RTL Group, the leading European entertainment network, announces its audited results for the year ended 31 December 2008.

Highlights

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¹ Adjusted for scope changes and at constant exchange rates
² EBITA represents earnings before interest and income tax expense excluding impairment of goodwill, disposal groups and amortisation and impairment of fair value adjustments on acquisitions and gain or loss from sale of subsidiaries, joint ventures and other investments
³ Primarily launch costs of digital television channels in France, Germany and the UK
⁴ Adjusted earnings per share represents the net profit for the period adjusted for impairment of goodwill, disposal groups and amortisation of fair value adjustments on acquisitions and gain or loss from sale of subsidiaries, joint ventures and other investments, net of income tax expense and one-off tax effects

RTL Group increases revenue and EBITA, for the seventh consecutive year

• Reported EBITA of EUR 916 million, up 2.0 per cent, despite a tougher economic climate

• Reported Group revenue up 1.2 per cent to EUR 5,774 million; underlying revenue, at constant exchange rates, up 2.6 per cent

• Reported EBITA margin improved to 15.9 per cent

• Net profit attributable to RTL Group shareholders down to EUR 194 million (2007: EUR 563 million), mainly due to an impairment of goodwill of the UK TV activities amounting to EUR 337 million

• Net cash from operating activities of EUR 1,065 million resulting in an operating cash conversion of 114 per cent

• Proposed ordinary dividend for 2008 up to EUR 1.40, from EUR 1.30 for 2007; once again proposed extraordinary dividend of EUR 2.10 for 2008 (EUR 3.70 for 2007)

• Increasingly challenging advertising conditions across Europe

Mediengruppe RTL Deutschland and FremantleMedia with record EBITA

• Mediengruppe RTL Deutschland with its best year ever; EBITA up 25.6 per cent;
  leading position on the German TV advertising market significantly strengthened

• FremantleMedia reports growing revenue and EBITA figures for the fifth consecutive year, driven by its slate of international prime time hit formats; EBITA up 18.3 per cent

• EBITA of Groupe M6 in France impacted by a major programme investment for the European football championship 2008; free DTT channel W9 continued its rapid audience and revenue growth and generated positive EBITA for the first time

• RTL Nederland implemented a restructuring programme at the end of 2008;
  EBITA down 17.6 per cent also due to these one-time restructuring charges

Selective acquisitions and launches to strengthen core business activities

• Acquisition of a 66.6 per cent majority shareholding in Alpha Media Group, Greece’s number four broadcasting company

• RTL Group builds up comprehensive catch-up TV services in Germany (RTLnow.de), France (M6replay.fr), the Netherlands (RTLgemist.nl) and in the UK (Demand.Five.tv)

• Investments to strengthen RTL Group’s internet portfolio

  • Mediengruppe RTL Deutschland acquired the fast-growing social network Wer-kennt-wen.de

  • Groupe M6 acquired a 100 per cent stake in the Cyréalis group

• Launch of exclusive mobile TV channel RTL 24 in the Netherlands

• Relaunch of marketing agency UFA Sports to round off RTL Group’s portfolio and to further diversify revenue streams

“A position of strength”

Gerhard Zeiler, Chief Executive Officer of RTL Group, said:

“In spite of increasingly difficult advertising markets in Europe, in 2008 RTL Group increased its revenue and operating result for the seventh year running. The company has a broad-based, secure setup, and is active in many countries and business areas. In particular, strong performances at Mediengruppe RTL Deutschland and FremantleMedia contributed to the increase in profits.

Based on the 2008 results and the cash position, we propose a total dividend of EUR 3.50 per share - consisting of an ordinary dividend of EUR 1.40 and an extraordinary dividend of EUR 2.10.

This position of strength is the result of our strategy, which is based on strict investment criteria. In 2008, we significantly stepped up our online activities with targeted acquisitions and investments. After our takeover of the Alpha Media Group in Greece, we now have 45 TV channels in 11 European countries.

Operating in a very challenging time, we are experiencing a substantial slowdown in advertising bookings. We will respond to this by focusing on our core business, and by reviewing all costs and structures. This will result in a significantly lower cost base in all of our operations.

Given the current state of the advertising markets, and the very short-term bookings cycle, it is impossible to give reliable full-year guidance. But it has to be expected that the profitability level will be down compared to 2008.”

About RTL Group
RTL Group is the leading European entertainment network, with interests in 45 television channels and 32 radio stations in 11 countries and content production throughout the world. The television portfolio of Europe’s largest broadcaster includes RTL Television in Germany, M6 in France, Five in the UK, the RTL channels in the Netherlands, Belgium, Luxembourg, Croatia and Hungary, Alpha TV in Greece, Ren TV in Russia and Antena 3 in Spain. RTL Group’s flagship radio station is RTL in France, and it also owns or has interests in other stations in France, Germany, Belgium, the Netherlands, Greece, Spain and Luxembourg. RTL Group’s content production arm, FremantleMedia, is one of the largest international producers outside the US. Each year, it produces 10,000 hours of programming across 57 countries.

The NRJ Group’s revenues (excluding barters transactions) came to 331.3 million euros in 2008, comparedwith 359.7 million euros in 2007, down 7.9% (-4.3% at constant scope and exchange rates). This changenotably reflects the consequences of the gradual reduction of the Group’s stake in NRJ Mobile, as well as theimpact of the end of the musical “Le Roi Soleil” following its final performances in July 2007. Excluding mobiletelephony and “Le Roi Soleil”, the Group’s revenues would have increased by 1.7%.In the fourth quarter, the Group generated 89.2 million euros in revenues, compared with 99.9 million euros in 2007, down 10.7% (-6.0% at constant scope and exchange rates). *** 

Following a particularly difficult fourth quarter due to the economic environment, the radio business inFrance recorded 222.1 million euros in revenues over 2008, compared with 239.6 million euros in 2007,representing a drop of 7.3% (-14.6% in Q4). In the fourth quarter, the downturn in business stems morespecifically from the fall in advertising investments for the retail, transport and telecommunications sectors. Over the full year, the retail sector’s advertising investments are up slightly, while the transport, services,telecommunications and toiletries-beauty product sectors show a marked downturn. 

Revenues from international radio activities climbed to 33.8 million euros in 2008, up 5.3% on 2007, notablydriven by growth in business on the Germanic region over the full year. Television activities generated 25 million euros in revenues over 2008, up 187.4% in relation to 2007. In thefourth quarter, despite the unfavourable economic environment, this business achieved sustained revenuegrowth (+186.7%). In December 2008, NRJ 12 achieved a national audience share of 1.1%* for this channel (1%* over the full year in 2008). NRJ 12 has continued to achieve satisfactory growth in its audience figures, and now attracts close to 24 million* viewers each week. 

* Source: Médiamétrie Médiamat Annuel 2008 Revenues on the telephony business came to 7.2 million euros in 2008, compared with 18.3 million euros in 2007 in light of the reduction of the Group’s stake in NRJ Mobile. This business has been deconsolidated since 1 May 2008, and the Group did not record any revenues for NRJ Mobile over the second half of 2008, compared with the 9.1 million euros in revenues booked over the second half of 2007. 

Non-media activities recorded 17.4 million euros in revenues over 2008, compared with 41.5 million euros in 2007. In 2008, the musical “Le Roi Soleil” contributed 0.8 million euros to consolidated revenues, compared with 23.4 million euros in 2007. Excluding “Le Roi Soleil”, the non-media division would have generated 16.6 million euros in revenues over 2008, compared with 18.1 million euros in 2007. 

Lastly, the Group’s broadcasting business contributed 24.7 million euros to consolidated revenues in 2008, up 35.7% on 2007, thanks in particular to the development of its activities on the digital terrestrial television (DTT) broadcasting market. In total, including revenues generated within the Group, the broadcasting business posted 37.6 million euros in revenues for 2008.

Turnover excluding Group barter operations in the first quarter of 2008 fell to 79.9 million euros against 94.5 million euros in the first quarter of 2007, equivalent to an 15.4% decrease (-13,2% on a like-for-like basis and at a constant exchange rate). This reflects growth in television, broadcasting and mobile phone operations (on a like-for-like basis) and a decline in radio and non-media activities.

In the first quarter of 2008, in a media market that has proved especially tough for the radio industry, turnover from radio activity in France stands at 50 million euros, compared to 60.2 million euros for the same period last year. This drop in turnover is chiefly attributable to downturn in advertising investment from the transport and services sectors, including the banking and insurance industry, a consequence of the effects of the financial crisis.

At 8.3 million, turnover generated from international radio activity is up 5.1% on the first quarter of 2007, a result of growth in German and Nordic zones and stability across French-speaking zones. Turnover from television continues to demonstrate impressive growth, reaching 4.3 million euros in the first quarter of 2008, compared to 1.5 million euros in the same period last year (+187%). In April 2008, the NRJ12 channel continued to boost its audience figures, capturing a 2.7% DTT audience share and crossing the 1% national audience threshold (source: Médiamétrie – target viewers aged four and over). The television division is also showing satisfactory growth, including the successful launch of the Ile de France NRJ Paris channel.

Turnover from telephone operations topped 5.5 million euros in the first quarter of 2008 against 3.7 million euros in the first quarter of 2007 on a like-for-like basis, representing 47.4% growth. In the first quarter, NRJ Mobile pursued its growth strategy with the roll-out of new pre-payed offer aimed at the youth market. Thus by the end of April 2008, NRJ Mobile had acquired close to 740,000 customers since launch, including over 65,000 subscribers.

Turnover from non-media stands at 5.6 million euros in the first quarter of 2008 compared to 14.7 million euros in the first quarter of 2007. In the first quarter, the Group is no longer taking earnings from the musical “Le Roi Soleil” [The Sun King] but has launched its new co-production Cléopâtre, with tickets now on sale ahead of the opening in January 2009. Finally, Group turnover from broadcasting continues to increase at a satisfactory rate, largely as a result of the growth of DTT broadcasting. Revenue from broadcasting totals 6.0 million euros in the first quarter of 2008, against 3.8 million euros in the first quarter of 2007, a 57.9% increase. In total, including turnover generated inside the Group, broadcasting revenue reached 9.3 million euros in the first quarter of 2008.

RTL Group had a good start to the year as reported EBITA was up 8.7 per cent to EUR 188 million in the first quarter. This increase is mainly driven by the performance of Mediengruppe RTL Deutschland. Reported Group revenue was down 2.0 per cent compared to the first quarter last year to EUR 1,336 million mainly due to lower revenues in the UK and France and also due to the strong Euro. The reported EBITA margin improved to 14.1 per cent mainly due to continued cost discipline. The net cash position amounted to EUR 1,240 million with an operating cash conversion of 101 per cent.

The dividend proposal of EUR 5.00 per share was approved by the AGM on 16 April 2008. The dividend payment amounting to EUR 774 million was made on 25 April 2008.

The net TV advertising markets in Germany, Belgium and the Netherlands all grew in the first quarter of 2008 whilst the French and the UK TV advertising markets were down.

The outlook for the full year 2008 remains unchanged: with regard to advertising sales, RTL Group has - despite the current economic climate - no reason to be pessimistic.

Operational highlights

• Mediengruppe RTL Deutschland maintains its clear leadership among young viewers; RTL Television’s show highlights Ich bin ein Star - Holt mich hier raus! (I’m A Celebrity… Get Me Out Of Here!) and Deutschland sucht den Superstar (Idols) with strong performance

   

• M6 in France successfully launched new access primetime lineup with the factual entertainment show Un dîner presque parfait (Come Dine With Me) and the newsshow 100% mag scoring high ratings; digital channel W9 continues to grow its audience figures

   

• FremantleMedia with No. 1 shows on all major UK channels; American Idol (Fox) again most watched primetime show in the US, 7.5 million viewers ahead of its closest competitor

   

• Five in the UK with growing audience share since mid February 2008 with a significant contribution from popular Australian drama Neighbours

   

• French radio family goes from strength to strength: flagship station RTL Radio clear market leader in all ratings criteria in the first 2008 Médiamétrie survey (January to March)

   

• RTL Group increased its stake in Grupo Antena 3 to just over 20 per cent

   

• Comprehensive and rapidly growing catch-up TV services in Germany (RTLnow.de), France (M6replay.fr) and the Netherlands (RTLgemist.nl), Five in the UK to launch revamped video on demand service in the course of 2008

   

• Re-launch of UFA Sports to invest in attractive segments of sports rights

France’s broadcast regulator, the Conseil Supérieur de l’Audiovisuel, has just given the Lagardère Active group a green light for its acquisition of the Paris radio station Sport MX.

The station will be known as Europe 1 Sport and will enjoy the benefit of Europe 1’s know-how and experience in the field of Sport.

Europe 1 was the first station to introduce a nightly sport broadcast, known as Europe Sport, back in 1996. Europe Sport began the practice of broadcasting football matches in their entirety on a multiplex, and created the concept of consultants.
Today, its evening programming devoted to sport has made it the top-ranked general-interest station six days a week, from Sunday through Friday*.

Europe 1 Sport will be designed to offer independent radio, with in-house programming having a dominant focus on sport: news, columns, reporting, live coverage, interviews, discussion and more.
The station will rely on its own staff and its natural ties to Europe 1 to build an offering unlike any before seen in Greater Paris.

In the words of Jean-Pierre Elkabbach, President of Europe 1:
“This is a great day in the history of Europe 1. I am delighted about this new project, which reaffirms both our entrepreneurial spirit and our strength in the market for sport. This smaller sibling to Europe 1 will not be just another presence on the Web but a genuine station with its own ambitions and its own audience in metropolitan Paris. And my hope is that soon, thanks to digital radio, it will have the opportunity to win over every listener in France.”

* Médiamétrie 126 000 survey, Nov.-Dec. 2007, 7:30-11:30 pm (Sun.) and 8:00-10:30 pm (M-F), cumulative audience in thousands

The NRJ Group’s sales (excluding exchange operations) for 2007 reached 359.7 million euros compared to 398.3 million euros in 2006. i.e. a 9.7% fall (-7.9% on a like-for-like basis and at a constant exchange rate). In the fourth quarter, the Group’s sales were 99.8 million euros compared to 119.0 million euros in Q4 2006. i.e. a 16.1% fall (-14.3% on a like-for-like basis and at a constant exchange rate).

In the fourth quarter, in a market that was still proving difficult for the sector overall, revenue from radio in France shows a slight improvement compared to the trend for the first 9 months. It came to 72.6 million euros compared to 78.8 million euros in Q4 2006. i.e. a 7.9% fall. In total, revenue from radio in France came to 239.6 million euros in 2007. i.e. a fall of 8.5% on 2006.

Revenue from international radio business, at 32.1 million euros, is up slightly (by 0.3%) on 2006 (+2.4% in Q4). It incorporates a positive consolidation scope effect of 2.7 million euros following the 50% consolidation of the sub-group, Nostalgie in Belgium, in 2007.

Revenue from television business continues to rise strongly. It amounted to 8.7 million euros in 2007 compared to 3.7 million euros in 2006 (+135.1%). In the fourth quarter, turnover reached 3 million euros, up 130.7% on Q4 2006. The move up-market of NRJ 12’s new generalist programme schedule enabled the channel to cross the 2% audience share threshold in November (2.1%) and December (2.3%) (source Médiamétrie – Target 4 year-olds and over, equipped with DTT). The channel is thus now in fourth place among the new DTT generalist channels and represented a national audience share of 0.7% in December.

Revenue from telephony business amounted to 18.3 million euros in 2007 compared to 13.8 million euros in 2006 on a like-for-like basis, i.e. a 33.2% rise. In Q4 2007, turnover amounted to 5 million euros, up 43% on a like-for-like basis. Following the launch in mid-2007 of the NRJ Mobile PAYG offering aimed at young people, the mobile telephony division successfully launched its new “C le Mobile” offering in mid-November aimed at an adult public and marketed exclusively via CM-CIC’s powerful network. Thus, at the end of December, NRJ Mobile had acquired nearly 600,000 clients since its launch, including nearly 35,000 subscribers (15,000 subscribers acquired in December alone).

Revenue from Non-Media business amounted to 41.5 million euros in 2007 compared to 62.6 million euros in 2006. Le Roi Soleil [‘The Sun King’], one of the greatest musical success stories in France, played its final shows in early July at Paris Bercy. In 2008. the Group will pursue the development of artistic productions, with musicals and plays, and is also preparing a new musical, the first performances of which are due to commence in 2009.

Finally, the Group’s broadcasting business continues to develop strongly, notably in the DTT broadcasting market. Its contribution to the Group’s sales reached 18.2 million euros in 2007 compared to 12.8 million euros in 2006. i.e. a rise of 42.2%. In December, towerCast, the Group’s broadcasting subsidiary, reached the threshold of the 1000th frequency broadcast on, and its total turnover came to 30.2 million euros (including turnover realised within the Group).

Recent developments and prospects
Over the last audience wave, the Radio medium reached its highest historical listenership levels (Source Médiamétrie, November-December audience, population aged 13 and over, during the week). In this context, the NRJ radio won a further 109,000 listeners compared to September-October 2007 with a listening period that 3 was minutes longer.

In television, DTT is pursuing its rapid deployment in France, both in terms of territorial coverage and household equipment levels. In 2009, DTT is expected to cover more than 90% of French population and virtually 100% by 2012. In this favourable context, the Group is pursuing the development of a fully-fledged television division with the national channel NRJ 12, which is applying for a Personal Mobile Television licence, the music channel NRJ Hits and a number of local channels, including the new DTT Ile-de-France (Paris region) channel, which will be launched early in 2008.

In telephony, NRJ Mobile is pursuing the acquisition of clients, notably with its post-paid offering. This will be boosted in the spring with the addition of innovative products aimed at the youthful target.

The official rebrand of Lagardère Active’s pop-rock radio and DTT channel Europe 2 and Europe 2 TV into Virgin Radio and Virgin 17, has taken place today.

Greenlit by regulator CSA, Lagardère gets a 10-year licence agreement with British group Virgin to use its brand. In exchange, Lagardère will pay 0.5% to one per cent of its revenues.

CSA’s greenlight for the rebrand was however granted under a few conditions: the logos of both services must not be confused with those of Virgin products and services, while no commercials or sponsoring agreements in favour of Virgin will be authorized on air. Any reference to Virgin products in programming will be excluded.

Justifying the rebrand of the two music networks, Christophe Sabot, General Director of Lagardère’s music unit, explains that owing to the advent and success of platforms such as You Tube or MySpace “competition is worldwide now and we definitely needed a powerful brand, a worldwide notorious brand and an incomparable brand”. According to Lagardère Active’s President Didier Quillot, whose objective is to make competitors NRJ and Skyrock getting definitely older, “when (a group) owns such a brand, it can use it on all media digital platforms”.

Regarding content, both new brands, whose new slogan is ‘’Get More’’ are due to start without any change in the editorial lines.

Source: Rapid TV News 2007

Radio broadcaster NRJ Group announced the launch of a multimedia website aimed at 12-25 year olds, with the target of attracting 800,000 users in its first year.

To provide content for the site, called ‘mynrj.com’, the company has signed agreements with record majors Sony (nyse: SNE - news - people )-BMG, Vivendi’s Universal Music, Warner Music and EMI, Roland Le Parc, head of NRJ’s internet activities, told Agence France-Presse.

Le Parc added that the service is designed to be an interactive, social networking site rather than simply a host for videos and blogs.

In addition, NRJ’s main website is to be overhauled starting from Nov 26 with the aim of becoming ‘the leading music site in France,’ NRJ said.