RNS Number:8135A
RTL Group
21 March 2001
21st March 2001
RTL Group (RTL.L)
RTL Group, Europe's leading broadcaster and content provider, announces its
pro forma
preliminary results (unaudited) to 31 December 2000 (1)
EUR Pro forma year Pro forma year Change
to 31 Dec 2000 to 31 Dec 1999
Revenue (2) 4,044 m 3,539 m +14.3%
EBITA (3) 555 m 429 m +29.4%
EBITA margin 13.7% 12.1% +13.2%
Net result 67 m 170 m -60.6%
Diluted Earnings per Share 0.42 1.08 -60.6%
Diluted Adjusted earnings per share 1.87 1.67 +12.0%
Dividend per Share 0.85 0.75 +13.3%
Financial Highlights
* Double digit revenue growth, up 14.3% to EUR 4,044 million (1999: EUR
3,539 million);
* EBITA up 29.4% to EUR 555 million (1999: EUR 429 million) driven by
strong EBITA growth in TV (up 50.0%);
* EBITA, stripping out new media activities, up 38.0% to EUR 592 million;
* TV EBITA margin up to 14.3% (1999: 11.3%); radio EBITA margin up to 30.7%
(1999: 25.2%);
* Full year dividend of EUR 0.85, up 13.3% .
Footnote 1: The unaudited pro forma financial information has been prepared
using consistent Group accounting policies, to illustrate the effects on the
profit and loss account and balance sheet of RTL Group, of combining CLT-UFA
and Pearson Television into RTL Group. For the purpose of the pro forma
financial information the combination is assumed to have occurred on 1 January
1999. The pro forma results for 2000 are based on a full 12 months' trading
for all those companies that became part of RTL Group as at the lisiting in
London in July 2000. The 1999 comparatives are based on the pro forma
financial information included in the Company's Listing Particulars dated 24
July 2000, restated to reflect specific changes in the basis of preparation as
set out on pages 14 and 15.
Footnote 2: This does not include the revenues of RTLII in Germany, RTL Klub
in Hungary, Groupe Jean-Claude Darmon and RTL 9 in France, all of which are at
equity consolidated, nor the revenues of the Group's investment in Antena 3
which is not consolidated.
Footnote 3: EBITA represents earnings before interest, financial results other
than interest, income tax expense, amortisation of goodwill and gain or loss
from sale of subsidiaries, joint-ventures and other investments.
Operational highlights
* Significant contribution of established TV operations: EBITA margin of
RTL Television in Germany up to 17.2% from 14.0%; EBITA margin of M6 in
France up to 25.3% from 20.6%;
* Improvement of newer TV broadcasters Channel 5, VOX, RTL Klub;
* Further consolidation of interests in RTL Television (100%), VOX
(99.7%), M6 (43.8%), Holland Media Group HMG (100%), Channel 5 (64.6%) and
Antena 3 (17.2%);
* Well-positioned for content growth: increased investments in new formats
and programmes and acquisition of award-winning Talkback Productions;
* Success in new media: prudent investments, leveraging existing strengths
to drive page impressions to 270 million per month (up 700%).
* RTL NEWMEDIA prepares entry to interactive TV.
Didier Bellens, Chief Executive Officer (CEO) of RTL Group, said: "RTL Group
has had a successful year, especially in our key broadcasting businesses in
Germany and France. We have grown our operations, controlled our costs and
increased our margins, and we believe we are better placed than most of our
competitors to withstand the current uncertainties in advertising markets
around Europe.
Combined with the effects of restructuring Pearson Television North America
and a decrease in the audience of RTL Radio in France, market conditions at
present lead us to expect a comparatively flat earnings performance in 2001.
Nevertheless, we will continue to build brands and audiences and identify
opportunities in new markets. We have further room to explore synergies, not
only between content and broadcasting, but also between territories and
between businesses, and we will continue to build our new media enterprises in
support of our main activities. We are confident that our core businesses
remain strong and well positioned for future growth."
A meeting will be held for analysts and investors at 09.15h London time on
Wednesday, March 21, 2001, at Pearson Television, Stephen Street, London W1.
This meeting will be webcast live and can be accessed through RTL Group's
website, www.rtlgroup.com, and Finsbury's website, www.finsbury.com.
Enquiries:
Media: Media and investors:
RTL Group Finsbury - Tel: +44 (0) 20 7251 3801
Roy Addison - Tel: +44 (0) 20 7691 6830 Rollo Head
Markus Payer - Tel: +352 421 425 130 Julius Duncan
Financial Review
Revenue Year to Year to Per cent
In EUR million December 2000 December 1999 Change
--------------------------------------------------------------
Television 2,862 2,397 +19.4%
Content 1,090 1,036 +5.2%
Radio 244 234 +4.3%
New Media 38 0 NA
Other 101 90 +12.2%
Eliminations -291 -218 NA
-------------------------------------------------------
Total 4,044 3,539 14.3%
-------------------------------------------------------
EBITA Year to Year to Per cent
In EUR million December 2000 December 1999 Change
--------------------------------------------------------------
Television 408 272 +50.0%
Content 126 125 +0.8%
Radio 75 59 +27.1%
New Media -37 0 NA
Other -9 -15 +40.0%
Eliminations -8 -12 NA
--------------------------------------------------------
Total 555 429 29.4%
--------------------------------------------------------
RTL Group's revenues reached a record level of EUR 4,044 million in 2000, up
14.3% compared to EUR 3,539 million for the previous year. Underlying revenue
growth, stripping out the effect of portfolio changes (mainly VOX and
Talkback), was 6.4% year-on-year.
EBITA increased by 29.4% to EUR 555 million. The EBITA margin (EBITA to
revenues) over the year improved to 13.7%, compared with 12.1% in 1999.
These results were driven by strong performances in the established TV
businesses and by the reduction of the losses incurred in newer channels VOX,
Channel 5 and RTL Klub. German and French TV contributed 51.6% of RTL Group's
revenues and 66.3% of the EBITA.
Radio continued to deliver strong EBITA margins with our key French operations
delivering margins over 30%. The members of the French radio family RTL, RTL2
and FUN Radio each increased their revenues and EBITA.
Revenues in the content business grew 5.2% to EUR 1,090 million. EBITA was
flat at EUR 126 million. The EBITA margin in the content segment was 11.6%
compared to 12.1% in the previous year. Earnings were impacted primarily by
increased costs for the creation of new formats at Pearson TV and also by
geographic expansion of production into Poland, India and Indonesia. The
production business benefited from the acquisition of the worldwide rights to
the US gameshow format, Greed, in the second quarter of 2000. Within eight
months, we were producing Greed in 13 different territories.
In new media, our strategy of leveraging the strong existing businesses in the
Group while keeping investments to prudent levels paid off. The Group
experienced an outstanding success in terms of audience reach with nearly 4
million unique visitors in January 2001. Total revenue was EUR 38 million with
EBITA loss of EUR 37 million.
Group operating costs increased from EUR 3,182 million to EUR 3,623 million,
up 13.9%, due primarily to the first time consolidation of VOX and Talkback;
underlying increase in costs was 5.6%.
The gain or loss from sale of subsidiaries, joint-ventures and other
investments decreased significantly compared to 1999 when CLT-UFA benefited
from the sale of its 45% stake in German pay-TV channel Premiere.
Net interest expense reflects the shift from a net cash to a net debt position
resulting primarily from acquisitions made in 2000. The net cash position at
the beginning of 2000 was EUR 393 million while the net debt position at the
end of 2000 was EUR 791 million.
Tax expense decreased to EUR 218 million, with an effective tax rate of 41.8%
on operating income.
Net profit for the year decreased to EUR 67 million from EUR 170 million due
to the effect of the Premiere sale in 1999 which was EUR 227 million after
tax. This was partially offset by an increase of profitability of the
business.
Diluted earnings per share were EUR 0.42 (1999: EUR 1.08) and adjusted
earnings per share (4) EUR 1.87 (1999: EUR 1.67). The proposed dividend is EUR
0.85 per share, in addition to the pre-merger one-time dividend of 0.45 per
share approved by the Board of Directors on July 25, 2000.
(4) Adjusted earnings per share represent net earnings adjusted for
amortisation of goodwill and gain or loss from sale of subsidiaries,
joint-ventures and other investments, net of tax.
Operational Review
1. Television
Revenue Year to Year to Per cent
In EUR million December 2000 December 1999 Change
---------------------------------------------------------------
Germany 1,715 1,404 +22%
- RTL Television 1,475 1,342 +10%
- VOX 175 0 NA
- Super-RTL 45 40 +13%
- Other 20 22 -9%
France 370 302 +23%
- M6 320 253 +26%
- VCF 50 49 +2%
Netherlands 334 320 +4%
- HMG 334 320 +4%
United Kingdom 307 255 +20%
- Channel 5 234 190 +23%
- P TV Broadcasting 73 65 +12%
Others 136 116 +17%
----------------------------------------------
Television 2,862 2,397 +19%
----------------------------------------------
EBITA Year to Year to Per cent
In EUR million December 2000 December 1999 Change
---------------------------------------------------------------
Germany 285 198 44%
- RTL Television 254 188 35%
- RTLII 29 10 190%
- VOX -3 -5 40%
- Super-RTL 3 2 50%
- Other 2 3 -33%
France 83 55 51%
- M6 81 52 56%
- RTL9 1 1 0%
- VCF 1 2 -50%
Netherlands 28 20 40%
- HMG 28 20 40%
United Kingdom 3 -3 NA
- Channel 5 -6 -10 40%
- P TV Broadcasting 9 7 29%
Others 9 2 350%
--------------------------------------------
Television 408 272 50%
--------------------------------------------
RTL Group's television business was the largest contributor to revenues thanks
to its market leading channel brands and favourable advertising markets.
Revenues in the television business grew by 19.4%; stripping out the
contribution of VOX, growth was 12.1%. This growth was fuelled by strong
performances at RTL Television, M6 and Channel 5. RTL Group's TV stations
continued to control costs tightly and developed greater cooperation both
domestically and across borders.
RTL Television, the RTL flagship channel in Germany, was market leader for the
eighth consecutive year in the important 14-49 age category with an audience
share of 17.3%. This was well ahead of its nearest rivals, despite the
positive influence of the Olympic Games and the Euro 2000 football
championship on public television audience share. With its broad range of
quality programmes, RTL dominated the top 100 list of most widely viewed
broadcasts of the year with 57 entries. Over the year, RTL recorded 36
audiences of over 10 million viewers. The Formula One Brazilian Grand Prix
achieved the biggest RTL Television audience of the year, pulling in a total
of 14 million viewers. RTL's most successful gameshow format Wer wird
Millionar (Who Wants to Be a Millionaire) attracted an average of more than 9
million viewers in the 14-49 age category. RTL Television saw its revenues
rise 9.9% to EUR 1,475 million over the year and contributed EUR 254 million
to EBITA, up 35.1% from EUR 188 million in 1999.
RTL II focused on a younger target audience through formats like Big Brother.
This led to a 24% increase among the 14-29 age category from 5.7% to 7.1%. The
channel's contribution to the Group's EBITA almost tripled to EUR 29 million.
VOX had a breakthrough year in 2000. With audiences holding firm and revenue
increasing by 15%, it was slightly loss-making in the second half of the year.
M6 in France maintained its position as the second most popular channel for
the 4-49 age category with an audience share of 17.9% and a high proportion of
in-house produced formats. M6's revenues were up 26% over the year to EUR 320
million.
Channel 5 flourished in a competitive marketplace, increasing its audience
share to 5.7% from 5.4% in 1999, making it the UK's fastest growing
terrestrial channel with revenues up 23 % to EUR 234 million and a reduced
EBITA loss to EUR 6 million, down from EUR 10 million in 1999.
RTL Klub in Hungary reached EBITA breakeven and consolidated its market
leadership in the fourth year after its launch in 1997.
2. Radio
Revenue Year to Year to Per cent
In EUR million December 2000 December 1999 change
---------------------------------------------------------------
France 219 209 5%
- RTL 171 169 1%
- RTL2 26 22 18%
- Fun Radio 22 18 22%
Germany 13 12 8%
Netherlands 8 8 NA
United Kingdom 4 5 -20%
------------------------------------------------
Radio 244 234 4%
----------------------------------------------------
EBITA Year to Year to Per cent
In EUR million December 2000 December 1999 Change
----------------------------------------------------------------
France 71 57 25%
- RTL 63 55 15%
- RTL2 8 6 33%
- Fun Radio 0 -4 NA
Germany 2 2 NA
Netherlands 2 2 NA
United Kingdom 0 -2 NA
-----------------------------------------------
Radio 75 59 27%
----------------------------------------------------
Revenues in the radio segment rose by 4.3% in 2000 to EUR 244 million while
EBITA was up 27.1% to EUR 75 million from EUR 59 million in the previous year.
RTL Radio in France remains the country's number one station despite
experiencing a sharp downturn in audience share, particularly in the fourth
quarter of 2000, due to unsuccessful changes in its programme schedule.
Decisive action was taken, and after a change in the radio station's
management, the Group is confident that a recovery in audience share will
result in the medium term. Due to the time lag between audience losses and
related decreases in revenue, the financial impact is more likely to occur
during 2001. For 2000 as a whole, RTL Radio's share of the radio advertising
market remained robust at 22.3%, and its contribution to the Group's EBITA
rose from EUR 55 million to EUR 63 million.
FUN Radio, the French dance station, achieved a turnaround in performance,
reporting a small positive EBITA compared to a loss of EUR 4 million in 1999.
FUN Radio's share of the radio advertising market remained at 3.2%.
3. Content
Year to Year to Per cent
In EUR million December 2000 December 1999 change
--------------------------------------------------------
Revenue 1,090 1,036 5%
-----------------------------------------------------------------
EBITA 126 125 0%
-----------------------------------------------------------------
Content revenues were up by 5% to EUR 1,090 million in 2000 from EUR 1,036
million in 1999. Stripping out the effects of Talkback, the production company
acquired by RTL Group in the first half of 2000, the revenues grew by 1%.
EBITA in the content division remained flat at EUR 126 million primarily due
to increased costs being incurred in developing new formats but also to the
expansion of the production business to new markets in Poland, India and
Indonesia. This investment in new formats doubled to to EUR 8 million in 2000
and is set to double again in 2001.
Pearson Television, the largest content company in RTL Group, produced more
than 200 different shows over the year, licensed over 10,000 hours of
programming to broadcasters and sold television series and films in over 100
territories. This included more than 7,000 hours of original production in 33
different countries across a wide-range of genres. The acquisition in June
2000 of 100 per cent of Talkback Productions in the UK greatly enhanced
Pearson TV's reputation for quality programme-making. Pearson TV won a
prestigious US International Emmy award with Talkback's popular comedy show
Smack the Pony - one of over 20 international awards that Pearson TV won in
2000.
UFA Film + TV Produktion in Germany was integrated with Pearson TV in 2000.
The integrated unit now provides programming to all the main broadcasters,
from traditional game shows like Die Quiz Show and Jeder Gegen Jeden to drama
series like Balko and daily soaps like Gute Zeiten, schlechte Zeiten.
In addition, RTL Group combined Pearson TV's international distribution and
North American production businesses. The US business continued to produce
such long-running successes as The Price Is Right, now in its 28th season at
CBS. The company also produced the final series of Baywatch in 2000 at the end
of its 11th season.
UFA Sports, one of the leading European distributors of television and
marketing rights for sporting events, extended its portfolio of TV and
sponsoring rights in 2000 to include more than 250 European soccer clubs and
over 40 national federations. French sports rights company Groupe Jean-Claude
Darmon in which RTL Group holds a 28% interest continued to develop its
relationship with football clubs and federations in France, Italy and Africa.
4. New Media
RTL Group has achieved considerable success in new media by leveraging its
existing strength in broadcasting and production with limited start-up losses
of EUR 37 million. The Group has established itself as one of the most
successful online players in European broadcasting. By the end of 2000, our 80
websites drove page impressions up more than 700% from the beginning of the
year to 270 million per month.
This increase in traffic was mirrored by an acceleration in revenues, which
almost doubled in the second half of 2000 from EUR 13 million to EUR 25
million, bringing revenue for the year to EUR 38 million. EBITA loss was EUR
37 million.
RTL World (rtl.de), operated by RTL NEWMEDIA, a fully-owned subsidiary of RTL
Television in Germany, contributed 70% of the page impressions for the Group
and within eight months of its launch in April 2000 became by far the most
successful general interest site in Germany. The integration of Bertelsmann
Broadband Group into RTL NEWMEDIA at the beginning of 2001 was another
important step in developing the Group's activities in interactive television
and broadband services.
IP-Web.net, was launched in 2000 and is the leading pan-European network for
the sale of online advertising. It combines eight online sales houses
belonging to IP, RTL Group's international advertising sales business, and
markets over 85 branded RTL and third-party sites throughout Europe.
Results and Notes
Pro forma consolidated income statement (unaudited)
for the year ended 31 December 2000
In million EUR 2000 1999
(as
restated)
Revenue 4,044 3,539
Other operating income 110 76
Consumption of current programme (1,384) (1,299)
rights
Depreciation, amortisation and (339) (286)
impairment
Other operating expenses (1,900) (1,597)
Amortisation of goodwill (317) (314)
Gain from sale of subsidiaries, 88 437
joint-ventures and other investments
------------ -------------
Profit from operating activities 302 556
Share of results of associates 24 (4)
------------ -------------
Earnings before interest and taxes 326 552
("EBIT")
EBITA 555 429
Amortisation of goodwill (317) (314)
Gain from sale of subsidiaries, 88 437
joint-ventures and other investments
------------ -------------
Earnings before interest and taxes 326 552
("EBIT")
Interest expense (net) (36) (7)
Financial results other than interest 3 36
------------- -------------
Profit before taxes 293 581
Income tax expense (218) (407)
------------- -------------
Profit from ordinary activities 75 174
Minority interest (8) (4)
------------- -------------
Net profit for the year 67 170
------------- -------------
Earnings per share (euro)
- Basic 0.43 1.10
- Diluted 0.42 1.08
Adjusted earnings per share (euro)
- Basic 1.91 1.70
- Diluted 1.87 1.67
For the purpose of the pro forma accounts, the number of issued and fully paid
ordinary shares is 154,787,554. The number of authorised ordinary shares is
157,883,305 as Pearson plc has the right to acquire a further 2 per cent of
the share capital of RTL Group under certain conditions.
The adjusted earnings per share represent net earnings adjusted for
amortisation of goodwill and gain or loss from sale of subsidiaries,
joint-ventures and other investments, net of tax.
EBITA represents earnings before interest, financial results other than
interest, income tax expense, amortisation of goodwill and gain or loss from
sale of subsidiaries, joint-ventures and other investments.
Pro forma consolidated balance sheet (unaudited)
As at 31 December 2000
In million EUR 2000 1999
(as
restated)
Non-current assets
Programme and sport rights 415 351
Goodwill 5,730 5,145
Other intangible assets 27 29
Property, plant and equipment 382 363
Investments in associates 59 46
Loans and other financial assets 1,036 607
Deferred tax assets 102 141
------------ ------------
7,751 6,682
Current assets
Programme rights 1,087 908
Other inventories 7 3
Income tax receivable 182 177
Accounts receivable 1,208 1,012
Marketable securities and other 81 487
short term investments
Cash and cash equivalents 218 1,106
------------ ------------
2,783 3,693
Current liabilities
Loans and bank overdraft 755 794
Income tax payable 104 376
Accounts payable 1,576 1,203
------------ -------------
2,435 2,373
Net current assets 348 1,320
------------ -------------
Non-current liabilities
Loans 335 406
Accounts payable 194 72
Provisions 249 246
Deferred tax liabilities 53 54
------------ -------------
831 778
------------ -------------
Net assets 7,268 7,224
------------ -------------
Shareholders' equity 7,254 7,166
------------ -------------
Minority interest 14 58
------------ -------------
7,268 7,224
------------ -------------
Pro forma Financial Information
Context
On 7 April 2000, Bertelsmann AG (Bertelsmann), Groupe Bruxelles Lambert /
Electrafina (GBL) and Pearson plc announced that they had agreed to combine
CLT-UFA and Pearson Television into Audiofina. On 24 July, the General Meeting
of Shareholders of Audiofina approved the contribution in kind by BWTV of 50
per cent of the shares of CLT-UFA Holding and the issue of 57,332,170 new
Audiofina shares. On 25 July, the General Meeting of Shareholders of Audiofina
approved the contribution in kind by Pearson plc of Pearson Television and the
issue of up to 34,053,283 new Audiofina shares. On the same day, the name of
Audiofina was changed to RTL Group. On 4 September 2000, the Extraordinary
Meeting of Shareholders of RTL Group approved the contribution in kind by
Pearson plc of its interests in Antena 3 and Via Digital.
Through the combination, RTL Group became the parent company of the new Group
which manages all its media operations. RTL Group holds inter alia 100 per
cent of CLT-UFA Holding (which in turn holds 99.3 per cent of CLT-UFA), 100
per cent of Pearson Television companies and 28 per cent in Groupe Jean-Claude
Darmon.
Basis of Preparation of the Pro forma Financial Information
The pro forma financial information has been prepared using consistent
accounting policies to those of the group to illustrate the effects on the
income statement and balance sheet of RTL Group of combining CLT-UFA and
Pearson Television into RTL Group. For the purpose of the pro forma financial
information the combination is assumed to have occurred on 1 January 1999.
The pro forma results for 2000 are based on a full 12 months' trading for all
those companies that became part of the RTL Group as at the flotation in July
2000. The 1999 comparatives are based on the pro forma financial information
included in the Company's Listing Particulars dated 24 July 2000, restated to
reflect specific changes set out below.
The following changes have been adopted for the purpose of presenting the pro
forma financial information for the year ended 31 December 1999 in order to
ensure consistency with the 31 December 2000 presentation. These changes have
resulted in a restatement of the pro forma financial information for the year
ended 31 December 1999 included in the Listing Particulars.
Overall, the adjustments have an immaterial impact at the level of net profit
and lead to a reduction in the net assets of EUR 147 million. The changes have
been classified within one of three categories shown below:
Goodwill
The following adjustments have been recorded in respect of goodwill, the
impact of which is to reduce net goodwill in the balance sheet at 31 December
1999 and the corresponding amortisation charge.
1. Finalisation of the Pearson Television Fair Value Exercise.
2. Change in accounting treatment for the acquisition in 2000 of the 11% of
RTL Television and 1% of CLT-UFA shares
3. The exclusion of the cash based acquisition of 6.4% of Channel 5 shares by
CLT-UFA in February 2000, as this acquisition was not part of the assets
contributed under the combination.
Taxation
Adjustments have been made to the deferred tax assets and liabilities after a
full review of the Group's tax position following the combination. This has a
negative impact on the net earnings of EUR 25 million.
Reclassifications
A number of reclassifications have been made in both the income statement and
balance sheet, which have no impact on net assets, including:
1. An adjustment of EUR 12 million to eliminate interest income on shareholder
loans to Channel 5 against the offsetting interest expense reflected in
results from associates caption.
2. A reclassification of EUR 8 million from financial results and other
interests to other operating income in respect of dividend income from
non-consolidated subsidiaries and foreign exchange net gains from
operational activities.
3. A reclassification of net monies held on behalf of RTL Group by GBL in 1999
from accounts receivable and accounts payable to cash on hand and at bank.
4. A reclassification of certain programme rights from non-current to current
assets.
5. A full elimination of intra group trading between group companies.
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