KEY FIGURES 2006 – 2010 2010 Report Annual Group RTL THE LEADING EUROPEAN ENTERTAINMENT NETWORK RTL Group +11.5 % EVERYWHERE. (2010: +63.2 %) EVERYONE. FOR INDEX = 100 TV & RADIO RADIO & TV SHARE PRICE PERFORMANCE 2006 – 2010 DJ STOXX – 19.6 % (2010: +13.3 %) what they watch or listen to – how, and why. and how, – to listen or watch they what ( ) ( ) REVENUE € million MARKET CAPITALISATION € billion out find can you Report Annual this Throughout 10 5,591 10 11.9 companies. Group RTL from broadcasts or 09 5,156* 09 7.3 productions enjoying world, the * Re-presented following the 2010 08 5,774 08 6.6 over all people asked we why, out find To application of 5,707 IFRS 5 to Five 07 07 12.5 REPORT ANNUAL (discontinued 06 5,640 operations) 06 13.1 +8.4 % +63.2 % family. or friends with still love live broadcasts, broadcasts, live love still Above all though, people people though, all Above EBITA (€ million) TOTAL DIVIDEND PER SHARE (€) 10 1,111 10 5.00 09 796* 09 3.50 convenience. their at shows * Re-presented 08 916 following the 08 3.50 application of radio replay or podcasts 07 898 IFRS 5 to Five 07 5.00 (discontinued 06 851 operations) 06 3.00 Dividend payout 2006 – 2010: € 3.1 billion download can Listeners +39.6 % devices. mobile or internet or watch them on the the on them watch or (€ million) 1 (€) EQUITY ADJUSTED EARNINGS PER SHARE moments, favourite their 10 5,597 10 4.23 replay or pause can Viewers 09 5,530 09 2.85 08 5,871 08 3.87 digitisation. of winners 07 6,448 07 3.54 06 6,151 06 3.52 ANNUAL REPORT big the are Consumers +1.2 % +48.4 % 2010 SHAREHOLDING STRUCTURE2 31 December 2010 BERTELSMANN AG 91.2 % RTL Group PUBLIC 8.8 % 1 Adjusted earnings per share represents the net profit for the year adjusted for impairment of goodwill and of disposal group, and amortisa- tion and impairment of fair value adjustments on acquisitions, gain or loss from sale of subsidiaries, other investments and re-measurement NETWORK ENTERTAINMENT EUROPEAN LEADING THE to fair value of pre-existing interest in acquiree, net of income tax expense and one-off tax effects 2 Excluding 0.76% which is held collectively as treasury stock by RTL Group and one of its subsidiaries KEY FIGURES 2006 – 2010 2010 Report Annual Group RTL THE LEADING EUROPEAN ENTERTAINMENT NETWORK RTL Group +11.5 % EVERYWHERE. (2010: +63.2 %) EVERYONE. FOR INDEX = 100 RADIO & TV SHARE PRICE PERFORMANCE 2006 – 2010 DJ STOXX – 19.6 % (2010: +13.3 %) what they watch or listen to – how, and why. and how, – to listen or watch they what ( ) ( ) REVENUE € million MARKET CAPITALISATION € billion out find can you Report Annual this Throughout 10 5,591 10 11.9 companies. Group RTL from broadcasts or 09 5,156* 09 7.3 productions enjoying world, the * Re-presented following the 0 2 08 5,774 08 6.6 over all people asked we why, out find To application of 1 5,707 IFRS 5 to Five 0 N 07 07 12.5 A (discontinued R 06 5,640 operations) 06 13.1 NUAL with friends or family. or friends with O EP +8.4 % +63.2 % RT still love live broadcasts, broadcasts, live love still Above all though, people people though, all Above EBITA (€ million) TOTAL DIVIDEND PER SHARE (€) 10 1,111 10 5.00 09 796* 09 3.50 convenience. their at shows * Re-presented 08 916 following the 08 3.50 application of radio replay or podcasts 07 898 IFRS 5 to Five 07 5.00 (discontinued 06 851 operations) 06 3.00 Listeners can download download can Listeners Dividend payout 2006 – 2010: € 3.1 billion +39.6 % devices. mobile or internet or watch them on the the on them watch or (€ million) 1 (€) their favourite moments, moments, favourite their EQUITY ADJUSTED EARNINGS PER SHARE 10 5,597 10 4.23 replay or pause can Viewers 09 5,530 09 2.85 RT digitisation. of winners 08 5,871 08 3.87 EPO 07 6,448 07 3.54 Consumers are the big big the are Consumers 06 6,151 06 3.52 ANNUAL R +1.2 % +48.4 % 2010 SHAREHOLDING STRUCTURE2 31 December 2010 BERTELSMANN AG 91.2 % RTL Group PUBLIC 8.8 % 1 Adjusted earnings per share represents the net profit for the year adjusted for impairment of goodwill and of disposal group, and amortisa- tion and impairment of fair value adjustments on acquisitions, gain or loss from sale of subsidiaries, other investments and re-measurement NETWORK ENTERTAINMENT EUROPEAN LEADING THE to fair value of pre-existing interest in acquiree, net of income tax expense and one-off tax effects 2 Excluding 0.76% which is held collectively as treasury stock by RTL Group and one of its subsidiaries MOTORSCOOTER TAXI DRIVER TAXI MOTORSCOOTER / DIDIER 40 ) ( THEM TO RELAX.” TO THEM THE HELMET HELPS HELPS HELMET THE MUSIC PLAYING IN IN PLAYING MUSIC HAVING RTL RADIO’S RADIO’S RTL HAVING WORRIED. WORRIED. TO BE A LITTLE BIT BIT LITTLE A BE TO “PASSENGERS TEND TEND “PASSENGERS FRANCE / MASSY NEW YORK / USA “I GREW UP IN ECUADOR. WHEN WE MOVED I HAD TO LEARN A NEW LANGUAGE. SO I WATCHED TELEVISION A LOT.” XAVIER (23) / LAUNDROMAT MANAGER HILVERSUM / NETHERLANDS “THE VOICE OF HOLLAND IS INCREDIBLY EXCITING AND NICE. THIS PROGRAMME IS MADE TO WATCH TOGETHER!” JANNEKE (19) / STUDENT JESSE (20) / CHEF ANNUAL REPORT 2010 BERLIN / GERMANY PHILIPPINE (26) / ACTRESS “My favourite is Who Wants To Be A Millionaire? because you can test yourself and see how much you know. I never manage to get through to the end, but my brilliant gran would almost certainly win.” CONTENTS CORPORATE INFORMATION 8 CHAIRMAN’S STATEMENT 10 CHIEF EXECUTIVE’S REPORT 14 PROFIT CENTRES AT A GLANCE 16 PHOTO STORY: TELEVISION AND RADIO – PART OF EVERYDAY LIFE 53 THE YEAR IN REVIEW 84 CORPORATE RESPONSIBILITY 94 OPERATIONS 96 HOW WE WORK 98 CORPORATE GOVERNANCE 102 THE BOARD 1 05 EXECUTIVE COMMITTEE 106 CREDITS FINANCIAL INFORMATION 108 DIRECTORS’ REPORT 112 Mediengruppe RTL Deutschland 116 Groupe M6 118 FremantleMedia 121 RTL Nederland 124 RTL Belgium 126 RTL Radio (France) 128 Other segments 1 39 CONSOLIDATED FINANCIAL STATEMENTS 1 44 NOTES 2 02 AUDITORS’ REPORT 2 04 FULLY CONSOLIDATED PROFIT CENTRES AT A GLANCE 2 06 FIVE-YEAR SUMMARY CHAIRMAN’S STATEMENT BY SIEGFRIED LUTHER RTL Group Annual Report 2010 8 Chairman’s statement With high audience shares and leading market positions, RTL Group’s TV and radio channels have emerged from the economic crisis stronger than before. This position is also reflected in the Group’s extraordinarily good results in 2010. All the key financial benchmarks – revenue, EBITA, margin, net profit – have increased substantially, mainly driven by strong performances in Germany, France and the Netherlands. Targeted acquisitions served to strengthen the Group’s content business. RTL Group benefited from the fact that, after the severe financial and economic crisis in 2008/09, the advertising markets in Western Europe recovered much faster and more strongly in 2010 than could have been expected – even in very optimistic scenarios. The big winner here was television. Large audiences, increased viewing time across Europe, attractive programmes and a growing pres- ence on all digital platforms, make television indispensable to advertisers. In addition to the recovery in the advertising markets, RTL Group management’s early and decisive action during the crisis also had a positive impact in 2010. One vital aspect was the way our major TV channels achieved significant cost savings in 2009 – through detailed work on structures and processes, but always with the aim of safeguarding the audience appeal and leading positions of RTL Group’s families of channels. Clearly, this approach is much harder work than a deep, general cut in the cost base. But the results speak for themselves, and not only in financial terms: in 2010 the major flagship channels RTL Television in Germany, RTL 4 in the Netherlands and RTL-TVI in Belgium significantly increased their audience shares yet again. This popularity is and will remain the foundation of RTL Group’s financial success. The RTL Group share price finished the year up 63.2 per cent, from €47 at the end of 2009 to €76.7 at the end of 2010, while the DJ STOXX index of European media shares increased 13.3 per cent over the year. The Board of Directors discussed the company’s growth strategy intensely with the management. With high cash flows and a significant net cash position, RTL Group has significant investment capacity. In 2010, several mid-sized acquisitions strengthened FremantleMedia’s business scope and international presence. Like the Group itself, FremantleMedia is diversifying its business models and customer base, expanding into the growing markets for casual gaming and branded entertainment, which includes activities such as advertising-funded TV programming, live events and sponsored sports tournaments. RTL Group’s digital channels, on-demand platforms and mobile applications are developing very rapidly. The high growth rates underline the fact that television drives and capitalises on digitisation. In fact, the respected journal The Economist wrote in May 2010: “If there is one media business with a chance of completing the perilous journey to the digital future looking as healthy as it did when it set off, it is television.” My special thanks go to the staff of RTL Group. In the past two years they have borne many difficult decisions. Their dedication, creativity and ideas played a major role in the company emerging strengthened from the economic crisis and achieving such excellent results last year.