CAPITAL MARKETS DAY – NOVEMBER 14, 2018 ENTERTAINMENT CONTENT WOLFGANG LINK ENTERTAINMENT ENTERTAINMENT SEGMENT: STATUS QUO AND AMBITION STATUS QUO1) AMBITION IN ~5+ YEARS REVENUE GROWTH REVENUE GROWTH ±0% 2016-2018E2) +0-5% 2018-2023+2) DIGITAL REVENUE DIGITAL REVENUE 10% SHARE3) 25% SHARE3) SMART ADVERTISING SMART ADVERTISING 5% SHARE4) 25% SHARE4) CHANGING CONSUMER BUILD AN ATTRACTIVE LOCAL PREFERENCES AND PORTFOLIO & MAXIMIZE DIGITAL CONSUMPTION PATTERNS REACH ON ALL PLATFORMS 1) Q3 2018 LTM; 2) CAGR; 3) Rough indication based on allocation of Entertainment business units to digital vs. non-digital clusters; digital revenues include digital content and revenues generated by digital/tech-driven services; 4) Smart advertising share of Entertainment advertising revenues; smart advertising includes targetable products both linear and digital 91 Source: P7S1 company data ENTERTAINMENT | CONSUMER FUTURE-FIT ENTERTAINMENT 1 CONSUMER CONSUMER LOCAL TOTAL DIGITAL AND TOTAL 1 2 3 4 FIRST CONTENT LINEAR REACH MONETIZATION 92 ENTERTAINMENT | CONSUMER INDUSTRY TRENDS KEY MARKET DEVELOPMENTS Social Increasing PayVoD Internet Entertainment Tech & data platforms number of players scale giants push & commerce as success enrich with offerings globally into AdVoD converge factors video 93 ENTERTAINMENT | CONSUMER CHANGING CONSUMER PREFERENCES MEDIA CONSUMPTION PATTERNS MEDIA CONSUMPTION MOTIVATION Anytime, Share memorable Committed to anywhere, moments with family content brands TV any device and friends Autonomous & Enjoying snackable Personalized spontaneous AdVoD content (on the go) Deliberately choosing Impatient & fear Willing to pay content matching of missing out SVoD personal interests Source: Trend and target group report “Gen Z”, November 2017, P7S1 TV Deutschland Consumer Insights 94 ENTERTAINMENT | CONSUMER INCREASING TV PLAYS A KEY ROLE IN THE CONSUMER DEMAND FOR TOTAL VIDEO ECOSYSTEM ENTERTAINMENT: VIEWING = MONTHLY TIME1) REACH1,2) [IN MIN] [IN %] +8% 233 (Q3 2018 VS. 2015, 227 TV 228 225 A 14-69) 86% 200-210 78- 83% A 14-69 157 160 TV 148 144 77% 105-110 67- A 14-39 72% FREE ONLINE VIDEO 63- 35-40 68% 61% 22 A 14-69 19 35-40 40- 13 13 45% PAYVOD 16 32% 3 5 11 A 14-69 2015 2016 2017 2018E 2023E3) TV STILL REMAINS SUPERIOR FOR MASS REACH IMPORTANT MEDIUM FOR BRAND BUILDING 1) Rolling last four quarters, Q4 for 2015-17, Q3 for 2018; 2) Usage at least once a month; 3) Internal estimates based on historic development and current usage trends 95 Source: ViewTime Report, SevenOne Media, forsa ENTERTAINMENT | CONTENT FUTURE-FIT ENTERTAINMENT 2 CONTENT CONSUMER LOCAL TOTAL DIGITAL AND TOTAL 1 2 3 4 FIRST CONTENT LINEAR REACH MONETIZATION 96 ENTERTAINMENT | CONTENT TWO COMPLEMENTARY STRONG CONTENT PILLARS U.S. FICTION 56% LOCAL CONTENT 44% GRID GRID SHARE1) SHARE1) Historically strong Leverage content across performance – however, all platforms and increase increasing SVoD competition 360° exploitation/windowing Secure future smash hit U.S. Increase monetization movies and series (incl. opportunities library) Push global content sales Flexibilize deal structures for and enter exclusive talent multi-platform usage partnerships INCREASE RED ARROW STUDIOS’ IN-HOUSE SHARE OF PRODUCTION TO >30% IN 2023+2) 1) Content mix P7S1 core channels Q3 2018 LTM, market share contribution, in %, Basis: all German TV households (German-speaking), A 14-49, Mon.Sun, 3-3h, Source: AGF in co-operation with GFK,TV Scope/ProSIebenSat.1 TV Deutschland; P7S1 company data; 2) Red Arrow Studios share of TV channels’ commissioned content spend in % 97 SUPERGIRL © Warner Bros. Entertainment Inc. All rights reserved JOKO WINTERSCHEID & KLAAS HEUFER-UMLAUF © SAT.1/Marcus Höhn ENTERTAINMENT | CONTENT INVESTING IN LOCAL CONTENT – MATCHING CONSUMER DEMAND Realize premium monetization Increase Push (daily) digital global content inventory sales STRONG CONSUMER DEMAND Differentiate EXEMPLARY: Scale vs. global Ø AUDIENCE SHARE TVOG1) Red Arrow digital giants 19% 19% 20% Studios 2015 2016 2017 SEASON 5 SEASON 6 SEASON 7 Benefit Safeguard from talent distribution partner- business ships Enable franchising of content 1) Basis: all German TV households, A 14-49, Mon-Sun, 3-3h; Source: AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland THE VOICE OF GERMANY © SAT.1/Andre Kowalski 98 ENTERTAINMENT | CONTENT TOTAL BUY-OUT ENABLES BROADER REACH & MONETIZATION SCOPE OF RIGHTS U.S. FICTION GERMAN FICTION3) LINEAR TV RIGHTS1) Limited runs Total buy-out CATCH-UP RIGHTS2) Limited windowing Total buy-out LIBRARY RIGHTS To be acquired separately Total buy-out BROADEN PREVIEW RIGHTS Selected + Total buy-out REACH AND MONETIZATION OFFLINE VIEWING To be acquired separately Total buy-out 3RD PARTY PLATFORM Selected Total buy-out SVOD To be acquired separately Total buy-out 1) No. of runs; 2) 1st run series; 3) Excluding theatrical feature film co-productions, limitations regarding license territory (limited to EINSTEIN German-speaking Europe) and license term (generally 7 years) in case of co-financed TV productions (with public film funding) © SAT.1/Martin 99 Baumdahl ENTERTAINMENT | CONTENT EXPAND IN ATTRACTIVE LIVE AND LOCAL GENRES FACTUAL SHOW/REALITY COMEDY FICTION TREND SPORTS TAFF © ProSieben/Benedikt Müller THE VOICE OF GERMANY © SAT.1/Andre Kowalski LUKE DIE WOCHE UND ICH © SAT.1/Willi Weber EINSTEIN © SAT.1/Wolfgang Ennenbach >50% >70% +26% +43% >10M OF ALL FORMAT OF LIVE ENTERTAINMENT INCREASE IN LOCAL INCREASE IN GERMAN ESPORTS FANS IN 2021 LAUNCHES ARE FACTUAL1) SHOWS ARE ABOVE CHANNEL COMEDY FORMAT FICTION TV FORMATS4) IN GERMANY5) AVERAGE2) LAUNCHES3) MARKET VIEW MARKET 1) Source: Nota Report, Channels Strategies Analysis 2018 (Western Europe); 2) Base: all German TV households, A 14-49, Mon-Sun, 3-3h, FY 2017; Source: AGF in co-operation with GfK/videoScope; Top 8 channels in Germany (ARD, ZDF, ProSieben, SAT.1, RTL, VOX, RTL II and kabel eins), incl. sports, excl. CEM and ranking show; average format ratings vs. channel average (8-11PM); 3) Source: The WIT Database, new format launches in 10 European core markets (AT, BE, DK, FR, IS, IT, NO, ES, SE, NL, without UK); 4) Source: The WIT Database, all linear TV channels in Germany, number of titles, 100 Primetime only, new format launches and ongoing seasons; 5) Source: Newzoo, eSports Market Report 2018 ENTERTAINMENT | CONTENT FACTUAL – DAILY CONNECTION WITH VIEWERS Our famous Factual brands (e.g. SAT.1 morning show, taff, Endlich Feierabend, Galileo) Ø20% Up to 20.5% Above channel Best market average (all Factual share for our morning formats)1) show since 20122) 1) Base: all German TV households, A 14-49, Mon-Sun, 3-3h, YTD 2018; Source: AGF in co-operation with GfK/videoScope /P7S1 TV Deutschland; 2) Base: all German TV households, A 14-49, Mon-Sun, 3-3h (Top: 15.03.2018); Source: AGF in co-operation with GfK/videoScope /P7S1 TV Deutschland 101 SAT.1 FRÜHSTÜCKSFERNSEHEN © SAT.1/Claudius Pflug ENTERTAINMENT | CONTENT STRONG FACTUAL BRANDS – STRONG PERFORMANCE KEY FACTS FUTURE STRATEGY Increase in-house competence +68% 2,850 (e.g., internalize “akte” from mid INCREASE IN OUR NET FORMAT 2019) FACTUAL OUTPUT HOURS 1) 1) 2018 VS. 2013 IN 2018 Establish own in-house news department Provide relevant information for 85 Ø100M all target groups on all platforms FACTUAL YOUTUBE VIDEO FORMATS VIEWS PER MONTH IN 20181) FOR OUR FACTUAL FORMATS2) 1) Source: P7S1 TV Deutschland, existing formats and own developed one-offs, excluding news, 2018 numbers based on current planning and development funnel; 2) Base: October 2018 (global); Source: YouTube Analytics 102 RED © ProSieben/Benedikt Müller ENTERTAINMENT | CONTENT UNRIVALED SHOW BRANDS ARE OUR CORE COMPETENCE Create relevant Massively Strong 360° talk-of-town successful on all exploitation and formats for younger digital platforms monetization potential audiences 39.7% 43M +30% Top market share for Digital video views for Mark-up on special ad GNTM within young Celebrity Big Brother pricing vs. classic ads – target group1) 2018 (+237%)2) highly sales relevant3) 1) Basis: all German TV households, A 14-29, Mon-Sun, 3-3h (Top: 01.03.2018); Source: AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland; 2) PSD BI and Format Report, Digital Video Views on O&O channels (Web, App, Smart TV, HbbTV), Syndication & YouTube, Germany only; Percentage increase compares season 6 (2018) with the previous season (2017); 3) Internal company 103 information, comparing avg. pricing of classic campaigns vs. special ad campaigns GERMANY’S NEXT TOPMODEL © ProSieben/Willi Weber ENTERTAINMENT | CONTENT STRONG FUNNEL OF NEW TOP SHOW FORMATS THE GREAT BAKE OFF PROFESSIONALS DANCING ON ICE © SAT.1 THE VOICE SENIOR © SAT.1 DAS GROßE BACKEN © SAT.1/Claudius Pflug A YEAR TO REMEMBER © Talpa Germany MASTERS OF DANCE © ProSieben/Willi Weber PROSIEBEN WINTERGAMES© ProSieben 104 ENTERTAINMENT | CONTENT EXPLOIT THE ENTIRE VALUE CHAIN – COMEDY OVERALL FRESH COMEDY 2015 2 HOURS INCREASED Formats BY 9x WITHIN LAST THREE YEARS 2016 3 Future Formats comedy ecosystem 2017 9 Formats 2018 17 Formats DIE MARTINA HILL SHOW © SAT.1/Boris Breuer 105 ENTERTAINMENT | CONTENT WE ARE NO.1 IN GERMAN TV COMEDY1) 2018 2018 1) As per hours vs. RTL Group, YTD Oct 2018 LUKE! DIE 90ER UND ICH © SAT.1/Boris Breuer 106 ENTERTAINMENT | CONTENT OUR INVESTMENT IN GERMAN FICTION DOUBLED IN 2019 HIGH-END FICTION CRIME DAILY SERIAL FEATURE FILMS NEW NEW 11.4% 23.2% BESTSELLER MOVIES CRIMEDY SERIES IN Q1 TOP MARKET SHARE IN TOP IN FALL 2019 2019 KEY TARGET GROUP1) MARKET SHARE2) HONIG IM KOPF © 2014 barefoot films GmbH, SevenPictures