Advanced Television

Bank trims ProSiebenSat.1 guidance

August 17, 2022

A report from analysts at investment bank Berenberg says that advertising revenues at German broadcasting giant ProSiebenSat.1 Media are softer and weaker than anticipated. Indeed, the report says that advertising assumptions for the Germany, Austria and Switzerland markets might be too optimistic.

“While the guidance from March 2022 reflected an assumption of DACH advertising revenues that would be up from zero to 3 per cent in 2022, the new outlook implies flat at the mid-point of the range. The new EBITDA guidance, accordingly, is for EBITDA of €805 million, plus or minus €25 million, versus €840 million (with the same range around it). Our estimate is virtually unchanged at €798 million, based on a 2.2 per cent decline (unchanged) in DACH advertising in FY 2022,” says the bank.

As to the bank’s view that even current guidance might be too optimistic, the bank explains its opinion, saying: “With advertising still the single largest constituent of group revenue (at 52 per cent of FY 2021 revenue, and even slightly higher on a pro forma basis post-disposals), and with the highest drop through to the bottom line, what happens in this line item is obviously crucial. As it relates to the DACH business, Q2 saw revenue down by 4 percent after a strong Q2 2021, and almost at the pre-pandemic level of 2019. Heading into H2, though, we think Germany faces more economic headwinds, which suggests that ad-spend ought to be worse, versus 2019, than it was in the first half.”

“The company has previously restated its revenues such that we do not know what was 2019 DACH advertising revenue, as currently constituted, but 2021 disclosures did allow us to calculate the H2 2019 revenues on this basis. What we can say, in this regard, is that if H2 2022 DACH advertising is down only 2 per cent vs H2 2021 (the mid-point of the new guidance range), it would be up by 4 percent versus H2 2019. At -4 per cent (the low end of the guidance range), it would be up 2 per cent. Both assumptions seem quite optimistic, and we remain at -5 per cent for H2 2022 (which is still +0.8 per cent versus H2 2019),” states Berenberg, which maintains its ‘Hold’ advice to investors.

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