The stresses on Europe’s commercial broadcasters continue. Rainer Beaujean, the Chairman of ProSieben’s (P7) Executive Board told German newspaper Handelsblatt that advertising revenues in September had fallen back but by less than 10 per cent.
Beaujean said that October was shaping up in a similar vein. He did not provide the advertising outlook for the rest 2020 due to a lack of visibility, said analysts at Deutsche Bank in a note to clients.
The note said: “As a reminder, P7’s total advertising revenue was down less than 20 per cent in July and we expect it turned slightly positive in August. We calculate that P7’s advertising revenue could decline by 10 per cent – 12 per cent in Q3. Rainer reiterated that P7 is on track to realise a €50 million saving from lower programming spend in H2.”
“He stressed that P7 decided against a radical cut in content spending to reposition themselves against global OTT platforms and will spend ~€1 billion on content with more than 50 per cent invested in local content,” added the note.
Regarding [commercial arm] Nucom, Rainer ruled out an outright sale of the division, although P7 will seek to monetise individual assets that are non-core.
“On corporate strategy, Rainer stressed that P7 is focused on cash flow generation, maintaining debt leverage and their ability to repay dividends, and also reiterated the mid-term ROCE target of 15 per cent for the group. Overall, the comments are reassuring in our view. As a reminder, we upgraded ProSieben to a Buy in August,” stated Deutsche Bank.