Annual Report 2018
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ANNUAL REPORT 2018 ENTERTAIN. INFORM. ENGAGE. KEY FIGURES SHARE PERFORMANCE (1 January 2018 to 31 December 2018) –4.9 % SXMP INDEX = 100 –17.6 % MDAX RTL Group share price development for January to December 2018 based on the Frankfurt Stock Exchange (Xetra) against MDAX, Euro Stoxx 600 Media and ProSiebenSat1 –30.4 % RTL GROUP –46.4 % PROSIEBENSAT1 RTL GROUP REVENUE SPLIT 9.7 % OTHER 15.1 % DIGITAL 45.8 % TV ADVERTISING 20.0 % CONTENT 5.3 % 4.1 % PLATFORM REVENUE RADIO ADVERTISING In 2018, TV advertising accounted for 45.8 per cent of RTL Group’s total revenue, making the Group one of the most diversified groups when it comes to revenue. Content represented 20.0 per cent of the total, while greater exposure to fast-growing digital revenue streams and higher margin platform revenue further improve the mix. 2 RTL Group Annual Report 2018 Key figures REVENUE 2014 – 2018 (€ million) EBITDA 2014 – 2018 (€ million) 18 6,505 18 1,380 17 6,373 17 1,464 16 6,237 16 1,411 15 6,029 15 1,360 14 5,808 14 1,347* *Restated for changes in purchase price allocation NET PROFIT ATTRIBUTABLE TO RTL GROUP SHAREHOLDERS 2014 – 2018 (€ million) EQUITY 2014 – 2018 (€ million) 18 668 18 3,553 17 739 17 3,432 16 720 16 3,552 15 789 15 3,409 14 652* 14 3,275* *Restated for changes in purchase price allocation *Restated for changes in purchase price allocation MARKET CAPITALISATION* 2014 – 2018 (€ billion) TOTAL DIVIDEND / DIVIDEND YIELD PER SHARE 2014 – 2018 (€)(%) 18 7.2 18 4.00* 6.3 17 10.4 17 4.00** 5.9 16 10.7 16 4.00*** 5.4 15 11.9 15 4.00**** 4.9 14 12.2 14 5.50***** 6.8 *As of 31 December * Including an interim dividend of € 1.00 per share, paid in September 2018 ** Including an interim dividend of € 1.00 per share, paid in September 2017 *** Including an interim dividend of € 1.00 per share, paid in September 2016 **** Including an extraordinary interim dividend of € 1.00 per share, paid in September 2015 ***** Including an extraordinary interim dividend of € 2.00 per share, paid in September 2014 CASH CONVERSION RATE* 2014 – 2018 (%) PLATFORM REVENUE* 2014 – 2018 (€ million) 18 90 18 343 17 104 17 319 16 97 16 281 15 87 15 248 14 95 14 225** *Calculated as operating pre-tax free cash flow as a percentage of EBITA * Revenue generated across all distribution platforms (cable, satellite, IPTV) including subscription and re-transmission fees **Restated DIGITAL REVENUE* 2014 – 2018 (€ million) ONLINE VIDEO VIEWS 2014 – 2018 (billion) 18 985 18 497 17 826 17 420 16 670 16 274 15 508 15 105 14 295 14 37 *Excluding e-commerce, home shopping and platform revenue RTL Group Annual Report 2018 3 ABOUT RTLRTL GroupGROUP is a leader across broadcast, content and digital, with interests in 60 television channels, eight video-on-demand platforms and 30 radio stations. RTL Group also produces content throughout the world and owns several rapidly growing digital video businesses. The television portfolio of Europe’s largest broadcaster includes RTL Television in Germany, M6 in France, the RTL channels in the Netherlands, Belgium, Luxembourg, Croatia, Hungary and Antena 3 in Spain. RTL Group’s families of TV channels are either the number one or number two in eight European countries. The Group’s flagship radio station is RTL in France, and it also owns or has interests in other stations in France, Germany, Belgium, Spain and Luxembourg. RTL Group’s content production arm, Fremantle, is one of the largest international creators, producers and distributors of scripted and unscripted content in the world. Fremantle has an international network of production teams, companies and labels in over 30 countries, producing over 12,700 hours of original programming and distributing over 20,000 hours of content worldwide. Combining the on-demand services of its broadcasters, the multi-platform networks BroadbandTV, StyleHaul, Divimove, United Screens and Fremantle’s more than 300 YouTube channels, RTL Group has become RTL Group – the leading European media company in online video. the Total Video Powerhouse. Scan and explore! RTL Group also owns the advanced video ad serving platform SpotX. RTL GROUP – ENTERTAIN. INFORM. ENGAGE. 4 RTL Group Annual Report 2018 Visit the interactive online report CONTENTS annual-report2018.rtlgroup.com CORPORATE INFORMATION 6 Chairman’s statement 8 Business model 12 Highlights 30 The Board 36 Our role in society 40 Our Mission Statement CR Report 2018 FINANCIAL INFORMATION 44 Directors’ report 110 Management responsibility statement 111 Consolidated financial statements 116 Notes 202 Audit report 208 Glossary 214 Credits 215 Five-year summary RTL Group Annual Report 2018 5 S STATEMENT S STATEMENT ’ THOMAS RABE CHAIRMAN OF THE BOARD OF DIRECTORS On 1 April 2019, RTL Group’s Board of Directors appointed Thomas Rabe as Chief Executive Officer of RTL Group. Martin Taylor was appointed as Chairman and CHAIRMAN James Singh as Vice Chairman of the Board of Directors. 6 RTL Group Annual Report 2018 Chairman’s statement RTL Group looks back on a successful year. Fuelled by organic growth, our Group generated record revenues of € 6.5 billion and a higher adjusted years, especially in scripted drama, are paying off. Creative highlights of the past year include the series Deutschland 86 and operating profit in 2018. Above all, we Ku’damm 59, as well as the production My Brilliant Friend by succeeded in offering attractive, the Fremantle subsidiary Wildside, which was sold to 147 territories. compelling content to our millions of viewers, listeners and users in each of our three strategic pillars. “BUILDING A STRONG LOCAL PRESENCE IN VOD WILL BE A CORE FOCUS In a competitive environment, our core TV families largely maintained their positions in TV advertising in their key territories – FOR OUR GROUP Germany, France, and the Netherlands. Mediengruppe RTL IN THE YEARS AHEAD.” Deutschland retained its market leadership with the 14 to 59 target group in Germany, even though major sporting events such as the Football World Cup and the Winter Olympics were broadcast by public-service competitors. The team in Cologne made great progress in focusing on local original We are also seeing a continued expansion of our digital activities, productions, launching more than 150 new formats in 2018. which contributed 15.1 per cent (€ 985 million) to total revenue last year, mainly driven by organic growth – a year-on-year increase In this regard, I would like to thank – both personally and of 19.2 per cent. on behalf of the entire Board – Anke Schäferkordt, who stepped down as CEO of Mediengruppe RTL Deutschland at the The Board of Directors of RTL Group closely followed all these end of last year. Her contribution to our company’s successful developments. The Committees’ work in 2018 focused performance in over 27 years with RTL has been outstanding. on business performance review, strategy review and strategic planning, the evaluation of major investments in content, VOD Groupe M6 in France improved its results in 2018, and has now and other lines of business, as well as management development successfully integrated the activities of RTL Radio in France. and senior management appointments. I am delighted that Towards the end of the year, we sold our stake in the Girondins de Lauren Zalaznick and Immanuel Hermreck joined the Board. Bordeaux football club and MonAlbumPhoto. At the beginning of At the same time, I thank Rolf Hellermann, who stepped down 2019, Groupe M6 announced it has entered exclusive negotiations from the Board of Directors at the end of the year, for his to acquire Lagardère’s television business, with its well-known valuable contributions. children’s channel, Gulli. As we look back on this very gratifying year, I would like to say Beyond these advancements, the focus has been on expanding a big thank you to the entire management team of RTL Group RTL Group’s VOD services, and we successfully passed and to our 16,000 employees around the world. Thanks the mark of one million paying subscribers by the end of 2018. to their creativity, innovation and passion, we will keep up the Mediengruppe RTL Deutschland relaunched its video-on-demand pace and momentum of RTL Group’s dynamic development. service, TV Now, which features an improved user interface, along with additional local, exclusive content and online-first formats. I am pleased that you continue to follow us on this path. Groupe M6 announced it will team up with France Télévisions and Groupe TF1 to build the joint French video-on-demand platform, Salto. In the Netherlands, RTL more than doubled subscriptions of its SVOD service, Videoland. Building a strong local presence in VOD will be a core focus for our Group in the years ahead. In content production, Fremantle reported a significant rise in revenues, despite negative exchange rate effects, and increased THOMAS RABE its profits. Our strategic refocus and investments of recent Chairman of the Board of Directors RTL Group Annual Report 2018 7 Business model OUR BUSINESS MODEL BROADCAST CONTENT DIGITAL TELEVISION PRODUCTION ONLINE VIDEO AND AND AND RADIO DISTRIBUTION AD-TECH 8 RTL Group Annual Report 2018 Business model THE ROLE OF THE GROUP Creating Allowing synergies autonomy Our Synergy Committees TV and radio are local Collaborating (Sycos) enable relevant businesses that serve and coordinating experts and decision different cultures, traditions Group and local makers to exchange best and markets, so each management meet regularly practice and develop Maintaining is led by its own CEO. This to share experiences, strategic and operational direction entrepreneurial approach discuss opportunities and aspects for all key areas The Group provides ensures each business challenges, develop of our business, such strategic direction and can act quickly and flexibly strategies, and collaborate as programming, digital, financial control, while in its target market, create across the Group, in sales, radio, and news.