CLT-UFA is number one in Europe

CLT-UFA Luxembourg, May 19, 1998,

The combination of the activities of CLT and UFA a complete success : CLT-UFA is Number One in Europe / Increasing profits in flourishing core businesses / Substantial investments in future projects

17 months after the combination of their activities, CLT-UFA has grown to be a strong European entity. Rémy Sautter and Rolf Schmidt-Holtz, Presidents and CEOs of CLT-UFA, stressed at the Press Conference this Tuesday that the launch period of CLT-UFA as a growth-orientated and innovative enterprise in the media market has been succesfully concluded.

CLT-UFA is an active and strategic group, which works on the principle of decentralization and allows those responsible in the different countries and business fields a high degree of entrepreneurial autonomy.

High profits in core businesses: Advertising-based television and radio remain the main profit makers

Already in its first year CLT-UFA's turnover increased to 114 billion LUF. Contributing to its success was the high return and the success of the core businesses, with main contributions stemming from RTL Television in Germany and M6 in France.

As the largest advertising medium in Europe and the market leader for the last five years, RTL, with gross sales of 3,5 billion DEM, increased its profits in 1997 by 18 percent to 170 million DEM compared to the previous year. CLT-UFA is expecting another 30 percent increase in profits for 1998. With the appointment of Gerhard Zeiler, director general of ORF, as the new managing director, as from November 1, 1998, CLT-UFA has also guaranteed continuity in the management of RTL Television. "Helmut Thoma and his team have done excellent work, he especially has built the success of RTL," stated Rolf Schmidt-Holtz. "With Gerhard Zeiler we've gained the candidate we really wanted for the RTL management team."

The French TV station M6 strengthened its position by increasing its market share from 12,5 to 13,2 percent. Its turnover increased from 2,4 to 3 billion FRF.

Following the successful turnaround of HMG in the Netherlands, the group generated a profit of 10 million NLG. In Belgium RTL TVI and Club RTL increased their net profit by 25 million BEF to 199 million BEF.

The flagship in radio remains the French station RTL, which maintained its leading position in the market with a turnover of about 1 billion FRF and the highest return on capital within the group. In Austria, 1998 saw the birth of a new radio station with 92,9 RTL Wien.

Profits reinvested in future projects

In 1997 the core businesses of CLT-UFA generated a profit of 3,5 billion LUF. Together with the extraordinary financial strength of the partners, these profits have enabled CLT-UFA to invest in an entrepreneurial future, particularly in the establishment of new stations. The start-up losses of the early broadcasters and the investment in future fields like Premiere Digital, Channel 5 and RTL KLUB amounted to 5,8 billion LUF in 1997.

Owing to these start-up losses, CLT-UFA suffered a total loss of 2,9 billion LUF. The extremely high investment in Pay-TV in Germany and in the further development of Channel 5 will lead to a presumable loss of 8 billion LUF, which will, however, be reduced by the capital return on the sale of TPS, RTL 9 and the radio stations in the UK.

A major portion of investment this year will be directed into the digital development of Premiere. At present the European Commission is deciding about the digital Pay-TV venture together with KirchGruppe. CTL-UFA will be sticking to its goal, irrespective of the European Commission's decision, to secure Premiere’s development on a long-term basis and to expand the nucleus of German Pay-TV.

1997 also saw substantial investment in advertising-based television, which remains the core business for CTL-UFA. Thus two new stations were launched in 1997, namely Channel 5 in Great Britain and RTL KLUB in Hungary. Both channels are developing according to plan.

"The high investment will ensure long-term returns in our enterprise. If we fail to make provisions in time, we’ll run out of fuel tomorrow," said Rolf Schmidt-Holtz, President and CEO of CLT-UFA.

For Rémy Sautter, President and CEO of CLT-UFA, the high investments are a "clear signal that the enterprise, as the leading European radio and television broadcaster, is sticking consistently to its goal to be present in all future fields and markets in Europe and to be right up front."

CLT-UFA will be vigorously supported in the implementation of its strategy by its strong financial partners. This support will be corroborated in 1998 by an additional credit provision of ten billion LUF from the partners Audiofina and Bertelsmann.

CLT-UFA banks on contents

CLT-UFA has successfully established its European position in the area of film and as a holder of sports rights. CLT-UFA INTERNATIONAL owns a comprehensive catalogue of film rights, which is extended by 300 program hours annually. UFA SPORTS has marketing respectively TV broadcasting rights to the matches of 10 National League Clubs, of approximately 200 European football clubs, 30 national teams as well rights to eight tennis events. This enabled UFA SPORTS to expand still further as Europe's largest sports marketer.

CLT-UFA INTERNATIONAL and UFA SPORTS could simultaneously give the new broadcasters sustained support with major attraction programs. RTL KLUB was able to get off to a good start due to the comprehensive supply of programs from CLT-UFA INTERNATIONAL and within the first few months gained a market share of over 20 percent. Channel 5 reached top ratings in the English television market with the football games acquired from UFA SPORTS.

Furthermore, CLT-UFA is, together with UFA Film & TV Produktion in Berlin and Trebitsch Produktion in Hamburg, also the market leader in the German production sector with around 900 program hours per year.

CLT-UFA controls the sale of airtime of its stations

An important strategic step for the long-term development of the Group was the purchase of Havas Intermediation / IP. With this purchase CLT-UFA took over the control of the sale of air time of its TV and radio stations . Rémy Sautter: "With the acquisition of IP Media a fundamental part of the TV-business has finally been integrated into the value chain of CLT-UFA."

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For further information please contact:
RTL Group
Markus Payer
Head of Media Relations
Tel: (+352 42142-5020)