ProSiebenSat.1 Group has reported a “dynamic recovery” in its portfolio in the second quarter of 2021 compared to the pandemic-impacted previous year’s quarter.
The German broadcasting group generated record revenues with an increase of 48 per cent to €1.04 billion (previous year: €709 million) – the highest figure ever achieved by ProSiebenSat.1 in a second quarter. The main driver was the strong growth in the advertising business, which has recovered even more strongly than expected from the impact of the pandemic. At the same time, the significant revenue increase was also carried by other areas that had also still been impacted by the pandemic in the previous quarters. Thus, in the Entertainment segment the content production business also posted strong revenue growth again, while there were likewise clear signs of recovery in the Commerce & Ventures segment. In the Dating segment, the live video business remains an important growth driver with the integration of The Meet Group.
In the months between January and June 2021, ProSiebenSat.1 increased its revenues by 22 per cent to €1.9 billion (previous year: €1.634 billion). At the same time, ProSiebenSat.1 says its diversification strategy is also reflected in the composition of Group revenues: In the first half of 2021, the share of Entertainment advertising revenues from the region of Germany, Austria and Switzerland accounted for only 44 per cent (previous year: 47 per cent) of the Group’s total revenues.
Rainer Beaujean, Chairman of the Executive Board of ProSiebenSat.1 Media SE, commented: “In addition to the recovery in advertising business, we also saw positive developments in our Dating and Commerce & Ventures business in the second quarter. This shows that our diversification strategy is paying off and that we are on the right track in our development to a digital group. We are convinced that we will close 2021 very positively in terms of both revenues and earnings and have therefore further increased our full-year targets, as already announced. All three segments are creating value for the entire Group and, with this increasingly synergistic, focused, and profitable set-up, ProSiebenSat.1 is performing better than pure, traditional media companies. At the same time, we are focusing on the key figures of profitability, cash flow, and debt as well as our P7S1 ROCE and are continuing to work on improving them significantly and sustainably.”
External revenues in the Entertainment segment rose dynamically by 55 per cent to €736 million in the second quarter of 2021 (previous year: €476 million). In the previous year’s quarter, the segment had been particularly impacted by the effects of the pandemic. As a result of now lower Covid-19 infections and the associated easing of restrictions in private and public life, especially in the German-speaking region, the advertising market is picking up again significantly. In this context, advertising revenues in the Entertainment segment saw a clear recovery with an increase of 55 per cent. Also the content production business recovered from the effects of Covid-19 in the second quarter, with revenues from program production and program sales more than doubling in comparison to the previous year. At the same time, distribution revenues rose by 9 per cent due to further increasing HD user numbers. On a half-year basis, the segment’s external revenues grew by 18 per cent to €1.3 billion (previous year: €1.1 billion) thanks to the strong development in the second quarter.
In the second quarter of 2021, the Dating segment generated external revenues of €139 million and thus €81 million more than in the previous-year quarter (previous year: €58 million). This increase is characterised by the acquisition of The Meet Group, which has been complementing the Dating portfolio synergistically since September 2020.
In the Commerce & Ventures segment, external revenues were at the previous year’s level at €172 million (previous year: €176 million) due to the disposal and deconsolidation of the OTC provider WindStar Medical in December 2020. Organically, the segment’s revenues grew however significantly by 18 per cent. This was particularly due to the online beauty provider Flaconi, which further continued its growth also in the second quarter of 2021.
As a result of the dynamic revenue growth, the Group’s adjusted EBITDA also improved significantly, increasing more than sevenfold to €166 million on a quarterly basis (previous year: €23 million). In particular, revenue growth in the high-margin advertising business had a very positive impact on the Group’s profitability. In the first half of the year, adjusted EBITDA grew by 71 per cent to €308 million (previous year: €180 million) in line with the revenue increase. Based on this very positive development, net income rose significantly from minus €61 million in the previous year to plus €114 million in the second quarter of 2021. As a result, net income grew very dynamically on a half-year basis to €180 million (previous year: -€30 million). Also adjusted net income increased significantly in the second quarter of 2021 and grew by €114 million to €63 million (previous year: -€52 million); in the first half of the year, it rose by €93 million to €100 million. This growth largely reflects the very strong development of adjusted EBITDA.
The Group’s adjusted operating free cash flow increased more than sixfold to €87 million in the second quarter of 2021 (previous year: €14 million). In the first half of 2021, adjusted operating free cash flow also grew significantly to €169 million (previous year: €33 million). This positive development is largely due to the strong earnings growth of the Group in the second quarter.
Despite the dividend payment in June 2021, the Group’s net financial debt decreased by €197 million year-on-year to €2.1 billion as of the end of the second quarter of 2021 (June 30, 2020: €2.3 billion). The payment of the dividend of €111 million was at the same time the main reason for the increase in comparison to the end of 2020 (December 31, 2020: €1.9 billion). In this context, the leverage ratio (the ratio of the Group’s net financial debt to its LTM adjusted EBITDA) improved significantly, decreasing to a factor of 2.6x as of the end of the reporting period (December 31, 2020: 2.8x; June 30, 2020: 3.6x). This reflects the lower net financial debt as well as the positive development of adjusted EBITDA in the last twelve months.
Against the backdrop of the very strong performance in the second quarter of 2021, ProSiebenSat.1 Group has decided to further increase its target ranges for revenues and adjusted EBITDA in full-year 2021 compared to the outlook published on May 12, 2021 on the occasion of the Q1 2021 Quarterly Statement.
In total, the Group is now targeting for full-year 2021 – without further portfolio changes – revenues of €4.400 billion (previously: €4.250 billion) as the lower end and revenues of €4.5 billion (previously: €4.45 billion) as the upper end of the target range (previous-year figure adjusted for currency and portfolio effects: €4.055 billion). In financial year 2021, Group revenue growth would thus be in a range between 9 per cent and 11 per cent compared to the previous year (previously: 5 per cent to 10 per cent). The range of the revenue target figures continues to depend particularly on the development of advertising revenues in the region of Germany, Austria and Switzerland in the context of the further course of the pandemic. Following the strong development in the second quarter, the Group now assumes a growth of 3 per cent in advertising revenues in the region of Germany, Austria and Switzerland compared to the previous year for the lower end of the revenue target range (previously: -2 per cent), an increase of 7 per cent (previously: 4 per cent) is now the basis for the upper end.