PRESS INFORMATION



 
 


 

RTL Group Pre-close Trading Update

Luxembourg, 7 December 2001 -  RTL Group is today issuing a pre-close trading update ahead of its year-end on 31 December 2001. RTL Group will report full year results on 4 March 2002.

Didier Bellens, Chief Executive Officer of RTL Group, commented:

“Advertising markets across Europe have continued to deteriorate since our results announcement in September. We now expect that the television advertising market as a whole in Germany, France and the UK will be down, year-on- year, by up to 10 per cent in the respective markets.

However, we continue to outperform our peers in our core markets, in respect of both audience share and advertising market share. The relative strength of our performance demonstrates the competitive advantages of our unique pan-European reach and our integrated approach.

We are continuing to review and implement cost control measures, where appropriate, and are performing a thorough review of our portfolio resulting in disposals or closure of non-core or under-performing assets.

Our strengths and multi-territory position set us apart from many of our competitors in the media sector. Both Moody's and Standard & Poor's have recently affirmed our 'A'-ratings and have assigned them to our new Euro Medium Term Note programme and syndicated loan. This reflects our financial strength and demonstrates that the combination and diversity of our assets are compelling.”

Current Trading and Outlook

As a result of the deterioration in the market since September, RTL Group now expects EBITA to be some 35–40 per cent below the 2000 proforma EBITA of EUR 555 million, before restructuring and investments in new businesses. Restructuring costs and investments in new businesses are currently forecast to be EUR 40 million and EUR 28 million respectively. We are also reviewing options for our Polish operations.

Visibility remains poor and it continues to be difficult to predict the outlook with any certainty.  However, based on our forward bookings thus far, we expect that advertising in the first half of 2002 will show continued weakness. This will partially be offset by the beneficial impact of the restructuring and portfolio review at RTL Group.

The Company will announce its annual results on 4 March 2002 in London, at the offices of FremantleMedia, 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
Katie Lang
+ 44 207 251 3801
Julius.Duncan@finsbury.com
katie.lang@finsbury.com

   
 


 



DIVISIONAL INFORMATION

Television

 

Audience market share

14-49 (%)

Advertising market share (%)

 

YTD October 2001

YTD October 2000

YTD October 2001

YTD

October 2000

Germany 1

RTL

18.0

16.9

28.9

27.3

RTL II

5.7

7.2

6.3

6.0

Super

2.4

2.2

2.2

1.9

Vox

4.3

3.9

4.0

3.7

 

Audience market share

15-49 (%)

Advertising market share (%)

France 2

M6

18.8

17.7

23.0

21.1

 

Audience market share

16-34 (%)

Advertising market share (%)

UK 3

 

5.5

5.3

6.2

6.1

 

Audience market share

20-49 (%) 18:00-24:00

Advertising market share (%)

Netherlands 4

RTL4

16.5

15.2

 

40.8

 

 

45.2

 

RTL5

4.8

4.7

Yorin

8.3

10.4

 

Audience market share

18-44 (%) 17:00-23:00

Advertising market share (%)

Belgium 5

RTL TVI

24.5

26.0

57.0

57.0

Sources (for audience/ for advertising):
1)  GFK/ A.C.Nielsen Werbeforschung S+P
2) Mediametrie/ SECODIP
3) BARB/ Industry Sources
4) Intomart/ BBC
5) Audiometrie CIM Sud/ Videotrack

In Germany and France, which in 2000 accounted for 70 per cent of RTL Group’s total TV revenue, we continue to outperform our peers, both in terms of audience and advertising share.

RTL Group’s channels have maintained their strong market position with continued ratings success with formats like “Who wants to be a Millionaire?”, “Gute Zeiten, Schlechte Zeiten”, “IQ Test” and the comedy series “Mein Leben und Ich”. This has enabled the RTL family of channels to increase their advertising market share, on a cumulative basis to the end of October, to 41.4 per cent, up from 38.9 per cent for the same period in 2000, whilst the audience share in the key 14-49 age group rose to 30.4 per cent, up from 30.2 per cent in 2000.

In France, the beneficial impact of “Loft Story” has been followed by the very successful launch of “Popstars”. This has helped push the audience share for M6 to 18.8 per cent, up from 17.7 per cent.  M6 continues to outperform its peers, growing its advertising share from 21.1 per cent to 23.0 per cent year-on-year. A significant proportion (approximately 30%) of the total revenue generated by M6 is non-advertising related thus providing a best practice example of revenue stream diversification.

The UK and the Netherlands were the first to experience the decline in advertising market conditions. Despite this, Channel 5 in the UK has managed to increase its share of the advertising market to 6.2 per cent in a market now expected to decline by 10 per cent in 2001 (source IP forecast Nov 2001). This is principally due to the increased investment in programming and, in particular, to the very successful launch of “Home & Away” in July. Significant audiences have been attracted to the time slots both before and after “Home & Away” is broadcast, thus benefiting the whole schedule. RTL Group fully supports the continued investment in programming believing that this will build long-term value at the expense of significant short-term losses.

In the Netherlands, RTL Group’s channels lost 0.7 per cent audience share and 4.4 per cent advertising market share in a market that is now expected to fall 8 per cent year-on-year. Since its launch, and after an initial loss of audience share, Yorin is now showing audience share growth in the target market 20-49 and we are confident that this will continue. In September, RTL 4 regained its market leadership with an audience share of 16.4 per cent in its target group.

In Belgium, RTL Group’s channels maintained their strong position in a flat TV advertising market.

Radio

In Radio, the ratings for November show that RTL in France has successfully stemmed the audience decline and is clearly in the number one position, with an audience share of 13.9 per cent versus 13.0 % at the beginning of this year.  Fun Radio grew its audience market share to 4.1 per cent, up from 3.2 per cent for the same period in 2000. RTL 2’s audience share grew its share to 3.1 per cent, its best ever result.  The French radio advertising market is now expected to be down 11% year on year.

Content

The merger of our sports business, UFA Sports, with those of Groupe Jean-Claude Darmon and Sport+, a subsidiary of Canal+ Group, was approved by the European Commission in November and will be completed at the shareholders meeting of Groupe Jean-Claude Darmon on 18 December 2001.

UFA Sports has had a very successful year in 2001 and we are expecting the new combined Group, Sportfive, to further grow and enhance revenue streams.

The restructuring of our US production activities was largely completed in the first half of the year.  The US syndication business was closed down in the second half of 2001, following the completion of a deal with the Tribune Group who will now manage our syndicated game shows. We will also co-operate with Tribune on potential development and co-production concepts.  The total cost of the restructuring of the US activities amounts to EUR 35 million.

Following the downsizing of our international drama activities, we have re-focused on our core production business. Our continued backing of this business, reflected by an increased development spend, is beginning to pay off.  New formats recently launched include “Pop Idol” and “Farmer Wants A Wife” on ITV, “Das Quiz mit Jörg Pilawa” on ARD, “Die Quiz Show” on SAT1 and “La Gym des Neurones” on France2. 

As part of the continued drive for synergies between the production business and broadcasters, the joint venture between FremantleMedia and HMG, Holland Media House (HMH), will be launching new formats that will be broadcast on our Dutch channels. Co-production and development arrangements in other countries are also being explored with the aim to further increase synergistic benefits.

New Media

We continue to be one of the leading players in Europe with RTL World (RTL.de) and M6 Web (m6.fr) commanding leading spots in their markets as general entertainment sites. As previously indicated, we continue our approach of controlled investments in new media activities, building on strong brands, content and community.  Looking forwards, we will reduce our losses in new media by up to 50% next year, in response to lower than expected revenue growth.



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