Bank expects recovery at RTL, ProSiebenSat.1

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A report from equity analysts at Deutsche Bank highlighting two European broadcasting giants, ProSiebenSat.1 (P7) and RTL Group, say their prospects show signs of improvement.

P7 is due to announce its Q1 results on May 9th, with RTL reporting on May 17th. The bank says: “We expect both to show the German TV advertising market has started 2018 up a solid 2-3 per cent. This should qualify as a relief after the unexpected softening in the German ad market last year. 2Q outlook should also reassure. Our channel checks are for around flat despite Easter phasing and World Cup headwind, resulting in a 1H up 1-2 per cent. We expect no major loss of share for P7, up ~2 per cent and with a major easing in comps over 2Q & 3Q, we see risks moving to the +1.5 per cent full-year consensus. P7 audience share also continues to recover, reducing the reinvestment risk from a major step-up in programming spend.”

In many respects Germany remains a market where viewer loyalty to the long-established TV broadcasters is a given. The bank says: “Germany is the least exposed market, with the lowest level of linear viewing decline, amongst the lowest level of Netflix penetration and highest print share for online to grow into. The German TV market also has carriage fees/retrans established & best macro backdrop. P7 is a leader in establishing an adtech stack, MCNs & SVoD presence to offset linear decline. In short, P7 is the cheapest TV stock when it should be at a premium. Deutsche Bank rates P7 as a “Buy”.


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