ProSiebenSat.1 raises FY outlook again

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ProSiebenSat.1 Media continued its revenue and earnings growth in the third quarter of 2021. The Group generated a considerable revenue increase of 15 per cent to €1.05 billion (previous year: €921 million), with the advertising business in particular growing strongly and improving even better than expected after the effects of the pandemic.

In the Entertainment segment, the programme production business also recorded strong revenue growth again, and the Dating segment supported the Group’s revenue increase with The Meet Group, which was consolidated in September 2020. In addition, all areas in the Commerce & Ventures segment continued to show considerable signs of recovery.

With the effects of the pandemic still noticeable in the first quarter of 2021, the strong second and now also third quarter of 2021 had a significant impact on the nine-month period: In the months of January to September 2021, the Group increased its revenues by 19 per cent to €3.04 billion (previous year: €2.55 billion).

Rainer Beaujean, Chairman of the Executive Board of ProSiebenSat.1 Media, commented: “We are very pleased with the development of ProSiebenSat.1. We posted record quarterly revenues for the second time in a row and significantly improved our profitability over the course of the year – the result of our successful strategy. Our Entertainment advertising revenues in the German-speaking region were even at the highest level in a third quarter ever. This again underlines the strength and sustainability of our medium. At the same time, our good performance throughout the Group proves that all signs point to growth also in the future. We have therefore raised our full-year targets once again. The P7S1 return on capital employed is an important KPI to measure our success. Its now expected improvement to over 13 per cent reflects our clear and focused strategy and shows that we are well on track to reach our medium-term target of 15 per cent faster than planned.”

Operating performance

The Entertainment segment’s external revenues increased by 15 per cent to €728 million in the third quarter of 2021 (previous year: €633 million). Organically, growth was also significant at 17 per cent. Following a strong increase in the second quarter, the advertising market continued to improve, especially in the region of Germany, Austria and Switzerland, with advertising revenues in the Entertainment segment up 18 per cent year-on-year in the third quarter of 2021. These were thus well above pre-pandemic levels, clearly exceeding the figure from the third quarter of 2019 by 12 per cent. The programme production business also continued to develop dynamically: Revenues from programme production and sales increased by 20 per cent year-on-year. In the nine-month period, the segment’s external revenues grew by 17 per cent to €2.07 billion (previous year: €1.77 billion) due to the strong development in the second and third quarters. Both in the third quarter and on a nine-month basis, ProSiebenSat.1 continues to be the number 1 in the German TV market. The Group is the market leader in the German TV advertising market with a share of 38.7 per cent (9M: 36.9 per cent), and in the audience market (14- to 49-year-olds) with 24.7 per cent (9M: 25.1 per cent).

In the third quarter of 2021, the Dating segment generated external revenues of €129 million and thus €44 million more than in the previous-year quarter (previous year: €84 million). This increase is driven by the acquisition of The Meet Group, which has been complementing the Dating portfolio synergistically since September 2020.

External revenues in the Commerce & Ventures were almost at previous year’s level amounting to €198 million in the third quarter of 2021 (previous year: €204 million) – despite the disposal and deconsolidation of the OTC provider WindStar Medical in December 2020.

As a result of the revenue momentum, the Group’s adjusted EBITDA also improved compared with the previous year quarter, rising by 9 per cent to €162 million in the third quarter of 2021 (previous year: €149 million). In addition to the different margin structures of the individual business models, this primarily reflects the planned increase in programming costs. As announced at the beginning of the year, the Group is using the positive advertising market environment to strengthen the reach and market share of its entertainment offerings in the medium and long term by focusing on local and live content. In the first nine months of the year, adjusted EBITDA increased by €141 million or 43 per cent to €470 million (previous year: €328 million). Adjusted net income almost doubled in the third quarter of 2021 to €58 million (previous year: €29 million), up by €122 million at €158 million in a nine-month comparison.

The Group’s adjusted operating free cash flow also improved significantly in the third quarter of 2021, increasing by €100 million to €134 million. In the first nine months of the year, there was a corresponding considerable increase in adjusted operating free cash flow to €303 million (previous year: €67 million). This positive development reflects especially the Group’s high earnings growth in both reporting periods. Overall, the improvement in adjusted operating free cash flow underlines the Group’s effective cash flow management.

ProSiebenSat.1’s net financial debt improved year-on-year by a considerable €377 million to €2.11 billion at the end of the third quarter of 2021 (September 30, 2020: €2,488 million), despite the dividend payment in June 2021.

Outlook

Against the backdrop of the continued strong development of advertising revenues in the third quarter of 2021, ProSiebenSat.1 Group has decided to again raise its target ranges for revenues and adjusted EBITDA in full-year 2021 compared to the outlook published on July 19th 2021.

Overall, the Group is now targeting for full-year 2021 – without further portfolio changes – revenues of €4.5 billion with a variance of plus/minus €50 million (previously: target range of €4.4 billion to €4.5 billion; previous-year figure adjusted for currency and portfolio effects: €4.05 billion). This represents a year-on-year increase between 10 per cent and 12 per cent (previously: 9 per cent and 11 per cent). ProSiebenSat.1 is thus again significantly increasing the outlook given at the beginning of the year, which had expected revenues of between €4.15 billion and €4.35 billion. 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 Covid-19 pandemic. After the strong third quarter, the Group assumes a growth of 9 per cent to 11 per cent (previously: 3 per cent to 7 per cent) in its advertising revenues in the region of Germany, Austria and Switzerland compared to the previous year and thus a better than previously expected development.

Based on these revenue assumptions, ProSiebenSat.1 now expects a Group adjusted EBITDA for the full-year of 2021 – without further portfolio changes – of around €840 million.


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