ProSiebenSat.1 maintains growth in Q2
August 11, 2022
After a positive start to the year, ProSiebenSat.1 Group continued to grow in the second quarter of 2022. Group revenues rose by 1 per cent to €1.05 billion, while adjusted EBITDA remained stable year-on-year at €166 million (previous year: €166 million).
In view of a strong previous-year quarter, which had benefited from catch-up effects due to the pandemic in the spring and summer months of 2021, as well as the current challenging economic environment because of the Russia/Ukraine war, ProSiebenSat.1 said this again underscores its successful strategy.
ProSiebenSat.1 Group also confirms its high previous year’s level on a half-year basis: From January to June 2022, the Group recorded a revenue growth of 1 per cent to €2 billion (previous year: €1.98 billion). Organically, thus adjusted for currency effects and excluding the revenue contributions of the portfolio companies sold in 2021 such as Gravitas Ventures, Amorelie, and moebel.de, ProSiebenSat.1 Group’s revenues increased by 2 per cent in the first half of 2022.
Rainer Beaujean, Group CEO of ProSiebenSat.1 Media SE: “Our revenue development in the second quarter proves once again that, thanks to our diversified set-up, we are more crisis-proof than many other media companies. We were thus able to continue our growth as a Group despite difficult economic conditions. This was not only driven by our Entertainment segment, but also by the Commerce & Ventures business. Thereby, ProSiebenSat.1 also generated for the first-time revenues of more than €2 billion in a first half of the year. At the same time, we are clearly focusing on synergies to create value in the long-term. The disposal of Red Arrow Studios’ US production business was the next milestone to position our Group in a more focused way and more profitably in the long-term. We are closely monitoring the economic uncertainties in our environment – we have reviewed our outlook accordingly and updated our forecast to reflect the most recent portfolio measures. Overall, we remain confident for the second half of 2022.”
Operating performance
The Entertainment segment’s external revenues recorded growth of 2 per cent or €11 million to €748 million in the second quarter of 2022 (previous year: €736 million). Advertising revenues were largely stable (-1 per cent or €-7 million) compared to the strong previous-year period and were almost at the pre-crisis level of 2019 – a solid development in view of the Russia/Ukraine war. At the same time, revenues from the content business (programme production and sales) grew by 15 per cent adjusted for currency effects and despite the disposal of the US film distributor Gravitas Ventures in November 2021 (€-11 million), with the revenue increase mainly resulting from the European business. This regional focus corresponds to the strategically relevant portfolio for the Entertainment segment: Following the disposal of Gravitas Ventures and further optimising the portfolio with the disposal of the US production companies as of July 1, 2022, the Group has now completed the strategic divestments at Red Arrow Studios and is focusing on synergies in the German-speaking region (Germany, Austria, Switzerland). Accordingly, ProSiebenSat.1 further increased the share of local formats on the Group’s stations compared to the previous year and is still the market leader among viewers aged 14 to 49 in the second quarter of 2022 with a share of 25.5 per cent (previous year: 24.9 per cent).
On a half-year basis, the segment’s external revenues grew by 5 per cent or €64 million to €1,410 million. The main driver was a 4 per cent rise in advertising revenues, as the advertising market grew very strongly before the start of the Russia/Ukraine war.
External revenues in the Dating & Video segment grew at an average annual rate of 10 per cent on a pro forma basis in the second quarter of 2022 compared with 2019, the comparative period before the outbreak of the pandemic, As expected, segment revenues however declined year-on-year as the previous year’s period had been characterised by record revenues. In the second quarter of 2022, revenues accordingly amounted to €130 million (previous year: €139 million), a decrease of 6 per cent or €9 million. On a half-year basis, revenues declined by 6 per cent or €18 million year-on-year to €262 million (previous year: €280 million). By contrast, revenues at the US dating provider eharmony developed very positively both in the second quarter and in the first half of 2022, making it now the biggest brand in our dating portfolio.
External revenues in the Commerce & Ventures segment increased by 3 per cent or €5 million to €177 million in the second quarter of 2022 (previous year: €172 million). Organic growth even was 10 per cent. The Group pursues an active portfolio management with a focus on synergies and sold the companies Amorelie and moebel.de at the end of 2021. These companies contributed in total €11 million to the segment’s revenues in the previous year’s period. The Commerce & Ventures portfolio assets affected by the pandemic restrictions, such as the experience and leisure business of Jochen Schweizer mydays and the car rental comparison portal Billiger Mietwagen (SilverTours), clearly recovered in the second quarter. In addition, the investment vehicle SevenGrowth and the media-for-equity and media-for-revenue business of SevenVentures posted significant growth compared to the previous year. In contrast, revenues at Flaconi were below the previous year’s level, among other things due to the current consumer restraint. The revenue development of the comparison portal Verivox was also below the previous year’s level, significantly impacted by the effects of the Russia/Ukraine war on the energy market. In the first half of 2022, segment revenues decreased by 6 per cent or €23 million year-on-year to €337 million (previous year: €360 million), with the disposed companies still having contributed €26 million in 2021. Organically, the segment’s external revenues accordingly grew slightly to €337 million (previous year: €334 million).
Ralf Peter Gierig, Member of the Executive Board & Group CFO of ProSiebenSat.1 Media. added: “Through our consistent and proactive liquidity management, we further reduced our debt compared to the previous year’s quarter, strengthened our cash flow, and lowered our Group’s working capital needs. At the same time, with the recent extension of our syndicated loan, we have further secured our long-term financing at attractive conditions and with a focus on solid financing.”
Outlook
ProSiebenSat.1 Group presented its outlook for the full-year 2022 on March 3rd 2022, forecasting, excluding portfolio changes, revenues within a range of €4.6 billion plus/minus €100 million and adjusted EBITDA within a range of €840 million plus/minus €25 million. Against the background of the current economic environment – driven by the Russia/Ukraine war, the resulting energy crisis and burdens on the consumer climate, and the ongoing pandemic – the Group now expects, excluding portfolio changes, to achieve results in the lower quartile of this outlook. This also corresponds to the majority of analyst estimates, which according to the Bloomberg consensus as of August 1, 2022, expect – excluding portfolio changes – average revenues of €4.512 billion and average adjusted EBITDA of €816 million for ProSiebenSat.1, also on the basis of the current market environment.
Taking into account the disposal of the US production business of Red Arrow Studios as of July 1st 2022, which would have had a forecast contribution to revenues of around €175 million and around €15 million to adjusted EBITDA in the second half of 2022, the average of the analysts’ estimates for revenues would be reduced to €4.337 billion and for adjusted EBITDA to €801 million. ProSiebenSat.1 Group’s forecast for the full-year – excluding further portfolio changes – is now revenues of around €4.375 billion with a variance of plus/minus €75 million (previous-year figure adjusted for currency and portfolio effects: €4.333 billion) and adjusted EBITDA of around €805 million with a variance of plus/minus €25 million (previous-year figure adjusted for currency and portfolio effects: €833 million) – still mainly supported by the Entertainment segment.
The main driver of ProSiebenSat.1 Group’s revenue and adjusted EBITDA forecast is the development of the advertising market, which is difficult to forecast until the end of the year because of the current market and environment conditions. For the updated revenue and adjusted EBITDA outlook, the Group assumes that its full-year advertising revenues in the German-speaking region (Germany, Austria, Switzerland) will develop at the previous year’s level when reaching the midpoint of the updated ranges.