HOW WILL WE CREATE AN EXCITING FUTURE FOR P7S1? - KEYNOTE - ProSiebenSat.1 ...
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KEYNOTE
HOW WILL WE CREATE AN
EXCITING FUTURE FOR P7S1?
MAX CONZE
“THE TV ADVERTISING INDUSTRY IS KEY QUESTIONS YOU HAVE RAISED
FACING DECADE-LONG CHALLENGES.
TRANSFORMATIONAL CHANGES
?
NEED TO BE CONSIDERED.”
(INVESTOR) STRATEGIC PRIORITIES:
WHAT ARE THE MOST IMPORTANT STRATEGIC PRIORITIES FOR P7S1?
“EUROPEAN BROADCASTERS […] HAVE LESS
TO LOSE AND MUCH MORE TO GAIN FROM
ADVERTISING:
?
OTT THAN THEIR U.S. PEERS.”
(J.P. MORGAN) HOW WILL P7S1 MITIGATE AN EXPECTED ADVERSE EFFECT ON ADVERTISING,
IF TV VIEWING DECLINE CONTINUES TO ACCELERATE?
“[…] P7S1 WITH LOWEST SHARE OF
IN-HOUSE CONTENT AND THE HIGHEST
EXPOSURE TO U.S. CONTENT […].” CONTENT PROGRAMMING:
(GOLDMAN SACHS)
“P7S1’S PROGRAMMING STRATEGY MUST
? WHAT IS P7S1’S CONTENT PROGRAMMING STRATEGY, FACING GLOBAL ONLINE
COMPETITION?
BE ADAPTED TO KEEP YOUNGER
AUDIENCES ENGAGED.”
NEED FOR OWN IP:
(REDBURN)
“THE GENERAL ATLANTIC DEAL OFFERS A
STRONG PLATFORM TO INTERNATIONALIZE
? WHAT IS P7S1’S VIEW ON LEVERAGING RED ARROW STUDIOS TO INCREASE
INTERNAL SHARE OF PRODUCTION?
THE NUCOM VERTICALS, THE NEXT PHASE
NUCOM GROUP:
OF P7S1’S DIGITAL DEVELOPMENT.”
(DEUTSCHE BANK)
? HOW DOES P7S1 ASSESS THE CURRENT POSITIONING OF THE NUCOM GROUP AND
ITS OPPORTUNITIES GOING FORWARD?
2
MY FIRST 150 DAYS – KEY OBSERVATIONS
HARD REALITIES GREAT STRENGTHS TO BUILD ON
NO GROWTH IN
ENTERTAINMENT AND
CONTENT PRODUCTION POWERFUL 9.7M
. ENTERTAINMENT
BRANDS &
AVERAGE TOTAL REACH
OF ONE EPISODE1)
HEAVILY DEPENDENT
ON TV ADVERTISING
ADVERTISING
. PLATFORMS
# 1
MARKETER2)
LIMITED REVENUES
GENERATED FROM DIGITAL
ENTERTAINMENT AREAS BELOVED
. COMMERCE
35M > 10X
OVERHANG AND LOW BRANDS MONTHLY VISITS3) REVENUES SINCE 2014
QUALITY OF U.S. CONTENT
. EXCITING
CONTENT
EXECUTING NOT
WELL-ENOUGH AND SLOWLY PRODUCTION 10BN
MONTHLY VIDEO VIEWS4)
1) Number of people reached with an average episode of last GNTM season, all people 3+, no double counting, linear TV (live, +3 days time shift) and websites (Laptop/Browser) as basis from AGF
data and proxy for incremental reach through Apps (Mobile, SmartTV) and YT (Digital Channels); 2) Based on AGOF media ranking 2017/2018; 3) As of December 2017, based on company data; 3
4) Worldwide; Average July to September 2018, excluding France, YouTube analytics; Source: P7S1 company data; AGF; AGOF media ranking 2017/2018; YouTube analytics
WORLD OF ENTERTAINMENT
IS CHANGING
MONTHLY REACH
91 89 88 86
[A 14-69, IN %]
2015-2018E1)
60 61
48
42
28 32
10 16
LINEAR TV FREE ONLINE VIDEO PAY VOD
TOTAL VIDEO USAGE
BY DEVICE 2018E2)
[A 14-29, IN %]
60% 17%
23%
TV PC/LAPTOP SMARTPHONE/
TABLET
ANYTIME, ANYWHERE, ANY DEVICE
MORE MEDIA CONSUMPTION THAN EVER
1) Rolling last four quarters, Q4 for 2015-17, Q3 for 2018, usage at least once a month; 2) Device split based on
average daily video usage time (220 minutes), rolling last four quarters, Q4 for 2015-17 4
Source: ViewTime Report, SevenOne Media, forsa
TV PLAYS A KEY ROLE IN THE
ECOSYSTEM
VIEWING = MONTHLY
TIME1) REACH1,2)
[A 14-69, IN MIN] [A 14-69, IN %]
TV
233
228 227 225
86% 200-210 78-
83%
63-
35-40 68%
FREE ONLINE 22 61%
VIDEO 19 40-
35-40 45%
13 13
16 32%
5
PAYVOD 3 11
2015 2016 2017 2018E 2023E3)
TV AD
MARKET
4.4 4.6 4.6 4.6
GERMANY4)
[IN EUR BN]
1) Rolling last four quarters, Q4 for 2015-17, Q3 for 2018; 2) Usage at least once a month;
3) Internal estimates based on historic development and current usage trends; 4) 2023 5
extrapolated by SevenOne Media
Source: ViewTime Report, SevenOne Media, forsa, Magna Global (as of June 2018)
A BIG SANDBOX TO PLAY IN
ADVERTISING MARKET1) ENTERTAINMENT MARKET2) E-COMMERCE MARKET/PLATFORMS3)
[IN EUR BN, GER] [CONSUMER SPEND, IN EUR BN, GER] [IN EUR BN, GER]
P7S1 P7S1 P7S1
MARKET MARKET MARKET
SHARE SHARE SHARE
~10%
AGENDA
VISION AND
GROWTH AMBITION
GROWTH ENGINE:
NUCOM GROUP
FUTURE-FIT
ENTERTAINMENT
NEW DIRECTION:
RED ARROW STUDIOS
TARGETS AND
FINANCIAL GUIDANCE
DIE BESTE SHOW DER WELT
© ProSieben/Andreas Franke 7
OUR VISION: CREATE A
CONSUMER-CENTRIC
ENTERTAINMENT
AND COMMERCE
CHAMPION
ENTER-
TAINMENT COMMERCE
& CONTENT CONSUMERS
CONSUMER-LED & OBSESSED NEED
CONSUMERS
CONTENT-LED LOVE
DIGITAL FIRST
TOTAL REACH
GROWTH-DRIVEN
PASSIONATE CREATORS
8
OUR AMBITION: ACCELERATE GROWTH
1)
OUR STARTING POINT AMBITION IN ~5+ YEARS
INCL. BOLT-ON M&A
REVENUES ADJ. EBITDA EQUITY VALUE REVENUES ADJ. EBITDA EQUITY VALUE
[EUR] 2) [EUR] [EUR] 3) [EUR] [EUR] [EUR]
4BN 1BN 5BN 6BN 1.5BN …
NON-ADVERTISING DIGITAL SMART ADVERTISING SHARE OF NON-ADVERTISING DIGITAL SMART ADVERTISING SHARE OF
REVENUE SHARE REVENUE SHARE ENTERTAINMENT ADVERTISING REVENUE SHARE REVENUE SHARE ENTERTAINMENT ADVERTISING
GROUP GROUP4) REVENUES5) GROUP GROUP4) REVENUES5)
40 % 30 % 5 % 50 % 50 % 25 %
YE 2016 – YTD 2018
ACTUAL
-22% 10-15% P.A.
TOTAL
TOTAL
SHAREHOLDER
SHAREHOLDER
RETURN
RETURN6)
ADJ. EPS GROWTH PLUS DIVIDEND YIELD
1) Figures relate to Q3 2018 LTM, if not stated otherwise; 2) Revenue split in EUR – Entertainment: 2.7bn, Red Arrow Studios: 0.5bn, NuCom Group: 0.8bn; 3) Equity Value based on current
stock price October 2018; 4) Incl. digital businesses from Entertainment, Nucom Group (referring to the segment Commerce) and Red Arrow Studios (referring to the segment Content 9
Production and Global Sales); 5) Smart advertising includes targetable products both linear and digital; 6) TSR 31.12.16-31.10.18 calculated as share price performance plus dividends reinvested
in security based on Bloomberg; Source: P7S1 company data; Bloomberg
STRATEGIC PRIORITIES
ACROSS OUR
THREE PILLARS
ENTERTAINMENT NUCOM GROUP
ONE ENTERTAINMENT
HOLISTIC CONSUMER-FIRST APPROACH
CONSUMER NEEDS
LARGE MARKETS SERVING STRONG NEEDS
LOCAL CONTENT
MORE LIVE, MORE LOCAL, MORE OWN IP
RED ARROW FOCUSED PORTFOLIO
DIGITAL ATTACK ASSETS ALONG FOUR CORE VERTICALS
STUDIOS FAN COMMUNITIES, AGGREGATORS, DIGITAL CHANNELS
INTERNAL FEED MARKET LEADERS
INCREASE SHARE OF IN-HOUSE TOTAL TO SMART REACH ORGANIC GROWTH AND BOLT-ON M&A
PRODUCTION FOR ENTERTAINMENT LINEAR & DIGITAL REACH MADE TARGETABLE
SYNERGISTIC FOOTPRINT TOTAL MONETIZATION
BUILD-&-BUY OF LOCAL FOOTPRINT NEW BUDGETS & CLIENTS
SCALE OF STUDIO71
INCREASE INTERNATIONAL FOOTPRINT
AND PROFITABILITY
Note: Red Arrow Studios refers to the segment Content Production and Global Sales; NuCom Group refers to the segment Commerce incl. travel
10AGENDA
VISION AND
GROWTH AMBITION
GROWTH ENGINE:
NUCOM GROUP
FUTURE-FIT
ENTERTAINMENT
NEW DIRECTION:
RED ARROW STUDIOS
TARGETS AND
FINANCIAL GUIDANCE
DIE BESTE SHOW DER WELT
© ProSieben/Andreas Franke 11NUCOM GROUP SNAPSHOT
EUR 0.8 BN REVENUES1) | EUR 0.1 BN ADJ. EBITDA1) | EUR 1.8 BN VALUATION2) | 35 M MONTHLY VISITS3)
EXPERIENCE &
CONSUMER ADVICE MATCHMAKING GIFT VOUCHERS BEAUTY & LIFESTYLE
SAVINGS LOVE EXPERIENCE WELL-BEING
83% #
W/ LARGEST
1 > 21K
DIFFERENT > 10X
AIDED BRAND REVENUES
AWARENESS4) CUSTOMER EXPERIENCES
DATABASE6) OFFERED7) SINCE 2014
5)
1) Q3 2018 LTM, excl. eharmony, incl. travel; 2) Enterprise value at time of transaction (February 2018); 3) As of December 2017 based on company data; 4) Based on consumer survey conducted
by the company; 5) Signed in October 2018, eharmony part of PEG; 6) Singles in Germany, Switzerland and Austria looking for a serious relationship; 7) Company information 12
Source: P7S1 company data; Nucom GroupLEADING TEAM AT PEG W/ PROVEN TRACK
RECORD: ELITEPARTNER INTEGRATION 2015
EHARMONY AN ICONIC BRAND WITH
87% AIDED BRAND AWARENESS1)
EHARMONY A U.S. TURNAROUND VALUE
ASSET
HANDS-ON EXECUTOR CAN APPLY OUR
PLAYBOOK AGAIN TO BOOST EHARMONY
GREAT PARTNERSHIP: 1ST JOINT
ACQUISITION WITH GENERAL ATLANTIC
> 200M > 20M 85M
EUR PRO-FORMA EUR EBITDA USD
COMBINED SYNERGIES3) ENTERPRISE
REVENUES2) VALUE4)
1) Based on PEG/NuCom brand market research; 2) Parship Elite Group and eharmony pro-forma
combined revenues, Q3 2018 LTM; 3) Full run-rate; 4) Publicly stated enterprise value as of October 2018 13
Source: P7S1 data; NuCom Group, company informationNUCOM GROUP BUILDING BLOCKS: BOOST TOTAL VALUE
ORGANIC REVENUE CAGR: +10-15%
EXTERNAL
REVENUES (INCL. M&A ~20% CAGR) ~2BN
[IN EUR]1)
ACTIVE M&A
PIPELINE
GROW VERTICALS
SERVING STRONG
BEAUTY &
LIFESTYLE
CONSUMER NEEDS
EXPERIENCE &
GIFT VOUCHERS EXECUTE SMART AND
MATCH-
ATTRACTIVE M&A
MAKING ADJUSTED
EBITDA:
CONSUMER OPTIMIZE EBITDA
~0.8BN ADVICE ~400M AT SCALE
ADJUSTED LEVERAGE SYNERGIES
EBITDA: ACROSS NUCOM
~110M ASSETS AND P7S1
LAUNCH
2013 Q3 2018 LTM2) 2023+
1) Chart dimensions are illustrative and do not represent exact amounts; 2) excl. eharmony, incl. travel
Source: P7S1 company data; NuCom Group 14CLEAR SYNERGY CASE FOR NUCOM
GROUP AND ENTERTAINMENT
SERVE
CONSUMER NEEDS
LEVERAGE MEDIA POWER:
LARGEST SOM CUSTOMER
NUCOM DRIVE DIGITAL AND CULTURAL ENTER-
TRANSFORMATION
GROUP TAINMENT
EXPLOIT CONSUMER
DATA (E.G., NETID)
FUEL NEW BUSINESS
MODELS AND
SYNERGIES
BUILDING A CONSUMER-CENTRIC AND TECHNOLOGY-DRIVEN BUSINESS
BRANDS PLATFORMS SERVICES CONSUMER DATA
15AGENDA
VISION AND
GROWTH AMBITION
GROWTH ENGINE:
NUCOM GROUP
FUTURE-FIT
ENTERTAINMENT
NEW DIRECTION:
RED ARROW STUDIOS
TARGETS AND
FINANCIAL GUIDANCE
DIE BESTE SHOW DER WELT
© ProSieben/Andreas Franke 16ENTERTAINMENT SNAPSHOT
STRONG CORE TO BUILD ON
STRONG DIVERSIFIED LEADING
ENTERTAINMENT DISTRIBUTION AD SALES PLAYER1)
BRANDS1) PORTFOLIO1)
2.7BN PAST
CAGR 2009-2016
CURRENT
CAGR 2016-2018E
FUTURE
CAGR 2018-2023+
ENTERTAINMENT
REVENUES2) +2-3% ±0% +0-5%
ENTERTAINMENT KPIs
TODAY3) TODAY3)
10% 5%
FUTURE4) FUTURE4)
25% 25%
ENT. DIGITAL SMART ADVERTISING SHARE OF
REVENUE SHARE5) ENT. ADVERTISING REVENUES6)
1) Examples; 2) In EUR, Q3 2018 LTM; 3) Q3 2018 LTM; 4) Target for 2023+; 5) Rough indication based on allocation of Entertainment business units to
THE VOICE OF GERMANY digital vs. non-digital clusters; digital revenues include digital content and revenues generated by digital/tech-driven services; 6) Smart advertising
© ProSieben/SAT.1/André Kowalski includes targetable products both linear and digital 17
Source: P7S1 company dataFUTURE-FIT MONETIZATION
ENTERTAINMENT REACH
CONTENT
CONSUMER
TOTAL DIGITAL AND
CONSUMER FIRST LOCAL CONTENT TOTAL MONETIZATION
LINEAR REACH
18CONTENT
EXPAND IN ATTRACTIVE LIVE AND LOCAL GENRES
FACTUAL SHOW/REALITY COMEDY FICTION TREND SPORTS
+80M EUR
TAFF © ProSieben/Benedikt Müller THE VOICE OF GERMANY © SAT.1/Andre Kowalski LUKE DIE WOCHE UND ICH © SAT.1/Willi Weber
EINSTEIN © SAT.1/Wolfgang
Ennenbach
P.A. ADDITIONAL
INVEST IN
LOCAL CONTENT
19CONTENT
WINNING LOCALLY: THE VOICE OF GERMANY
ATTRACTIVE ON VIEWER DIGITAL
ALL CHANNELS ENGAGEMENT EXTENSION
20% >50,000 ~75M
Ø AUDIENCE SHARE TVOG TOUR 2017/18 VIDEO
LINEAR TV1) TICKETS SOLD2) VIEWS3) ALREADY
>30%
UPLIFT ON VIDEO
VIEWSFOR NEW
SEASON4)
LEVERAGE AND BUILD-UP FACES
1) Season 7, 2017; Base: All German TV households, A 14-49, Mon-Sun, 3-3 h; based on AGF in co-operation with GfK/videoScope; 2) Internal company data; 3) Q3 2018 LTM; VV Facebook, YouTube,
channel web & app, 7TV based on Social Media & Business Intelligence; 4) Total video views 18.10.-03.11.2018 vs. previous year 20
THE VOICE OF GERMANY Source: P7S1 company data; AGF
© ProSieben/SAT.1/André KowalskiCONTENT
RIGHT BALANCE OF U.S. CONTENT AND
LOCAL PRODUCTION
▪ 56% U.S. AND 44% LOCAL CONTENT GRID SHARE TODAY1)
▪ INCREMENTAL LOCAL CONTENT INVESTMENT OF ~EUR 80M P.A.
▪ U.S. CONTENT CONTINUES TO BE IMPORTANT:
RIGHT LEVEL OF QUALITY AND RIGHTS NEEDED
SECURE FUTURE OUTPUT DEALS WITH FAVORABLE PRICING AND
BETTER SCOPE OF RIGHTS
NEW DEAL WITH WARNER BROTHERS FULFILLING REVISED CRITERIA
▪ U.S. CONTENT RIGHTS OVERHANG:
UP TO EUR 400M POSSIBLE CONTENT WRITE-OFFS
CASH IMPACT AFTER TAX OF ONLY UP TO EUR 110M OVER APPROX.
FOUR YEARS
1) Content mix P7S1 core channels Q3 2018 LTM, market share contribution, in %, Basis: all German TV households (German-speaking), A 14-49, Mon.Sun, 3-3h
Source: AGF in co-operation with GFK,TV Scope/ProSIebenSat.1 TV Deutschland; P7S1 company data
21REACH
EXPAND TO TOTAL AND SMART REACH
TODAY FUTURE
LINEAR TV REACH TOTAL REACH + SMART REACH
P7S1 WITH STRONG PRESENCE COMBINE LINEAR TV REACH MAKE TOTAL REACH SMART:
IN TV REACH WITH DIGITAL REACH TARGETABLE AUDIENCES
. . BASED ON DATA INSIGHTS
MASS REACH MEDIUM; DESPITE COMPENSATING DECLINE OF
.
SLIGHT REACH DECLINE ESP. IN TV REACH FOR YOUNGER INCREASING VALUE OF
YOUNG TARGET GROUPS AUDIENCES INVENTORY
1.5-2.5X
NET CPM VS. CLASSIC/
TV REACH TOTAL REACH NON-DATA ADS1)
1) Internal pricing analysis on targetable products both linear and digital
Source: P7S1 company data 22REACH
ESTABLISH TOTAL REACH AS
ONE KEY METRIC
TOTAL REACH1) TOTAL MINUTES2)
0.5 MILLION 800 MILLION
DIGITAL
CHANNELS
OWN APPS AND
.de
0.5 MILLION 600 MILLION
WEBSITES
+ +
>2.5M
VIDEO VIEWS
WEB-ONLY 8.8 MILLION 4,100 MILLION
CONTENT3) TV
# 1
ENTERTAINMENT
9.7M AVERAGE EPISODE
5,500M SEASON YTD SEPT. 2018
BRAND ON 1) Number of people reached with an average episode of last GNTM season, all people 3+, no double counting, linear TV (live, +3 days time shift) and websites
(Laptop/Browser) as basis from AGF data and proxy for incremental reach through Apps (Mobile, SmartTV) and YT (Digital Channels), rounded; 2) Total minutes watched
INSTAGRAM4) YTD September 2018, LINEAR // Basis (households): all German TV households, 3+, Mon-Sun, 3-3 h; Source: AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland;
GERMANY´S NEXT TOPMODEL
DIGITAL // Basis (devices): TV websites and apps, 7TV, YouTube (without advertising), Germany only; Source: Google Analytics/YouTube Analytics; 23
3) “Let’s Face Reality” web format, May – September 2018, PSD BI // Format Report, Digital Video Views on ProSieben O&O channels (Web, App, Smart TV, HbbTV,
© ProSieben/Willi Weber Syndication) and YouTube; 4) Followers on Instagram in comparison to TV formats and entertainment brands in Germany, October 2018REACH
BOOST TOTAL REACH BY ALL-OUT DIGITAL ATTACK
FAN COMMUNITIES AGGREGATOR PLATFORMS DIGITAL CHANNELS
TARGET:
95M TARGET:
10BN
VIDEO VIEWS OF
TOP 5 FORMATS1)
10M
USERS2)
MONTHLY
VIDEO VIEWS
USERS2) WORLDWIDE3)
GERMANY´S NEXT TOPMODEL
© ProSieben/Willi Weber
OWNED & OPERATED AGGREGATOR PLATFORM PRODUCTION HOUSE WITH
EMERGING INTO FAN APPS FOR LOCAL CONTENT 20% OF TOP 100 MOST POPULAR
CHANNELS IN GERMANY4)
IMMERSIVE DIGITAL CONTENT INVITING ALL PLAYERS FUTURE ENTERTAINMENT
FOR YOUNGER AUDIENCES
1) GNTM, TVOG, taff, PBB, FFS; Q3 2018 LTM, excl. 7TV; 2) Ambition; 3) Average July to September 2018,
excluding France, YouTube analytics; 4) Includes TV and talent channels, Social Blade, Top Lists, ranked 24
by subscribers 19.10.18
Source: P7S1 company data; YouTube analyticsREACH
7TV: BUILD JOINT AGGREGATOR PLATFORM
LARGE AMOUNT OF LOCAL CONTENT
AIMING FOR .
10M USERS EXCLUSIVE FILMS, ORIGINALS & SERIES
(~2.5M EXISTING .
USER BASE1)) LIVE SHOWS & SPORT EVENTS
SIMPLE PRICING CONCEPT
>200 PEOPLE EXCLUSIVE
WORKING ON PREMIUM ENTERTAINMENT AND
(€) SPORTS CONTENT AND
PROJECT ADDITIONAL FEATURES
ACCESS TO LIVE TV
BASIC AND CATCH-UP2)
NEW IN 2019 (AD)
PARTNER: INVEST
TO CREATE THE
LEADING GERMAN ADDRESSING
ENTERTAINMENT HUB ADDITIONAL PARTNERS
1) Based on number of subscribers already using 7TV, maxdome and Eurosport Player, October 2018; 2) Only extract of all available channels
Source: P7S1 company data 25MONETIZATION
TOTAL MONETIZATION: ONE ADVERTISING PORTFOLIO
AWARENESS ENGAGEMENT CONVERSION
LINEAR TV CAMPAIGNS & SPECIAL ADS
TV &
TV
ADDRESSABLE TV
ADDRESSABLE TV SWITCH-INS & SPOTS
VIDEO DIGITAL VIDEO ADS
MARKET
SEGMENTS DOOH OUTDOOR SCREENS SCREENS AT RETAIL
SERVED
DIGITAL
BY P7S1 NEW DATA-DRIVEN INFLUENCER ADS
PERFORMANCE NEW PERFORMANCE-DRIVEN SOCIAL MEDIA
NEW PERFORMANCE RETAIL MEDIA
DIGITAL FREESHEETS SALES PROMO APP
360° SMART REACH
TOTAL REACH
26MONETIZATION
360° MONETIZATION OF THE FULL VALUE CHAIN
CUT-IN ON TV ONLINE MOBILE PR SPONSORINGS $
>40%
OF AD REVENUES WITH
‘GERMANY’S NEXT TOPMODEL’
FORMAT VIA SPECIAL ADS1)
TV ADVERTORIAL MUSIC
+30%
EVENTS MARK-UP POSSIBLE ON SPECIAL
PRODUCT PLACEMENT
AD PRICING VS. CLASSIC ADS2)
+5%
SOCIAL PROMO LICENSING
SWEEPSTAKES
YEARLY GROWTH RATE FOR
SPECIAL AD REVENUES3)
1) Internal company analysis of ad sales revenues for Germany’s Next Topmodel format 2018; 2) Internal company information, comparing avg. pricing of classic campaigns vs. special ad campaigns
3) Internal company information, special ad sales revenue growth CAGR 2014 -2018 27
Source: P7S1 company dataMONETIZATION
SMART REACH AS KEY MONETIZATION LEVER
TOTAL REACH SMART REACH
ADD. TV DIGITAL
SMART REACH
INVENTORY ~20% ~100%
+ OF TV DEVICES IN
HOUSEHOLDS IN 20191)
OF DIGITAL
INVENTORY BY 20191)
ADDRESSING TOTAL ADDRESSING INDIVIDUAL
AUDIENCES BASED ON
E.G., SPECIAL TARGET
AUDIENCES BASED ON
DATA INSIGHTS E.G.,
MONETIZATION ~2.5X ~1.5X
GROUPS UPLIFT NET CPM VS. NET CPM VS.
CLASSIC TV SPOTS2) NON-DATA ADS3)
SOCIODEM
Age
GEO PURCHASE
INTENT
+
ACCESS TO NEW BUDGETS AND CLIENTS
CROSS-DEVICE
DATA TODAY5) FUTURE6)
SMART ADVERTISING
DATA COOPS
REVENUE SHARE4) 5% 25%
1) Add. TV: based on 61M TV devices in German households of which 12M are connected HbbTV devices; digital internal planning by SevenOne Media; 2) Internal pricing analysis based on 30 second TV
spot length; 3) Internal pricing analysis comparing avg. CPM of digital video ad with avg. mark-up for data ad (bookable via programmatic); 4) Smart advertising includes targetable products both 28
linear and digital; 5) Q3 2018 LTM; 6) 2023E
Source: P7S1 company dataSUMMING IT UP: ENTERTAINMENT BUILDING BLOCKS
ORGANIC REVENUE CAGR: +0-5%
EXTERNAL
~3.2BN
REVENUES (INCL. M&A UPPER END OF RANGE)
[IN EUR]1) M&A
DISTRIBUTION/
SUBSCRIPTION/
ADJACENT
SMART &
AD TECH
ADJUSTED
DIGITAL
EBITDA:
~2.7BN
360° MONET./ ~1BN
CORE PRICING
ADJUSTED TV AD
EBITDA:
~0.9BN
Q3 2018 LTM 2023+
10% 5% 25% 25%
ENT. DIGITAL SMART SHARE OF ENT. DIGITAL SMART SHARE OF
REVENUE SHARE2) ENT. ADV. REVENUES3) REVENUE SHARE2) ENT. ADV. REVENUES3)
1) Chart dimensions are illustrative and do not represent exact amounts; 2) Rough indication based on allocation of Entertainment business units to digital vs. non-digital clusters; digital revenues
include digital content and revenues generated by digital/tech-driven services; 3) Smart advertising includes targetable products both linear and digital 29
Source: P7S1 company dataAGENDA
VISION AND
GROWTH AMBITION
GROWTH ENGINE:
NUCOM GROUP
FUTURE-FIT
ENTERTAINMENT
NEW DIRECTION:
RED ARROW STUDIOS
TARGETS AND
FINANCIAL GUIDANCE
DIE BESTE SHOW DER WELT
© ProSieben/Andreas Franke 30RED ARROW STUDIOS SNAPSHOT
OUR BUSINESS
GERMAN-SPEAKING INTERNATIONAL DIGITAL CREATION
CONTENT CREATION CONTENT CREATION AND INFLUENCER
AND DISTRIBUTION MANAGEMENT
LEADING 20 700+ 10BN
GERMAN PRODUCTION PRODUCTION INT. SALES MONTHLY VIDEO VIEWS
COMPANY1) COMPANIES CLIENTS WORLDWIDE2)
~0.5BN EUR REVENUES3)
1) Germany’s most successful production companies based on the 100 most seen formats, A14-49; DWDL.de; 2) September 2018, excl. France;
YouTube analytics; 3) Q3 2018 LTM; external revenues 31
Source: P7S1 company data; DWDL; YouTube analyticsNEW DIRECTION: RED ARROW STUDIOS
INTERNATIONAL DIGITAL CREATION
GERMAN-SPEAKING
CONTENT CREATION AND INFLUENCER
CONTENT CREATION
AND DISTRIBUTION MANAGEMENT
RAS SHARE OF P7S1’S LATEST U.S./UK PICK-UPS1)
LOCAL COMMISSIONED
CONTENT
>1,300
>30% CHANNELS
2023+ WORLDWIDE2)
13% 10BN
MONTHLY
2018 VIDEO VIEWS
WORLDWIDE3)
BUILD AND GROW LOCAL FOOTPRINT MANAGE FOR SUCCESS SCALE GLOBALLY
PARTNER WITH BEST CREATORS EVALUATE PARTNERSHIPS FOR SCALE DRIVE PROFITABILITY
Note: RAS = Red Arrow Studios
1) The Weekly season 1, The Restaurant That Makes Mistakes season 1, Bosch season 5, Hollywood Medium season 4; 2) Data as of September 2018, YouTube channels only; 32
3) Average July to September 2018, excluding France, YouTube analytics
Source: P7S1 company data; YouTube analyticsRED ARROW STUDIOS BUILDING BLOCKS
ORGANIC REVENUE CAGR: +5-10%
EXTERNAL
REVENUES (INCL. M&A ~10% CAGR)
~0.8BN
[IN EUR]1)
M&A
STUDIO71
RED ARROW STUDIOS
INTERNATIONAL ADJUSTED
EBITDA:
REDSEVEN
~0.5BN ~80M
ADJUSTED
EBITDA:
~20M
Q3 2018 LTM 2023+
13% >30%
RAS SHARE OF P7S1’S LOCAL RAS SHARE OF P7S1’S LOCAL
COMMISSIONED CONTENT COMMISSIONED CONTENT
Note: RAS = Red Arrow Studios
1) Chart dimensions are illustrative and do not represent exact amounts; external view does not include internal revenues with ProSiebenSat.1 TVDeutschland (RedSeven) 33
Source: P7S1 company dataAGENDA
VISION AND
GROWTH AMBITION
GROWTH ENGINE:
NUCOM GROUP
FUTURE-FIT
ENTERTAINMENT
NEW DIRECTION:
RED ARROW STUDIOS
TARGETS AND
FINANCIAL GUIDANCE
DIE BESTE SHOW DER WELT
© ProSieben/Andreas Franke 34RECAP: GROUP GROWTH AMBITIONS
1)
OUR STARTING POINT AMBITION IN ~5+ YEARS
INCL. BOLT-ON M&A
REVENUES ADJ. EBITDA EQUITY VALUE REVENUES ADJ. EBITDA EQUITY VALUE
[EUR] 2) [EUR] [EUR] 3) [EUR] [EUR] [EUR]
4BN 1BN 5BN 6BN 1.5BN …
NON-ADVERTISING DIGITAL SMART ADVERTISING SHARE OF NON-ADVERTISING DIGITAL SMART ADVERTISING SHARE OF
REVENUE SHARE REVENUE SHARE ENTERTAINMENT ADVERTISING REVENUE SHARE REVENUE SHARE ENTERTAINMENT ADVERTISING
GROUP GROUP4) REVENUES5) GROUP GROUP4) REVENUES5)
40 % 30 % 5 % 50 % 50 % 25 %
YE 2016 – YTD 2018
ACTUAL
-22% 10-15% P.A.
TOTAL
TOTAL
SHAREHOLDER
SHAREHOLDER
RETURN
RETURN6)
ADJ. EPS GROWTH PLUS DIVIDEND YIELD
1) Figures relate to Q3 2018 LTM, if not stated otherwise; 2) Revenue split in EUR – Entertainment: 2.7bn, Red Arrow Studios: 0.5bn, NuCom Group: 0.8bn; 3) Equity Value based on current
stock price October 2018; 4) Incl. digital businesses from Entertainment, Nucom Group (referring to the segment Commerce) and Red Arrow Studios (referring to the segment Content 35
Production and Global Sales); 5) Smart advertising includes targetable products both linear and digital; 6) TSR 31.12.16-31.10.18 calculated as share price performance plus dividends reinvested
in security based on Bloomberg; Source: P7S1 company data; BloombergCONFIRMED MID-TERM TARGETS
ENTERTAINMENT
MORE LOCAL CONTENT ON LINEAR AND DIGITAL INVESTMENTS IN 2019 IN
CHANNELS TO MONETIZE TOTAL & SMART REACH ORDER TO DRIVE HIGHER
+0-5%
REVENUE GROWTH
THEREAFTER MID-SINGLE
EXTERNAL REVENUE GROWTH CAGR (ORGANIC)
DIGIT %
RED ARROW STUDIOS P7S1 GROUP REVENUE
INCREASE INTERNAL CONTENT FEED, BOOST INTER- GROWTH CAGR
NATIONAL AND SCALE S71 IN GERMANY AND BEYOND RETURN TO GROWTH PATH
AFTER CHALLENGING
+5-10% H1 2018
EXTERNAL REVENUE GROWTH CAGR (ORGANIC)
MID-20s %
P7S1 GROUP ADJUSTED
NUCOM GROUP
EBITDA MARGIN
ACCELERATE GROWTH OF FOUR VERTICALS ALONG WITH
GENERAL ATLANTIC SERVING STRONG CONSUMER NEEDS
AMBITION TO REACH UPPER
END OF REVENUE GROWTH
+10-15%
EXTERNAL REVENUE GROWTH CAGR (ORGANIC)
TARGETS
Source: P7S1 company data
36BUILDING BLOCKS OF GROUP’S TARGET REVENUES
MID SINGLE-DIGIT REVENUE CAGR (PLUS M&A)
EXTERNAL
REVENUES
[IN EUR]1)
~0.3BN ~6BN
RED ARROW AMBITION
~0.5BN STUDIOS LEVEL BASED
ON MID-TERM
REVENUE GROWTH
ENTERTAINMENT ~0.1BN TARGETS AND
~1.2BN FUTURE M&A
NUCOM GROUP ~0.1BN
~4BN ADJUSTED
EBITDA:
~0.3BN
ADJUSTED ~1.5BN
EBITDA:
~1BN
Q3 2018 LTM 2023+
TARGETED GROUP
REVENUES INCL. M&A
1) Chart dimensions are illustrative and do not represent exact amounts
Source: P7S1 company data 372019 INVESTMENTS FOR GROWTH
AMOUNT FY 2019 INVESTMENTS
SAVINGS TIZATION REACH CONTENT
▪ MORE LOCAL CONTENT TO GROW REACH ACROSS ALL PLATFORMS
-EUR 80M ▪ INCREASED RELEVANCE AND DIFFERENTIATION FROM COMPETITORS
GROWTH/ MONE- (DIGITAL)
▪ STRENGTHEN DIGITAL ENTERTAINMENT FOOTPRINT & GROW DISTRIBUTION
-EUR 20M ▪ MULTIPLY CONSUMER TOUCH POINTS WITH OUR CONTENT
▪ ADVERTISING TECHNOLOGY, AI, DATA AND NETID AS WELL AS OTHER ENABLERS FOR
-EUR 20M IMPROVED REACH MONETIZATION
▪ TOTAL SEGMENT REVENUE GROWTH (EXTERNAL AND INTERNAL) DRIVEN BY ALL KEY ASSETS
+EUR 50M ▪ COST SAVINGS FROM ADDITIONAL EFFICIENCY MEASURES
-EUR 70M ▪ FY 2019 ENTERTAINMENT ADJ. EBITDA EXPECTED TO BE EUR 70M BELOW FY 2018
Source: P7S1 company data
38PRELIMINARY FY 2019 OUTLOOK
ENTERTAINMENT
RETURN TO REVENUE
+0-5% GROWTH, ADJ. EBITDA TO
DECLINE BY EUR 70M
(-EUR 50M ON GROUP LEVEL) MID-SINGLE
MID-TERM EXTERNAL REVENUE GROWTH (CAGR)
DIGIT %
RED ARROW STUDIOS P7S1 GROUP REVENUE
✓
GROWTH (REPORTED)
+5-10%
MID-TERM EXTERNAL REVENUE GROWTH (CAGR)
22-25%
NUCOM GROUP P7S1 GROUP ADJUSTED
✓
EBITDA MARGIN
+10-15%
MID-TERM EXTERNAL REVENUE GROWTH (CAGR)
Source: P7S1 company data
39WE AIM FOR AN ANNUAL TOTAL SHAREHOLDER
RETURN OF +10-15%
ORGANIC GROWTH
EPS GROWTH
M&A
THROUGH
SHARE BUYBACK
TOTAL
+10-15% P.A.
AMBITION
SHAREHOLDER
LEVEL
RETURN
ADJUSTED EPS GROWTH
DIVIDEND YIELD PLUS DIVIDEND YIELD
50% PAY-OUT RATIO1)
FINANCIAL LEVERAGE TARGET RANGE UNCHANGED: 1.5 - 2.5X
1) A payout-ratio of 50% of Adjusted Net Income will for the first time be applied for FY 2018 dividend (payment in FY 2019)
Source: P7S1 company data 40HOW WILL WE EXECUTE TO WIN?
#1 CLEAR GAME PLAN AND KPIs
#2 STREAMLINED ORGANIZATION
#3 SIMPLIFIED OPERATIONS
#4 DISCIPLINED CASH USAGE
#5 PARTNER FOR SCALE
GALILEO © ProSieben
#6 TECH ENGINE
41TO SUM IT ALL UP
AMBITION IN ~5+ YEARS:
EUR 6 BN REVENUES | EUR 1.5 BN ADJ. EBITDA | +10-15% TSR P.A.1)
ENTERTAINMENT:
A FUTURE-FIT GERMAN ENTERTAINMENT BUSINESS THAT
IS MORE LOCAL, MORE DIGITAL AND MORE SMART REACH
NUCOM GROUP:
A RAPIDLY SCALED DIGITAL PLATFORM AND
E-COMMERCE CHAMPION
RED ARROW STUDIOS:
A MORE SYNERGISTIC PRODUCTION FOOTPRINT
HOMEWORK AND DELIVER FIRST…
1) Adjusted EPS growth plus dividend yield p.a.
Source: P7S1 company data 42THE PRESENTERS ON STAGE
KEYNOTE FINANCIALS NUCOM GROUP
MAX DR. JAN DR. FLORIAN CLAAS VAN
CONZE KEMPER TAPPEINER DELDEN
ENTERTAINMENT RED ARROW STUDIOS
WOLFGANG EUN-KYUNG SABINE CONRAD JAMES REZA
LINK PARK ECKHARDT ALBERT BAKER IZAD
43This presentation contains "forward-looking statements" regarding
ProSiebenSat.1 Media SE ("ProSiebenSat.1") or ProSiebenSat.1 Group,
including opinions, estimates and projections regarding
ProSiebenSat.1's or ProSiebenSat.1 Group's financial position, business
strategy, plans and objectives of management and future operations.
Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual
results, performance or achievements of ProSiebenSat.1 or
ProSiebenSat.1 Group to be materially different from future results,
DISCLAIMER
performance or achievements expressed or implied by such forward-
looking statements. These forward-looking statements speak only as of
the date of this presentation and are based on numerous assumptions
which may or may not prove to be correct.
No representation or warranty, expressed or implied, is made by
ProSiebenSat.1 with respect to the fairness, completeness, correctness,
reasonableness or accuracy of any information and opinions contained
herein. The information in this presentation is subject to change
without notice, it may be incomplete or condensed, and it may not
contain all material information concerning ProSiebenSat.1 or
ProSiebenSat.1 Group. ProSiebenSat.1 undertakes no obligation to
publicly update or revise any forward-looking statements or other
information stated herein, whether as a result of new information,
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