman of the Board of Directors Chairman of the Board of Directors
Immanuel Hermreck Rolf Schmidt-Holtz Thomas Götz Thomas Götz Bernd Hirsch Jean-Louis Schiltz Martin Taylor1
Responsibilities
• Consulting the CEO and giving prior consent on the appointment • Oversight of the Group’s financial reporting, risk management and removal of executive directors and senior management and internal control as well as standards of business • Proposals on the appointment and removal of non-executive directors conduct and compliance to the General Meeting of the shareholders • Monitoring of financial reporting, statutory audit of the legal and • Establishing Group’s compensation policy consolidated accounts, independence of the external auditors, effectiveness of the Group’s internal controls, compliance programme and risk management • Review of the Group’s financial disclosures and recommendation to the Board of Directors regarding the appointment of external auditors
1 Independent Director 10 For more information on Corporate Governance and the Corporate Governance charter, please see www.rtlgroup.com RTL Group at a glance STRONG MANAGEMENT TEAM
RESPONSIBILITIES OF THE EXECUTIVE COMMITTEE
Thomas Rabe Elmar Heggen Björn Bauer 1 The Executive Committee is vested with internal management authority Chief Executive Officer Chief Operating Officer and Deputy CEO Chief Financial Officer • CEO since 2019 • Deputy CEO since 2018 • CFO since 2019 Responsibility of CEO for • Portfolio responsibility: • COO since 2019 • Responsible for RTL Group’s 2 Mediengruppe RTL Deutschland, Finance, Investor Relations and the day-to-day management • Portfolio responsibility: of the Group Fremantle and SpotX Groupe M6, RTL Nederland, Group IT departments • Responsible for RTL Group’s RTL Belgium, RTL Hungary, RTL Audit & Compliance and Croatia, Divimove, BroadbandTV 3 Active dialogue with the Board European Affairs departments and the Luxembourg operations of Directors about the status and • Representing RTL Group on the development of the Group Board of Atresmedia, Spain • Responsible for RTL Group’s 4 Proposal of annual budgets, Business Development, Legal, to be approved by the Board Corporate Communications & of Directors Marketing and Group HR 11 departments RTL Group at a glance NEW GROUP MANAGEMENT COMMITTEE
EXECUTIVE COMMITTEE Thomas Rabe Elmar Heggen Björn Bauer
Chief Executive Officer, Deputy CEO and Chief Operating Officer, Chief Financial Officer, RTL Group RTL Group RTL Group
Jennifer Mullin Bernd Reichart Nicolas de Tavernost
Chief Executive Officer, Chief Executive Officer, Chief Executive Officer, Fremantle Mediengruppe RTL Deutschland Groupe M6
12 RTL Group at a glance RTL GROUP’S REPORTING SEGMENTS
Mediengruppe Groupe M63 Fremantle RTL Nederland RTL Belgium Other Segments RTL Deutschland 100%1 48.3%1 100%1 100%1 66.0%1
RTL Radio RTL II Super RTL RTL Hungary RTL Croatia Atresmedia4 RTL Luxembourg (France) 35.8%2 50.0%2 48.3%1 100%1 100%1 18.7%2 100%1
SpotX BroadbandTV StyleHaul Divimove United Screens
100%1 57.3%1 100%1 100%1 100%1
1 Fully consolidated 2 Investment accounted for using the equity method 3 Net of treasury shares and own shares held by Métropole Télévision SA under liquidity contract 4 Net of treasury shares 13 The Group’s ownership based on total number of shares after declaration of treasury shares held by the company as per 31 December 2018. RTL Group at a glance OUR ROLE IN SOCIETY #RTLCARES
Our commitment to our main stakeholders … … in three CR focus areas
Viewers, listeners and digital users
The creative community
Advertisers
Our employees
Communities and charities
“We embrace independence and diversity in our people, our content and our businesses.”
14 RTL Group at a glance OUR MATERIAL TOPICS #RTLCARES
Materiality assessment MANDATORY ASPECTS
Conducted regularly to identify the issues that are important to the business Diversity of people and to stakeholders and to determine the relative priority of these issues and content
Human rights (Editorial independence)
Employee matters Learning, fair working conditions, health
Aligned with Anti-corruption and anti-bribery
Social matters Content responsibility, community investment
Environmental matters Relevance: 0 = none, 6 = very high
15 RTL Group at a glance OUR MEASURES IN CORPORATE RESPONSIBILITY #RTLCARES
Diversity of people and content Employee matters Social matters
• Diversity targets Learning Content responsibility • Enhanced maternity and adoption pay • Trainee programmes • Partnerships, e.g. with Stiftung Lesen to reduce pay gap • Training for employees • Child-protection standards • Employee networks • Internal mobility programmes • Hosting child-friendly programmes • Media literacy initiatives, e.g. RTL Factory hackathon Human rights Fair working conditions • European Works Council Community investment • Newsroom Guidelines • Fair recognition, treatment and opportunities • € 17,433,048 estimated net value of free air • Investigative journalism time or donated media time given to charities in 2018 Health • € 3,482,662 cash donations and budget allocated • Fitness offers to corporate foundations or charity • Health check-ups initiatives supported internally in 2018 • Wellbeing campaigns • € 23,064,207 funds raised for charity during flagship events
Anti-corruption and anti-bribery Environmental aspects
• Anti-corruption training programme • Promoting sustainable mobility in the • Anti-corruption policy company (e.g. bicycles, e-mobility) • Employee initiatives, e.g. UFA Green Team
16 RTL Group at a glance OUR AMBITIONS #RTLCARES
OUR CONTENT OUR DIVERSITY TARGET OUR CO2 TARGET
Our news organisations strive for truthful, By 2021, we aim to We plan to reduce our carbon fair and impartial reporting, while protecting individual rights and shielding minors from increase the percentage of emissions by 20% until 2025 inappropriate content. female leadership in our 30% with the milestone of a 10% We ensure our output reflects the diversity of the management to 30%. reduction by 2020. various cultures we serve. (2018: 20%) (Baseline 2016) We do not tolerate discrimination against employees or applicants for employment because of race, national or ethnic origin, gender, pregnancy, marital or parental status, age, disability, religion or belief, sexual orientation or any other characteristic specified under applicable anti-discrimination law or company policy.
RTL Group’s corporate culture is founded on fairness, partnership, mutual trust and commitment.
17 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY BUSINESS & RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL STRATEGY SHARE 2019 MEDIA WORLD UPDATE Full-Year 2018 Highlights OUR TOTAL VIDEO STRATEGY ONCE AGAIN PAYS OFF…
BROADCAST High margins, dynamic growth of VOD services
BROADCAST CONTENT Strong revenue growth +8% and higher EBITDA +5%
DIGITAL €1 billion in digital revenues +19% already 15% share of total revenue TOTAL VIDEO STRATEGY
19 Full-Year 2018 Highlights …WITH RECORD REVENUE, EXCEEDING €6.5 BILLION FOR THE FIRST TIME
KEY FIGURES
+2.1% Revenue: €6,505m BROADCAST -5.7% -1.8pp EBITDA: €1,380m Margin: 21.2% +0.7% Operational EBITDA:
Total +6.3% Dividend: €4.00 Yield
20 Full-Year 2018 Highlights MORE DIVERSIFIED THAN EVER BEFORE
Digital revenue split TV advertising In € million 45.8% 985 MPNs: €331m +19% MPNs
VOD VOD1: €216m Content 826 Content €6.5bn 20.0% Ad-tech Content: €165m Other (Fremantle) Other
2017 2018 9.7% Digital Ad-tech2: €148m % of 15.1% total RTL Group revenue 4.1% 13% 15% Other: €125m Radio advertising 5.3% RTL GROUP FY 2018 Share of digital revenue 3 YEARS AHEAD of plan Platform REVENUE SPLIT
21 1 Activities include SVOD, TVOD, in-page and in-stream revenues), 2. Includes joint ventures with Mediengruppe RTL Deutschland and RTL Nederland Full-Year 2018 Highlights INCREASED TRANSPARENCY TO TRACK ORGANIC GROWTH DRIVERS
TV & RADIO CONTENT DIGITAL 2018/YOY MPNs Ad-tech
Revenue: €4,740m -1% Revenue: €1,592m +8% €331m +28% €112m1 +2%
Platform rev.: €343m +7% # hrs produced: 12,738 hrs +2% Ad-tech ad-spend: $576m +49%
SVOD subscribers: 1m +77% % of drama: 19% -3pp MPN video views: 463bn +20%
Digital rev.: €377m +11% Digital rev.: €165m +39% MPN & Ad-tech rev.: €443m +20%
Total digital revenue €985m
22 Broadcast, content, digital split based on consolidated business unit view; inter-company eliminations excluded, 1. Excludes joint ventures with Mediengruppe RTL Deutschland and RTL Nederland Full-Year 2018 Highlights FOCUS ON ORGANIC GROWTH DRIVERS: DIGITAL AND CONTENT
BROADCAST CONTENT DIGITAL
Top-line drivers to 2021 VOD revenue to grow by > €150m Drama revenue to grow to > €500m Ad-tech revenue to grow by > €100m SVOD subscribers to triple to ~ 3m
23 AGENDA
RTL GROUP AT FULL-YEAR Financials OUR INDUSTRY BUSINESS & RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL STRATEGY SHARE 2019 MEDIA WORLD UPDATE Financials 2018 REVENUE BRIDGE IN 2018
RTL Group revenue bridge in 2018 In € million
176 6,505
6,373 (62) 18 Net growth FX Acquisitions
2017 2018
25 Financials 2018 HIGHLY DIVERSIFIED REVENUE MIX
RTL GROUP 2018 REVENUE SPLIT TV advertising In % TV ADVERTISING 45.8%
Content 20.0% 55.8% 65.9% Other1 €6.5bn 9.7% Digital 15.1% 4.1%
Radio 5.3% advertising TV advertising Platform Other revenue
26 1 Other includes home shopping, merchandising, e-commerce, technical services, etc. Financials 2018 RECORD REVENUE, HIGH MARGINS
Full-Year to Full-Year to Per cent In € million December 2018 December 2017 change Revenue 6,505 6,373 +2.1 Underlying revenue 6,516 6,339 +2.8 Operating cost base 5,464 5,342 +2.3 EBITDA 1,380 1,464 (5.7) EBITDA margin (%) 21.2 23.0 (1.8)pp Operational EBITDA 1,380 1,370 +0.7 Operational EBITDA margin (%) 21.2 21.5 (0.3)pp Net debt (470) (545) - Net debt EBITDA ratio at end of year 0.34 0.37 -
27 Financials 2018 EBITDA TO NET PROFIT
Full-Year to Full-Year to Per cent In € million December 2018 December 2017 change Reported EBITDA 1,380 1,464 (5.7)
Depreciation, amortisation and impairment (224) (233)
Gain/(loss) from sale of subsidiaries, other investments and re-measurement to fair value of pre-existing 25 21 interest in acquiree
Impairment of, goodwill of subsidiaries, investments accounted for using the equity method and remeasurement (105) (6) of earn-out arrangements
Net financial income/(expense) (13) (24)
Income tax expense (278) (385) Profit for the year 785 837 (6.2)
Profit for the year attributable to RTL GROUP SHAREHOLDERS 668 739 (9.6)
28 Financials 2018 CASH CONVERSION
Full-Year to Full-Year to In € million December 2018 December 2017 Net cash flow from operating activities 873 1,023 Add: Income tax paid 354 345 Less: Acquisition of assets, net (178) (69) Equals: Reported free cash flow (FCF) 1,049 1,299 Acquisition and disposal of subsidiaries and JVs, net of cash acquired (18) (30) Other financial assets (deposit excluded), net 117 (33) Net interest (12) (13) Transactions with non-controlling interests & treasury shares (25) (147) Income tax paid (354) (345) Dividends paid (686) (687) Cash generated 71 44 EBITA 1,171 1,248
CASH CONVERSION (FCF/EBITA) 90% 104%
29 Financials 2018 ATTRACTIVE DIVIDEND YIELD
Full-Year to In € million December 2018 Profit for the year attributable to RTL Group shareholders 668 Adjustments for: Impairment 105 Deferred tax asset (67) PLP commission (28) Adjusted net result 678 ORDINARY DIVIDEND, in € per share 3.00 Ordinary dividend, absolute amount1 461 DIVIDEND Dividend payout, in %2 68% YIELD OF 6.3%3
1 Based on total share capital less treasury shares held by the Group and liquidity programme. 2 Ordinary dividend, absolute amount/adjusted net result. 30 3 Including €1.00 interim dividend and based on average share price in 2018 (€63.06) Financials 2018 SIGNIFICANT VALUE ADDED
In € million 2018 2017 EBITA 1,171 1,248 Deduction of shares of results of investments accounted for using the equity method and already taxed (21) (26) 1,150 1,222 Net basis after deduction of uniform tax rate 771 819 Shares of results of investments accounted for using the equity method and already taxed 21 26 NOPAT 792 845 Invested capital at beginning of year 4,123 4,181 Invested capital at end of year 4,093 4,123 66 per cent of the net present value of operating leases and satellite transponder service agreements 302 320 at beginning of year 66 per cent of the net present value of operating leases and satellite transponder service agreements 226 302 at end of year Adjusted average invested capital 4,372 4,463 Cost of capital 350 357 RVA1 442 488
31 1 RVA = RTL Group Value Added. For more information, see note 3 to the Consolidated Financial Statements in the RTL Group Annual Report 2018 Financials 2018 …AND STRONG FINANCIAL KPIs
In € million 2018 2017 2016 2015 20141 Revenue 6,505 6,373 6,237 6,029 5,808 EBITDA 1,380 1,464 1,411 1,360 1,347 EBITA 1,171 1,248 1,205 1,167 1,144 RVA2 442 488 462 455 457 Net debt (470) (545) (576) (671) (599) Net debt EBITDA ratio at end of year 0.34 0.37 0.41 0.49 0.44
1 2014 figures adjusted for changes in purchase price allocation 32 2 RVA = RTL Group Value Added. For more information, see note 3 to the Consolidated Financial Statements in the RTL Group Annual Report 2018 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY BUSINESS & RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL STRATEGY SHARE 2019 MEDIA WORLD UPDATE Our industry in the digital media world HOW THE INDUSTRY IS CHANGING WITH FRAGMENTATION
TV CHANNELS
ONLINE CHANNELS
34 Our industry in the digital media world TOTAL VIDEO MARKET IS GROWING, DRIVEN BY ONLINE VIDEO
Total video market size Revenue, in € billion Advertising revenues 7.0 Online short form +4.0% Catch-up TV 1.2 Linear and time shifted TV 5.7 +4.3% Other revenues 0.6 0.8 5.2 SVOD
0.4 0.3 0.7 CAGR, in per cent 0.1 4.2 0.3 0.9 0.4 +0.3% 0.2 0.3 +5.6% 4.6 4.7 -0.1% 1.8 3.3 3.3 1.4 0.6 0.2 0.2 0.3 0.1 0.1 -0.6% 0.9 0.9
2017 A 2022 E 2017 A 2022 E 2017 A 2022 E GERMANY FRANCE NETHERLANDS
35 Source: IHS Markit 2018, Internal estimates, differences in sum due to roundings Our industry in the digital media world VIDEO CONSUMERS ARE ON THE MOVE
100%1 42% 7% 22% 5% 7%
10 HOURS 24 MINUTES Traditional TV Connected TV DAILY
-8% +7% +4% -14% -2%
36 1 Source: Nielsen Q2/2018 for the USA | 100% including radio Our industry in the digital media world RTL GROUP’S BUSINESS MODEL
BROADCAST
Content procurement Aggregation Distribution Audience and production and monetisation
CONTENT REACH COMMERCIALS ADVERTISING REVENUE
TV CHANNELS AND VIDEO ON-DEMAND TECHNICAL ACCESS TO CONTENT PLATFORM REVENUE
37 Our industry in the digital media world THE CONTENT PRODUCTION VALUE CHAIN
Concept Pre- Production Post- International creation Production1 Production Distribution
• IP creation • IP development • Shooting • Cut • Tape Sales • Script • Funding • Screenplay • VFX • Rights • Character • Scheduling • Storyboard • Sound Management design • Integration of • Music • Commercial Exploitation • Story Process • DRM • Attach key cast • Ancillary Exploitation • Storyboard
38 1 Pre-production will only start once, the idea was sold to a commissioning client network Our industry in the digital media world RTL GROUP AIMS TO BE PRESENT ALONG THE AD-TECH VALUE CHAIN
LINEAR NON-LINEAR TV/SET PC/MOBILE TOP BOXES
CONNECTED TV DEVICES
PROGRAMMATIC OTT TV/ADDRESSABILE SERVER-SIDE DYNAMIC PROGRAMMATIC TARGETING INDIVIDUAL ONLINE VIDEO TV (HBBTV) AD INSERTION (SSDAI) LINEAR TV HOUSEHOLDS WITH SPECIFIC ADS ON LINEAR TV
STILL IN PILOT PHASE CROSS-SCREEN PLANNING
VISION: BUILD AN INDEPENDENT TOTAL VIDEO MONETISATION PLATFORM
FORECAST BOOK EXECUTE OPTIMISE
39 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY BUSINESS UPDATE RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL SHARE 2019 MEDIA WORLD Mediengruppe RTL Deutschland MARKET LEADERSHIP, HIGH PROFITABILITY
Key financials Family of channels In € million 14 to 59, FY 2018 Revenue HIGHLIGHTS EBITDA 33% 27.3% MARGIN Achieved a 36% increase in subscribers -2.8% YOY³, driven by strong 10.4% original programming 2,289 2,226 23.7% Others 6.3%
Set-up “d-force” joint MARKET 10.6% venture with P7S1 to boost addressable TV ARD-III 7.1% LEADER and online video 738 728 advertising ARD 8.1% 24.8% 9.0% ZDF P7S1 Strong position in high-growth podcast 2017 2018 and audio market Slight decrease due to lower TV ad Maintained clear lead over P7S1 revenue in a major sports year
41 1 SVOD growth refers to end of June 2019 vs. end of June 2018 Groupe M6 STRONG OPERATIONAL PERFORMANCE, RECORD EBITDA
Key financials Family of channels In € million Women < 50 responsible Revenue for purchases, FY 2018 HIGHLIGHTS EBITDA 27% 21.4% MARGIN Received regulatory approval, tech platform -1.3% to be provided by M6 1,503 1,483 15.0% Others 33.8% 6.4% Acquisition of Gulli further complements STRONG #2 strong family of 400 channels 389 France 3 4.0% 32.4% 8.4% France 2 Groupe TF1 Successful launch of RTL Originals podcasts, 2017 2018 generating >2 million High-margin platform revenue Audience shares impacted by downloads since start drives profitability FIFA World Cup 2018
42 RTL Nederland REVENUE BOOSTED BY VIDEOLAND AND POSITIVE TV AD MARKET
Key financials Family of channels In € million Adults 25 – 54, Prime time, Revenue FY 2018 HIGHLIGHTS EBITDA 18% 27.2% MARGIN No. 1 platform for Dutch video content, +6.5% strong subscriber growth 15.3% (+58% YOY1) 508 477 Others 27.2%
CLEAR 11.9% Create and own original IP, strengthen MARKET market leader position LEADER
87 89 20.1% 25.5% Pubcaster Talpa TV Acquired complementary 2017 2018 inventory to strengthen Solid results in spite of ongoing investments Established #1 family of channels sales house position
43 1 SVOD growth refers to end of June 2019 vs. end of June 2018 Fremantle SUCCESSFUL STRATEGIC TRANSFORMATION…
CORE ENTERTAINMENT DRAMA DIGITAL
Keep global entertainment Grow drama business Develop digital business formats on-air with new clients and formats
Formats
16th season 13th season 15th season 2nd season 1st season 2nd season 1st season #1 FB video ever > 1m DAUs
Partners
409 programmes on-air in 62 territories >35 series since launch 29bn YouTube views in 2018 in 2013 in 2018
44 Fremantle DRIVES ORGANIC GROWTH
Key financials In € million 9% 148 1,592 MARGIN
1,472 (41) +10% 13 147 Organic growth FX Scope 140 EBITDA Revenue
2017 2018 2017 2018
12,738 hours of content aired in 2018 (+2% on 2017)
45 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL SHARE 2019 MEDIA WORLD & STRATEGY UPDATE RTL Group PRIORITIES GOING FORWARD
FOCUS ON OPERATIONAL PERFORMANCE and strengthen families of channels across the Group
GROW NATIONAL STREAMING CHAMPIONS with focus on technology and exclusive content
ACCELERATE CONTENT CREATION / PRODUCTION across Fremantle and TV broadcasters
DEEPLY INTEGRATE AD-TECH and create Europe’s leading ad-tech development unit
PURSUE INTERNAL AND EXTERNAL COLLABORATION / ALLIANCES
TOTAL VIDEO INVEST IN DATA AND TECHNOLOGY across the Group STRATEGY
47 Strategic priority – ALLIANCES NEW ALLIANCES: SHAPING THE FUTURE OF THE EUROPEAN TOTAL VIDEO INDUSTRY
External alliances Internal alliances Examples / non-exhaustive
Ad Alliance: Expanded portfolio with digital assets of Bertelsmann Content Alliance: Cross-divisional offers Axel Springer’s Media Impact sales house across TV, audio and print well received by creatives and advertisers Audio Alliance: Develop and distribute audio products D-force with P7S1: Planned DSP joint venture to drive across Bertelsmann, RTL Group, G+J, PRH and BMG growth in addressable TV and online video market Format Creation Group: Create and control non-scripted IP to fulfil demand for exclusive content European netID: Now has around 65 partner websites VOD tech platform provided by Groupe M6: in Germany Serving streaming offers across RTL Group
Form alliances to accelerate growth Leverage RTL Group’s unique position
48 Strategic priority – VOD NATIONAL STREAMING CHAMPIONS SEE FAST GROWTH AND COLLABORATE ON TECH
Achievements COMPETE COLLABORATE CREATE
>1.2M PAYING SUBSCRIBERS INTEGRATED TECH PLATFORM 48 EXCLUSIVE TITLES for TV Now and Videoland for RTL Group streaming offers in across TV Now and Videoland H1/2019: +46% YOY FR, NL, BE, HU, CR, LU in HY 2019 Component sharing with German streaming service TV Now 49 Strategic priority – CONTENT CONTENT POWERHOUSE – FREMANTLE TO EXPAND GENRES & CO-PRODUCTIONS…
Key formats
Priorities DEVELOP IP WITH EXPAND DRAMA NEW CLIENTS BROADCASTERS
75 scripted series in the 1st joint IP formats First Facebook show pipeline with 20 in advanced with RTL NL in progress Confetti commissioned production stages in 5 markets
50 Strategic priority – CONTENT …WITH FOCUS ON DEVELOPING INTELLECTUAL PROPERTY
Top-line drivers to 2021
Priorities DEVELOP IP WITH EXPAND DRAMA NEW CLIENTS BROADCASTERS
Expand development relationship Expand joint IP development with RTL Expand digital first content with premium networks broadcasters creation/monetisation
51 Strategic priority – AD-TECH CREATE EUROPE’S LEADING AD-TECH DEVELOPMENT UNIT
Strategic review of RTL Group’s ad-tech businesses
EU operations (except the UK) to be led by Mediengruppe RTL Deutschland, bundled under Smartclip brand
Create open ad-tech platform customised for European broadcasters and streaming services
Reviewing strategic partnership options for the SpotX Global business
52 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY BUSINESS & RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL STRATEGY SHARE 2019 MEDIA WORLD UPDATE RTL Group Share A LEADER ACROSS BROADCAST, CONTENT AND DIGITAL IN THE MEDIA SEGMENT …
Share performance 1 January 2018 to 31 December 2018 RTL Group P7 SXMP MDAX
-4.9% SXMP
-17% MDAX RTL Group share price development for January to December 2018 based on the Frankfurt Stock -30.4% Exchange (Xetra) against MDAX, Euro Stoxx 600 RTL GROUP Media and ProSiebenSat1 -46.4% PROSIEBENSAT1
29/12/2017 29/01/2018 28/02/2018 31/03/2018 30/04/2018 31/05/2018 30/06/2018 31/07/2018 31/08/2018 30/09/2018 31/10/2018 30/11/2018 31/12/2018
54 RTL Group Share TOTAL SHAREHOLDER RETURN (TSR)
Total shareholder return (TSR) 2018 2016 2014 Share price as of 1 January (in €) 67.07 77.05 93.93
Closing share price as of 31 December 2018 (in €) 46.70 ‒ ‒
Cumulative dividends paid, including intervening years and extraordinary dividends (in €) 4.00 12.00 23.00 Total shareholder return (in %) (24) (24) (26)
TSR = [Closing share price at 31 December 2018] + [Cumulative dividends paid from 1 January 2014 until 31 December 2018] TSR has been [Share price as of January 2014] calculated as follows (using 1 January 2014 as an example) € 46.70 + € 23.00 TSR = -1 = -25.8% € 93.93
55 RTL Group Share ANALYSTS’ VIEW
Recommendation by Analysts1 In % ANALYSTS COVERING RTL GROUP Latest update: 20 May 2019 Latest Sell Buy Bank Analyst recommendation Deutsche Bank Laurie Davison Hold 11% 22% Barclays Capital Julien Roch Neutral UBS Richard Eary Neutral Bank of America Merrill Lynch Adrien de St.Hilaire Underperform Société Générale Christophe Cherblanc Hold Bankhaus Lampe Christoph Bast Hold Citi Catherine O'Neill Neutral HSBC Chris Johnen Hold Morgan Stanley Omar Sheikh Underweight Exane BNP Annick Maas Neutral Hold JP Morgan Daniel Kerven Neutral KBC Ruben Devos Accumulate 67% Kepler Cheuvreux Conor O'Shea Buy Nord LB Holger Fechner Hold Warburg Research Lucas Boventer Hold ODDO BHF Jerome Bodin Buy Pareto Mark Josefson Buy Goldman Sachs Lisa Yang Neutral
56 1 Based on analysts who have published notes known of by the Group since the announcement of the 2019 half-year results RTL Group Share EQUITY STORY: WHY INVEST IN RTL GROUP?
MARKET-LEADING RESILIENT EFFICIENT STRONG AND POSITIONS TOP-LINE GROWTH COST STRUCTURES ROBUST CASH FLOWS Across the value chain of A well diversified And strict cost control Enable attractive broadcast, content and digital, revenue mix providing financial flexibility shareholder returns through re-definition of TV as Total Video
EXCELLENT ANCHOR INVESTMENT ATTRACTIVE SHAREHOLDER RESPONSIBLE POSITION DIVIDEND POLICY BERTELSMANN CORPORATE CITIZEN to invest sustainably in A leading global media, Creating value for users, existing businesses and new services and education partners, shareholders, growth drivers, ensuring company employees and the attractive shareholder greater society remuneration
57 AGENDA
RTL GROUP AT FULL-YEAR FINANCIALS OUR INDUSTRY BUSINESS & RTL GROUP OUTLOOK A GLANCE HIGHLIGHTS 2018 IN THE DIGITAL STRATEGY SHARE 2019 MEDIA WORLD UPDATE RTL Group OUTLOOK FOR 2019 2019 Guidance
Revenue outlook + REVENUE expected to In € million and % grow moderately, driven by digital businesses and Fremantle +2.5% +5.0% €6,668m €6,830m
EBITA pre-restructuring costs EBITA outlook In € million and % – expected to decrease moderately, reflecting investments in TV -2.5% -5.0% programming and VOD €1,142m €1,112m
NEW DIVIDEND POLICY: at least 80% pay-out ratio of adjusted net result¹
RTL Group is reverting back to guidance on EBITA in its outlook statement. The Group believes this will provide a better operational KPI than continuing to use EBITDA. The Group notes that the analyst community continues to use EBITA–some on an exclusive basis–as the main KPI for the Group’s profitability. Reverting back to EBITA will therefore align the Group’s guidance to the expectations of the investment community. In addition, the Group’s EBITDA will be affected by the new IFRS 16 (Leases) standard from 2019 onwards. Both EBITDA and EBITA will continue to be reported on for the Group’s business segments. As outlook guidance will revert back to EBITA, RTL Group will also comment primarily on EBITA as the KPI for operating profit in 2019.
59 1 – reported net result adjusted for any material non-cash impacts such as goodwill impairments etc RTL Group OUTLOOK FOR 2019
LEVERAGE TARGET CASH CONVERSION
UNCHANGED UNCHANGED Levels of 0.5 and 1.0 times net Not below 85 to 90 per cent debt to full-year EBITDA
60 Outlook FINANCIAL CALENDAR 2019/2020
MARCH
13 March 2020 1 2 3 4 5 6 7 8 9 10 11 1213 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 at 8:00 am CET Full-year results 2019 APRIL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2122 22 23 24 25 26 27 28 29 30 31
MAY
22 April 2020 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 at 15:00 am CEST Annual General Meeting JUNE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
14 May 2020 JULY at 8:00 am CEST 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Quarterly Statement: January to March 2020 AUGUST 1 2 3 4 5 6 7 8 9 10 11 12 1313 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
13 August 2020 SEPTEMBER at 8:00 pm CEST 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Interim results: OCTOBER January to June 2020 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
61 Outlook CONTACT
Senior Vice President ANDREW BUCKHURST Investor Relations
+352 2486 5074
62 INVESTOR RELATIONS PRESENTATION LAST UPDATED 27 NOVEMBER 2019 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.
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