I. RTL Group in 2001 Key figures 2 Shareholding structure 3 Chairman’s statement 4 CEO’s review 5 Corporate organisation 8 Highlights 10 II. RTL Group’s businesses and markets in 2001 (review of operations) Commercial television 12 Content 30 table ofRadio c38 ontents New Media 48 Supporting our communities 52 Corporate governance 53 Group management 54 III. Directors’ report, 57 Auditors’ report and Consolidated financial statements Mission statement RTL Group’s aim is to offer popular high quality entertainment and information to all our audiences by encouraging and supporting the imagination, talent “and professionalism of the people who work for us. key values These are the principles and qualities that guide RTL Group: • Quality: we seek excellence in everything we do. • Creativity: we provide stimulating workplaces where creative talent can flourish. ” • Focused management: we manage our businesses actively on behalf of our shareholders, while respecting the cultural needs of the communities we serve. • Productivity: we seek out ways to work more efficiently as a Group. key figures 1999 and 2000 based on pro forma figures 1999 and 2000 based on unaudited pro forma figures 1999-2001 Share price performance 2001 Revenue breakdown Adjusted earnings per share* Revenue by activity - € million € € million 2 866 400 – – RTL GROUP * 1.70 1.91 0.90 3 539 4 044 4 054 – DJ STOXX MEDIA P ■ 99 00 01 99 00 01 1 148 300 – 213 91 64 - 328 Shareholders' equity Market capitalisation € € TV Content Radio New Others million billion 200 – media Elimination 2001 Consolidated EBITA per segment 7 166 7 254 4 585 4.8 13.5 6.8 100 – € million 99 00 01 99 00 01 297 Dividend per share 0 – € 48 26 -100 – -55 -40 0.75 0.85 0.50 01/99 12/99 12/00 12/01 TV Content Radio New Others 99 00** 01 media * Brussels stock exchange, as most traded place. *Net result adjusted for amortisation and impairment of goodwill and gain or loss from sale of subsidiaries, joint ventures and other investments, net of tax. **Excluding an extraordinary dividend of EUR 0.45 300,000000 240,833333 3000 181,666667 300,000000 2500 122,500000 240,833333 30002000 63,333333 181,666667 25001500 4,166667 122,500000 20001000 -55,000000 63,333333 1500500 4,166667 10000 -55,000000 500 0 300,000000 300,000000 240,833333 240,833333 3000 3000 181,666667 181,666667 2500 2500 122,500000 122,500000 2000 2000 63,333333 63,333333 1500 1500 4,166667 4,166667 300,000000 1000 300,000000 1000 -55,000000 -55,000000 240,833333 500 240,833333 500 3000 3000 181,666667 0 181,666667 0 2500 2500 122,500000 122,500000 2000 2000 63,333333 63,333333 1500 1500 4,166667 4,166667 1000 300,000000 1000 -55,000000 -55,000000 500 240,833333 500 3000 0 181,666667 0 2500 122,500000 2000 63,333333 1500 4,166667 1000 -55,000000 500 0 Key figures / Shareholding structure 3 Shareholding structure 31 December 2001 31 January 2002 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII WAZ 20% 80% Public Pearson BWTV Bertelsmann Public Bertelsmann BWTV 11%* 22% 37% 30% 11%* 52% 37% RTL Group RTL Group IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII * 0.7% of RTL Group’s shares held collectively as treasury stock by RTL Group and CLT-UFA We were the first, at our results announcement in March, Everyone at RTL Group can take credit for such a strong to herald the downturn, at a time when many of performance in a very tough year, and I want to thank them our competitors still wanted to believe it was simply all for remaining focused and professional throughout. a short-term problem. Our shareholding structure has changed dramatically Throughout the year, RTL Group’s management led the way through 2001, culminating in the agreement between the From in terms of realism and honesty. Bertelsmann and Pearson at the end of the year that saw Chairman This clear-sightedness had two outcomes. Firstly, we were the latter exiting RTL Group. I want to thank all our amongst the quickest to apply cost controls across all shareholders – including GBL, who remain an influential our operations, starting in the Spring. Secondly, the Group force on our Board following their own agreement with and its management developed a reputation for transparency Bertelsmann in February – for their continued support The year 2001 was one of the most difficult that advertising and responsibility, which has established us as a reliable and enthusiasm for our Group. -related industries have ever seen. The downturn was largely barometer of the pan-European media economy. unpredicted at the end of 2000, but the effects began to be apparent almost as soon as the New Year began. As the results for 2001 show, RTL Group continued I am proud to say that our Group has once again been to outperform its competitors in all the key markets, which, a leader – not just in seeing and understanding the scale combined with a good balance sheet, helped us grow of the problem, and then reacting quickly to offset the effects, stronger. It remains unclear when the market will recover, but also in breaking the news to the shareholders but I believe our Group is better placed than most others Juan Abelló and the markets. to take advantage of that recovery when it comes. Chairman Message from the Chairman / CEO’S review 5 CEO S review’ and market share, while M6 in France and Channel 5 But we have not permitted cost cutting to impact on the quality in the UK also went against the market trends. of our output. Indeed, in some markets, such as Channel 5 in the UK, we have substantially increased our television The difficult trading conditions concentrated our minds, programme budgets. 2001 was the year we faced up to the harsh realities and much was accomplished during the year. of a prolonged economic downturn. We created a leaner organisation with better control over As a well-funded group, we have a unique opportunity administration and programme costs. to build market share by investing in quality, while others The first signs of trouble appeared in the UK in the second We brought our businesses closer together, in the process are slashing programme expenditure. half of 2000. The pattern of falling advertising revenue improving our cost-effectiveness and instilling a positive spread quickly through western Europe in 2001. culture of internationalism throughout our Group. Bringing our businesses together At the year end, the overall television advertising market We reviewed and refocused our portfolio and strengthened 2001 was the first full year of operation for our Group in Germany, France and the UK was down by 7% to 10% our balance sheet. following the merger with Pearson Television in 2000. and visibility remained poor into 2002. A leaner organisation We grouped our content businesses together during As Europe’s largest commercial broadcaster, we could not Group management took decisive action in 2001 to maximise the year in a unified management structure under escape the consequences. Advertising revenue across all our utilisation of resources and bring down costs. the new FremantleMedia brand. businesses was down by 2.8% year-on-year in 2001. It could This was done throughout the Group, not least at Group level, The drive to deliver synergies was intensified, in order have been worse. Geographical diversification helped to limit our where we have reduced headcount, streamlined our operations, to leverage the enormous potential of our brands exposure to the most severely affected markets, while the strength and closed some corporate locations. and to gain the benefits of our pan-European scale. of our brands and the quality of our creative, sales and management people ensured that we performed well in our major markets. We restructured our content business in the US to reduce This was most marked in the levels of cooperation losses and improve our risk profile, closing our syndication we were able to achieve, reflected in the large Our German businesses were outstanding, especially our flagship business and downsizing our international drama commitments, number of successful joint projects and collaborations RTL Television, which achieved marked gains in audience for which we took a one-off charge in 2001. during the year. Our people worked across borders to bring formats such Refocusing our portfolio Not only were we quick to alert the financial markets as revenue as Greed and Pop Idol to new markets quickly and efficiently. We are continually examining opportunities to improve our conditions deteriorated, we were also one of the first to take We worked across businesses to develop initiatives, market positions through acquisitions and strategic alliances. a goodwill impairment adjustment, which we announced as in the Netherlands where Holland Media House (HMH), We took a major step forward in May, when we announced with our interim results in September. This acknowledged the joint venture between FremantleMedia and HMG, the formation of a new sports rights and marketing business. the downturn in asset values that occurred in the year following started to deliver exciting new programming for SPORTFIVE is the result of a merger of RTL Group’s UFA Sports, the merger between CLT-UFA and Pearson Television. our television channels. Canal+ Group’s Sport+ and Groupe Jean-Claude Darmon. The SPORTFIVE combination defines us as a premier league In November we completed the restructuring of RTL Group’s The teams worked together within our national media player in the important sports rights marketplace. financing arrangements with a €2 billion medium-term families, as in France where Fun Radio was able to benefit notes programme. from the success of Loft Story on M6.