CLT-UFA is the European Broadcast and Production Powerhouse/ Record revenues and income in 1999/ Value chain to be extended/ Plans to grow geographically
Luxembourg, May 17, 2000. In 1999, CLT-UFA has confirmed its pole position in European Broadcasting, Didier Bellens, the company’s newly named President and CEO emphasized at the Annual Press Conference held this Wednesday in Luxembourg.
Three years after CLT and UFA joined forces, the Group registered a record net result group share of € 415 million. Operational net result has been € 152 million. Turnover increased by 5% in 1999 from € 3,063 million in 1998 to € 3,211 million.
This positive trend continues in the first quarter of 2000. CLT-UFA achieved an unaudited net result of € 62 million up from € 25.9 million for the same period in 1999. The revenues group share increased by 13% to € 783 million in the first quarter of 2000, coming from € 691 million in the same period of 1999.
Didier Bellens, CEO of CLT-UFA, said: “ In a fiercely competitive market, we realized a great year 1999. CLT-UFA already is a highly profitable business. With the challenges ahead, we will be able to become the undisputed market leader in broadcasting and production all over Europe and beyond.”
CLT-UFA’s traditional Free TV operations, including RTL Television and M6, turned in an excellent performance. In 1999 and the first quarter of 2000, the Group made strategic investments in Free TV markets in Germany, the Netherlands, the United Kingdom and Poland. It also continued to build up a substantial position in the world of Internet and new businesses.
High profits in traditional operations
Since the merger, CLT-UFA’s Free TV stations have recorded a 84% increase in earnings per year.
RTL Television, the largest advertising media in Europe, not only maintained its leading position in its target group of viewers aged 14-49, but also became market leader in the overall audience. This is mainly due to the innovative formats RTL Television realized in 1999. RTL Television further increased its profitability in 1999 reaching 16% Return on Sales in 1999.
In France, M6 brought to success the concept of theme channels and extended its second position in the Free TV market. Earnings before interest and taxes rose 23% from € 106 million in 1998 to € 130 million in 1999. Sales peaked at € 707 million in 1999, a raise of 20% compared to 1998.
The radio business of CLT-UFA is still delivering a sustained growth and strong profitability. RTL Radio in France was once again market leader and rose earnings before interest and taxes about 27% in 1999. The radio stations of CLT-UFA in France reached an audience market share of 24.4% and an advertising market share of 35.4%.
Without any acquisition, the production business in Germany showed a very dynamic growth, rising the sales 25% up to € 201 million in 1999.
UFA SPORTS further extended its marketing business, sales and earnings with high growth. Sales rose up 26%, reaching € 244 million in 1999 coming from € 194 million in 1998.
Strong profitability through stronger intra-group co-operation
In order to increase profitability, CLT-UFA initiates program supply agreements between RTL Television, RTL II and Super RTL. RTL Television also provides programming for M6 in France and RTL Klub in Hungary, which will be continuously developed in the year to come.
The bottom line effect of programming supply in the German channel family is over € 50 million in 1999. RTL Television generated intra-group sales of over € 55 million in 1999.
“These are excellent examples for cost-controlling”, stated Ewald Walgenbach, Chief Operating Officer. “Better use of programming rights and program supply agreements such as RTL Television providing the news to RTL II are the direction we have to follow.”
Successful investments in Free TV
In 1999 and in the first quarter of 2000, CLT-UFA raised its shares in the German Free TV channel VOX up to 99.7% held directly and indirectly. For the first time, a station becomes a direct shareholder of another station – RTL Television being a 49.9% shareholder in VOX, thus confirming the concept of channel family in Germany. The Group also acquired the 11% stake in RTL Television previously held by BWTV.
CLT-UFA raised its stakes in French Free TV channel M6 and in UK broadcaster Channel 5, confirming its strategy to increase its entrepreneurial influence. After the merger between CLT-UFA and Pearson TV, the new group will even hold a majority stake in Channel 5.
In the Netherlands, CLT-UFA also signed a contract with Vereniging Veronica to acquire the 35% stake in HMG, CLT-UFA now being the 100% owner of HMG.
Almost all start-ups profitable
Earnings of start-ups rose 68% in 1999. Super RTL in Germany reached break-even in 1999 – one year earlier than expected. Channel 5 in UK and RTL Klub in Hungary are expected to break even in 2000.
Success of CLT-UFA leads to new organizational structure
Three years after the merger of CLT and UFA, the success of CLT-UFA has been confirmed by an organizational re-structuring. The bipartite management structure and the division of competencies have been replaced by an unified management structure. This is a strong indication that the integration of the company has been successfully achieved.
Strong position in the content business through merger with Pearson TV
The announced merger of CLT-UFA, the leader in European Free TV and Radio, with Pearson TV, Europe’s No 1 in content and production, confirms CLT-UFA’s will to build up a Broadcast and Production Powerhouse in Europe and beyond. The complementary businesses of CLT-UFA and Pearson TV open new possibilities to realize synergies and to create growth and value.
The content of Pearson TV will enrich the channels of CLT-UFA, thus providing access to the market. The new company will be highly attractive to all creative talents and will therefore be able to be innovative both in content production and programming. To increase the activities in acquisition and distribution, the new company has the right size. The new company will be a real European market force to buy highly attractive programming as well as to sell own content in packages and output deals.
The merger also spurs the geographic expansion of CLT-UFA. The new company has access to the Spanish-speaking world. The new company will also build on the already existing US foothold.
CLT-UFA is the leading European broadcasting Group with shareholdings in 40 television and radio stations, most of which are market leader (RTL Television in Germany, RTL radio in France, HMG in the Netherlands). CLT-UFA also holds interests in numerous production and broadcasting rights distribution companies (including UFA Film – Film and TV Productions in Germany and UFA Sports in Europe).