Trading Statement
July 30 2001 - 3:14AM
UK Regulatory
RNS Number:6741H
RTL Group
30 July 2001
RTL Group
(Pre-Results) Trading Update
RTL Group is making the following trading update in advance of its interim
results announcement on 14 September 2001 for the six months ended 30 June
2001. This reflects the decision of the Board of RTL Group to issue regular
trading updates at the start of the interim and year-end close periods to
improve the flow of information to investors.
Didier Bellens, Chief Executive Officer of RTL Group, commented:
" We have continued to outperform our peers in most of our markets, especially
in our largest, Germany and France, in terms of audience and advertising
market share. In Germany, our market share increased in the first half of the
year, consolidating our market leading position. In France, the success of
Loft Story and other formats on M6 significantly enhanced the channel's
performance in the first half to push. In the first half M6 net advertising
revenues increased by up 6.5 per cent. This enabled M6 to achieve and the
channel, achieved a 23.1 per cent advertising market share for the half year
over the period. Loft Story also helped Fun Radio to grow its audience share,
while RTL Radio maintained its market leadership and continued to recover from
last year's decline in audience. In content, we are very excited about the
opportunities presented by the sports rights deal that we struck in May with
Groupe Jean-Claude Darmon and Groupe Canal Plus. In all, our focus on growing
operations and controlling costs, combined with a robust balance sheet and
strong credit ratings assigned by Moody's and Standard & Poor's A3/A-, leave
us well-placed to deliver on our stated strategy for long-term growth."
RTL Group indicated in March that the visibility of the advertising market was
low and that growth rates for advertising across its European markets would
slow beyond the expectations of peers and industry bodies. The advertising
markets have been tough, and RTL Group's markets showed low or negative growth
for the first half of the year. Visibility has deteriorated further and the
phasing of recovery in advertising conditions cannot be predicted with any
certainty. Assuming current advertising market conditions continue and after
taking into account management actions to control costs, RTL Group now expects
EBITA for the year ending 31 December 2001, to be 10 to 15 per cent below the
2000 proforma levels of EUR 555 million. This estimate is before taking into
account the restructuring of the US business which the company anticipates
will cost EUR 22 million, as well as investments in new businesses of EUR 27
million.
Television
Audience market share14-49 (%) Advertising market share
(%)
H1 2001 H1 2000 H1 2001 H1 2000
Germany RTL 18.1 16.7 29.3 27.1
RTL II 5.7 7.2 6.6 5.7
Super 21.0 19.5 2.0 1.8
(3-13)
Vox 4.2 3.8 4.0 3.8
Audience market share 15-34 (%) Advertising market share
(%)
France M6 22.8 20.41 23.1 21.2
Audience market share 4+ (%) Advertising market share
(%)
UK 5.6% 5.8% 6.1 6.1
Audience market share 20-49 (%) Advertising market share
(%)
Netherlands RTL4 16.2 17.7 23.1 24.1
RTL5 4.5 4.2 4.7 4.4
Yorin 8.3 9.3 12.7 15.6
(20-34)
Audience market share 18-44 (%) Advertising market share
(%)
Belgium RTL 25.6 25.5 - -
TVI
In Germany and France, which in 2000 accounted for 70 per cent of RTL Group's
total TV revenue, we outperformed our peers, both in terms of audience and
advertising share in difficult market conditions.
Following a very strong performance in 2000, the television market in Germany
has seen in the first six months of this year a cumulative fall in gross
advertising spend of around 1.6 percent. However, RTL Group's channels have
maintained their strong market position with continued ratings success with
formats like "Who wants to be a Millionaire?"" with over 14 million viewers,
and "Formula 1" and "Champions League". This has enabled RTL Group to increase
its advertising market share to 41.9 per cent in the first six months of the
year, up from 38.4 per cent in the same period in 2000, while the audience
share rose to 30.4 per cent up from 29.9 per cent in 2000.
In France, the success of Loft Story has helped push the audience share for M6
up to 19.9 per cent, up from 18.1 per cent. Two-thirds of the audience growth
was attributable to Loft Story, the remaining one-third to other programming.
M6 outperformed its peers by growing its advertising share from 21.2 per cent
to 23.1 per cent year-on-year against a market that fell 3.9 per cent.
The UK and the Netherlands were the first two markets to display signs of
advertising slowdown and have been the worst affected as conditions have
continued to deteriorate. However, Channel 5 has maintained its advertising
market share of 6.1 per cent in a declining overall market, which is down by
9.6 per cent year-on-year. Channel 5 continued to invest in programming with
total investment up 17 per cent in the six months, in line with our long-term
aim of increasing audience share at the channel.
In the Netherlands, RTL Group's channels lost between 2.3 per cent audience
share and 3.6 per cent share advertising share in a market that fell 7 per
cent year-on-year. The rebranding of Veronica as Yorin has resulted in an
initial loss of momentum in audience and advertising share that we expect will
pick up again as the new brand becomes established. In Belgium, RTL Group's
channels maintained their strong position in a flat TV advertising market.
Radio
In Radio, the ratings for April show that RTL in France has successfully
stemmed the audience decline from the fourth quarter of 2000. The last radio
audience ratings published on 16 July 2001 confirm RTL Radio's number one
position, with its audience share up 13.3 per cent. Fun Radio grew its
audience share to 5.38 per cent (up from 4.6 per cent), partially due to the
coverage of Loft Story and the success of Arthur's show. RTL 2's audience
share remained stable at 2.8 per cent.
Content
The company continues to build its competitive advantage in content. In May,
we joined forces with Groupe Canal Plus and Groupe Jean-Claude Darmon to
create a pan-European sports rights-buying company. This deal is currently
awaiting approval by the European Commission.
In the US, we are restructuring our production and syndication business,
Pearson TV North America, to focus on development, production and distribution
of light entertainment programmes. We have downsized our international drama
activities following a deterioration in the economic returns from the
business. This was due to a shift in viewers' tastes in Europe towards locally
produced reality and game show programmes, the downturn in the US advertising
market and the consolidation of the US industry. As a result, we have taken a
one-off charge of EUR 22 million in our interim results.
Following the change in equity market valuations, management is in the process
of performing a review of the carrying value of Pearson TV, with which CLT-UFA
and former Audiofina merged in July 2000. Pearson plc. contributed Pearson TV
in return for RTL Group shares, at the then prevailing market value. We will
report on the results of this review, which could result in a one-off non-cash
goodwill impairment adjustment, in the interim results announcement on 14
September 2001.
RTL Group's worldwide production business continues to grow. We have concluded
development and co-productions arrangements in several European countries both
with RTL Group broadcasters and third parties. The success of Greed has
continued and it is now produced in 20 countries. Our European serial dramas
are as popular as they have ever been despite the recent reality and game show
competition.
New Media
In New Media, we further strengthened our position as one of the leading
players in Europe with more than 6 million unique visitors to our
entertainment sites and over 400 million page impressions on a monthly basis,
up 370 per cent on the previous year. RTL World (RTL.de) and M6 Web (m6.fr)
command the leading spots in their markets as general entertainment sites. We
continue our approach of controlled investments in new media activities,
building on strong brands, content and community.
Furthermore, RTL Group announces a change in its Board of Directors. On 27
July 2001, the Board of RTL Group accepted the resignation with immediate
effect of Mr Andre Desmarais and appointed Mr Jocelyn Lefebvre as an
independent non-executive director.
Mr Jocelyn Lefebvre is currently a director of Imerys S.A., the Paris listed
minerals processing group. In the past five years, he was a director of Orior
Holding S.A. He has not held any other directorships of any other listed
company during this period. Under paragraphs 6.F.2 (b) to (g) of the Listing
Rules, no further information is required to be disclosed in relation to Mr
Jocelyn Lefebvre.
The Company will announce its interim results on 14 September 2001 in London,
at the offices of Pearson TV, 1 Stephen Street.
Media contacts:
RTL Group
Roy Addison
Markus Payer
+ 352 421 42 5020
roy.Addison@rtlgroup.com
markus.payer@rtlgroup.com
Media and Investors:
Finsbury
Julius Duncan
Alice Macandrew
+ 44 207 251 3801
Julius.Duncan@finsbury.com
Alice.macandrew@finsbury.com
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