CLT reports sustained growth and profitability in its last year as a stand-alone company, despite economic downturn and fierce competition.
CLT-UFA Luxembourg, April 24, 1997
Luxembourg: Luxembourg media company CLT reported growth in turnover and steady profits in its last year as a stand-alone company, with figures announced at the close of its Board of Directors' meeting. The company reported an overall turnover of LUF 92,766 million, up 4.76% on the previous year at constant consolidation scope. Turnover growth therefore declined to 1.7% after taking into account mainly the sale and elimination of TÚlÚ Star from consolidated accounts. Estimated profits set out in a press release issued March 19 were confirmed, with full-year net profit totalling LUF 3,372 million compared to LUF 3,335 million the previous year. The Board of Directors will propose that the gross dividend be set at LUF 122 per share compared to LUF 120 in 1995. CLT's TV operations generated 85% of revenues, with radio and audiovisual rights accounting for approximately 10% and 5%, respectively. Business in Germany represented around 58% of total turnover, compared with 18% for France and 24% for the Benelux countries.
Steady profits were due primarily to extraordinary profits of LUF 7,946 million, up from LUF 1,578 million in 1995. These reflected the sale of the French press group TÚlÚ Star along with the building that previously housed CLT's head offices in Luxembourg. Over the same period, CLT recorded losses in LUF 4,127 million arising from the cancellation of Club RTL in Germany, and start-up investments for TPS in France and Channel 5 in the United Kingdom, as well as investments at Super RTL, RTL 2 and other developments for an amount of LUF 2,880 million compared to LUF 1,488 million in 1995. The group's core businesses had a highly successful year, with good performances offsetting reduced results from other profit centres that came up against stiff competition on the whole.
RTL Television defended its position as market leader for the fourth year in a row, still the most successful commercial station in Germany and the largest advertising medium in Europe. Audience share in the target 14-49 age group reached 19.3% and it captured almost 30% of the advertising market. Earnings rose to DM 144 million, a substantial increase on 1995. In France, M6 reported the strongest increase in audience share (under age 50) of all TV stations in the market, with a market share of 16.5%. Revenues jumped 16.3% to FRF 2.375 million while the M6 group's net profit increased from FRF 344 million to FRF 355 million, even after FRF 16.7 million in start-up losses at TPS.
TV activities in the Netherlands came in for wide-reaching restructuring of RTL 4, RTL 5 and Veronica within the Holland Media Group (HMG). CLT gained control of HMG by increasing its stake in the group's largest shareholder, but nevertheless reduced its indirect interest from 47.3% to 39.5%, thus realizing an important capital gain. HMG's audience share reached 36% and it accounted for 57% of advertising on commercial TV in the Netherlands. At the same time the group faced a fiercely competitive and unstable market environment, and operating results decreased significantly, although this was also due to the start-up losses of Veronica.
In December 1996, digital pay-TV service TPS was launched in France. In the first three months of 1997, it won more than 100,000 subscribers and outperformed its business plan. At the same time, TPS closed output deals with international partners including Paramount and MGM. On December 7, 1996, RTL 7, a new commercial TV station broadcast from Luxembourg to viewers in Poland, went on the air. The station's technical reach covers 35% of all Polish households and represents almost 13 million people. Only three months after launch, RTL 7 had an audience share of 2.2%. Channel 5, a new commercial terrestrial channel in the UK in which CLT-UFA holds 29% along United News, Pearson and Warburg Pincus, was successfully launched on March 30, 1997 after a massive retuning campaign to eliminate interference and guarantee optimal technical reception.
RTL Radio in France defended its number 1 position for the fifteenth year running. With an overall audience share of 19.5% (QI/1997), it was the only radio channel in France to increase its market share on the previous year. Yet in a strained overall economic environment, RTL Radio's revenues slid nearly by 4%. FUN Radio reported a turnover of FRF 153 million an audience share of 4.2%. RTL 2 boosted its audience share by 0.7% and managed to cross the 2% audience share threshold, allowing it to appear in the national audience share research figures.
1996 was a milestone in CLT's history, with the strategic alliance between Audiofina and Bertelsmann leading up to the creation of CLT-UFA ­ Europe's biggest entertainment enterprise ­ on January 13, 1997. CLT and UFA's decision to join forces has created a strong contender, well positioned to take up the challenges posed by future developments in international media markets. The company's strength lies in its strong shareholding structure, underpinned by the resources of its shareholders Audiofina and Bertelsmann. With 19 TV stations, 22 radio stations and substantial interests in production, co-production and rights acquisition in 10 European countries, CLT-UFA is in a strong position to successfully compete with all major players on the global entertainment scene.